“I Told You So”

How many times have we heard from some investor or trader telling you personally or through some social media application the famous words “I told you so”. 

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It could be irritating and disturbing at times when we were told of such words; irritating that it may be construed as a conceited statement, and disturbing to the point that one may doubt his/her investing/trading thesis and viewpoints.

All these could be boiled down to one thing: the assumed ability to predict the markets. A lot of us are trying to predict the markets, but no matter how hard we work on it, it is very hard to even tell what would happen eventually.

We could get things right when the planets align to our favour, which to most events it will occur. The difficult part is to know when it manifests. Throughout the years I have had heard of hyperbolic predictions and somewhat they did come true, to which I give them credit as some had carried out research and used data to back them up. The issue that I (and I guess many of us) have is the ego that accompanies the right prediction.

To me, it is alright to announce the right calls made, as it is a form of sharing learning points with others, and on the individual level, to gain a sense of achievement and recognition. The negative part is the haughtiness in claiming the credit, and to the point of dissing and belittling others.

Though it may hurt especially when the comments are directed at one personally, there is no need to be bothered by such situations. The foreseen event did happen at that point of time. The next question is how long the event would last. If it is security price, it may be at that anticipated price level until likely the next market cycle, or if it is a trend/product (e.g., artificial intelligence/iPhone), it would become an evolution after the initial revolution; both scenarios would end up tapering to a “nothing much to shout about” phase.

Investing (and trading) is a long game, and those who could play the game longer, wins. As what my ex-colleague and investor once quipped, “Only time will tell”, on knowing who would prevail in their desired prediction outcomes.

Related posts

“A Broken Clock Is Correct Twice A Day”

The Only Answerable Person On One’s Investment Is To Oneself

Private Credit Woes

Besides the geopolitical news that is happening now at the Persian Gulf, another event is rocking the financial markets at the moment, too, and that is private credit.

 

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What is Private Credit?

Traditionally, companies that required loans would either go through the mainstream banks, or via public markets in the form of bonds issuance. Private credit, on the other hand, are loans issued by institutional investors or private funds. A major attractive point of private credit to companies is that the debt structure can be negotiated with the lender, like interest rates and repayment terms. On the other end of the deal, investors who lend to companies through the private credit vehicle are expected to have higher returns to that of conventional bonds.

Though investing in private credit typically open to accredited and institutional investors, there are other slightly indirect ways for retail investors to participate using publicly listed securities. One is by investing in listed business development companies (BDCs), and the other is using exchange traded funds (ETFs). The majority of BDCs and private credit ETFs are traded on the United States market.

So, What’s the Problem Now?

A few reasons came together for the woes facing the private credit sector, with the main ones on the vulnerability of the software sector (Saas-pocalypse), and the aftereffects of having too long a period of low interest rates, which make highly leveraged companies unable to sustain payments in a rising interest rate period.

The above concerns, and in part due to private credit funds’ opaque nature of valuation, had led to a high number of private credit investors to start pulling out their monies for flight to safety. Being a closed end investment vehicle, managers of private credit funds had to curb the redemption requests as loans to companies are illiquid and could not be recalled quickly. All these resulted in a downward spiral which some analysts say may result in a crash seen during 2007/2008.

Impact

The impact on listed BDCs and private credit ETFs could be seen; BDC Blue Owl Capital (ticker: OBDC) had seen a drop of -12.6% year-to-date (YTD) of its share price, and the Simplify VettaFi Private Credit Strategy ETF (ticker: PCR) was down -13.6%, to name a couple.

Mainstreet Capital (ticker: MAIN), a BDC in our portfolio, also suffered with around -13%, and was dragged along with the rest. However, MAIN’s software exposure to software companies was relatively low (2%-6%¹) as compared to OBDC’s (at least 20%²), thus in the event of a major default happening in the software sector, MAIN would probably be the least affected from a fundamental point of view.

The Bedokian’s Take

One could see the interconnectedness of the various sectors and industries at play in the markets and economy, and recognising this and knowing how it works is important. This is part of associative investing³, where one could spot opportunities and possible threats by linking up their relationships around.

As for our investment in MAIN, we are considering adding positions to it; based on our 10-30 Rule price analysis⁴ and using the start and end closing prices of 2025, the 0.9 times of the average price is at about USD 53.75, which is above the closing price of USD 52.63 on 2 Apr 2026, signalling an entry.

Disclosure

The Bedokian is vested in MAIN.

Related post

Inside The Bedokian’s Portfolio: Mainstreet Capital

Disclaimer

All data is obtained and calculated from Yahoo Finance unless otherwise stated.

1 – Mainstreet Capital Corporation. Investor Presentation. Fourth Quarter – 2025. https://d1io3yog0oux5.cloudfront.net/_b292ae5bca9821007cb321f572787174/mainstcapital/db/396/11076/pdf/Q4+2025+MAIN+Investor+Presentation+-+v.2.25.26+-+320PM.pdf (accessed 3 Apr 2026)

2 – Pitcher, Jack & Wirz, Matt. Private Credit’s Exposure to Ailing Software Industry Is Bigger Than Advertised. The Wall Street Journal. 29 Mar 2026. https://www.wsj.com/finance/investing/private-credits-exposure-to-ailing-software-industry-is-bigger-than-advertised-d80da378 (accessed 3 Apr 2026)

3 – The Bedokian Portfolio (2^nd Ed), p137-138

4 – ibid, p131-133

“Can Buy?”

As at the close of the market on Friday, our Bedokian Portfolio was down by about 4.75% since the beginning of the year, majority in part due to pessimistic market sentiments brought about by the ongoing Saas-pocalypse, rising oil prices and the fear of the collapse of private credit, to name a few obvious ones. It could have been worse, but we gave credit to the diversified nature of our investment portfolio and income returns from dividends for having a not-so-painful drawdown.

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During this down market, some participants are engaged in panic selling, but seasoned investors instead see this as opportunities, after which the next question would be “can buy?”.

For us, we use what we call indicators and signs, which I had mentioned a bit in the eBook¹. In short, indicators are statistics, figures and hard data, i.e., quantitative, whereas signs are personal observations, user experiences and the subjective “gut feel”, i.e., qualitative. They are like instrument gauges to provide better clarity and judgement to make the final decision, i.e., push the “Buy” button.

Indicators

One of the indicators that we use is the “10-30 Rule” which I also shared in the eBook², but we shall look at the “10” part instead; for instance, to see if the general market is ripe to enter, for this period, we would take an index (e.g., the S&P500) closing numbers at the beginning and end of 2025, sum them up, divide by two, and multiply it by 0.9 (10% less, hence the “10”), which calculated to be around 5,721 points. With this number still below the last closing of 6,368.85 points, it tells us that the current situation is not low enough.

The “10-30 Rule” could also be tested on individual counters; take Microsoft’s price points at the start and end of 2025 and going through the formula, the number is USD 405.99, and with the last closing price of USD 356.77 below the former, it presented a strong buy consideration.

Another indicator utilised is the relative price-to-earnings (P/E) between the index and a selected counter. The common case study for this is Alphabet’s P/E compared with the S&P500’s, which was 17.36 and 21.76 respectively back in 2025³, and it was one of the key factors for us to load up additional Alphabet shares in that year.

Signs

While indicators can be calculated, signs require a more qualitative understanding of the goings-on of the market and companies in question, and they can be subjective. The important thing is to see if there is an upside potential for the market or business going forward.

The current example which I could show would be the Saas-pocalypse where artificial intelligence (AI) is going to eat every software company’s lunches. There are already two camps split over the future direction, with some believing AI is going to take over them, while others felt it is an overreaction and saw the possibility of AI and software companies working together: in economic studies terms, substitute or complementary.

Putting signs into the context of buy prices, the conviction is to have the notion of “the rest are wrong and I am right”, and the current price is mismatched to the potential value of the counter.

Fundamental Analysis

Indicators and signs are some of the tools used in conducting fundamental analysis, and there are many others that could be contemplated in making a buy call, like ratios, profitability, market share, etc. A complete look is necessary before deciding on the key factors and ultimately, the go-ahead to press the button.

Disclosure

The Bedokian is vested in the S&P 500 via the SPY ETF, Microsoft and Alphabet.

Disclaimer

1 – The Bedokian Portfolio (2^nd Ed), p153-154

2 – ibid, p131-133

3 – Foelber, Daniel. Meet the Only “Magnificent Seven” Stock That Is Cheaper Than the S&P 500 (According to This Key Metric). 27 Jun 2025. https://www.fool.com/investing/2025/06/27/magnificent-seven-stock-sp-500-buy-alphabet/ (accessed 28 Mar 2026)

Black Gold

After the rise of gold and silver, the next commodity that got the world’s attention is crude oil, known as “black gold” colloquially. The recent conflict in the Persian Gulf saw the chokehold of the vital waterway known as the Strait of Hormuz, affecting some 20% of the world’s daily crude oil supply, majority of which were destined for Asia.

The effects were already felt within the last week or so. Most of the crude oil prices had passed the USD 100 per barrel mark, prompting diesel and petrol prices to spike, and the consequential prospect of inflation returning caused by rising costs of transportation of goods.

 

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Crude Oil in The Bedokian Portfolio

Crude oil is one of the three items to include in the commodities asset class of The Bedokian Portfolio. Unlike gold and silver, both of which can be held physically, for crude oil the simplest way for a layman investor to hold them would be via exchange traded funds (ETFs). The tricky part is that almost all these ETFs use derivatives called futures as their underlying assets, and due to their mechanics (like contango and “rollovers”), they do not really reflect the actual movement of spot oil prices. Hence, I consider crude oil to be optional for inclusion for investors who do not understand how they work.

The recent trade volume of crude oil ETFs had increased not seen since the start of the Russian-Ukraine conflict in 2022, denoting interest in such financial instruments in light of the recent confrontation. Using the United States Brent Oil Fund (BNO) ETF, which I oft utilised for oil plays, the price had shot up almost 41% since 27 Feb 2026¹, the day before the attacks began.

The Bedokian’s Take

If the fighting goes on and the oil blockade enforced, oil prices would likely remain elevated. The duration of wars is unpredictable, and for them to end would require at least one side to capitulate or both sides to agree, something which only the direct participants would know.

On the investment front, if one has the oil ETFs bought before the current crisis, the choice is either to realise some profits or to average up slowly using around 10-20% of the initial capital; the latter method is to provide a price buffer and some gains if oil prices come down suddenly.

Crude oil aside, there are other non-related counters that experienced a drop in prices, too. This is where one could find underpriced but fundamentally stronger companies to invest.

Finally, some analysts and economists were viewing this scenario akin to that of the 1973 Oil Crisis, where it was followed by a period of stagflation, i.e., inflation with slow economic growth. Whether this may happen is uncertain, but it always pays to have a diversified portfolio.

Disclosure

The Bedokian is NOT vested in BNO currently.

Disclaimer

1 – Yahoo Finance.

Lendlease REIT Preferential Offering

Screenshot of PLQ Mall from Lendlease REIT Website

Lendlease Global Commercial REIT (Lendlease REIT) has announced a preferential offering to raise around SGD 196.6 million to acquire the remaining 30% stake of PLQ Mall situated next to Paya Lebar MRT station, as well as to pare down existing debts and to pay off equity raising and debt financing costs. Existing unitholders will get 119 non-renounceable units for every 1,000 units held, priced at SGD 0.558 each.

Accordingly, with the acquisition, the distribution per unit (DPU) is expected to be accretive at +2.1%, with gearing maintaining at around 38%, which is not far off from the 38.4% announced during the REIT’s 1H FY2026 results announced almost a month ago.

Existing Lendlease REIT unitholders can exercise their offer from now till 18 Mar 2026.

The Bedokian’s Take

It was expected that Lendlease REIT would be getting 100% of PLQ Mall as spelt out in their 1H FY2026 financial results presentation on 13 Feb 2026, just that we did not expect them to carry it out so soon since their 70% stake was obtained only a few months ago in Nov 2025.

From a geographical perspective, PLQ Mall, together with its neighbouring Paya Lebar Square and Singpost Centre, is located at the heart of a 2-km radius that contains a diverse mix of residential, commercial, and industrial properties. This creates a central hub for both residents and workers in the area. Further south beyond the 2-km range is another commercial property in which Lendlease REIT has a minority stake: Parkway Parade. Notwithstanding the minor ownership, these two malls could complement each other in the Paya Lebar/Marine Parade region.

As a Lendlease REIT holder, in a longer term sense, and also to prevent dilution (at 11.9% based on 119/1000), it is prudent to lap up the preferential offer. Zooming out, one must not forget that Lendlease REIT still has a couple of prime retail assets in the form of Jem and 313 Somerset.

An issue, though circumstantial, is on the offer price of SGD 0.558; the price as of 11 Mar 2026 stood at SGD 0.555, which means if this price level persist till 18 Mar 2026, it might be worthwhile to obtain the units from the open market, especially if discount brokerages are used to transact.

Disclosure

The Bedokian is vested in Lendlease REIT.

Disclaimer

References

Preferential Offering to Raise Approximately S$196.6 Million –  https://www.lendleaseglobalcommercialreit.com/information/

1H FY2026 Financial Results. 13 February 2026 – https://www.lendleaseglobalcommercialreit.com/siteassets/investor-centre/financial-results/2026/1h-fy2026-results-presentation.pdf

 

UI Boustead REIT IPO

Screenshot from UI Boustead REIT Prospectus cover

It is finally here: the initial public offering (IPO) for UI Boustead REIT (which I had mentioned here before). Below are some of the key highlights from the prospectus:

IPO Application Highlights

• Offer price of SGD 0.88 per unit.

• Total offering size of around 677.2 million units, of which 33.9 million are offered to the public, with the rest in the placement tranche.

• Offer period from 5 Mar 2026 till 10 Mar 2026 at 12 noon.

Asset and Lease Highlights

• 23 properties in the REIT: 21 in Singapore (representing 71.2% of agreed property value) and two in Japan (representing 28.8% of agreed property value), focusing on logistics, industrial and business spaces.

• Portfolio weighted average lease expiry (WALE) of 5.8 years.

• Committed occupancy of 89.4%.

Financial Highlights

• Net Asset Value (NAV) of SGD 0.85.

• Forecasted yield is projected for 7.4% for 2026 and 7.8% for 2027.

• Aggregated leverage (gearing) of 37.9%, with interest coverage ratio of 4.7 times.

Selected Analysis

It is noted that most of the figures shown above such as the NAV and occupancy rate were as of 30 Sep 2025, which was almost six months ago. 

The first number that got my attention was the relatively low occupancy rate of 89.4%, likely attributed to the Japanese properties (one in Kansai with a committed occupancy rate of 76.7%, and another near Tokyo with 76.5%). However, the prospectus had mentioned the occupancy would reach 99.4% for the Kansai property by 2027, and the one in Tokyo had reached 100% as of 20 Feb 2026. This information at least gave some assurance on the occupancy issue.

For an overall comparison of their yields, gearing and WALE, I would use two REITs that are similar in terms of property type and with assets in Singapore and overseas (Figure 1):

REIT	Yield (%)	Gearing (%)	WALE (years)
UI Boustead REIT	7.4  (projected 2026)	37.9	5.8
AIMS APAC REIT	6.79	36.6	4.1
Frasers Logistics & Commercial Trust	6.13	34.8	4.9

 

Fig.1: Yield, Gearing and WALE figures for UI Boustead REIT, AIMS APAC REIT and Frasers Logistics & Commercial Trust. Data for AIMS APAC REIT and Frasers Logistics & Commercial Trust obtained from Yahoo Finance and their respective recent financial presentations. 

UI Boustead’s projected yield, gearing and WALE are on the higher side when compared with its peers.

The tenant mix of UI Boustead REIT’s properties are diversified in terms of lease, tenant profile (single or multi tenanted) and sector/industry, with the highest net property income contributor (a leading aircraft manufacturing company) at 8.6%, thus reducing tenant concentration risk.

The Bedokian’s Take

UI Boustead REIT is another industrial, logistics and business space to consider on top of the two which I had used for the comparison in Figure 1. At SGD 0.88, the IPO price is slightly above the NAV of SGD 0.85 (+3.5%), but I find this premium acceptable. For those who did not have such REITs in their portfolios and wished to venture into these property types, this may be a good start. Personally, however, I may give this a skip as we have AIMS APAC REIT and Frasers Logistics & Commercial Trust in our portfolio.

Take note that the public tranche is relatively small (only around 5% of the entire offer), and being a REIT there would be many bidders for it, so one may need to go to the open market should one could not get their desired allocation. 

Disclosure

The Bedokian is vested in AIMS APAC REIT and Frasers Logistics & Commercial Trust.

Disclaimer

References

UI Boustead REIT Prospectus - https://links.sgx.com/FileOpen/UI_Boustead_REIT_Prospectus_(5_March_2026).ashx?App=IPO&FileID=6738

 

Hard Carrying

“Hard carry” is a terminology used by gamers that refers to a player or game character dominating an entire game or a game mission, resulting in the player’s/character’s team victory, even though the rest of the teammates are either performing poorly and/or did not do anything much. Putting it in a general context, a person is seen hard carrying a group when he/she was the one pulling everyone through with his/her skills and/or knowledge.

Picture generated by Meta AI.

On the investment front, there could be a few securities or counters doing the hard carrying of gains, such as those that provided the most capital gains, or those that gave the most dividends, or a fair mix of both.

It would be an interesting exercise to see what counters are the “hard carries” in one’s own portfolio, and although it may be comforting to see which were the resulting counters, an analytical and objective view must also be adopted on what to do with them.

Sustainability

Sustainability is often one of the key considerations of investors when conducting a portfolio review. Questions such as whether a counter would continue to give the same growth rate and/or provide the same yield throughout. Even if it cannot sustain the required increment, does it able to maintain within the desired threshold, or perhaps it could still provide some alpha over market returns or inflation rate? These two questions could only be guesstimated by fundamental analysis, i.e., reading up on the company’s forward trajectories and plans, and foreseeing how things unfold in the markets or anything that has a direct or strong indirect effect on the company/sector/industry concerned. 

Sizing

Hard carries in the growth category may run into the risk of being too dominating in terms of sizing in the portfolio. Unless one’s conviction and confidence on a company is strong, it pays to be diversified to avoid a wipeout should anything happen. Different people have different sizing guidelines, which for our Bedokian Portfolio the limit is 12% (for individual company counters).

Selling

On a related note to manage sizing, selling part of the hard carrying holdings is one way, which on a wider scale it is called rebalancing. As part of diversification, rebalancing allows the investor to move the capital from one oversized asset class or counter to an undersized asset class or counter, thus avoiding the potential larger loss should the abovementioned wipeout occurs. A big challenge in carrying out rebalancing is the mental hurdle of not letting a winning position go, thinking that it still has the potential to go higher (and earning more). For this it may be necessary to sacrifice a little bit of the hard carriers for the sake of the portfolio, for I had mentioned before, no security/counter is bigger than the portfolio itself.

Possibilities And Probabilities

Although these two words may be similar to each other, both are different in meanings. Possibilities are occurrences that can happen, whereas probabilities are the likelihood of the occurrences happening. Using a lottery as an example, it is possible to win the top million-dollar prize, but the probability would be very small given the odds of winning it (literally at least a one-in-a-million chance).

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The reason that I brought up these two things was from my encounters with other investors over the years, particularly on the issue of risk. While I had met some who totally disregard risks (so-called the “boom or bust” or “all-in and hope for the best” investors and traders), there were many others who did consider the different aspects of risks in their investments, to whom I give my praises to. Among the latter group, however, were some individuals who treated all possibilities with equal concerns; in other words, all potential risk happenings were given the same probable treatment by the person(s).

This is akin to an investor viewing the possibility of a company’s share price going down to zero and that of a brokerage firm absconding with his/her securities with the same probability lens. Hence, a typical interaction with this group would be peppered with many “what ifs”, like “if I buy overseas securities, what if the custodian ran away with my money?” or “what if A invaded B, resulting in the share price of the company located in B going down to zero?”, and so on.

For investors with this line of thought, a little bit of self-critique is necessary to slightly wean off from the equal-probability bias. After acknowledging a risk possibility, the first question to ask oneself would be how often it happened. If it was many times, assign a higher probability to it; if not, treat it as an event that one may not see again in his/her lifetime, and then go on and assess the next risk happening. After going through the possible risks, a probability scale of sorts is formed. Though in strict sense, probabilities are quantifiable and calculations are required to give them a number (e.g. percentage or odds), but having a simple probability scale should suffice for one to have a clear picture.

In an ironic twist that even myself adhere to, it is good to have a contingency plan for even the lowest probability risk event, and most are surprisingly easy to implement. Afraid of a custodian brokerage running away? Open an account on another one (what are the chances of two custodian brokerages going rogue at the same time? Very remote). Scared of a company’s share price going to zilch? Diversify one’s holdings. Most of these can be mitigated, but there are several events where one (or almost everyone) cannot prevent, like a total global market collapse, or an asteroid 10 kilometres in size hurtling towards Earth at 60,000 kilometres per hour. For this, should it really happens, it has been nice knowing everyone.

2025 Review, 2026 Preview And Bob

It is that time of the year again where we will go through what had happened the past year, what may happen the next year, and some updates on our hypothetical investor Bob.

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2025 Review

Going through the usual markets which I cover annually, the S&P500 had returned +17.86% year-to-date (YTD) while, surprisingly, the Straits Times Index (STI) returned higher at +22.41%, and reaching an all-time high of above 4,600 points as at the close of Christmas Eve.

The STI, often seen as a laggard and bypassed by some local investors, saw a period of happy days over the past year, to which in my view was partially attributed to capital flowing from other parts of the world to our deemed safe haven markets.

The best story for this year comes not from equities, properties or bonds, but from gold and silver, which both have a place in The Bedokian Portfolio. The news of debasement of the United States dollar coupled with the increased use of silver in industrial (and political) use resulted in a spike of the two precious metals’ prices mainly in the second half of the year, with gold and silver having +70.64%¹ and +143.01%¹ YTD respectively, beating the aforementioned equities indices.

HACK, IPAY & ICLN

Since last year, I have included a section in my year-end posts highlighting the three sectors/industries: cybersecurity, payment solutions, and clean energy, represented by the exchange traded funds (ETFs) HACK, IPAY, and ICLN, respectively, in which we are vested in. The table below (Fig. 1) shows the ETFs’ YTD performance for the whole of 2025 (up till 24 Dec 2025) and the compounded annual growth rate (CAGR) from 1 Jan 2018 to 30 Nov 2025 (nominal and inflation adjusted) since I had espoused them in 2017.

 

ETF	2025 YTD (till 24 Dec 2025)	Nominal CAGR (1 Jan 2018 to 30 Nov 2025)2	Inflation Adjusted CAGR (1 Jan 2018 to 30 Nov 2025)2
HACK	+9.99%	+13.51%	+9.74%
IPAY	-8.17%	+5.43%	+1.93%
ICLN	+45.06%	+9.37%	+5.73%

 

Fig.1: YTD and CAGR nominal and inflation adjusted returns of HACK, IPAY and ICLN

2026 Preview

Amongst the boomtown happenings, we also heard about economists and analysts projecting a market downturn next year, amplified by news of layoffs (happened and projected) and increasing unemployment numbers. The constant push and pull of conciliatory and retaliatory trade measures between the two largest economies, the United States and China, brought about more uncertainty that ironically in my opinion, the resulting rise of our local stock market.

Whether good times or bad are forecasted, it is important to note that we cannot really tell what lies ahead, but it is equally important to stay invested and diversified; diversification after all is the first line of defence against market uncertainty.

Bob

I had just realised Bob’s portfolio did not show up as it should be on the blog page, hence going forward I will transfer the portfolio and post it as a static table form after rebalancing on 2 Jan 2026 with an SGD 5,000 cash injection.

Anyway, Bob’s portfolio value is now close to SGD 160,000 and had collected almost SGD 4,600 in dividends. Also, I would be changing Bob’s REIT ETF to another after considering the other ETF’s fund size and liquidity, so stay tuned after 2 Jan 2026 for the reveal of Bob’s portfolio.

Onward to 2026!

Disclosure

The Bedokian is vested in HACK, IPAY and ICLN.

Disclaimer

All figures are from Yahoo Finance as of 25 Dec 2025 unless otherwise stated.

1 – TradingView (accessed 25 Dec 2025)

2 – Portfolio Visualizer, HACK, IPAY and ICLN between 1 Jan 2018 to 30 Nov 2025 (accessed 25 Dec 2025) 

Is Such Knowledge Really Necessary?

 A few days ago, someone had posed me this question:

“Is it necessary to know all these before starting to invest?”

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By “all these”, the person was referring to a blogpost I made back in 2021 (link here), where I had introduced a structured and holistic guideline to learn investing. An acquaintance of mine, after reading the post, then asked the above question. The viewpoint provided was that such knowledge was deemed too overwhelming and not suitable for people who may not have the aptitude to grasp the concepts.

Honestly, this was not the first time I was queried on it, so I am writing this post providing my viewpoints and use the link as my answer in case anyone asking me again in future.

No doubt it is a daunting task to go through the structured learning guideline on how to go about investing, in my opinion it is important to know what one is getting into. Whenever I embark on a learning journey on a topic, my preference is to know the underlying concepts, or at least the basic understanding of the whole works, and with it, further related information would be easier to catch on to and eventually the learning would become more gradual.

Besides knowing what one is doing on the investment front, the possession of the know-how also serves as a bulwark against fishy investment/trading schemes. Oftentimes there were news reports of people falling for investing frauds which, upon critical thinking and questioning, would have been avoided.

It is not difficult to start learning on investing, for it is akin to learning other new skills and hobbies like cycling and pickleball. The availability of generative artificial intelligence tools like ChatGPT and Gemini makes learning easier nowadays (though some caution and basic fact finding is still needed for this). The choice of learning is there, whether one wants to have the effort to take it up.

Passive Investing Simplified?

Investment legend Warren Buffett included investment guidelines in his will for his wife, recommending 10% of cash be allocated to short-term government bonds and 90% to a low-cost S&P 500 index fund. While this approach may seem unexpected given his reputation as an investor, the reasoning is practical: many individuals lack expertise in selecting specific equities, so investing through an index is a straightforward alternative.

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A common method for index investing is via exchange traded funds (ETFs). Index ETFs aim to replicate the composition of their underlying indices as closely as possible. These products appeal to passive investors—those who invest with minimal ongoing management and periodically rebalance their portfolios.

Using asset class diversification, it is feasible to construct a diversified portfolio with just two ETFs for an equity-bond mix, or up to four or five for broader diversification strategies such as the Bedokian Portfolio. However, the extent of diversification depends on several factors.

Selecting global equity and bond ETFs, along with additional options like global real estate investment trust (REIT) ETFs and commodities ETFs, can provide broad market exposure. However, true diversification may be limited by the weighting methods of the indices and the corresponding ETFs. Market-capitalisation weighting assigns proportionally higher representation to larger companies, while equal weighting treats all constituent securities equally. Market-cap weighted ETFs are more prevalent, which means that sectors and countries with larger companies, such as U.S. technology firms, tend to dominate these indices, potentially reducing diversification.

To achieve better diversification, additional ETFs targeting specific regions, countries, or industries may be required to manage concentration risk. As a result, investors might select multiple ETFs for each asset class rather than relying on a single fund. Further considerations, such as bond duration and property types within REITs, also affect diversification.

Passive ETF investing remains one of the most straightforward approaches compared to other investment styles. While complete diversification across all levels is challenging, selecting appropriate ETFs for each asset class can provide reasonable market coverage with some compromise regarding regional or sectoral biases. The primary goal of investing is to benefit from compounding returns that outpace bank savings rates and inflation.

Disclosure

The Bedokian is vested in the S&P500 via the SPY ETF.

Disclaimer