As the bull market continues, stock prices keep going up and this has contributed to the rise in our investment portfolio. I track its performance on StocksCafe and I’m seeing more green now as stock gains climb. While I’m happy with the results of our investment actions taken in 2020, I reckon a sustained bull market this year would be bad for us. After all, we are still working at our jobs, earning salary income and should continue to be buyers of stocks for as long as we can. If stock prices continue to rise, it gets more difficult and expensive to take positions in the market.
Anyway, I already wrote about my 2021 goal for our robo advisors – StashAway and DBS DigiPortfolio in my previous post. I’m going to elaborate more about my 2021 goal for the rest of our investment portfolio. While ETFs with exposures to a variety of markets globally form the majority of our holdings, the proportion of local and overseas individual stocks is rising as we look to increase our portfolio returns. We are even including alternative asset classes such as cryptocurrencies to further diversify the portfolio. I reckon we are in a strong enough financial position to take more risk with our investments. Hence, I have allocated a sum of money for high risk investments where there’s potential for big gains.
As of end Dec 2020, the value of the rest of our investment portfolio (i.e. excluding StashAway and DBS DigiPortfolio) is S$650,000. We have automated monthly contributions of S$2,000 to our investment plans for OCBC Blue Chip Investment Plan (BCIP) and POSB Invest Saver. I’m not sure how much manual investments we will make this year if stock prices keep going up. At some point, I have to consider whether the downside risk outweighs the upside reward when I keep buying stocks at higher prices.
The problem is that interest rates on our cash balances are getting lower, which increases the opportunity costs of not investing. It feels like I’m being forced to invest the cash. Otherwise, I will miss out on further gains while our idle cash drags down the asset portfolio return. It’s an interesting situation because I can see how having more wealth can solve this problem. If I can get to a comfortable wealth level, I wouldn’t mind having idle cash because I can just wait for a better time to invest. Without fear of missing out since I already have enough money. It’s because I feel the need to accelerate my wealth building rate that I force myself to invest the cash.
Such a conundrum to be faced with that I have no idea what is the right thing to do. I’m just going to take a measured approach and trudge on for now. I’m hoping to grow the rest of our investment portfolio (i.e. excluding StashAway and DBS DigiPortfolio) by S$100,000 to S$750,000 by end Dec 2021. It’s a stretch target and will require me to take some aggressive positions this year. I will need to change my investment style to accommodate this as I come to terms with having to take on more risk to generate higher returns.
Is there a reason why u choose these 2 robo-advisors instead of Syfe and Endowus?
StashAway was one of the earliest robo advisors to start operations in Singapore so I always had an account with them. I opened DBS DigiPortfolio just to see how a bank’s equivalent of a robo advisor compares against StashAway. Plus I diverted funds that were already going into POSB Invest Saver monthly investment plan to DBS DigiPortfolio instead. In short, I had no particular reason for choosing them over Syfe and Endowus other than what was convenient and made sense to me at that time.