Returns
My individual stock portfolio is down 11.7% YTD. The losses are mainly due to HK stocks like Tencent.
The individual stock portfolio is 45% of my total wealth. My total wealth also have other asset like CPF, cash, bonds (mainly SSB) and index fund/ETF. YTD, my total wealth is down 3%, as the stock losses are alleviated by my income.
A Mistake to Buy Asia High Yield Bond
I bought a smallish amount in Asia High Yield Bond ETF. After I bought it, it went 10% under-water. It is a mistake to buy it, as high yield bonds have high correlation with stocks and I have large allocation to stocks.
SSB Step-Buying
As interest rates are increasing, leading to SSB interest rates rising higher each month, I will buy some SSB each month and redeem the SSB (with much lower interest rates) bought last 2 years.
Gold Buying
I have been slowing accumulating Gold ETF (GLD). In the past, I would not think of buying gold, as it has no interest and does not produce anything. Now, I change my thinking, as gold can be a hedge against inflation and is a good diversifier (as it has low correlation with bond/stocks.) Moving forward, I should aim to have 5% of my total wealth in gold.
My View -- Cash may be the safest asset now
Cash (and CPF) may be the safest asset in the current environment of rising interest rate and high inflation. While the high inflation will erode the real value of cash, bonds/stocks are affected by rising interest rates. Commodities may be a good asset in current environment but I am not familar with commodities and commodities have large run-up in price this year.
Other Thoughts
Recently, I have been thinking of shifting my asset allocation to something closer to 'Permanent Portfolio' (=25% each in stock/bond/cash/gold) or 'All Weather Portfolio'. While such portfolio could have lower returns compared to 60/40 portfolio, it has lower volatility/drawdown and provides greater peace of mind.
I am also increasingly of the view that I am better off with investing in world stock etf like VWRA. Maybe I will reduce the size of my individual stock portfolio and allocate more funds to index fund/etf.
