Focus Investing Vs Diversification Vs Indexing

Freak wrote:

phantasia55 wrote: Can i move the discussion abit to SGX focused Vs Global Diversification?

Personally, I do not invest a nickel in Singapore. I am working in Singapore. I already invest my most important capital (human capital) in Singapore. Hence, there no need for additional investment in Singapore.

Furthermore, I want to reduce the correlation between investment return and earned income. When Singapore is down and I lose my job

1) If I invest in Singapore equity, I can lose both my portfolio and job at the same time.

2) If the criss is local/regional and I invest outside Singapore, my portfolio may not be down.

3) If the criss is global then everywhere is been hit.

Therefore, I choose not to invest in Singapore to reduce (but not eliminate) the chance of lose both my portfolio and job at the same time.

For example, there were Singaporean who lost money in the stock market and lost their job at the same time during the Asian financial criss. This was a double hit.

Some investors think that we should overweight Singapore equity. In fact, they have good reasons for such action. For example, lower investment cost (STI ETF), lower currency risk and tax advantage. I do acknowledged and agreed that there are some advantages in overweight Singapore equity. My decision for not a nickel in Singapore is more of a personal preference than an objective decision.

BTW, for investors with significant portion of the portfolio in Singapore, they need to apply the some risk control. For example, do not place a huge portion of the portfolio in just two or three penny stocks. The risk is too huge.

Hi, I have listened to a talk forgot by whom some old ang moh professor arranged by National Library who also proposed the same thing. In fact what he said is more extreme. He said never invest in the same sector of what you are working at, and never invest in the same region where you are working, so example I am in IT so high tech sector is out for me (may be only life science if you also consider that as high tech) and asia is out also. But I see some flaw if never. I rather ride the bubble with some precaution, initially for some gain, and after enough profit, let what I can lose soars and if the height is too scary I let go some more (take profit).

totally going out of singapore may allow you some protection against currency risk in case sgd plunge but if other than sg means totally in asia other than sgd, structural risk may actually be still the very similar.

sir this is my thumb print (@), please verify —

Disclaimer: Info posted here are my opinion. I am biased. Use it at your own risk. Don’t believe everything you are told. Use your brain. I am OK if you disagree. I can make really stupid mistakes.