Archives for category: Everything under the sun

This week was a tough week at work. I’ve come to realise that I have zero aptitude and desire for some of the tasks required of me. More than that, I realise that at my age and stage in life, what I really want is a break and the space to pursue my interests. The last thing I need are deadlines for tasks that bore me.

The countdown has begun.

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Trickle me, Elmo
(Klement on Investing)

Next time anyone mentions “trickle-down economics”, please show them this.

Is the 60/40 Portfolio Still Relevant?
(Enterprising Investor)

Not sure if the post had a conclusion but the money shot from the piece is (emphasis mine):

To draw further conclusions about the utility of the 60/40 portfolio versus the 80/20 or any other allocation strategy requires further research. Indeed, our colleagues are in the midst of conducting it. But as our analysis shows, a portfolio redeemed at year-end 2021 would have outperformed the same portfolio redeemed at year-end 2022. This is a good reminder of the risk of end-point bias in any time series analysis.

With any rate of return figures, it helps to remember that choosing a single time period to demonstrate returns is a sign of poor research.

What Makes You Happy
(Collaborative Fund)

There’s wisdom to this piece that I understand but struggle to practice in everyday life. May you reach there sooner than me.

1Q23 has come and gone and what a quarter it’s been. Markets started off the year strong, riding the momentum that started towards the end of last year with China’s reopening. Then, the fallout from a run on SVB seemed like it would cause a wider banking crisis with Credit Suisse becoming a casualty of the fallout. Fortunately, things seem to have calmed down somewhat although many people are speculating that the next shoe to drop will come from the weakness in Commercial Real Estate.

Whatever happens, may the odds be in your favour.

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How to Build Generational Wealth [All You Need to Know]
(Of Dollars and Data)

Nick Magiulli provides a great overview and breaks down the steps needed to build generational wealth. Based on my own reading and observation, he’s got the points mostly right. I would add that the crucial step is to ringfence the wealth from the members of future generations that are likely to squander the wealth – that is, even if the growth rate of future generations grows faster than the growth rate of the family wealth, the family wealth can be protected if the less productive members get a minimal or inconsequential share of the wealth. Personally, I wouldn’t pass down any substantial amount of money or control to anyone in the family if they haven’t reached a certain age e.g. 40 years old because by then, enough time would have passed to determine if they have the character capable of handling that amount of responsibility.

An Unconventional Guide to Happiness
(Mark Manson)

Ok, Mark Manson can really write.

Accounting-Fraud Indicator Signals Coming Economic Trouble


On a more serious note, it’s a common narrative that when economic conditions become more challenging, companies start getting more creative with their accounting in order to meet quarterly expectations. I don’t believe the incentives for this sort of behaviour have changed.


Lionel is also a very good writer. The view on strategy by Roger Martin cited in the post is a very enlightening.

A boost to productivity growth from AI?
(Klement on Investing)

Time for white-collar workers to embrace the inevitable.
John Maynard Keynes’ vision of the future is here.

Following the downfall of Credit Suisse, markets seem to be fearing a contagion among European banks. Deutsche Bank seems to be the poster boy for this new wave of contagion and I think news in the coming week will be all about whether the ECB manages to contain this wave of negative sentiment or whether we’ll see another wave in this banking crisis.

Early in the year, I was in the camp that the hike in interest rates could cause instability in some markets but I never thought that it would be in the banking sector given how much more capitalised banks are following the GFC. I honestly thought it would be in commercial real estate (especially the office segment) because of how work-from-home has become a fixture of post-covid life. If the banking sector is already reeling from this recent turmoil and the commercial real estate sector takes a hit, things could get ugly.

Having said all this, the next few years could be one of the rare times where DCA-ing into the market will outperform lump-sum investing. If you’re a young investor getting started today, you couldn’t pick a better time.

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‘Gerbil banking’ preceded the Great Depression. We’re seeing it again today

Was this the genesis of the Post Office offering banking services? I’ve always wondered why Japan’s Postal service had such a huge banking arm and why we have Post Office Savings Bank (POSB) in Singapore. Maybe this origin story in the US explains it.

Strategic thinking matters
(Klement on Investing)

The game described in the article is one that I’ve read about before. In fact, they used the very same setup in one of the games in season 2 of Alice in Borderland on Netflix. Maybe it’s a good filter when hiring traders.

Why your financial conditions index sucks

The money shot from the post is:

In any case, because a financial conditions index has no natural unit, it can’t really be compared over long periods – as Catherine Mann points out, there’s no absolute answer to whether conditions are “loose” or “tight”, just a sense that if the line is going up they’re getting tighter and if they’re going down they’re getting looser. This means that the FCI, however cleverly constructed, isn’t giving more information than you could get by looking at a chart of share prices (with maybe a fleeting glance at a chart of bond spreads). 

Aha, maybe it’s time to throw some of these things away.

Where People Find Meaning in Life: revised in 4 slides

Someone posted a visualisation of a survey on areas in life that people in different countries find meanginful. I found this interesting for a few reasons:

  1. Family, Children, and Community relations rank near the top across all nationalities. This seems to echo the finding from The Good Life which is a book based on a long-running study of what matters in life to people.
  2. The results for Singapore (see 2nd picture in the link) are arguably quite different from every other country in the survey in that even in the top-ranked category “Family and Children”, only 29% of those surveyed answered positively on whether they found meaning in life from this category.

In short, maybe whatever studies you read about that survey predominantly White Anglo-Saxon People (WASPs) don’t really apply to this part of the world after all.

The rise of the Finfluencer is something that I wanted to write about for some time so it’s timely that TodayOnline has a nice article on this trend.

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What is a Finfluencer?

The word ‘Finfluencer’ is really just a portmanteau of the words “finance/financial” and “influencer”. So you guessed it, a ‘finfluencer’ is just an influencer or online personality whose content revolves around finance. In a way, I guess this is the natural evolution of financial content on the internet – from financial blogs to finance YouTube channels and Fintwits to Finance on TikTok.

Don’t get me wrong. There are some good ones out there and these guys/girls mostly have a professional training such as a CFA Charter or professional background as an investor or financial advisor (the non-Singaporean sort) but there are many of them who come from other professions such as real estate, engineering or computer science.

The rise of the “anyone-can-do-finance finfluencer” was really fueled by the strong rebound in markets in 2020 where it seemed like everyone was making easy money from taking concentrated positions in stocks where prices and fundamentals were grossly mismatched. The interesting thing is that many of these ‘Finfluencers’ had never even invested a dollar before the bull (or bubble?) of 2020 and therefore, many of them had never experienced a full market cycle.

I say this with some certainty because of the few that I’ve watched on YouTube for entertainment research, almost all of them seem to think that market returns in 2022 were bad. I guess they weren’t completely wrong because if you’ve been in high-beta, “growth” stocks (I put “growth” in inverted commas because growth has been used far too loosely to describe some of these companies) then the pain actually started in 2021 and returns could be anywhere from -60 to -90%. The granddaddy of names popular with such “Finfluencers” is Tesla which was down some 60% at the end of 2022.

Some of these “Finfluencers” try to educate people on personal finance which mostly comprises money-saving tips, budgeting, credit card hacks, and so on. I guess these are useful to some extent but I’ve not seen one with a complete system of helping people with their finances.

What’s the problem with Finfluencers?

The more egregious offenders teach basic financial knowledge but in my opinion, most do so at the cost of oversimplifying concepts to the extent that blindly following these teachings could be harmful.

Take, for example, the 4% rule that many of these people like to throw around. The version of the 4% rule that many people like to tout basically says that if you withdraw 4% of your portfolio every year, you won’t have to worry about running out of money to spend.

A majority of these Finfluencers fail to point out that the 4% rule which originated from a paper done by William Bengen, is based on a portfolio of 50% intermediate-term bonds and 50% equities, and (conservatively) for a withdrawal of 30 years.* Unfortunately, that’s where the good news ends. Bengen’s paper was written in 1994 when interest rates were a lot higher than in the last 20 years.

Also, the 4% rule was based on US stocks and bonds. If your investments are in other markets or asset classes substantially different from that study, then you simply cannot use the results of that study. There are others who have updated their study of the efficacy of the 4% rule (see BigERN) and whether the 4% Safe Withdrawal Rates apply to international stocks.

I don’t know many Finfluencers, especially local ones, that have pointed out the same thing that I have with regard to the 4% Rule. The 4% rule is just an example and there is more insidious advice that have been peddled – such as using crypto brokers that have gone bankrupt, going all-in on a single overvalued stock and so on.

The problem with these Finfluencers is that there is an inherent conflict of interest. Many of them exist for the sake of generating clout and monetising that clout. The monetisation could be through advertising or referral fees. In short, their aim is to generate money through getting your attention and nothing gets your attention better than big misleading headlines like “Here’s how I 100x my investments!” or “How I used XYZ to get returns of up to 20%”.

Remember, these guys are not in the education business, there are in the entertainment business.^

*In Bengen’s paper, he found that the portfolio never ran out of money before 33 years and in many cases, the portfolio lasted up to 50 years.

^Similarly, your financial advisor/relationship manager that earns commissions through sales of products is in the sales business. They may say that their interests are aligned because you’ll only reccomend more clients to them if they do well for you but you really can’t tell if the investment product they sold you will work out or not (odds are, it won’t!) until many years later. Meanwhile, these guys get paid a huge commission up front and in a few years time, these guys will probably have moved on to something else or to some other client.

It’s been close to about three months since I started my new job and I don’t think I’ve ever felt this level of stress. This isn’t to say that stress is bad. In some instances, stress is good. It really depends on how you handle it.

But first, let’s rewind.

Why I left my previous job

For the last 10-plus years, I was a lecturer at a local polytechnic. I taught economics, some corporate finance, and some modules of lesser importance. Teaching was something that I did relatively well, the bosses liked me, and before I left, I was overseeing our small team of economics lecturers.

I really like teaching. The nice thing that happens when you teach is that you really find out if you truly understand something. If you don’t do a good job at it, it’s likely that the person learning from you will be left confused. However, the more you help people clear the confusion, the deeper your understanding of the subject or concept becomes as well.

I never understood this as a student but it’s all so clear now. Maybe that’s why some of the smartest people I’ve met have also been some of the most generous and patient when it comes to sharing what they know. Deep down, they’ve understood that teaching someone something is not a zero-sum game. The teacher learns from teaching just as much as the student.

I also had the good fortune to work with some great colleagues and through the work, I made some good friends. However, my job eventually included managing people who were difficult and resistant to change, and teaching subjects I thought were superficial, to say the least. With every organisation, it’s inevitable that there are some processes that could be improved but it’s also difficult to make drastic changes because there are so many moving parts.

More importantly, I knew that if I stayed at the same job for another year or two, I would never be able to leave. After all, who would hire someone who had mostly only worked in education? I may have the requisite knowledge but knowledge not applied is like a knife that has gotten rusty with age.

By some stroke of luck, I found a role in another government agency that was about investment management and so I took that leap of faith. It’s also good fortune that they wanted me instead of someone with more industry experience. I’m not sure why but my guess is that the private sector pays a lot better for people with the requisite industry experience.

Two-plus months into my new job

As I write this, I’m about two and a half months into my new job and it’s been rough.

Yes, I’m a CFA Charterholder but still, the learning curve has been steep. Learning to adapt to a new organisation, workplace, team, and demands of the job in a completely new field is like going from playing pro basketball to becoming a marathon runner. Even if you’re familiar with different parts of marathon running (e.g. the training methods, who the best runners are, race timings and so on), it doesn’t really help if you’ve never actually run a marathon before. Now imagine that but you’re not just running a marathon but a competitive marathon.

That’s essentially what I’m facing right now.

Learning the ins and outs of a new industry is one thing, but getting used to communicating the government way is a whole other ball game. But I came to learn about how institutional investors actually do their day-to-day work so I have no right to complain.

I also have helpful bosses and colleagues so that is a plus.

Opportunity within crisis

The thing with life is that how you respond to things matters a lot more than what life throws at you.

In that way, I may have matured a little because at my previous workplace, whenever unpleasant things out of our control happen, I ended up blaming the system or putting it down to people who had no motivation to do better. Recently, I’ve been turning (back) to meditation and mindfulness in order to help me cope with things and I’ve been getting a lot of clarity on how I feel about the events that happen.

This isn’t to say that I’ve suddenly gained mastery over my thoughts and emotions and I ride every event, pleasant or unpleasant like a surfer riding a wave. I’ve still found myself hit by waves of anxiety or existential dread whenever the stress builds up but I’ve been able to step back for a moment and acknowledge how I’m feeling. It’s somewhat like having an out-of-body experience where I can see that I’m feeling anxious about something, and in my anxiety, I’ve reflexively started having some thoughts or taken some actions to distract myself from the unpleasant nature of the task that awaits me.

I also started to change some habits. For starters, I’ve switched to having my coffee without milk. I’ve been joking that it’s because of inflation and while there’s some truth to that, it’s mostly because I drink a lot of coffee and in recent years, I felt a little bloated after having coffee with milk.

This doesn’t guarantee that I’ll do well at my new job but I think I’m developing some good skills to handle more of whatever life throws at me.

Be thankful

I’m thankful that I have this chance to experience and learn new things. I’m also thankful that my wife has been really supportive of this move so far. She’s had to buy dinner back several times or feed our cat masters while I had to work through the evening to get work done. I can imagine how much tougher things would be if I had to juggle this adjustment while there was chaos in my personal life so for that, I am thankful.

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It’s that time once more to look back on what has passed and to look ahead at what’s to come. 2022 has been a year of huge change not just for markets but for me on a personal level. I hope this post doesn’t turn into an incessant ramble. If it does, I apologise in advance.

Goodbye Bull, Hello Bear

The first obvious thing that happened this year is that markets turned from being great for all the bulls to the first real bear for many Gen Z investors. The S&P 500 peaked in December 2021 at around 4800 and has been on a downtrend ever since. For Gen Zs who were mainly invested (or should I say speculating?) in pseudo-tech (please don’t be in the camp that thinks, Tesla, Peleton, or Doordash are tech stocks), meme stocks, crypto, or TSLA, the pain is particularly acute. The Nasdaq composite peaked in November 2021 and is roughly down about 30% since then. Growth-at-all-cost stocks are down even more. Using ARKK as a proxy, these sorts of names peaked in early 2021 and are now down roughly 70% or so.

This is what I said about ARK Invest in March 2021 and I guess 2022 is when I take my victory lap

So rates have started rising and “markets” are spooked. I say “markets” because honestly it’s mainly in the high flying names of last year (e.g. TSLA, the ARK ETFs etc.) that have been hit. But honestly, even if those names get hit for a total drawdown of 50%, it’s going to be hard to say if it’s cheap to buy.

Best Things I’ve Read All Week (7 March 2021)

The main cause of mayhem in the markets was the series of Fed rate hikes that started in late 2021. Since then, the Fed Funds Rate has been hiked to around 4.5% (upper bound) and the Fed’s own expectation is that they will stop hiking when the rate reaches about 5%. It wasn’t so much about how much the Fed hiked rates but also how quickly they did so. At the same time, the Fed has also begun reducing its balance sheet which is adding to another source of tightening in the monetary system.

Where the Fed hikes rate to is now a foregone conclusion. The question on everyone’s minds is how long will they stay there?

The obvious impact on markets is the sort of thing you learn in a finance 101 class. As the risk-free rate increases, so does the discount rate on future cashflows for all sorts of investments and projects. This reduces the present value of future cash flows and has a greater impact on cashflows that are more distant in the future.

This basically explains why the broader markets have fallen anywhere from 20-30%. As to whether markets will fall some more or stage a sustained rebound from here, it really all depends on whether the economy achieves that so-called soft landing that Fed is hoping for. Therefore, 2023 will be all about how bad the economy gets – will growth and employment slow down drastically, or will many companies crash, burn, and therefore cause mass layoffs to become a feature that extends beyond the tech sector?

Crypto is tested

This will also go down as the year when Crypto, as an asset class, has its Global Financial Crisis moment.

From the failure of Luna and Terra, Three Arrows Capital to Celsius and of course, FTX. This will be the year that investors in crypto realise that no matter how much they hide behind the technology, the problems that they face in crypto as an asset class are pretty much the same problems that have existed in finance forever.

Alongside the failures of those companies, their high-profile founders Do Kwon, Zhu Su, Alex Mashinsky, and SBF have not basically been outed as either frauds or really bad businesspeople. The funny thing is, in finance, fraud is a feature of every hot new thing, not a bug.

Personally, I don’t think crypto is going away but this year has made it much harder for crypto as a mainstay asset class for mainstream investors. However, if you’re still bullish on crypto, you also have to recognise that after this year, you will live with more regulation or less liquidity. Neither of which makes for the sort of rocketship-like gains unless you can time the bottom.

Revenge of Inflation

For the first time in a generation, inflation is once again a thing.

First, a mea culpa. In October 2021, I commented on a Today piece that was done on inflation.

“I’m not sure much of the inflation we’re seeing today is because of an increase in the money supply. Furthermore, isn’t the velocity of money being a bigger factor for inflation the more commonly accepted theory these days? Increases in money supply leading to inflation seem to be a very 70s thing.”

Best Things I’ve Read All Week (31 Oct ’21)

As we now know, inflation came back in a big way. However, this wasn’t completely due to loose monetary policy but also in part due to the fiscal handouts to alleviate the damage caused by Covid and the war in Ukraine. The good news is that inflation seems to have peaked but the bad news is that many market watchers seem to think that it won’t come down to the Fed’s target of 2% that soon (for example, see Howard Marks’ latest memo “Sea Change“). This seems to be the likely conclusion given the tensions between the US and China that have led to onshoring or friend-shoring of supply chains and the other ongoing geopolitical tensions around the globe.

The good news for retail investors is that something always can be done. One, yields on cash or near-cash instruments have increased dramatically. In Singapore, this caused T-bills to be a thing, and bank are now offering interest rates on savings accounts that are higher than even the CPF SA. This is a sharp reversal of the pattern seen over the past decade or more where the CPF SA’s yield of up to 5% was seen as an acceptable bargain for keeping your money locked up until you reach the age where you’re allowed to then withdraw the monies from your CPF.

The question on everyone’s mind now is: how long will this last? I don’t profess to know but the consensus seems to be along the lines outlined above.

Working in finance

This year, I left the organisation and job that I had been doing for the past 10 and a half years. It wasn’t an easy decision given how comfortable I was in the role and I’m nearing the age where you don’t really start learning new tricks. Most people my age would have gained some level of mastery in their professional life and would be close to or entering the peak earnings phase of their careers. In my case, I was due to take over from my boss so in fact, career progression is something that was on the cards.

If that’s the case, then why leave?

The reason is that I couldn’t see myself doing my boss’s role or my current role for the rest of my life. I had also become jaded with certain aspects of the job and I guess that given my age, if I didn’t try to move now, then it would be never.

At the same time, I didn’t want to leave my job just because there was some dissatisfaction with it. The work environment and the colleagues whom I worked with were (mostly) good. So it was by some stroke of good fortune that I was offered a role that involved investments.

I’m two months into the job and frankly, I’m not sure how good I’ll be at this. What I can say is that I’m grateful for the opportunity to experience and learn what an investment professional does on a day-to-day basis.


This year has been an exceptionally brutal one for portfolios. While the drop in equity and bond prices hasn’t been particularly bad, the problem is that both major asset classes fell by double digits. This means that what is traditionally considered a diversified portfolio (e.g. a 60/40 stock, bond portfolio) has taken a hit when investors typically expect bonds to buffer against falls in stock prices. In short, bonds didn’t deliver the protection it’s supposed to have against a fall in equities.

Fortunately for me, I’ve been accumulating cash all through the year. The other fortunate thing is that I never participated in the mania in US markets so while my existing positions accumulated over the years took a slight hit from an increase in discount rates, this was relatively small compared to the buffer provided by a sizable cash position and large holdings in the STI.

In a year where the S&P 500 is down almost 20% and the STI is down 4.61% (before dividends), my portfolio[1] is only down 2.84% (without dividends) and 1.27% (with dividends). All in all, I would say it’s roughly in line with the total returns of the STI. More importantly, the numbers presented are investing returns which is just an indicator of my (lack of) skill in investing.

A layperson would probably care more about the size of the portfolio and this would include all monies added to the pot. I made a tremendous effort to accumulate more cash in the portfolio and I don’t know how I did it but this year will go down on record as the year where I managed to add around 30% of my take-home pay to the portfolio. This helped to increase the total size of the portfolio by 7.39%.

Which would you rather have? A -1.27% returns on investment or a +7.39% increase in your portfolio size because you deferred some present consumption?

This marks my 15th year in the markets. I guess with this current cycle, you could say I’ve lived through 3 major bears now (’08-09, ’20, ’22-?).

I can’t say if the next decade will be like the last one or if will it become a secular bear that goes sideways for a while but I know that my portfolio has increased from a tiny 5-figure portfolio to a more than respectable 6-figure one.

And this isn’t because I’m some investing genius. In fact, if I was more aggressively invested, it would be a 7-figure portfolio by now. The secret is that I simply saved money, added to the portfolio, and didn’t trade in and out of positions. Based on pure investment returns, my portfolio has grown 1.93x over the last 11 years while the actual portfolio size (including cash added) has grown 5.89x. Roughly speaking, investment returns were 6.16% p.a. while total portfolio size returns were 17.49% p.a.

My experience just shows that if you’re a young investor with little capital, the best thing you can do for yourself is to continue saving, investing, and letting the gains compound. For example, adding $10,000 per year to a $100,000 portfolio increases its size by 10% while adding the same amount to a million-dollar portfolio only increases it by 1%. When your portfolio is smaller, it’s far easier to negate bad returns simply by adding more cash.

As demonstrated, adding cash does little to move the needle on a bigger-sized portfolio but I will argue that for the vast majority of people, this won’t apply. After all, how many people reading this (both in Singapore and abroad) already have millions of dollars in their portfolios?

If you want gains, just do consistent work.

[1] My portfolio only includes stocks and cash that are in my investment accounts. I don’t include cash reserved for everyday spending, monies in my CPF account, or home equity.


Finally, my personal life has been great. Despite catching covid sometime during Jul/Aug, my wife and I have been relatively healthy. I’m really thankful for my wife. We lead a relatively simple life compared to many of our peers – we watch way too many K-dramas, take walks along the park near our place, spoil our cats, and the most difficult decisions we have tend to revolve around where we should go to dinner.

Compared to many folks, we have been very fortunate.

We’ve also welcomed a long-tailed black friend that we saved from my parents’ place. And after we picked him up, we started seeing many signs that he was meant to come into our lives. Maybe it’s just confirmation bias or maybe it’s fate. Who knows?

Finally, looking forward

Following a brutal 2022 that has removed a lot of the excesses in financial markets, I am getting optimistic that investing steadily and consistently over the next 3-5 years in a broadly diversified portfolio will pay off in the longer run.

This year, I’m hoping to write more on financial literacy. I think it’s a topic that, despite the government’s best intentions[2], helps people lead better lives. Too many people fall into one of two categories. They either (a) fall prey to scams, frauds, or just bad financial advice or (b) become too afraid and conservative that the value of their savings erodes over time due to inflation.

Both categories of people are pitiful but at least for those who fall in (a), you could put it down to greed. For those who fall into category (b), it’s sad because it sounds like they are doing everything right – working and saving, only to end up finding it difficult to retire or they can only do so with some form of work, or end up feeling insecure about their finances without a job.

The good news is that this isn’t rocket science and so I hope to share what I know and combine that with a real-time case study of my own path to retirement.

I wish you all the best for 2023.

[2] I say this for a fact because at my previous job, some direction came at the top level for our students to complete some compulsory modules on financial literacy. I can’t say how successful these have been because I still witnessed many of my former students fall prey to the scams, frauds, and mania that surrounded Crypto, meme stocks, and NFTs. This just shows how difficult it is for you to learn something in class and then be aware enough of how it applies in the real world when the world is going crazy about something.

Did I jinx the Santa rally? Although markets in China and HK are rallying hard with zero-Covid becoming more a thing of past with each passing day. The Fed meets one more time in 2022 – next wed, 14 Dec (US time). Will that help or hurt? Only time will tell.

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I Collect Cashflows
(The Reformed Broker)

A timely reminder in both good and bad times that in the long run, the market is a weighing machine. And what the machine weighs is really the cashflows that the investment throws off. I was looking at the performance of the STI over the last five years and as terrible as it has been (slightly negative on an annualised basis), you would have been up about 4% p.a. if you include all re-invested dividends.

Dollar trends and regimes
(Disciplined Systematic Global Macro Views)

Basically, if the dollar continues to get stronger for longer… something, somewhere in the global economy will break.

My Favorite Investment Writing of 2022
(Of Dollars and Data)

A few nice links in that list – notably the ones by Housel, Eiffert, and Dickson. Kyith from Investment Moats also shared about the one from Katie which basically is a less scary way of thinking about how much assets you need to generate a certain level of monthly spending. Could be useful from a Behavioural Investing standpoint.

OCBC Financial Wellness Index 2022

The full report of that survey every personal finance person in Singapore is talking about. Not much surprise here but these are the more interesting stats that stood out for me

  • 48% of respondents (up from 43%) said that they gambled more than they can afford to lose
  • 38% of those earning $10K or more per month (highest proportion across all income categories) have some form of unsecured debt (i.e. credit card, personal line of credit, education loan, renovation loan)
  • 40% of respondents say they have trouble paying off their housing loan on time
    note: The survey also notes that at the time of the survey, the benchmark rate was at least a full percentage point lower than the current rate
  • 34% of seniors (aged 55-65) say they speculate excessively (mostly in futures, structured products, and currency trading)

The above points are wild. Especially the one about speculating seniors.

Will there be a Santa rally? Or is this the next leg down? Only time will tell.

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Is the 60/40 Portfolio Dead?
(Peter Lazaroff)

I didn’t listen to the podcast episode but there’s plenty enough in the notes to make the point. I also don’t think it’s the end of something like the 60/40 portfolio. If anything, bonds now have higher expected nominal returns going forward. And there’s also the Time Magazine cover kind of effect going on right? When everyone thinks it’s the end of something in the financial markets, that’s when it usually comes roaring back.

Except for FTX of course. No coming back for SBF.

Overcome the Comfort Crisis
(The Art of Manliness podcast)

Now that I’ve started a new job, I’ve also begun to take a lot more public transport. There’s nothing better than to listen to podcasts on the train and this episode of the AOM podcast resonated with me.

I’m not going to lie – the transition to this new job and role has been brutal mainly because I’ve never been in this industry and the amount of protocol and processes to follow in my new role is massive. So it’s timely that AOM put out a re-run of this episode that gave me some perspective that discomfort is not a bad thing.

Now, I’m comfortably uncomfortable.

Annie Duke Thinks You Should Quit
(People I (mostly) Admire)

Steve Levitt interviews former pro poker player turned cognitive scientist, Annie Duke. Great episode and provides a great framework for deciding when to quit anything.

Photo by olia danilevich on

Gosh, time flies. Many things have changed but some things still remain.

For one, Covid is still with us. For the everyday person, we’ve moved from Covid to the delta variant and now, to Omicron. We’ve done as much as we can as far as protection is concerned. Most people are already vaccinated and boosted. We’ve still kept our masks on and limitations on group sizes and certain activities (anyone remembers what clubs and KTVs are anymore?) are still a thing.

I hope 2022 will be the year where we move another step closer to the way things used to be. Maybe we’ll still have to keep our masks on (hopefully, we’ll move to masks on when indoors only) for a while more but at least we should be able to start to move back towards having the government take a more hands-off approach to things.

The markets

Things have gone splendidly well for the markets this year. What was it? 70 new highs for the S&P500? I don’t know if things will go as well next year but let’s hope they will. I haven’t positioned my portfolio for aggressive growth but I’m not positioned for a crash either.

However, the three scheduled rate hikes coming in 2022 should provide some pause. Will it crash the markets? I don’t think so. The market now is a completely different beast from the 2000s or in the lead-up to the Global Financial Crisis.

If anything, 2021 has actually taken some steam out of the more speculative areas of the market. Take Ark Invest for example. 2021 has been Ark Invest’s flagship fund worst year since inception with the fund falling 20%. With the coming rate hikes, it’s going to be even less attractive to be in the more speculative areas of the market.

What about the broader market like the S&P500? Some people argue that the S&P 500 is becoming increasingly concentrated in the big tech giants like Apple, Alphabet, and Microsoft. They aren’t wrong. However, those companies also account for the lion’s share of the profits in the S&P 500. (see the graph titled “Top 25 Firms” at this link)

Is that particularly speculative? I think not.

Personal Stuff

This year has been fairly quiet on the personal front. Life has been peaceful and while the delta variant made things suck for many people, I rather enjoyed the fact that Work-From-Home was the default for most of the year.

This was offset by the burdens that work placed on me this year. On top of the additional duties from a new appointment, I have been involved in one big project and was also asked to join a task force that involved some very senior people.

To be fair, no one does more work because they want to and the people I’m surrounded by are really smart people. The problem is when you’re a cog in a large machine and for whatever reason, someone far removed decides to make some changes and it cascades down. In fact, it would be a lot easier if we were dealing with machines because machines are a closed system.

The work itself isn’t difficult but it involves doing many little, annoying things. And I particularly hate doing annoying things. This is why my experience over the past year only further strengthened my resolve. I need to take my portfolio more seriously.

The good news is despite my relative inaction, the portfolio grew by 20-odd percent. However, it’s hit the limits of how fast it can grow even after constant contributions to the portfolio. Going forward, the portfolio will need to see more contribution from investment returns or growth will be minimal.

I’ve been looking into various portfolio strategies and coding little helper scripts that will help me manage my portfolio more effectively.

Next year, you’ll hear about how it’s turned out.

Hello 2022

So here’s my wishlist for 2022:

  • Markets will be neutral to bullish
  • Living with Covid will converge even further to Life before Covid
  • Less emails and MS Teams meetings
  • Good health and wealth for my loved ones

No matter what’s happened in 2021, I hope that 2022 will be good for you and your portfolio.

Looks like it’s still some way to go before we remove Covid-19 restrictions in Singapore.

Photo by Mikes Photos on

I Collect Cashflows
(The Reformed Broker)

Josh Brown takes the boomer investment model and wraps it up in Gen-Z crypto speak. Thoroughly hilarious.

Inflation Scares in an Uncharted Recovery
(IMF blog)

IMF is calling it. Let’s see if they’re right.

We forecast in our latest World Economic Outlook that higher inflation will likely continue in coming months before returning to pre-pandemic levels by mid-2022, though risks of an acceleration do remain.

Why Xi is screwing Evergrande
(Thoughts of a cynical investor)

The big question is whether screwing Evergrande is going to lead to a housing nuclear fallout in China?

Why Very Successful Civil Servants Favor Low Variability in their Career Outcomes
(Investment Moats)

I won’t profess to know the why but as a public servant, I can emphatically say that civil and public servants are indeed attracted to low variability. I think it’s in our nature.

The funny thing is that for the few who recognise that the job has such bond-like qualities, they tend to embrace higher volatility in their investments and they have done pretty well.

In dry California, some buy units that make water from air
(abc news)

Via Collaborative Fund.

Have we tried this in Singapore? Our humidity here is off the charts. Should make for a better source than California.