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Reduce volatility by having fixed income as we age?

Saturday, September 15, 2018

Reader says...
Morning AK, as you get older, will you consider to be more defensive in your portfolio?

Means shifting more to SSB, CPF etc instead of blue chip stocks for example?

Just in case touch wood financial crisis then your portfolio less time to recover.

Appreciate your thoughts as always. ๐Ÿ˜‰







AK says...
I guess your question is about reducing volatility in our investment portfolio.

Well, for most of us, that should be the job of our CPF savings. ๐Ÿ˜‰

Why do I say "for most of us"?

Remember my blog on "unless we are very rich"?






Too defensive an investment portfolio and the returns would be compromised too much and might not be meaningful enough for us to have a comfortable retirement.

Again, this is "for most of us".

For those who have plenty of money sloshing around, they don't have to be as particular. ๐Ÿ˜‰






I am investing for income mostly.

Volatility which could result in plunging share prices doesn't bother me.

I am more concerned with receiving dividends from my investments, during good and bad times.

In fact, I welcome plunging prices as that means I could buy more on the cheap. ๐Ÿ˜‰






Related post:
CPF is all we need unless very rich.

10 comments:

singaporean learning to retire well said...

You have strong psychology AK!

The ability to ignore price movement and focus on whether a stock is able to give out sustainable dividends is a difficult skill to master!

AK71 said...

Hi SLRW,

It is about having peace of mind.

http://singaporeanstocksinvestor.blogspot.com/2015/02/how-to-have-peace-of-mind-as-investor.html

It is about having a holistic approach.

http://singaporeanstocksinvestor.blogspot.com/2017/01/holistic-approach-to-secure-financial.html

Laurence said...

Quote.
Too defensive an investment portfolio and the returns would be compromised too much and might not be meaningful enough for us to have a comfortable retirement.
For those who have plenty of money sloshing around, they don't have to be as particular.
Unquote.


AK has plenty of money sloshing around. ;)-

Yikes!

Who threw a note counter at me?

Who? Who?

Bad AK! Bad AK!

Lol.

AK71 said...

Hi Laurence,

Alamak.

Why you liddat say?

Bad Laurence! Bad Laurence! :p

Henry said...

Don't think AK needs to bother about hedging volatility using bonds because he already has a 6 figures passive income every year. And a mil in his CPF. Even if his investment yield drop, its still 6 figures that enable him to live a very comfortable life. To be able to achieve that, think his net worth has to be in the range of 5 mil or more. So I think net worth matters? Correct or not? :)

AK71 said...

Hi Henry,

As I am not very rich, I don't bother looking for investment grade bonds to invest in because I have a meaningful amount of CPF savings which is risk free and volatility free.

Of course, if I am very rich, then, the CPF might not be enough but as it stands, it is enough for me.

See:
CPF is all we need unless we are very rich.

I hope that answers your question. :)

Henry said...

Aiyo AK so humble. Humility is good. You are already very successful to me.
"Very rich" or some call UHNWI means net worth of US$20 mil i think.

AK71 said...

Hi Henry,

I am just being honest. :)

I am also very fortunate to be a Singaporean.

When people ask if I am patriotic, I would tell them that I feel patriotic whenever I look at my CPF statement. :p

AK71 said...

Alan Teow says...
Lol.......I like the way you put it.
"When people ask if I am patriotic, I would tell them that I feel patriotic whenever I look at my CPF statement."

AK71 said...

See:
Purpose of CPF is to make the rich richer!

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