I have invested in the (modified) Permanent Portfolio for slightly over 3 years now. And I'm considering abandoning it.
Don't get me wrong, it is not that I am giving up or that I no longer believe it works. It is because I have found another strategy that should give even higher returns.
Even if the Permanent Portfolio works as it should, it generates an average compounded returns of 9%. However, the other strategy generates 15% returns, based on backtested data as well.
As this strategy involves investing in US equities as well, and currently, the US market is at the 3rd highest CAPE ratio in the 130-year history (27.1 at time of writing), I am waiting for a correction to happen before I make the final decision. If that happens, I can also see for myself what happens to my Permanent Portfolio.
I'll wait...
Showing posts with label Portfolio Management. Show all posts
Showing posts with label Portfolio Management. Show all posts
Friday, 17 July 2015
Saturday, 30 August 2014
Portfolio Restructuring
Over the past few months, there has been some changes to my investment portfolio mainly due to a need for cash in the near future.
I stick to the following allocation for my liquid assets:
Say if I have $50,000 in invested amount, I will target to have at least another $25,000 in opportunity fund plus at least 6 months' worth of my monthly expenses.
Morgan Housel has this plan to deploy the opportunity fund which I think is a good guide to follow:
Earlier this month, I have also fully liquidated all my unit trusts and slowly sold some of my STI ETF to meet my asset allocation requirement. In addition, the reallocation involves increased investment in individual stocks for higher potential returns.
I also stopped the Decision Moose strategy sometime in July. As I only invested a very small amount in it, I find that the time and effort spent to track and monitor its performance is not worth it.
The fully divested unit trust portfolio performance over the past 2+ years has a CAGR of 5.98%. Nothing fantastic about it.
As of now, I am left with the following investment holdings:
I stick to the following allocation for my liquid assets:
Say if I have $50,000 in invested amount, I will target to have at least another $25,000 in opportunity fund plus at least 6 months' worth of my monthly expenses.
Morgan Housel has this plan to deploy the opportunity fund which I think is a good guide to follow:
The last 10% drop in STI occurred earlier in January this year, and the next one might happen sometime end of this year.
Earlier this month, I have also fully liquidated all my unit trusts and slowly sold some of my STI ETF to meet my asset allocation requirement. In addition, the reallocation involves increased investment in individual stocks for higher potential returns.
I also stopped the Decision Moose strategy sometime in July. As I only invested a very small amount in it, I find that the time and effort spent to track and monitor its performance is not worth it.
The fully divested unit trust portfolio performance over the past 2+ years has a CAGR of 5.98%. Nothing fantastic about it.
As of now, I am left with the following investment holdings:
- A basket of stocks consisting of REITS, STI ETF and companies listed both local and overseas for both growth and dividend yield.
- Permanent Portfolio made up of US ETFs.
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