My Portfolio: seeking advice.

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Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

My Portfolio: seeking advice.

Post by soloraj »

Dear Boogleheads, I am seeking advice on my investment approach. I am using the suggested template to detail my circumstances and portfolio.

Country of Residence: Singapore
International Lifestyle: Permanent Resident and plan to retire in Singapore

Emergency funds: Three months of expenses

Debt: Repayment mortgage, 13yrs remaining, variable interest 0.55%
Age: 56

Desired Asset allocation: 100% stocks / 0% bonds

Please provide a hint as to the size of your current total portfolio: low to mid six-figures

_______________________________________________________________

Current retirement assets held in general investment account, tax free

Employee granted stock (30% unvested)
37%, Large US Tech Firm (FAAG category)

Core Portfolio (Ticker) (Expense Ratio)
10%, Vanguard S&P500 UCITS ETF (VUAA) (0.07%)
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
7%, iShares Core MSCI Emergining Markets UCITS ETF (EIMI) (0.18%)
5%, iShares USA Small Cap UCITS ETF (CUSS) (0.43%)
5%, Vanguard UK FTSE 250 UCITS ETF (VMIG) (0.10%)
5%, SPDR Straits Times Index ETF (ES3) (0.30%)
3%, Berkshire Hathaway/class B

Commodities:
3%, Invesco WilderHill Clean Energy ETF (PBW) (0.5%)
3%, Precious Metals ETF (still researching)

5%, REITS (still researching)

5%, Individual stocks to hold for short term (Currently: Disney, Mastercard, ChargePoint, Las Vegas Sands)
5%, Cash (for investing)

Total percentage of all the above accounts together equals 100%.
_______________________________________________________________

New annual Contributions
5%
_______________________________________________________________
Questions:
1. Does this portfolio look sufficiently diversified?

2. Where are the weaknesses in my approach?
Laurizas
Posts: 515
Joined: Mon Dec 31, 2018 3:44 am
Location: Lithuania

Re: My Portfolio: seeking advice.

Post by Laurizas »

soloraj wrote: Sun Jul 11, 2021 5:34 am 1. Does this portfolio look sufficiently diversified?
I think your portfolio is sufficiently diversified.
soloraj wrote: Sun Jul 11, 2021 5:34 am 2. Where are the weaknesses in my approach?
1) 56 years old and no bonds. 2) I would consolidate portfolio because small allocation (less then 10 %) does not move a needle.
User avatar
Sandtrap
Posts: 19582
Joined: Sat Nov 26, 2016 5:32 pm
Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: My Portfolio: seeking advice.

Post by Sandtrap »

soloraj wrote: Sun Jul 11, 2021 5:34 am Dear Boogleheads, I am seeking advice on my investment approach. I am using the suggested template to detail my circumstances and portfolio.

Country of Residence: Singapore
International Lifestyle: Permanent Resident and plan to retire in Singapore

Emergency funds: Three months of expenses

Debt: Repayment mortgage, 13yrs remaining, variable interest 0.55%
Age: 56

Desired Asset allocation: 100% stocks / 0% bonds

Please provide a hint as to the size of your current total portfolio: low to mid six-figures

_______________________________________________________________

Current retirement assets held in general investment account, tax free

Employee granted stock (30% unvested)
37%, Large US Tech Firm (FAAG category)

Core Portfolio (Ticker) (Expense Ratio)
10%, Vanguard S&P500 UCITS ETF (VUAA) (0.07%)
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
7%, iShares Core MSCI Emergining Markets UCITS ETF (EIMI) (0.18%)
5%, iShares USA Small Cap UCITS ETF (CUSS) (0.43%)
5%, Vanguard UK FTSE 250 UCITS ETF (VMIG) (0.10%)
5%, SPDR Straits Times Index ETF (ES3) (0.30%)
3%, Berkshire Hathaway/class B


Consolidate the above to the percentage sub allocation between the 2 Vanguard Funds
Consider switching to Vanguard Total Stock if your cost basis is fairly even between the two.


Commodities:
3%, Invesco WilderHill Clean Energy ETF (PBW) (0.5%)
3%, Precious Metals ETF (still researching)

5%, REITS (still researching)


Consolidate to the above.


5%, Individual stocks to hold for short term (Currently: Disney, Mastercard, ChargePoint, Las Vegas Sands)

Consolidate to the above.

5%, Cash (for investing)

Total percentage of all the above accounts together equals 100%.
_______________________________________________________________

New annual Contributions
5%
_______________________________________________________________
Questions:
1. Does this portfolio look sufficiently diversified?
Simplify, remove overlap and redundancy, consolidate funds if 3-5% or less of total.
2. Where are the weaknesses in my approach?
As above.
Suggestions:
1. Consider using Total Stock or Total World.
2. Consider an allocation to fixed in some form. Add new monies there.
3. Consider a Target Date Fund (optional: self rebalancing).
4. Concurrently, pay down mortgage over time.
5. Increase emergency fund so that there's enough to cover any additional expenses in your upcoming retirement transition. There will be lumpy expenses at that time.
6. Seek legal counsel for financial estate planning.

(dislaimer): there are a lot of approaches to this based on each person's experience and knowledge and opinions. This is just one.
j :D
Wiki Bogleheads Wiki: Everything You Need to Know
TedSwippet
Posts: 5166
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: My Portfolio: seeking advice.

Post by TedSwippet »

Welcome. I've assumed below that you are not a US citizen or US permanent resident.
soloraj wrote: Sun Jul 11, 2021 5:34 am Core Portfolio (Ticker) (Expense Ratio)
...
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
...
The other ETFs you list are non-US domiciled, but VXUS is US domiciled. For you, this is a very tax-inefficient holding. It adds a second layer of unrecoverable US tax, 30% on dividends, that you completely avoid if you hold the same underlying assets in equivalent non-US domiciled ETFs. Additionally, if you hold more than $60k in aggregate in 'US situs' assets -- and VXUS is 'US situs' -- you risk loss to US estate tax of between 26-40% of assets above that $60k limit. Any individual US shares you hold (employer granted stocks, Disney, etc) all contribute to that $60k.

Where investment funds are yet to be decided, for example REITS, for the same reasons as above you should avoid using US domiciled ETFs and stick to non-US domiciled ones.

Full details in the wiki:

Nonresident alien taxation - Bogleheads
Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
User avatar
Sandtrap
Posts: 19582
Joined: Sat Nov 26, 2016 5:32 pm
Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: My Portfolio: seeking advice.

Post by Sandtrap »

TedSwippet wrote: Wed Jul 14, 2021 7:36 am Welcome. I've assumed below that you are not a US citizen or US permanent resident.
soloraj wrote: Sun Jul 11, 2021 5:34 am Core Portfolio (Ticker) (Expense Ratio)
...
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
...
The other ETFs you list are non-US domiciled, but VXUS is US domiciled. For you, this is a very tax-inefficient holding. It adds a second layer of unrecoverable US tax, 30% on dividends, that you completely avoid if you hold the same underlying assets in equivalent non-US domiciled ETFs. Additionally, if you hold more than $60k in aggregate in 'US situs' assets -- and VXUS is 'US situs' -- you risk loss to US estate tax of between 26-40% of assets above that $60k limit. Any individual US shares you hold (employer granted stocks, Disney, etc) all contribute to that $60k.

Where investment funds are yet to be decided, for example REITS, for the same reasons as above you should avoid using US domiciled ETFs and stick to non-US domiciled ones.

Full details in the wiki:

Nonresident alien taxation - Bogleheads
Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
+1
Excellent points.

j🌺
Wiki Bogleheads Wiki: Everything You Need to Know
jg12345
Posts: 421
Joined: Fri Dec 11, 2020 12:03 pm

Re: My Portfolio: seeking advice.

Post by jg12345 »

Hi OP
Since it is your first post, welcome, and I suggest to give a good read to boglewiki and to an amazing guide prepared by the Barhain chapter.

Some pointers:
1) The portfolio is quite diversified, although for simplicity you may just want to substitute literally everything (or only the stock part) with a single Vanguard FTSE all-world acc ETF. I wonder whether your commissions for rebalancing all these, and with a low-mid 6 digit portfolio, start to get too high. One etf, simpler, less risk of messing up weights/rebalancing, maybe less costs.

2) Berkshire Hathaway is a single stock, despite being a conglomerate and investment company. Hence you're investing 8% in single stocks, not 5%. It seems a bit much. Get it to 0?

3) You may want to get rid of commodities / REITs and just use stocks.

4) 100% stocks at your age + 8% in single stocks + commodities/reits seems risky to me, but your appetite to risk is obviously unknown to anyone here. Just wanted to note that.

Best of luck!
oken
Posts: 219
Joined: Thu Oct 10, 2019 7:00 pm

Re: My Portfolio: seeking advice.

Post by oken »

Welcome!

56 is an interesting age in Singapore. Congrats on the milestone.
Your Retirement Account has been set up. You can withdraw from CPF, but payouts have yet to come (until 65-70) and you have yet to choose which payout plan. You also have the option of topping up your Retirement account even more over the years.

Have you settled on your plan for CPF life? Can we assume that your "low to mid six figures" does not include whatever is in your RA? If not, that might be the first thing you what to think about for your money. CPF life is generally a pretty good hedge against longevity risk and the Escalating Plan also helps hedge against inflation.

As for the portfolio itself, 100% stock for me just means VWRA and chill. =D
But since you've decided on 100% stock, I'm guessing CPF plays the bond portion of your plans?
MoRS76
Posts: 15
Joined: Wed Nov 13, 2019 4:35 am

Re: My Portfolio: seeking advice.

Post by MoRS76 »

oken wrote: Thu Jul 15, 2021 5:38 pm Welcome!

56 is an interesting age in Singapore. Congrats on the milestone.
Your Retirement Account has been set up. You can withdraw from CPF, but payouts have yet to come (until 65-70) and you have yet to choose which payout plan. You also have the option of topping up your Retirement account even more over the years.

Have you settled on your plan for CPF life? Can we assume that your "low to mid six figures" does not include whatever is in your RA? If not, that might be the first thing you what to think about for your money. CPF life is generally a pretty good hedge against longevity risk and the Escalating Plan also helps hedge against inflation.

As for the portfolio itself, 100% stock for me just means VWRA and chill. =D
But since you've decided on 100% stock, I'm guessing CPF plays the bond portion of your plans?
My 2 cents…

+1 to VWRA as a single diversified global index. You can allocate 5-10% to a global small caps index if you want more growth/risk.

37% in stock grants from a single company is too concentrated for my taste. Recommend 20% max and move rest to VWRA. You may lose extra growth but you’re adding more protection especially if you’re nearing your retirement time frame.
muffins14
Posts: 5432
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: My Portfolio: seeking advice.

Post by muffins14 »

I’m surprised so many readers find a portfolio with 37% in employer stock to be well diversified. Typically most recommend no more than 10%, so the advice would be to sell your shares down to that level over a reasonable time frame
Crom laughs at your Four Winds
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

Laurizas wrote: Wed Jul 14, 2021 6:24 am
soloraj wrote: Sun Jul 11, 2021 5:34 am 1. Does this portfolio look sufficiently diversified?
I think your portfolio is sufficiently diversified.
soloraj wrote: Sun Jul 11, 2021 5:34 am 2. Where are the weaknesses in my approach?
1) 56 years old and no bonds. 2) I would consolidate portfolio because small allocation (less then 10 %) does not move a needle.
Thank you Laurizas, I failed to explain that 35% of my retirement income will come from fixed income sources from government schemes and rental property, so I feel I do not need to make an investment in bonds. After taking in the suggestions posted here, I will consolidate my portfolio into 2 or 3 index funds.
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

Sandtrap wrote: Wed Jul 14, 2021 7:12 am
soloraj wrote: Sun Jul 11, 2021 5:34 am Dear Boogleheads, I am seeking advice on my investment approach. I am using the suggested template to detail my circumstances and portfolio.

Country of Residence: Singapore
International Lifestyle: Permanent Resident and plan to retire in Singapore

Emergency funds: Three months of expenses

Debt: Repayment mortgage, 13yrs remaining, variable interest 0.55%
Age: 56

Desired Asset allocation: 100% stocks / 0% bonds

Please provide a hint as to the size of your current total portfolio: low to mid six-figures

_______________________________________________________________

Current retirement assets held in general investment account, tax free

Employee granted stock (30% unvested)
37%, Large US Tech Firm (FAAG category)

Core Portfolio (Ticker) (Expense Ratio)
10%, Vanguard S&P500 UCITS ETF (VUAA) (0.07%)
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
7%, iShares Core MSCI Emergining Markets UCITS ETF (EIMI) (0.18%)
5%, iShares USA Small Cap UCITS ETF (CUSS) (0.43%)
5%, Vanguard UK FTSE 250 UCITS ETF (VMIG) (0.10%)
5%, SPDR Straits Times Index ETF (ES3) (0.30%)
3%, Berkshire Hathaway/class B


Consolidate the above to the percentage sub allocation between the 2 Vanguard Funds
Consider switching to Vanguard Total Stock if your cost basis is fairly even between the two.


Commodities:
3%, Invesco WilderHill Clean Energy ETF (PBW) (0.5%)
3%, Precious Metals ETF (still researching)

5%, REITS (still researching)


Consolidate to the above.


5%, Individual stocks to hold for short term (Currently: Disney, Mastercard, ChargePoint, Las Vegas Sands)

Consolidate to the above.

5%, Cash (for investing)

Total percentage of all the above accounts together equals 100%.
_______________________________________________________________

New annual Contributions
5%
_______________________________________________________________
Questions:
1. Does this portfolio look sufficiently diversified?
Simplify, remove overlap and redundancy, consolidate funds if 3-5% or less of total.
2. Where are the weaknesses in my approach?
As above.
Suggestions:
1. Consider using Total Stock or Total World.
2. Consider an allocation to fixed in some form. Add new monies there.
3. Consider a Target Date Fund (optional: self rebalancing).
4. Concurrently, pay down mortgage over time.
5. Increase emergency fund so that there's enough to cover any additional expenses in your upcoming retirement transition. There will be lumpy expenses at that time.
6. Seek legal counsel for financial estate planning.

(dislaimer): there are a lot of approaches to this based on each person's experience and knowledge and opinions. This is just one.
j :D
Thank you Santrap, after reading the suggestions here I think consolidating my investments into VWRA is a better approach to take. I do plan to pay down my mortgage overtime so that I retire debit free. US estate planning is high on my mind, I'm not sure where to go to for this, it is something I need to look into.
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

TedSwippet wrote: Wed Jul 14, 2021 7:36 am Welcome. I've assumed below that you are not a US citizen or US permanent resident.
soloraj wrote: Sun Jul 11, 2021 5:34 am Core Portfolio (Ticker) (Expense Ratio)
...
7%, Vanguard Total International Stock Index ETF (VXUS) (0.08%)
...
The other ETFs you list are non-US domiciled, but VXUS is US domiciled. For you, this is a very tax-inefficient holding. It adds a second layer of unrecoverable US tax, 30% on dividends, that you completely avoid if you hold the same underlying assets in equivalent non-US domiciled ETFs. Additionally, if you hold more than $60k in aggregate in 'US situs' assets -- and VXUS is 'US situs' -- you risk loss to US estate tax of between 26-40% of assets above that $60k limit. Any individual US shares you hold (employer granted stocks, Disney, etc) all contribute to that $60k.

Where investment funds are yet to be decided, for example REITS, for the same reasons as above you should avoid using US domiciled ETFs and stick to non-US domiciled ones.

Full details in the wiki:

Nonresident alien taxation - Bogleheads
Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
Thank you TedSwipet,
I am a UK citizen and resident of Singapore, I take your point on non-US domiciled index etfs.
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

jg12345 wrote: Thu Jul 15, 2021 8:50 am Hi OP
Since it is your first post, welcome, and I suggest to give a good read to boglewiki and to an amazing guide prepared by the Barhain chapter.

Some pointers:
1) The portfolio is quite diversified, although for simplicity you may just want to substitute literally everything (or only the stock part) with a single Vanguard FTSE all-world acc ETF. I wonder whether your commissions for rebalancing all these, and with a low-mid 6 digit portfolio, start to get too high. One etf, simpler, less risk of messing up weights/rebalancing, maybe less costs.

2) Berkshire Hathaway is a single stock, despite being a conglomerate and investment company. Hence you're investing 8% in single stocks, not 5%. It seems a bit much. Get it to 0?

3) You may want to get rid of commodities / REITs and just use stocks.

4) 100% stocks at your age + 8% in single stocks + commodities/reits seems risky to me, but your appetite to risk is obviously unknown to anyone here. Just wanted to note that.

Best of luck!
Thank you for the welcome jg12345,
After reading the advice here I will be moving my investments into VWRA. 35% of my retirement income will be from fixed income sources from government schemes and rental property, so the investment in stocks is 75%. Sorry, I should have stated that in my original port.

Thanks for the advice on the Barhain chapter, I downloaded and read thier excellent pdf.
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

oken wrote: Thu Jul 15, 2021 5:38 pm Welcome!

56 is an interesting age in Singapore. Congrats on the milestone.
Your Retirement Account has been set up. You can withdraw from CPF, but payouts have yet to come (until 65-70) and you have yet to choose which payout plan. You also have the option of topping up your Retirement account even more over the years.

Have you settled on your plan for CPF life? Can we assume that your "low to mid six figures" does not include whatever is in your RA? If not, that might be the first thing you what to think about for your money. CPF life is generally a pretty good hedge against longevity risk and the Escalating Plan also helps hedge against inflation.

As for the portfolio itself, 100% stock for me just means VWRA and chill. =D
But since you've decided on 100% stock, I'm guessing CPF plays the bond portion of your plans?
Hi Oken,
I became a Singapore PR last month so I'm trying to educate myself on how CPF works. I think taking out money from my portfoilo and putting that into the CFP Retirement Account seems to be a good move. I will be moving the remainder of my non-employee funds into VWRA.
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

MoRS76 wrote: Fri Jul 16, 2021 6:36 am
oken wrote: Thu Jul 15, 2021 5:38 pm Welcome!

56 is an interesting age in Singapore. Congrats on the milestone.
Your Retirement Account has been set up. You can withdraw from CPF, but payouts have yet to come (until 65-70) and you have yet to choose which payout plan. You also have the option of topping up your Retirement account even more over the years.

Have you settled on your plan for CPF life? Can we assume that your "low to mid six figures" does not include whatever is in your RA? If not, that might be the first thing you what to think about for your money. CPF life is generally a pretty good hedge against longevity risk and the Escalating Plan also helps hedge against inflation.

As for the portfolio itself, 100% stock for me just means VWRA and chill. =D
But since you've decided on 100% stock, I'm guessing CPF plays the bond portion of your plans?
My 2 cents…

+1 to VWRA as a single diversified global index. You can allocate 5-10% to a global small caps index if you want more growth/risk.

37% in stock grants from a single company is too concentrated for my taste. Recommend 20% max and move rest to VWRA. You may lose extra growth but you’re adding more protection especially if you’re nearing your retirement time frame.
Thanks MoRS76,
I'm looking into a global small caps index ucits etf. Is there one you would recommend?
Topic Author
soloraj
Posts: 9
Joined: Sun Jul 04, 2021 5:55 am

Re: My Portfolio: seeking advice.

Post by soloraj »

muffins14 wrote: Fri Jul 16, 2021 7:00 am I’m surprised so many readers find a portfolio with 37% in employer stock to be well diversified. Typically most recommend no more than 10%, so the advice would be to sell your shares down to that level over a reasonable time frame
Thanks muffins14,
The growth prospects are so strong for my employer's stock that I'm ok with the concentration risk for a few more years and then may sell down.
oken
Posts: 219
Joined: Thu Oct 10, 2019 7:00 pm

Re: My Portfolio: seeking advice.

Post by oken »

soloraj wrote: Sun Jul 18, 2021 6:18 am Hi Oken,
I became a Singapore PR last month so I'm trying to educate myself on how CPF works. I think taking out money from my portfoilo and putting that into the CFP Retirement Account seems to be a good move. I will be moving the remainder of my non-employee funds into VWRA.
Welcome to Singapore.

The short summary is that CPF creates a Retirement Account when we turn 55, we put in a certain amount of money in it, and then anytime from 65-70, we can choose for it to start paying out a regular income for us.

This website might be a good start.
https://blog.moneysmart.sg/budgeting/cp ... nimum-sum/

You can use this website to estimate the payout you will get when you want to start payouts. (Between 65-70)
https://www.cpf.gov.sg/eSvc/Web/Schemes ... atorInputs
jg12345
Posts: 421
Joined: Fri Dec 11, 2020 12:03 pm

Re: My Portfolio: seeking advice.

Post by jg12345 »

muffins14 wrote: Fri Jul 16, 2021 7:00 am I’m surprised so many readers find a portfolio with 37% in employer stock to be well diversified. Typically most recommend no more than 10%, so the advice would be to sell your shares down to that level over a reasonable time frame
You're rightly surprised... I did not notice it so I did not comment [facepalm]

+1 to all those who suggested to move a large chunk or the entirety of that employer stock to VWRA. I do understand you believe "growth prospects are good", but I think a fair warning should be given: the risk of a single stock appears too high for someone your age.
MoRS76
Posts: 15
Joined: Wed Nov 13, 2019 4:35 am

Re: My Portfolio: seeking advice.

Post by MoRS76 »

soloraj wrote: Sun Jul 18, 2021 9:53 am
MoRS76 wrote: Fri Jul 16, 2021 6:36 am
oken wrote: Thu Jul 15, 2021 5:38 pm Welcome!

56 is an interesting age in Singapore. Congrats on the milestone.
Your Retirement Account has been set up. You can withdraw from CPF, but payouts have yet to come (until 65-70) and you have yet to choose which payout plan. You also have the option of topping up your Retirement account even more over the years.

Have you settled on your plan for CPF life? Can we assume that your "low to mid six figures" does not include whatever is in your RA? If not, that might be the first thing you what to think about for your money. CPF life is generally a pretty good hedge against longevity risk and the Escalating Plan also helps hedge against inflation.

As for the portfolio itself, 100% stock for me just means VWRA and chill. =D
But since you've decided on 100% stock, I'm guessing CPF plays the bond portion of your plans?
My 2 cents…

+1 to VWRA as a single diversified global index. You can allocate 5-10% to a global small caps index if you want more growth/risk.

37% in stock grants from a single company is too concentrated for my taste. Recommend 20% max and move rest to VWRA. You may lose extra growth but you’re adding more protection especially if you’re nearing your retirement time frame.
Thanks MoRS76,
I'm looking into a global small caps index ucits etf. Is there one you would recommend?

I use WSML but I’ve been given advice that combining it with VWRA results in a bit of overlap at the bottom end between FTSE All World (0-90/95% investable universe) and MSCI World Small Cap (85-99%). But I’m not too bothered by it.
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