Much has been discussed about La papillion's allocation of his parent’s fund and he was kind enough to share more of his thoughts with me. Since the fund serves the same purpose, my choice of derivatives will be very similar to his.

1. DBS BK 4.7% NCPS 100  (26.85%)
2. OCBC BK 4.2% NCPS  (25.75%)
3. Cash (47.4%)

However, as you can see that the allocation is very different. While my aim is to beat the highest FD rate of 1.2%, I’m not going to promise my parents anything. Yes, it will still be capital guaranteed but my mom has so many bad experiences in the stock market that by not making a loss is considered a ‘profit’ in itself. I’m satisfied with 2.2% returns excluding the pathetic savings rate – all of which will be returned back to the fund. Another reason for the high cash allocation is that I may need a loan to purchase a property. I will pay them the same bank interest and I can save on miscellaneous fees - Win - Win. But what happens if they suddenly need the money? While I can liquidate their stocks, I can’t just sell off my property. That’s why I have to be mindful not to take too big a loan. Ensuring that they are adequately insured and having my own emergency fund also help. Going forward the fund will continue to grow because we are still contributing a partly sum of $400 a month. This allows for more flexibility in the portfolio – such as adding other counters or I taking a bigger loan [:evil grin:]. News that Temasek Holdings is exploring ways to offer bonds to retail investors definitely catches my attention. My task now is to submit the proposal to the shareholder for approval.