Thursday, March 19, 2015

Conservative or Aggressive

Hi Everyone,

I am been looking through my portfolio management tools by DrWealth (If anyone still does not know what is DrWealth, do check out my previous post http://jyklmoneyblog.blogspot.sg/2015/03/drwealth.html), the analysis that I have gotten is pretty unhealthy in the sense that I have more cash flows than the amount that I have invested in shares. 

As you can see the graph above, that is my overall portfolio that I have currently. more than 70% of my portfolio are cash and only less than 30% of my portfolio are in investment. Certainly, this has indicate that my portfolio health is rather unhealthy but the reason why I have so much cash is because of OCBC 360. Because with OCBC 360, it gives me 3.05% returns every year, which is pretty good as compare to other banks. The risk of this is much much much lower than investing in shares. 

Although 3.05% wont be able to beat the inflation rate but for me, I am quite a conservative person. So I prefer this strategy first until OCBC 360 remove this promotion. After that, then I will focus more in investing in stocks and open other bank account to gain more interest.

Personally, my investment fund wont exceed 45% of my total portfolio because I am a super conservative person and I am still new to shares and investment, it will be wise for me not to go all out if not I will get myself burned!

So how about you? Are you an aggressive or conservative type of investor?
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13 comments:

  1. la papillionMarch 19, 2015 at 7:02 PM

    Hi James,

    Haha, your portfolio doesn't look conservative with all the highly geared reits sector and not a single bonds/pref shares ;) How do you know if you're a conservative or an aggressive investor?

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    1. JamesMarch 19, 2015 at 10:17 PM

      Yup, I did focus on reits, but it's just a small amount which I believe that it will grow in the future, a pretty small gamble. The main focus are on blue chips and Sheng Shiong, these I believe are much more stable and conservative investment.

      Also, I take into consideration of the amount that I have spend, if you take a look at my chart, I have over 70% of cash on hand right now. As I rather place these money on bank to gain interest rather than full force out on the market for investment.

      Delete
    2. la papillionMarch 19, 2015 at 10:50 PM

      Hi James,

      Haha, as bro8888 mentioned, you won't know if holding cash is a risky or a conservative decision until it's too late :)

      There are many layers of diversification, and your portfolio just consists of stocks. When the market sinks, everything will just tank (some more so than others) and you'll lose money. If the market persists in this state, your cash will rot and you'll also lose money, so I'm not sure if that fits your idea of being conservative.

      So I'm not sure how to answer your question on whether I'm an aggressive or a conservative investor haha! Is there a definition?

      Delete
    3. JamesMarch 19, 2015 at 11:40 PM

      Sorry, I misunderstood ur question, conservative in my allocation of money to investment (high risk activity) as most of my money are in bank (super low risk).

      Delete
  2. Createwealth8888March 19, 2015 at 7:10 PM

    Cash is King or Cash is Rotting. Only time will tell you which.

    :-)

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  3. BMarch 19, 2015 at 11:31 PM

    Hi James

    I think the question is about whether you are conservative in your stock selection or conservative in your portfolio allocation. If it is the latter, I agree that you are considered conservative because you are putting majority of your asset in cash. If it is the former, then I agree with LP that your stock selection is no where conservative as Reits hold massive debts in their books. This doesn't mean it's bad it's just not as conservative as some of the fellow bloggers who are holding stocks like Vicom and Kingsmen.

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    Replies
    1. JamesMarch 19, 2015 at 11:41 PM

      Vicom and Kingsmen are safe shares?

      Delete
    2. la papillionMarch 20, 2015 at 1:00 AM

      Good question by James! Lol!

      I think even reits can be conservative depending on what price u paid for it ;) it seems I'm poking this and poking that but I'm just trying to convey the idea that it's not so clear cut what is conservative and aggressive. What is low risk and high risk might prove to be so only when tested, haha! So when someone tells me he is conservative or aggressive, usually I'll ask how they know it.

      I still don't know if I'm high risk or conservative. Sometimes I'm this, sometimes I'm that.

      Delete
    3. BMarch 20, 2015 at 2:00 AM

      I'm only talking about conservative in terms of debt, not the price bought or valuations.

      Hope this is clear.

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    4. JamesMarch 20, 2015 at 2:29 AM

      Yea true is hard to determine because everyone had their own indicator of conservative or aggressive.

      Hi B: ohhh in terms of debt, because i didnt follow these two shares so not sure about its status and didnt heard anyone in HWZ forum talks about these two shares as well

      Delete
  4. Passive Income FarmerMarch 20, 2015 at 8:34 AM

    Hi James,

    It is good to be "unhealthy" by having lot of cash. Haha. At least this is a "changable" situation.

    I really doubt how long the good OCBC-360 can last...

    Cheers,
    Farmer.

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    Replies
    1. JamesMarch 20, 2015 at 9:53 AM

      I also do doubt that OCBC 360 might not last long, so I already have alternative plan of having CIMB as my backup plan. Although the interest rate is only 0.8% (for saving account) but it is still better than most saving account from other banks. And also, if that time comes, I will probably shift another 20% of my cash for investment.

      Delete

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