Is there a reliable way to invest?

Investments and reliability hardly go hand in hand, I used to think. And investments are filled with ups and downs in the markets.

When I first started investing in 2005, I got excited. When I made that 10-20% return, I thought I should sell out before the markets go down. Sometimes I am right, sometimes I am not. And some of the time, that one wrong move will erase all gains made over the past few years.

Well, I had one objective – I needed to plan well for retirement for the long term which will be a few decades down the road. Is there a reliable way to get there especially since it is many years down the road?

My worries

What if I had invested and when I needed the money for retirement, the company I had invested into went out of business or is no longer a relevant business or unable to make the same profits? A few such companies may have been the recent SIA, Hyflux, Blackberry, Kodak etc.

Being able to predict accurately might have been due to skill or even luck at times. But to be able to do it right 100% of the time is almost impossible. Even Warren Buffet does not get it right all the time.

Investing on my own creates anxieties. Whenever I read the papers or look at my portfolio, I am tempted to make a trade. It is either to sell or buy and that creates additional stress for me that very day as I always hope to sell the highest or buy the lowest.

About 5 years ago, I have finally found a more reliable way to achieve my long goals with less emotions, less risk and yet higher expected returns, while building a large CORRE^TM portfolio. If you would like to find out more, you can send me a question.

Do you know the cost of delay?

Have you thought of letting your money work harder for you? Many people wished they had let their money work harder earlier but never got round to doing it due to the many distractions in life and the distractions will keep coming at you constantly if you do not keep a disciplined approach to start.

So how much does it really impact you as an individual?

Let us imagine 2 persons who are of the same age wanted to have the money available 25 years down the road, with an assumption of annualized returns of 7%pa.

Person A starts investing $1,000 a month for 25years, he would have achieved a projected $758,000.

Person B delays that by 2 years.

So person B starts investing $1,000 a month for 23years, he would have achieved a projected $641,000.

That difference of 2 years of delay would have cost him $117,000 which can be the equivalent to a downpayment of a HDB house! Can you imagine the significant difference over 30-40 years?

Should you not plan early so that you can ensure continued success without the need to worry in the future? Every paycheck counts!

9 new year financial resolutions 2021

1. Save more money.

2. Start a proper CORRE investment strategy by reallocating your assets to reduce risks while getting similar returns.

3. Review your insurance especially for critical illness, personal accident and loss of income due to the above.

4. Pay off your debts.

5. Find ways to reduce your tax.

6. Review your existing investments to find a way to reduce risk whilst achieve similar or higher returns.

7. Review your mid and long term goals to see if you are on track.

8. Find a charity of your choice or family to give to.

9. Plan your estate and wills.

Markets are at all time high

Now that markets are at all-time high, most speculators will probably feel very uncomfortable now. “What should the next step be? Should I sell, wait or top up?” How do I invest with a peace of mind?

For those who are invested into single stocks, seeing your stock go up sky high can be scary because you never know what might happen next. Some of these examples include Hyflux and Kodak or even SIA which could potentially have changed their future outlook.

However, if you are a long term investor, looking back in history all the way back to evidence from year 1926, you would realize that the broad diversified markets always go up. And if an investor had just held a CORE asset allocated portfolio and rebalanced along the way, he would have been handsomely rewarded over the decades (as shown in the picture). Individual stocks would not have performed the same way. There are only a handful of stocks that might have been around for the same period of almost 100 years. Most of the individual stocks would either have been obsolete, closed down or disappeared over the years with the evolving markets and industries.

If we are building CORE portfolios that are broadly diversified across the world with proper rebalancing done over the years, it would be fair to say that the values in the future will be higher than it is today, whilst going through some crisis along the way (this is based on evidence investing).

If you would like to find out what CORE portfolios that can help you achieve your individual dreams and goals, whilst giving you peace of mind, you should always reach out to have a conversation.

My investment strategy is getting me nowhere

A recent conversation with a client was investing into stocks. He was trying to study and buy into companies at low prices and exit them at higher prices, shifting between various companies he has been tracking that are typically stocks in Singapore. Unfortunately, some companies have been suspended, some gone down so low that it is not even worth looking at, some have done very well but he had exited way too early.

After several years of investing, he was getting nowhere near his goals as he was always happy with that few thousand dollars that he made along the way. He will pull out from his investments as he was also afraid when the next wave of change might hit that made the company go south or obsolete as many other blue chip companies had gone in that similar direction. Some examples would have been SIA, Hyflux, Kepcorp, Singtel, SPH, Kodak etc.. When we calculated his retirement goals, it was a big amount and he knew straightaway that he had to change strategy.

Core and satellite strategy

He needed a core strategy that builds wealth in a global diversified manner across the world, not just focused only in specifics like US, Europe, China or a concentration into a few technology stocks. He needed it to remove the pain of seeing some companies go up and down with no bright future ahead as well. He wanted to be able to sleep in peace in downturns which could come in various forms. This is for a long term retirement strategy. He needed the money to be there available for retirement when he has slowed down in his income or stopped work totally. Isn’t that what most of us are hoping to achieve in our lives?

The satellite strategy varies from person to person and one needs to take a small allocation to position that in place to give the icing on the cake. I used to have this problem as well and after shifting my strategy about 5 years ago, I have managed to build a CORE portfolio of 7-8x in size from what it used to be previously.  

Do you have a CORE portfolio strategy built in place for you for retirement that you can invest with peace of mind and yet achieve better than average market returns than most retail investors? Connect with us to see to share your experience and see if we can help you get you to your goals in a more comfortable manner.