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.

The year 2020 is finally coming to an end. So many things have happened that I find it incredible how we got to this point and it has only been a year. While we are on leave and enjoying the celebrations, we feel exhausted. We are also trying to rest and recharge in between to get ready for the new year. I’m not doing a year end net worth update yet because there’s still next week to go. But I’m okay with how the numbers are going so far. There’s still room for improvement, hence the title of today’s post.

We are making progress with our net worth every month and year despite having a more passive ETF-focused investing strategy and holding a large cash balance. The portfolio has grown to a sizeable amount and it’s getting more difficult to manage now. The direction we take with it can have a significant impact years down the road but the big problem is that we will only realise it too late. While ETFs are great as building blocks of a portfolio, they cannot provide that growth rate we are looking for long term.

We should be on a 50% work from office and 50% work from home operating model at our corporate jobs in the long run. The main benefit coming out from this is that we will have more time on our hands. And I plan to use some of it to adopt a more aggressive investing strategy. After the major restructuring at my wife’s bank, I realise her career situation will only get tougher over time. She may still have a job and her work environment remains better than most banks out there. But the expectations will only get higher as the bank looks to squeeze more out from her. The same applies to me but at a lower pay and rank level so I’m not put under as much stress and pressure as her.

I’m turning 35 and my wife is turning 33 next year in 2021. It’s a sobering realisation that we are practically in our mid 30s. We may want to have a 2nd kid and that’s going to drain us even more in terms of time, energy and money. With this, I have decided that our current passive ETF-focused investing strategy is not sufficient for the family as we grow older. Our pay may not grow much anymore but our expenses will keep going up. So we have to take on more risk to get a higher return from our salary income while we still can. I’m going to dedicate more time to learning about investments in general, other asset classes and research on individual stocks. This should hopefully allow us to shift away from passive ETFs and grow the portfolio even more.