Asked by Derek Ang

What do you think of this investment portoflio allocation?

Hi, I am starting my investment journey and would like some views on portfolio allocation and my risk profile. I am 30 years old employed, am looking at average - moderate risk. I am looking at both capital appreciation as well as income investing (from dividends). Looking to start with 50k - 100K. My current plan is to allocate my funds to the following assets: Stocks - 40% REITS - 40% Unit Trust / Funds - 20% I would like to ask if the above allocation is reasonable.

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  • Loh Tat Tian
    Loh Tat Tian
    Level 6. Master
    Answered on 24 Nov 2018

    40% stocks. What kind of stocks? The economy is intertwined. There are economic cycle for different phase of development or seasonal cycles (like O&G, shipbuilding, consumer goods etc) which can fall between defensive or growth (and higher risk). REITS are just 1 segment where you are like a landlord. Rising interest rates can be a concern for higher gearing REITS. Also rights issues, etc. REITS also have sectors from hospitality, industrial, commercial, residential. Unit trust and Funds are similar like stocks but doing a basket, and could be region/country specific. You need to read the prospectus and what sectors they are investing in.

    Too many questions, so sorry if I can't give you an answer.

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  • Lok Yang Teng
    Lok Yang Teng
    Level 6. Master
    Answered on 24 Nov 2018

    Yes, there’s is diversification between different investment vehicles. But you didn’t specify the allocaction wise for each mode of investment. For moderate risk, I feel you should invest more on blue chip and consumer goods sector, a small minority on small-mid cap stocks.

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