InvestIdeas

The following is my current asset allocation.

Let's imagine that I have SGD100 worth of assets, and everything is priced in SGD.

Assets
-------
Cash $15.52
Singapore Portfolio $70.36
US Portfolio $14.12

Liabilities
---------
USD Loan $12.56

Futures exposure (negative indicates a short position)
----------------
SIMSCI -$6.52
Crude Oil $5.58
Gold -$0.89

How I trade/invest/speculate is by adjusting the above numbers during different market scenarios.

I would like to know your current asset allocation too, if you would like to share and discuss

I think Asset Allocation started with how you apportioned your money into Equities, Bonds and Cash.

Thereafter, it was expanded into Properties and Commodities.

And also various Currencies.

Now, it has also expanded further into Shorting the various Asset Classes ...

Just something to add to the discussion. From dshort.com

Diversification Works, Until it doesn't
Diversification is a cornerstone of Modern Portfolio Theory and portfolio risk management. We spread our investments across a range of asset classes to ensure participation in the upside and reduce exposure to the downside. This is a time-honored strategy that works ... most of the time. But during epic market downturns, equity asset classes tend to march to the same dismal drumbeat.

http://dshort.com/articles/2009/diversi ... rview.html

Just before the crash last year, Marc Faber mentioned that everything was expensive eg. Equities, Commodities and Properties.

On hindsight, he was right and even if you have diversified into the 3 Asset Classes, you would have been clobbered.

However, Asset Allocation means that if you have been in Cash, US$ and were Shorting, you would have been sitting quite pretty ..

So first get the Asset Class correct and half the battle is already won..

Winston, I totally agree with that. Many different asset classes to choose from, and can be long or short. So many possible combinations for different market scenarios.

Millionairemind, yes, the mainstream view of diversification is to reduce volatility while participating in the upside. For myself, I love volatility and therefore my purpose of using asset allocation is not to reduce volatility. It is more of an overall game plan. With an overall plan, I can execute my individual trades clearly.

If I am not mistaken, your asset allocation might be 100% cash now, while waiting for trends to form. That is also one possible asset allocation. I am curious to know how the others are positioning themselves

b0rderc0llie wrote: I am curious to know how the others are positioning themselves

Dont have the exact numbers as I'm travelling.

I have a big chunk in Cash. Some Equities for medium term play. And Some Commodity Funds.

Big chunk in Spore $, US$ ( & HK$ ) and some Aust $ and Euro.

50 % cash SGD ( I live in S'pore and spend SGD, doesn't make sense for me to keep foreign. And no time to monitor forex, so decide not to meddle)
50 % equities (SGX, training ground for now)

6 more months till 2010. Depending on how the market goes. Waiting for the 'rumoured' bull market since 6 months ago. I am going to start collecting those reports and take action against them for misleading me. LOL , just kidding.

b0rderc0llie wrote:Winston, I totally agree with that. Many different asset classes to choose from, and can be long or short. So many possible combinations for different market scenarios.

Millionairemind, yes, the mainstream view of diversification is to reduce volatility while participating in the upside. For myself, I love volatility and therefore my purpose of using asset allocation is not to reduce volatility. It is more of an overall game plan. With an overall plan, I can execute my individual trades clearly.

If I am not mistaken, your asset allocation might be 100% cash now, while waiting for trends to form. That is also one possible asset allocation. I am curious to know how the others are positioning themselves

In order of sizing, I guess it'll look like:

HDB flat (haha)
SG cash ==> say, value = n
---
Aussie FCFD ==> 0.5n
Singapore equities (CPF and cash) ==> 0.5n
---
US equities & equity options ==> 0.5n

I think this is probably not very different from a lot of other people. I don't consider my HDB flat or SG cash an investment (savings rate cannot even buy ice cream). They're there for actual day-to-day living in, transactions, and (for the cash portion) perhaps for future allocation.

Most of the churn happens in the US positions where I'm usually in neutral plays or writing spreads (but slow-moving right now with the low volatility). Some short-term punts now and then as well (just got orh-bak-kak'd last night hahahaha). My trading style is mainly technical, with a fair dose of "too cleverness" (hence the OBKs) if you get what I mean.

This is actually a nice thread; thanks to BC for starting it. I think we had a similar discussion in WS last time, interesting to see if things have changed for folks since then (maybe 1+ years ago). For me, nothing much has changed, except that I'm one year older.

Has your AA changed ? With things stabilizing, are u taking on more risky assets eg Equities in Emerging Markets and Commodities ?

As for me, I'm back to a big portion in Cash. No more Commodities Etfs.

I cant see any compelling buys out there so no place to put the cash. Anyway, it's handy for stagging on the Ipos in HK