Singapore Permanent Portfolio Update – May 14

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It has been a while since we update on the performance of the model Singapore Permanent Portfolio.

Between 3 Jan 12 and 31 May 14, the model Portfolio has averaged an annual return of 1.03%, or 3% cumulative return. This is unimpressive to many people. However, it is important to note that this model Permanent Portfolio has yet to carry out its first re-balancing. The Permanent Portfolio is a not a dividend portfolio but a capital gain portfolio. To make profits, the investor has to buy and sell the components in the portfolio. Hence, profits are only made in between two re-balancing and this model portfolio has yet to see one.

Most importantly, Permanent Portfolio promises a very low drawdown and during this 2 years and 5 months, the maximum drawdown was only -9.5%, despite the series of bad news: turmoil in Europe, drop in US credit rating (stocks dropped 20%), and the crash in gold prices. So far, the model portfolio has managed the downside risk well.

Permanent Portfolio vs its components

We should also compare the volatility between Permanent Portfolio and its components. STI ETF is the best performing component while Gold ETF is the worst.

Singapore Permanent Portfolio Components 31 May 14

Portfolio Weightage and Re-balancing

The amount of cash and value of stocks have risen and took up close to 30% of the portfolio. There should be opportunity to re-balance the portfolio if stocks continue to rise and hit the 35% mark, or if gold price drops and hit the 15% mark. I am eagerly anticipating for the first re-balancing to occur.

Singapore Permanent Portfolio Weightage 31 May 14

STI ETF Dollar Cost Averaging Performance

I will also take the opportunity to update on the STI ETF performance. If you have invested $500 per month since Jan 08, you would have made 6.9% per year. This is without any effort to pick stocks or time the market.

STI ETF SBP - 31 May 14

Passive investing has its merits – low effort with decent returns.

By the way, I am writing a book on Singapore Permanent Portfolio. Would you buy and read it?

  • On the book, yes. Given most Singaporeans close proximity and ties, would be good to include comparative permanent portfolios for other ASEAN countries like Indonesia/Malaysia/Thailand/etc.

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