Tracking the Singapore Permanent Portfolio

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Our favourite investment portfolio for every Singaporean is getting more attention! Business Times senior correspondent, Teh Hooi Ling, wrote about it in Sunday Times.

She did a back test from 2003 with $1 million. In 2012, it grew to $2.04 million. This is an 8% average annual return. But this is not the best part. We all know that stock market gives you close to double digit returns if you hold for a long period of time. But retail investors always make investment decisions based on greed and fear whereby they buy in a bull run and sell in a bear run. The Permanent Portfolio is able to assuage your fear as the drawdown for this portfolio is incredibly low. Hence you will not make the financial mistake of selling low.

Based on her chart, I estimated the portfolio merely dropped from $1.5m to $1.4m during the 2008 financial crisis while the stock market dropped by 50%. With such stability and low volatility, every investor is able to sleep sound at night regardless how the financial markets are performing.

BFP has also started tracking the performance of the Singapore Permanent Portfolio. We have also included a Google Doc which you can download and track your own Permanent Portfolio (it is free of course!). Unlike Hooi Ling, we won’t be so ambitious to start with $1m. We are going to start with $100k from the beginning of 2012. We will forward test this portfolio to show you that it works well for retail investors who are risk averse and have low tolerance for drawdowns. Most importantly, you do not need a lot of knowledge, time and effort to construct and balance this portfolio going forward.

The Singapore Permanent Portfolio Performance page will be updated at the end of each month. Join us on this journey and we hope you will consider adopting this portfolio for yourself.

  • Is there a good time or better time to start the permanent portfolio by first buying the STI ETF ? Now STI is at all time high

    • You can start anytime by buying all the assets at one go. Do not time the market when setting up PP. At any one time, there will always be an ‘expensive’ asset.

  • Hi Alvin,

    I am a Singaporean living in Singapore. I recently picked up your book “The Singapore Permanent Portfolio” and have completed reading it. Thank you for providing such an awesome resource for Singaporeans. I have a question I couldn’t find in FAQs which I would like to clarify.

    It would be wonderful if you could share your advice on how would one add new money every month from our monthly salary?

    Do one add monthly savings to the cash component of the Permanent portfolio, and rebalance it once the cash component reaches 35%.

    Is there a better way going about it since the overall expense will be higher now with more frequent rebalancing?

    Thank you.

    SG PP

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