[Ask FH] How to build a balanced stock portfolio for all ages – Part I



I’ve recently received a number of really great questions on how to build a stock portfolio. I decided to address them all at one go in this article, in the hopes that it would be helpful for other readers out there. As always, if you have any questions on investing at all, drop me an email at [email protected] with the subject title [Ask FH], and I’ll respond to you personally via an article.

Note: I’ve tweaked/omitted some of the information below to protect the privacy of the readers. Accordingly, any resemblance with a person you know is purely coincidental. 🙂


Hi Financial Horse,
I like reading your articles. They are not too long and have the necessary depth for us to make a value judgement, based on our investment strategies.
Currently, I am a 22-yo student studying in university. Since I have secured a scholarship for my studies, my parents have converted money initially stashed away for my education into my investment portfolio to “play” with.
Currently, I have 60% in stocks, with my main holdings being Ascendas REIT, Ascendas h-REIT and Keppel DC REIT and others being ESR, SPH REIT and Guocoland. I view this as my “income-generator”, giving me dividends on a consistent basis.
Out of my 60% stocks, 30% is reserved for international exposure. Currently, I am holding on to shares of AAPL, SBUX, MSFT, V and FB, as well as a diversified ETF portfolio consisting of QQQ, VTI, MGK, VGK, VPL, VWO.
30% of my portfolio is in cash, and 10% is in P2P lending. This is my “pseudo-bonds” because I dislike bonds for their low rate of return. With a long investment horizon, I believe I have the time span to endure recessions and come out stronger financially, especially with SG REITs giving me constant cash flow.
The question is: Is there anything else I can do with this portfolio? Also, I would like your opinion on P2P lending. Do you think they are a risky form of investment and are they suitable for an ordinary retail investor like me? Thanks for your guidance.

Financial Horse says:

I love receiving questions from young readers. If there is one thing that I regret about my investing journey, it is not having started earlier. When you are young, you have your whole life’s earning power ahead of you, so the amount of risk you can take is unlimited. You also know no fear, and every experience is a learning point.

To simplify your asset allocation, it’s basically 18% international stocks (US stocks and ETFs), 42% Singapore real estate stocks and REITs, 30% cash, 10% P2P.

Your US stock and ETF portfolio is quite well diversified, so nothing much to say there. I have 3 points to make:

  1. Your Singapore stocks (Ascendas REIT, Ascendas h-REIT and Keppel DC REIT and others being ESR, SPH REIT and Guocoland) is very heavily weighted towards real estate. Is there any reason why this is so? It’s okay if you are very bullish and want to take an overweight position on real estate (like I said, when you’re young you have a high risk appetite), but if it’s an unconscious thing, you may want to consider diversifying your Singapore stocks. Personally I would add some exposure to local banks (DBS, UOB, OCBC), so that when interest rates go up, you can potentially enjoy some of the upside.
  2. You have a 30% allocation to cash. This should be in a high yielding account such as DBS Multiplier or UOB One, although that said you may not be able to fulfill the criteria for a higher interest without a salary. If so, Singapore Savings Bonds (SSBs) are a fantastic place to park your money. The interest rates are decent, and you can withdraw it any time, with the interest pro rated to the time of withdrawal.
  3. P2P is incredibly risky stuff. I’m not sure how familiar you are with lending practices in this part of the world, but P2P is basically junk bonds without the protective loan covenants. When a bank lends money to you, they have a number of loan covenants that says that you cannot exceed certain leverage ratios, or undertake risky activities etc. None of these protections are available in P2P lending. You’re basically lending money to a random company out there, and hoping that they would pay you back. Sure there’s money to be made here, but it’s like picking up coins in front of a train. One day a recession is going to come around and these P2P guys will get wiped out, and you’ll lose all your principal. In fact, this has already happened in China.

There is no way that you should think of P2P lending as a “pseudo-bond”, because the kind of risk you are taking on, is far higher than with an equity investment. I personally wouldn’t invest in P2P lending, but if I were, I would expect minimum 15% interest rates, ideally 20%+, as compensation for the risk.


Hi FH,

I’m currently learning about valuation and when I used it to review my existing portfolio, I realized that I bought almost all my stocks at very high valuation.

The fundamental of them still intact, but I do not like the idea that I bought them at very high valuation and they are all in red now at least 10-30% paper loss.

When I bought them, I have plan to hold them for at least 3-5 years.

I would like to seek your opinion whether I should cut my losses now (with trade war worry & raising interest rate), in pursue of other cheaper stock with good fundamental or accumulate cash and wait for market crash?

Financial Horse says:

This is a hard question to answer without knowing what stocks you bought (and at what valuations), and what are your financial objectives (do you need the cash urgently, are you a long term investor etc).

As a general note, fundamental analysis is tricky to get right. I remember looking at Amazon stock back in 2015 when it was trading at 300 times P/E, and I thought it was a ludicrous price. Of course, the share price has since gone up 400%. Analysing a share is a holistic exercise, and as a long term investor, fundamental analysis should only be one part of picture.

You should also think about the long term prospects of the company. Is the dip in share price a temporary thing, or is likely to be permanent? Most Asian indices are currently in a bear market because of the trade war, so if you bought a large blue cap and it’s down 30%, this may purely be a short term thing. Imagine that you bought a KFC store at 1 million. The day after, there are huge road works right outside the store. Because of the noise and the inconvenience, diners no longer visit the store, and the sales drop significantly. If someone offers to buy your store at a 30% discount (S$700,000), would you sell? Of course not (unless you need the liquidity urgently). As long as you hold the store, eventually the construction will complete, and the sales will recover. It’s important to note that the day to day price of a stock on the market is not tied to the value of the company, but what investors think it is worth. If you think that the stock you own is worth 30% more than what the market is offering you, just hold on to it. If you are right, the price will eventually recover.

Also ask yourself, if you sell this stock, what would you do with the money? Are you going to put it in the bank? If the stock is paying you a 3% dividend and you think it will recover eventually, why not hold it? If you going to use the money to buy another stock in another company, what makes the new company so much better than the current one? A lot of investing is about fighting the inner demons, but the fact that you are able to ask this question, shows that you are on the right path. 🙂


Hi Financial Horse,

 I have been a keen reader of your blog for a couple of months now and I would like to thank you for sharing many invaluable insights into the world of investing and looking forward to more!

A short introduction on my profile, I am a 30 year old single … working as a full time business analyst in the media industry. Although I have a keen interest in the areas of investing, personal finance, I consider myself as a novice with much to learn.

 I am writing to you hoping that you could look at my current portfolio and give me your views on any opportunities, gaps or risks that I am unaware of.


  1. STI ETF: $6k – DCA through POSB RSP for 2 years since 2016. I have stopped my RSP instructions for now as I felt that the current price is overvalued.
  2. Stashaway: $6k, Higher Risk Portfolio 86% Growth 14% Protective – DCA $200 per month since August’17
  3. Autowealth: $5.6k, 80% Equities 20% Bonds Portfolio – DCA $200 per month since August’18

 The reason why I chose 2 different Robo platforms to invest in is because:

  1. Diversify in terms of platform risk
  2. As Stashaway is more US-centric in terms of allocation whereas Autowealth has positions in Europe, EM, I felt that I could achieve some form of diversification

 Alternative Investments:

  1. P2P Lending: $3k – 100% invoice financing with an average return of 1.7% per month and all returns are reinvested. Taking into account loans that have defaulted, I am still raking in a healthy return.

 Cash $20k:

My take home salary is about $4k and a comfortable sum to invest every month would be between $500 to $1,000.

 Additional questions: Personally, I have read on stock picking but have never had the courage to make the first foray. I guess it stems from a lack of confidence as I am unable to pick a clear strategy (both Fundamental or Technical investing). How would you recommend I overcome this?  

Thank you for taking the time to read my mail and I am open to any comments you may have!

Financial Horse says:

Another young investor! It’s always a pleasure to advise young readers.

First off, P2P is incredibly risky stuff. I wrote a bit on this above, so do check it out to see how risky this is.

I’ve written a lot about robo-advisors in the past, but generally I would say that they’re a decent choice if you want the peace of mind that comes with having someone else manage your money. Net of fees, I don’t think they will outperform a broad stock market index, but that’s okay if the alternative is not investing at all.

The STI is not an amazing buy, but it gives you broad exposure to the large-cap Singapore stocks at one go, and for a beginner investor it’s hard to go wrong with something like that.

But I don’t think any of this advice is particularly helpful for you. So here’s what I would do if I were in your situation (I leave it to you to decide if it makes sense for your situation).

  1. I would take all the money out of P2P.
  2. I would keep the STI investment, StashAway, and Autowealth.
  3. I would allocate my new money into a REIT portfolio, because the current portfolio lacks exposure to REITs. You can take a look at my recent article here for some suggestions on REITs.
  4. The end goal here, should be something like a 40% global ETFs, 60% Singapore stocks and REITs. Once you learn more about investing, you can take the money out of StashAway and Autowealth, and invest in the underlying ETFs directly. Good ETF suggestions are: S&P500 (SPY), NASDAQ (QQQ), Total Stock Market ETF (VTI), Hang Seng Index (02800).

Fundamental analysis vs Technical analysis is like Messi vs Ronaldo. Sure, Messi likes to dribble and pass, Ronaldo likes to shoot, but the end goal is the same. They’re all here to score. But if you ask Ronaldo to pass more, and Messi to shoot more, it just doesn’t work because that’s not who they are.

So I can’t tell you how to pick between Fundamental or Technical Analysis, because it depends on who you are as an individual. When I first started in investing, I thought Technical Analysis was absolute rubbish because the idea that patterns in charts can predict future movements, is kinda like reading tea leaves. So that’s why I’m a fundamental analysis kind of guy, and that’s why my articles generally don’t touch on Technical Analysis. But that’s my story, you need to discover your own story.

My suggestion would be to read an article on fundamental analysis (any of my past stock articles work), and then read an article that analyses stocks from a technical perspective (just google it) and see which one you identify with the most. Do more research into the one you pick and decide if you like it. If you do, try it. You can always change your mind halfway, so don’t be afraid to take the first step. Life, and investing, is a marathon, not a sprint. There are many good investors out there who use both fundamental and technical analysis, you could be one of those as well. 🙂



Firstly, a big Thank You for taking the time and making the effort to advise me on my investment options.

I will try to give as clear a picture of my financial situation for you to advise me on how I can make my money work harder to fund my retirement.

I am 50 plus this year and my husband is a retiree. My daughter is in Uni now and she earns herself a scholarship thus relieving me of any financial commitment where her education is concerned.

I am still working and I run my own business with a monthly income of 15K. In addition to my salary, I have a rental income of 4K a month. I have about 600K in my war chest. But setting aside an emergency fund of 200K, that will leave me with 400K cash for investment. 

I have reached my FRS sum of 177k in CPF and OA is about 650K, Special Account of about 35K after deducting the FRS of 177K.

I have an HDB 5 room flat and a 20 plus year old leasehold condo for which we have plans to sell in a  few years time, both properties are fully paid up. We are now staying in a landed property with market value of about 3 million. Loan outstanding is about 1.5 million, monthly mortgage is about 7K. I have intention to pay off the outstanding mortgage loan with the cash from CPF and the proceeds from the sale of the condo. Our monthly expenses is around 5K which is very comfortable for us.   

With the numbers, I believe I am ready to invest for dividend income with a long term investment plan. I want to look for a safe haven to park my money. I have a low risk appetite and at my age, all I want is to be able to sustain my lifestyle once I retire.

Retirement funds will be available once the time is ripe for us to sell the landed property. We would want to move back to our HDB flat once this property is sold. 

Please give me some advise on how I can start my investment journey.

Thank You for your time.

Financial Horse says:

I’m not going to lie, of all the questions here today, I felt that this was the trickiest one. When you’re young, you don’t have a penny to your name, but you have your whole life ahead of you, and literally the world is your oyster. When you’re older, you have accumulated many assets (and wisdom), and your risk appetite drops drastically. You just want to preserve your wealth, and watch your kids grow up.

I did a quick tabulation of your balance sheet and cash flow:

Assets Liabilities
200k war chest 1.5 million loan on house
400k investment
650k CPF OA
35k CPF SA
FRS 177k
Planning to sell a 80 year leasehold condo, conservatively that should yield 1.2 million
Current house is about 1.5 million paid up
3.96 million 1.5 million

Net assets = 2.5 million

Investible assets = 400k investment


Cash in Cash out
15k income 7k mortgage
4k rental 5k expenses
19k in 12k out

Net inflow = 6k

The number one thing all investors have to do before investing, is to create an emergency fund. You’ve very prudently allocated a S$200,000 warchest, which is more than a year’s expenses even if your income ceases entirely. This is fantastic. My only comment is that this should be earning interest via a high yield fixed deposit, or SSBs.

Your liquid, investible assets, is basically the S$400,000 cash and the S$650,000 CPF OA. I noticed that you question was on how to invest the S$400,000, which indicates an intention to leave the S$650,000 CPF OA intact? That’s a really fantastic move, because at your age, wealth preservation becomes the key (as opposed to wealth generation). CPF OA is 100% risk free, and it yields a very decent 2.5% interest rate. So keep it there, this basically forms the bond component of your investment. With S$650,000 in CPF OA and S$400,000 in equity, you’re basically looking at a 60:40 bond:equity mix on your liquid assets, which is very decent.

There are 3 key points from me:

(1) How to invest the S$400,000

Your intention is for long term dividend income. The immediate asset class that comes to my mind, is REITs. Here’s what I would do in your situation (I’ll leave you to decide if this makes sense for you)

S$300,000 into REITs

Stick to blue chip REITs with Singapore assets from a reputable sponsor (CapitaLand, Mapletree, CDL, Far East, Frasers). You want Singapore properties because you don’t want to be exposed to another country’s property cycles, and given your goal is wealth preservation, you’re able to accept a lower yield in exchange for the stability. Good examples are CapitaLand Mall Trust, CapitaLand Commercial Trust, Mapletree Commercial Trust, Far East Hospitality Trust, Netlink Trust.

S$100,000 into diversified stock ETFs or Singapore stocks

At the same time, you need some exposure to equity for the diversification, and in the long run it can be hard to beat the returns from a diversified stock ETF. If you’re comfortable with global stock exposure, you can consider some solid ETFs such as: S&P500 (SPY), NASDAQ (QQQ), Total Stock Market ETF (VTI), Hang Seng Index (02800). If not, you can stick purely to SGX stocks, in which case the STI Index is a good choice if don’t want to stock pick, or failing which, the bank counters (DBS, OCBC, UOB) are always a safe bet from a long term perspective.

(2) When to invest the S$400,000

The next question is equally tricky. Do you lump sum invest the S$400,000, or do you spread it out over a period of time. I advised a young investor on this before, and in that case I though a lump sum made sense, because his risk appetite was high, and he could basically afford to lose the entire sum without any impact on his life (the cash was a windfall). In your case, I’m not so sure.

Equity valuations are currently at historical premiums, and the worst thing that can happen for you, is to invest the S$400,000 only for the market to crash 12 months later. For this reason, I would probably consider averaging in over 2 to 3 years, while parking the money in a high yield account in the interim. You may be sitting out of some gains in the interim, but at least you have the peace of mind that you’re averaging in over a few years, and not at one go. Psychologically, it’s also far easier to investment a chunk of money over a few years, as opposed to keying in buy orders for half a million worth of stocks in a single day.

(3) Mindset of an investor

Based on your profile, it seems that you don’t have any prior experience with equity markets. The one thing you have to note, is that equity markets are volatile. There’s no getting around it. They can go up 20% in a year, but they can also drop 50% the next. If you’re putting money into the equity markets, you need to know that eventually, there will be a crash and stocks will drop drastically in price.

And when it does, you need to have faith and belief that you picked the right stocks, and that given enough time, they will recover in time. The worst thing you can do is to panic sell your stocks in a crash. You should always think of your assets being the S$200,000 warchest, S$650,000 in your CPF accounts, a fully paid up condo, and S$1.5 million equity in your current house. In a crisis situation, you won’t be able to liquidate your real estate without taking a huge loss, but your S$200,000 warchest, S$650,000 CPF, and your business income, should be more than sufficient to tide you through it.


I became bored with my day job (I am 40), and started 2018 with a resolution to find an income source to replace my job. I bought a Toto ticket hoping to win the $M prize, which of course did not happen. The next thing I tried, was day trading.

I opened an online trading account and deposited $2k as an experiment. I was cheap and did not pay to attend a course on day trading. I did however, tried my very best to read available materials on day trading I can find on the internet. I brushed up on basic technical analysis, and learnt the maths and probabilities of day trading. I chose the intruments to trade in (stock index futures) and developed a well-defined trading strategy. I used mostly 50x leverage. I executed trades precisely according to my strategy and kept a proper trade journal. On many days, I would rush home after work to catch the European markets, and sometimes I traded US markets too. It was tiring to even trade on part time basis, and I also lost focus on work due to lack of sleep and diverted attention.

Over a 3 months period, and after 74 trades, my capital plummeted from $2k to $200+. My friends told me I need to learn from the professionals, ie. attend a good course. Nonetheless, I realized that day trading is not any easier than a day job. I probably can get better at day trading if I put in money and effort to learn. However, to me, I may be able to achieve better results if I put in the same effort towards my career. So, I gave up day trading after 3 months.

I shifted focus to my job again, which can produce good stable income. My new plan is to invest for the long term and build passive income so that I can achieve financial freedom after 10 years. This seems achievable after reading this blog. I must thank FH for selflessly sharing your knowledge. I learnt so much from you on choosing REITs, portfolio allocation and strategy, and how to invest a lump sum capital.

Thank you again!

Financial Horse says:

This isn’t really a question, but I was deeply appreciative and touched by this heartfelt comment. I started Financial Horse to document my investment thoughts, to make me a better investor. I never expected to have such an influence on other investors out there. It has been a hugely humbling experience, and I want to thank all my readers for the unceasing support. You guys are the heart of soul of this blog, and I’m incredibly excited and privileged to be able to go down this investing journey with you guys. If you ever have any queries or just want to discuss, drop me an email with the title [Ask FH], and I’ll address your query!

Financial Horse, signing out!


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  1. Hi FH,

    New fan here!

    You recommended investing in the following ETFs: S&P500 (SPY), NASDAQ (QQQ), Total Stock Market ETF (VTI), Hang Seng Index (02800).

    My question is (pardon my ignorance), wouldn’t one be exposed to the 30% tax due to dividend? If no, how do I identify which are under DRIP?

      • Thank you for the article, FH.

        Not sure if i understood it correctly. Is it correct to say that the ETFs are recommended because they are growth stocks, not dividend stocks?

        Meaning when selecting, i should be going for eg SPYG:US (SPDR Portfolio S&P 500 Growth ETF)?

        • I suppose the point is that a huge chunk of the returns of the S&P500 is capital gains, which is not affected by withholding tax. That said, if you buy the S&P500 through an Irish domiciled fund as mentioned in the article, you can half the withholding tax you pay. Hope this helps! 🙂

  2. Hi FH, I m a quite new reader and also new in Singapore, but doing investing for a while…just want to tell you that no need to be worried about P2P. In Europe we have Mintos or Twino that are offering a Buyback guarantee. Technically you dont need to think much to who to lend money unless the loan is secured. For Singaporeans maybe not so attractive due to currency exposure, but check it or try it out 🙂

  3. Hi Financial Horse,

    Thank you for dishing out investing advice! Very helpful for beginners like me.

    My parents are retirees and i have been cracking my head to help them invest some of their savings apart from through SSB and bank FD. Of course like how you advised a reader here, my parents are for capital preservation as well. I am also looking to get REITS for them but waiting for better entry price.

    I would like to ask if the upcoming Phillip Sing Income etf would be an alternative to the etf you mentioned above? Or is it still better to go regional/global?


    • Wow thanks for raising this ETF to me, really interesting stuff! I really like the mix of stocks they have, it’s a great dividend play in Singapore. The expense ratio is on the high side, but then again that’s what you’d expect from a local ETF. I think this is definitely a viable option, although I wouldn’t be comfortable to have 100% of my portfolio in this. Always good to have a bit of diversification, through global and regional stocks.

  4. Hi thanks for the write-up. I have read up quite a bit on ETF and feel that it is more suitable for my profile after losing quite a bit in stock market for the past few years.
    I am keen in putting $1000 monthly in ETF ($500 in STI ETF and $500 in Vanguard VWRD) as saving plan for the continuous of 20 years…I am currently 30 years old with the take home income approximately $4k.
    From my research, for the investment in STI ETF, the transaction is ideal to perform through DBS Exchange Traded Funds Regular Savings Plan, with 1% fees.
    I would like to check with you for your opinion with regards to VWRD. Given that it would be a monthly transaction, do you think Standard chartered or SAXO would be more cost-efficient? or would there be any other better trading account? thanks..

    • Hello there!

      If you’re doing a monthly investment of S$500 per counter, it may be hard to beat DBS RSP so you’re absolutely right.

      For VWRD, both will be horribly inefficient, and you’ll be paying quite large transaction fees as a % of investment. Personally I think monthly DCA is overrated, quarterly or half yearly DCA is absolutely fine, especially if you’re doing it over a 20 year period. I would suggest saving up a larger amount to invest each time (6 months works out to S$3000 which is acceptable), and use Standard Chartered because their minimum fee is only slightly higher, and they don’t have an AUM fee like Saxo.



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