Asset allocation of investable funds is an important aspect of investments. One should not put all money in one basket. The risk is too high should the single asset collapses. This is risk management in investing.
My asset mix of investable fund for 2019 is as follows:
|Asset Mix in percentages (%)||12-Dec-19|
|Equities (see below)||15.8|
|Insurance related products||32.6|
|Cash & Equivalent||24.3|
|Equities – Singapore||13.2|
|Equities – Others||2.6|
Equities exposure is 15.8%.
Fixed Income exposure is 27.3%.
Insurance related products are 32.6%.
Cash and cash equivalent are 24.3%.
This is a cautious asset mix. At my age, I am not taking a major risk in equities. Fixed income and insurance related products took up a big chunk at nearly 60%. My cash position is 24.3% of the portfolio.
Comparing with 2018
For this year, I had reduced my investments in equities by 6.9 percentage points from 22.7% to 15.8% of my overall portfolio. Equities are riskier assets and since 2019 is turning out to be volatile for stock markets, I had redeemed some equities to reduce my exposure.
|Asset Mix in percentages (%)||31-Dec-18||12-Dec-19||Change|
|Equities (see below)||22.7||15.8||-6.9|
|Insurance related products||11.9||32.6||20.7|
|Cash & Equivalent||38.9||24.3||-14.6|
|Equities – Singapore||15.9||13.2||-2.7|
|Equities – Others||6.8||2.6||-4.2|
Investment in bonds and fixed income remained relatively stable at 27.3% of portfolio. Bonds and fixed income provide stable income during period of volatile equity markets.
In February this year, we invested in Premierlife Generation II, a life insurance policy administered by Great Eastern Life (GE). As a result, the insurance related investments went up by 20.7 percentage points from 11.9% to 32.6% of my overall portfolio. This insurance related investments form the biggest chunk of my portfolio.
Cash and cash equivalent is now down to 24.3% of my portfolio (from 38.9%). Much of the cash had gone to buy the life insurance policies.
Copyright © 2019, limkimtong for Living Investment
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