Genesis
The 15HWW Permanent Portfolio was built during late 2016 with a capital of around $140,000 and I started tracking it from Jan 2017.
The aim of a permanent portfolio is to create a liquid portfolio with low volatility and a respectable return. A comparative benchmark is the CPF SA return of 4%.
To keep the portfolio as simple as possible, there is neither rebalancing nor injection of funds.
Purpose
Personally, I view many components of this portfolio as a form of emergency fund. For example, the cash and bonds are invested in very liquid and safe instruments and can be sold and cashed out within a matter of days.
Another reason is that by showcasing and regularly updating this humble portfolio, I hope it will inspire confidence in some readers to take some risk, invest and build wealth steadily with a low-effort portfolio.
Portfolio Value From Jan 2017 To Jan 2023
January 2023 Update
Annualised Return: 5.0% p.a. (Jan 2017 to Jan 2023)
At the rate the market is bouncing back, 4Q 2022 could turn out to be the bottom for this cycle.
It really appears that we are out of the tunnel. Even with the weak USD that has declined significantly against the SGD in recent weeks, this portfolio is up by SGD10,000 compared to the previous update, a 5% increase.
All risk assets (STI ETF, Berk B, Gold and Crypto) are up in a slowly rising tide. It was really doom and gloom just a couple of months back, which, on hindsight, was the time to deploy heavily. Ironically, being contrarian really works most of the time in financial markets. The worst thing to do then was to sell in a panic, especially if you had already bagheld a -50% drop or worse, a -80% drop in price.
I only managed to buy a bit but I am not complaining. With a good start to the year, the annualised return of 5.0% (since inception) for this portfolio is also much more respectable as a result.
Till the next update in three months’ time!
Related Articles:
The 15HWW SRS Portfolio Update: November 2022
The 15HWW Permanent Portfolio Update: October 2022
Annex: A Brief On The Various Components Of The 15HWW Permanent Portfolio
1. STI ETF (Initial Allocation: 20%)
It comprises the 30 biggest listed companies in Singapore and many of them are dividend-paying. The ETF distributes the dividends semi-annually, in February and August every year.
2. Berkshire B (Initial Allocation: 20%)
The idea is to use Warren Buffett’s holding company to loosely replicate the S&P 500 for US equities exposure. Since foreigners investing in US stocks are taxed on dividends, it is an advantage that Berkshire B does not pay any dividends.
3. Gold (Initial Allocation: 20%)
I used to hold some paper gold but have since converted them to physical gold. The portfolio consists of 9 pieces of 50g PAMP Gold Bar bought from UOB Bank. They are fairly liquid since they can be sold back to UOB Bank at a small spread. You can also check the prices here.
4. Cash/Bonds (Initial Allocation: 30%)
The majority is invested in Astrea Bonds and Singapore Saving Bonds (SSBs) which are very liquid in nature. Astrea Bonds are traded on the market while SSBs can be redeemed at par value, usually in a week or two’s time.
5. Bitcoin (Initial Allocation: 5%)
Added in 2021 to diversify away from cash and gold as a store of value. As many centralised crypto exchanges have abused users’ trust in them, my bitcoin is now stored in a cold wallet.
6.. Ether (Initial Allocation: 5%)
Added in 2022 since I am not a Bitcoin Maxi. As many centralised crypto exchanges have abused users’ trust in them, all my ether is staked on-chain.
Thanks for reading. Wishing all readers a Happy Lunar New Year!
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