Portfolio advice - Indian nationals (place of retirement undecided)

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Topic Author
boglemonster_123
Posts: 2
Joined: Fri Sep 03, 2021 12:44 am

Portfolio advice - Indian nationals (place of retirement undecided)

Post by boglemonster_123 »

Hello - after researching for some time and further to the helpful comments received from this community, below is the plan my spouse and I made for our portfolio. Would be grateful for your views on the same.

Age: 31 (both of us)
Loans / liabilities / debt: None
Location: Singapore (we earn salary in SGD)
Nationality: Indian (also we are not Singapore PRs)
Retirement location: Unknown (highly unlikely to be in Singapore)
Financial objective - FIRE at 40
FIRE number: 2.5 million (we have just started our investment journey and have investments of about 100k as of now)
Broker: IBKR Singapore

Current portfolio:
1) VWRA (90%) (reason - globally diversified index fund with relatively low expense ratio; hold this in USD)
2) AGGG (10%) (reason - globally diversified index fund with relatively low expense ratio; hold this in USD)

We plan to keep this for the next 5 years until we hit about 1.5 million. Thereafter, we plan to gradually increase the bond component of the portfolio (up to 30%-35%).

Grateful for your feedback on the plan. Thank you very much
Laurizas
Posts: 515
Joined: Mon Dec 31, 2018 3:44 am
Location: Lithuania

Re: Portfolio advice - Indian nationals (place of retirement undecided)

Post by Laurizas »

boglemonster_123 wrote: Sat Dec 04, 2021 12:18 am Grateful for your feedback on the plan.
Good plan!
Valuethinker
Posts: 48954
Joined: Fri May 11, 2007 11:07 am

Re: Portfolio advice - Indian nationals (place of retirement undecided)

Post by Valuethinker »

boglemonster_123 wrote: Sat Dec 04, 2021 12:18 am Hello - after researching for some time and further to the helpful comments received from this community, below is the plan my spouse and I made for our portfolio. Would be grateful for your views on the same.

Age: 31 (both of us)
Loans / liabilities / debt: None
Location: Singapore (we earn salary in SGD)
Nationality: Indian (also we are not Singapore PRs)
Retirement location: Unknown (highly unlikely to be in Singapore)
Financial objective - FIRE at 40
FIRE number: 2.5 million (we have just started our investment journey and have investments of about 100k as of now)
Broker: IBKR Singapore

Current portfolio:
1) VWRA (90%) (reason - globally diversified index fund with relatively low expense ratio; hold this in USD)
2) AGGG (10%) (reason - globally diversified index fund with relatively low expense ratio; hold this in USD)

We plan to keep this for the next 5 years until we hit about 1.5 million. Thereafter, we plan to gradually increase the bond component of the portfolio (up to 30%-35%).

Grateful for your feedback on the plan. Thank you very much
The plan looks fine.

However you do need to consider your risk tolerances. When your equity portfolio has dropped 50% in value -- as it no doubt will at some point -- how will you react? Will you be able to keep investing? What if market falls mean you have the same wealth in 5 years time as you do now?

(This is not idle speculation. Both 2000-03 and 2008-09 were pretty shattering for equity performance. As was March-April 2020 -- if vaccines had not emerged when they did, or if some of the geopolitical tensions the virus has unleashed ran further than they did do (leading to worse breakdowns in international cooperation) then we might be in quite a different place right now).

If you have a larger bond commitment it will provide the opportunity for rebalancing. Otherwise you just take the pain. For this reason I suggest people hold a minimum of 20% in fixed income assets.

Bear markets can be long and one does not realise one is in one until one looks back-- there's a heck of a lot of volatility on the way. I am thinking of 2000-10 or 1966-1980. Or Japan 1989 to present day.

10 years is a very short time horizon in stock market terms. Whereas in 30 years you will almost certainly be in good shape, in 10? It's unlikely equity returns in the next 10 years will match the last 10.

(The other part of FIRE is keeping a low cost base in retirement -- which as you say is hard to ascertain).
Topic Author
boglemonster_123
Posts: 2
Joined: Fri Sep 03, 2021 12:44 am

Re: Portfolio advice - Indian nationals (place of retirement undecided)

Post by boglemonster_123 »

Thank you. You advice is well-received.
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