Sunday, 12 November 2017

Money Management plus Method - I

My general guide for assets allocation in equity relative to STI:

ST index Tier% Equity holding %
above 3600 90 <10 td="">
3400 80 20
3200 7030
3000 60 40
2800 50 50
2600 40 60
2400 30 70
2200 20 80
2000 10 90
1800 10 90
below1600 10

This is an 'off-loading' concept - meaning that when the stock market gets overheated, you retrieve back part of your capital as war chest and wait for suitable opportunities, eg. when STI drops, to build your position again in equity.

(We can use in conjunction with Technical Analysis rather than blindly 'catching falling knife' when there is a market downturn.)


Here are a couple of methods of Asset Allocation:

  1. Strategic asset allocation calls for setting target allocations and then periodically re-balancing the portfolio back to those targets as investment returns skew the original asset allocation percentages. The concept is akin to a "buy and hold" strategy, rather than an active trading approach.
  2. Tactical asset allocation (TAA) is a dynamic investment strategy that actively adjusts a portfolio's asset allocation. The goal of a TAA strategy is to improve the risk-adjusted returns of passive management investing.
There are more, if you are interested... click here
or get your hands on 'The little book that saves your assets' by David M. Darst.

I discovered an interesting blog here which also briefly mentioned the concepts.

Now there's Money, there's Method. The only big obstacle to cross is Mind.


No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...