Author: The Bedokian Portfolio

The Bedokian Portfolio and the US Market

Over the National Day holiday I was fiddling around with an online backtesting tool at www.portfoliovisualizer.com, which I had used it for my post “Keep Calm and Ride The Waves” back in April 2017, and a thought came up; how would The Bedokian Portfolio fare in the US financial market. Using the Balanced Bedokian Portfolio (35% equities, 35% REITs, 20% bonds, 5% gold and 5% cash), I backtested it and here are some of the findings: The Compound Annual Growth Rate (CAGR) for the period of 1994 to 2016 was 8.66%. If US$10,000 were invested in January 2001, with...

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Ceteris Paribus

If it sounds Latin to you, yes it is. In English the term ceteris paribus is “other things equal”, meaning in an experiment or observation setting where the relationship between two variables or factors are studied, all others are taken as constant or unchanged. Ceteris paribus is often used in economic studies, where analysis of cause and effect between two variables in a given situation is carried out to give a result in the absence of other variables. Though in the real world there are many factors at play to produce a given market or economic situation, ceteris paribus...

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It’s Been One Year

Exactly one year ago, I had launched my ebook The Bedokian Portfolio and this blog. I would like to thank you, the reader, for your support and I hope you have benefited from this blog as well as from my ebook. To date, there has been almost 15,000 pageviews to this blog, and slightly more than 1,000 downloads of the ebook. Review and Going Forward I had written 30 articles for the past year, covering topics from macroeconomic issues such as interest rates to how to store your physical gold and silver. These articles are meant as additions and...

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Tactical Asset Allocation

If you have read enough portfolio publications and books, you may have came across this term called “tactical asset allocation”. According to Investopedia, tactical asset allocation is “an active management portfolio strategy that shifts the percentage of assets held in various categories to take advantage of market pricing anomalies or strong market sectors”.1 In other words, your portfolio’s asset class allocation will change according to the prevailing environmental factors and economic conditions. Taking the balanced Bedokian Portfolio for example (35% equities, 35% REITs, 20% bonds, 5% commodities and 5% cash), if the market is pointing to a boom period...

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Bob Is Rebalancing

I had mentioned here that Bob would be rebalancing his Bedokian Portfolio with an S$5,000.00 capital injection on 30 June 2017. Let us go through how he did it step by step. In The Morning When the market opened at 9:00 AM on 30 June 2017, Bob checked the opening prices of the securities in his portfolio. He then translated the prices to the table below (Fig. 1). Fig. 1 Note: USD 1 = SGD 1.38 Bob added S$5,000.00 to the cash component, bringing it up to S$7,019.22 (see Fig. 2). Fig. 2 Purchasing The Securities There are now...

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More On Associative Investing

Back in August 2016, I had touched on the concept of associative investing to capitalise on disruptive technology companies, where we could invest in areas that support and/or result from these firms, especially since there is little or no avenue to invest in the said companies themselves.1 The basis for associative investing is simple; all sectors and industries are dependent on one another, and it is making use of these interdependence relationships to carry out investing. For example, if you want to invest in e-commerce, besides e-commerce companies, you could take a look at sectors and industries that are...

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Have I Forgotten Bob?

No, I do not. In fact, I still remember him and his Bedokian Portfolio. This is the nature of passive investing, where the portfolio would just sit there (and be easily forgotten) and you do not look at it again until the time that you want to rebalance it. Anyway, since we had started this test portfolio at the beginning of the year, let us take a look at the status as of 6 June 2017: *USD/SGD rate at 1.38, from www.xe.com as at 6 June 2017 **Inclusive of dividends from STI ETF of S$185.50 and from Philip AP...

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The Rise of Robo-Advisors

Financial technology, or fintech, is revolutionising the financial world in terms of processes and services, and one of the products of fintech is the robo-advisory. On the investment front, robo-advisories, or robo-advisors, would help you craft your investment portfolio according to your needs, preferences, and risk profiles. The robo-advisor would then, if you want, automatically maintain your investment portfolio, which includes rebalancing. If you are a passive Bedokian Portfolio investor, this would mean an even more hassle-free maintenance of your portfolio. However, before jumping into this, there are a few points that you may need to consider. Costs Robo-advisors...

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Commodity-Related Companies for the Commodities Asset Class?

A question popped up by one of my friends with regards to the commodities asset class in The Bedokian Portfolio. He asked instead of getting gold, silver and oil, could he replace them with gold and silver mining, and oil companies? After all, they are in the commodity business. To give my answer, it will be a “no”. Why No The main aim of the commodity asset class is to have a form of insurance against the volatility of the markets, in accordance to reducing portfolio risk through diversification of asset classes1.  That being said, it is better to...

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Sector Diversification

In my ebook The Bedokian Portfolio, I constantly harped on diversification of asset class and foreign financial markets, but I did not touch much on sector diversification. In this blog post, I would share a bit on the sector aspect. What is a Sector According to Investopedia, sector, or sometimes called the industry, is “… an area of the economy in which businesses share the same or a related product or service. It can also be thought of as an industry or market that shares common operating characteristics”1. In the degree of diversification for The Bedokian Portfolio, sector comes...

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Keep Calm and Ride The Waves

2017 had opened with a big bang for the local financial market. For the period of 3 January to 13 April, the Straits Times Index (STI) had taken a tremendous rise from 2887 points on 3 January to 3169.24 points on 13 April, with reaching a high of 3187.51 points just two weeks ago1; Gold had risen from USD 1158.84 to USD 1287.92 along the same timeframe2; Singapore REITs (S-REITs) had also gone up, with the FTSE REIT Index rising from 714.89 points to 765.43 points3. Even the ABF Singapore Bond Index Fund, one of the main indicators used...

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Of Rights, Warrants and Your Bedokian Portfolio

If you belong to the active camp of investors of The Bedokian Portfolio, chances are you might see the terms “rights” and “warrants” in your individual equities and REITs counters. For this post, I will share what are rights and warrants, how these would affect your Bedokian Portfolio and what to do about them. Rights Rights are entitlements to existing shareholders for the purchase of additional shares of a company/REIT at a typically discounted price. When a company or REIT announces a rights issue, it will include a few numbers that determine how many additional shares are entitled per...

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Physical Gold and Silver, the Whats and Hows – Part 3

In this final part about physical gold and silver, we will look into how to maintain, keep and store your bullion. Packaging Bullion bars come in two forms; cast and minted. Cast bars looked like bricks and are considered “no frills”, having being produced from a simple mould and come with no packaging. Some bullion dealers would shrink-wrap the cast bars to protect them. Minted bars are more refined looking, typically engraved with the refinery’s logo and come with packaging. It is advisable not to remove the bars as most dealers prefer to buy them back with the original...

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Another REIT ETF is Coming

Good news for index investors; There will be another REIT ETF coming out by end March 2017. Called the NikkoAM-Straits Trading Asia ex Japan REIT ETF, this would be the second REIT ETF listed in the local Singapore Exchange after the earlier Phillip SGX APAC Dividend Leaders REIT ETF, which was launched in October 2016. About the ETF Nikko Asset Management, the people who brought you the Nikko AM Singapore STI ETF and the ABF Singapore Bond Index Fund, manages the NikkoAM-Straits Trading Asia ex Japan REIT ETF (for simplicity let us call it NikkoAM-Straits Trading REIT ETF). The...

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Physical Gold and Silver, the Whats and Hows – Part 2

In Part 1, I had touched on spreads, weights and spot, the spread within the spread, and a little bit on mints, refineries and the London Bullion Market Association. In this part, I will go into semi-numismatics and numismatics (or known as semi-numis and numis), jewellery and why they are not ideal for physical gold and silver investments, and whether you should go for bullion bar or coin. Semi-Numismatics and Numismatics According to the Oxford Dictionary, the word “numismatics” means “the study or collection of coins, banknotes, and medals”1. As for semi-numismatics, there is no clear definition, but usually...

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