Nine Years…

Today marks the ninth year of The Bedokian Portfolio blog. For this anniversary post, I will touch on our definition of retirement and some updates on our Bedokian Portfolio.

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Definition Of Retirement

Most people reach a stage in their professional lives known as retirement, which is typically defined as leaving one's job and ceasing regular employment. Many view retirement as an opportunity to step away from work routines and spend time differently. However, some may encounter challenges such as difficulty adjusting to new daily structures or uncertainty about how to spend their time, potentially due to a lack of post-retirement planning.

Our definition of retirement consists of two parts: reaching financial independence so that employment income is not required as the main source of funds, and gaining the flexibility to engage in preferred activities, including continued work if desired. For the first part, achieving financial independence often involves alternative sources of cash flow, such as investment portfolios or income-generating assets. The second part is qualitative and it relates to identifying personal goals and experiences previously unattainable due to work commitments.

Continuing to work after retirement remains an option, either for supplementary income or personal fulfillment, but one may choose to leave or change jobs if existing roles become physically or mentally demanding. The objective is to enable a fulfilling post-retirement life distinct from prior work routines. If continued employment is motivated solely by financial necessity or there is no structured plan for retirement activities, then one may not be fully prepared for this phase.

Our Bedokian Portfolio So Far

Despite geopolitical tensions and economic uncertainties, the bull run in the U.S. and our local markets continued, and these greatly contributed to our Bedokian Portfolio (and other portfolios in our Portfolio Multiverse, too). Our Bedokian Portfolio value as of 26 July is just around 8% shy of our 2028 year-end target, around three and a half years later.

As shared in this post we used an annual return of 4% for projection, which I guess for most people is conservative. We would prefer to stick to this number as it acts as a buffer should our portfolio value heads south in later years, and if the portfolio size grows more than expected, the plus point is that we may consider an earlier step-down point.

Cheers to all!

The Rise Of The Singapore Dollar

  

(Picture credit: PublicDomainPictures from pixabay.com)

If you had heard from those around you that travelling to some places were getting “cheaper”, they were right. This is mainly due to the strengthening of our Singapore Dollar (SGD) against other major currencies, as shown in Figure 1 over the past 5 years:

SGD to	1-Year %	2-Year %	5-Year %
United States Dollar	+5.34	+3.84	+8.66
Euro	-2.36%	-1.03	+5.15
British Pound	+0.31	-0.03	+1.64
Japanese Yen	-3.95	+10.62	+49.76
Australian Dollar	+8.20	+7.33	+14.91
Chinese Yuan	+3.81	+3.78	+11.27

 

Fig.1: Singapore Dollar to major currency pairs, 1-year, 2-year and 5-year gain/loss. Period covered 13 Jul 2020 to 11 Jul 2025 as at around 11 Jul 2025 2255hr Singapore Time. Source: XE.com. 

While Singaporeans going abroad would literally get more bang for the buck in terms of exchange rates, looking from the other side, if one is having assets in, for instance, Japan, assume the holdings’ prices remain unchanged, the loss would be around 33% over five years.

This is what investors refer to as foreign exchange, or forex, risk. It works both ways in the overall scheme of things; when the country’s currency is strengthened over a period, its imports become cheaper, but its exports would be getting more expensive for the other side, ceteris paribus.

There are many reasons why a certain currency is appreciating and/or depreciating against other currencies. The major ones would be inflation rate, interest rates, macroeconomics (balance of trade, public debts, etc.), geopolitics and demand-supply for the currencies. Factoring in these reasons into the -33% example above, there might be a variety of results, with the possibility of returns going into positive territory.

Forex risk looks daunting, but if the asset returns (capital gains and income) outpace it, the risk should not be a major issue. Though the United States Dollar (USD) may have lost around 8% over five years, the S&P 500 had gained close to 97% in the same period, making forex risk looked like a small blimp. 

Similarly, taking the Euro, which lost around 4.8% against the SGD for half a decade, the representative index STOXX Europe 600 rose by 49%. Surprisingly, Japan, which suffered the 33% forex loss mentioned above, had returned almost 76% based on the Nikkei 225 index. 

Back to the topic of strong SGD, this might be an opportune time to enter markets whose currencies had weakened and accumulate financially sound companies. 

Related post

Going Local, Global or Glocal

All figures quoted were from Google Finance and XE.com.

The Most Important Moment In A Buy/Sell…

 …is to press the button. Period.

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Sure, pressing buttons are easy, whether the physical ones on your keyboard, the tactile touchscreen of your smartphone or on the computer monitor assisted through a mouse click, we all had done it before.

However, it is the weight of responsibility or consequence that comes with the pressing of the button that makes this seemingly harmless activity a not-so-simple endeavour. Imagine sending an important email that may make or break one’s career, or on a more serious note, the big red button to launch nuclear weapons (as far as I saw from some entertainment channels on how it works).

Or, more relevantly, your decision to whether to buy or sell a counter for your investment portfolio.

I believe a lot of thoughts, considerations and analyses had been factored in before the buy/sell call was made, but the final act before the actualisation of the transaction would be conviction. Advice, opinions, views and recommendations could come from anywhere and anyone, but conviction should come from the decision maker himself/herself.

Yet, it is this final step of conviction that is filled with doubts, anxieties and worst case, fear. A lot of “what-ifs” happens at this stage, which is akin to a high wall between the penultimate and the last steps of a staircase. Still, a decision must be made, whether one likes it or not, for the individual’s investment journey must go on and the markets wait for no one. Looking back, if a good call is made, well done, but if a bad call is made, learn from it.

Like the journey of life, these ups and downs are lessons for us to be better investors.