The Bedokian Portfolio Turns 10!

Back in July 2016, the first post on this blog went live. It was a short piece, little more than a welcome note explaining that this would be a space for observations and opinions on the markets and the economy, alongside clarifications on The Bedokian Portfolio ebook (then the first edition) that had just been published. I was hoping that the information from the ebook and blog would be useful to whoever was reading them. At that time, there was still a relative shortage of investment books written with a Singapore context, especially in the field of portfolio management. 

Picture generated by ChatGPT

Looking back at the past 383 posts, I had commented on the general market and economic situations, analysed the various securities (vested or not), and shared on the psychological and behavioural aspects of investing. Beyond the blog itself, the past decade also saw the publication of the second edition of The Bedokian Portfolio, The Trading Portfolio Handbook, and an amateur paper testing The Bedokian Portfolio on the United States market (all available for free download here). 

Recently, three apps were developed: Equities Indicator, Growth Indicator and S-REITs Indicator (see here), and they assist in screening value and dividend equities, growth equities and Singapore real estate investment trusts (REITs), respectively, according to the selection guidelines from the The Bedokian Portfolio ebook¹. The introduction of AI-generated pictures and characters for the blog, alongside the apps, represents my experimentation with AI, which I will elaborate on further below.

In the past ten years, we had gone through a global pandemic, trade wars, periods of low and high interest rates, the ongoing de-globalisation and the current AI boom. Through all of this, the five asset classes of the Bedokian Portfolio: equities, REITs, bonds, commodities, and cash, experienced their own respective ups and downs. It is precisely the correlation between the asset classes, together with the accompanying disciplines of diversification and rebalancing, that brought about the gradual compounding growth and relatively lower volatility of the portfolio.

Where is our portfolio standing now?

I had shared earlier here that our main Bedokian Portfolio was down 4.75% year-to-date (YTD). As of local market close yesterday (29 Jul 2026, 5:00 PM), our portfolio was up around 6.8% YTD, and the total market value had surpassed 9.4% of our year end 2029 target. The latter is broadly expected, as we are benchmarking against a 4% year-on-year growth trajectory, and this conservative performance measure acts as a dampener to smooth out the percentage swings of returns.

The Use of AI

In recent years, AI has become indispensable in our digital life. A lot of apps and even the familiar online search engines have seamlessly incorporated the AI tools, in particular large language models (LLMs) and chatbots. I had also started on this trend with the abovementioned picture generation, and development of the three apps through AI assistance (a.k.a. vibe coding).

On top of this, we sometimes use AI to assist and augment our investment and trading research and analysis. The fun part about this is we could use the output of one LLM, and input its result on others, i.e. using the “LLM-as-a-judge” method, to provide additional perspectives.

AI tools are powerful in terms of collecting, aggregating and summarising data and information, and sometimes in inference. Still, my honest opinion is, for the investing and trading aspect, some manual interpretation and intervention is needed, and the ultimate judgment call should be reserved on the individual investor/trader.

Going Forward

The future is unknown, as always, and there will be events that disrupt the whole scheme of things, like complex geopolitics and AI in the current context. What is known is that this blog will continue for the foreseeable future, providing tips and commentary on the investing world.

Here is to the next chapter, and to a fruitful investing and trading journey ahead for all of us.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

1 – The Bedokian Portfolio (2^nd Ed). Ch12 and Ch17.

How Liquid Should Your Liquidity Be?

Cash plays an important role in the Bedokian Portfolio, a pool of liquidity that could be deployed to the other four asset classes (equities, real estate investment trusts or REITs, bonds and commodities). Cash injections, through regular contributions from disposable income, dividends from equities, distributions from REITs, coupons from bonds and interest from cash, contribute to this pool.

What if one could get more bang for the buck from this liquid pool?

Sounds a bit contradictory as cash is meant to be readily deployable capital. Unless the cash is in physical form and locked away in a safe or a metal container of a famous powdered malt-drink, it is still earning something depending on where it is.

 

 Picture generated by ChatGPT

 

Where Else To Put Cash?

The first obvious place is the basic bank savings account, which is around 0.05% based on what I had seen from bank websites. The next bank offering would be fixed deposits that offer a higher interest rate but with locked-in periods ranging from one month to three years.

 

Besides banks, there are other means of holding cash and still earning something. Six-month and one-year Treasury Bills (T-Bills) are issued by the Monetary Authority of Singapore (MAS) and can serve a similar purpose to a fixed deposit, although they are government securities rather than bank deposits. There is another financial instrument issued through MAS, the Singapore Savings Bonds (SSBs), a 10-year savings plan with incremental interest rates over time.

 

Another mention is money market funds, or MMFs. These are unit trusts that invest in short-term debt securities such as T-Bills, short-term corporate debt and fixed deposits. Hence, they combine several cash management instruments within a single investment vehicle.

 

Not All Are Equal

Safes, bank accounts, T-Bills, SSBs and MMFs are ways to hold one’s cash in the portfolio and the latter four generate some return, albeit lower than the other asset classes. However, they are different in terms of their structures and characteristics. Bank savings accounts and fixed deposits are insured up to SGD 100,000 by the Singapore Deposit Insurance Corporation (SDIC), subject to conditions. T-Bills and SSBs are issued by MAS and backed by the Singapore Government. MMFs are investment vehicles, so they are subject to market forces and are not guaranteed in the event of a collapse, though the latter happening is very remote.

 

My take is that the more important aspect of cash is not about how much yield I can earn, but rather the liquidity of the various mentioned instruments. For me, liquidity matters more than squeezing out every last iota of return.

 

Monies from bank savings accounts can be withdrawn anytime. MMFs can generally be redeemed within a day or two. SSBs are redeemed monthly, while T-Bills and fixed deposits will have to wait till the end of the tenure, provided the former are not sold in the secondary market, and the latter are not closed prematurely. Looking across these cash management instruments, there is generally a trade-off between yield and liquidity.

 

Any Compromise On This?

Choosing a place to hold cash for the portfolio is like considering the "liquidity of the liquidity". My take is, as a ballpark, a holding period of no more than six months is preferred; this is the time frame where a typical passive investor would rebalance his or her portfolio, so a six-month T-Bill or fixed deposit would allow the funds to become available again for deployment. Also, other recent streams of cash received from the portfolio could be utilised first, and this may lead to a probable sub-division of cash into liquid (bank savings accounts and MMFs) and slightly less liquid places (T-Bills, SSBs and fixed deposits), or maybe even in safes and tin cans (though a trip to the automated teller deposit machines is needed for this).

 

Final Take

There is a tendency for investors to judge every asset class by its returns. Equities are expected to grow. REITs are expected to generate distributions. Bonds are expected to provide stability. It is only natural, then, to expect the cash component to chase the highest interest rates available.

 

But perhaps that is asking it to do something it was never meant to do.

 

One lesson I have learnt over the years is that every asset class should have a clearly defined purpose within a portfolio. Problems often arise when we expect one asset class to behave like another.

 

In the Bedokian Portfolio, the role of cash is simple. It is not there to outperform the other asset classes. It is there to provide a readily deployable pool of liquidity whenever investment opportunities arise. If it can earn a modest return while waiting, that is certainly welcome. But if chasing a slightly higher yield means sacrificing that flexibility, then perhaps the extra return is not worth the compromise after all.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

References

https://www.mas.gov.sg/bonds-and-bills

https://www.investopedia.com/terms/m/money-marketfund.asp

https://www.sdic.org.sg

 

Doing Nothing Is Doing Something

One of the oft-heard questions from fellow investors during periods of market volatility was, "What should I do now?"

Picture generated by ChatGPT

It is a natural question. When markets move like a roller coaster, there is an expectation that investors should do something, e.g., buying, selling or making some sort of adjustments to their portfolios.

However, sometimes the best decision is to do none of the above.

While doing nothing is mostly thought of as being indecisive or lazy, but in investing, it could be a form of a deliberate action taken.

The Urge To Act

Humans are conditioned to equate action with progress, i.e., getting things done. Problems in our personal and working lives are taken care of by doing something, so when issues popped up, the urge to solve them is there.

The catch is that markets do not reward activity, but rather they reward good decisions.

Has Anything Really Changed?

Let us assume that an investment portfolio fell 10% over a few weeks.

Has the investor's financial objective changed?

Has the investment horizon shortened?

Have the businesses of the securities held permanently deteriorated?

Has the portfolio drifted sufficiently to warrant rebalancing?

If the answer to these questions is "no", then perhaps the investment plan requires no immediate action. The market has changed, but the portfolio itself may still be doing exactly what it was designed to do.

Knowing When To Act

This does not mean investors should never act.

There are occasions when action is necessary, like business fundamentals have deteriorated, asset class allocation drifted too far from the target percentages, and/or personal circumstances has changed. In such cases, being inactive may be the wrong decision to take.

The important point is that decisions should be driven by one's investment philosophy and methodology, not by the latest market headlines.

Takeaways

One of the least known lessons in investing is that not every situation demands a response.

There are times to buy. There are times to sell. And there are times to simply allow a well-constructed portfolio to continue doing its job.

Doing nothing is not the absence of a decision. When supported by a sound investment framework, it is a decision in its own right.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

Bob’s Portfolio Update: June 2026

Our Bedokian Portfolio test investor, Bob, had recently rebalanced his portfolio on 30 June 2026, which can be seen here.

At the end of last year, I had mentioned that Bob would be changing his real estate investment trust exchange traded fund, or REIT ETF (here). As observed, Bob usually rebalances his portfolio biannually: the first market day of the year in January and the last market day in June. On 30 June 2026, along with the usual SGD 5,000 cash injection, Bob had swapped out the REIT ETF with another. The timing was impeccable as that date is the last cum-dividend day for the replacement ETF (Amova-StraitsTrading Asia ex Japan REIT Index ETF, or ticker CFA).

Picture generated by Gemini

Why The Switch?

The previous counter in Bob’s holdings, the Phillip SGX APAC Dividend Leaders REIT ETF (BYJ), was the first of its kind, listed in October 2016. When Bob started his investment journey in January 2017, the availability of the Phillip REIT ETF came at the right time to be the representative for his REIT allocation.

In December 2025, while preparing for rebalancing, Bob reviewed the portfolio and decided to change the REIT ETF. The major consideration points were:

• Cost – Total Expense Ratio (TER): BYJ’s TER is 1.70% while CFA’s TER is 0.55%. A lower TER meant that returns would be eroded lesser by fund expenses.

• Size – Assets Under Management (AUM): BYJ’s AUM is around SGD 10 million and CFA’s AUM is around SGD 712 million. A higher AUM allows better economics of scale in which a lower TER is one of them. Also, a higher AUM fund enjoys better liquidity in terms of a narrower bid/ask spread that is good for quick transaction and price discovery.

• Diversification – Holdings and Exposure: BYJ holds 30 REITs while CFA holds around 43 REITs. In terms of geographical and sector exposure, accordingly BYJ is three countries (Singapore, Australia and Hong Kong) with a huge skew towards retail (around 43%); CFA’s exposure is six countries (Singapore, Hong Kong and India among them) with at most 26% to a sector, therefore is more diversified.

• Dividend Yield: The 12-month dividend yield as of the fourth quarter of 2025 for BYJ and CFA are 4.23% and 5.36% respectively. A dividend yield of 5% and above is preferred as REITs are seen as the main income generator in the Bedokian Portfolio.

Why Not Others?

Good question. There is three other REIT ETFs listed, namely Lion-Phillip S-REIT ETF (CLR), CSOP iEdge S-REIT Leaders ETF (SRT) and UOB APAC Green REIT ETF (GRN). Taking the four considerations in the previous section, CLR’s and SRT’s TER are slightly higher (both 0.6%) and consisted only of Singapore-listed REITs. GRN also has a higher TER (0.82%) and has the lowest dividend yield among the five (3.88%). 

However, if asked for an alternative to CFA, Bob would likely choose CLR for its larger AUM and higher dividend yield.

Takeaways

Bob's switch from BYJ to CFA is less about chasing performance and more about maintaining portfolio efficiency. A lower TER, broader diversification and a higher distribution yield made CFA the more suitable candidate for the REIT allocation today.

The key takeaway is that passive portfolio management, as practiced, is not a "set-and-forget" exercise. While the overall framework remains unchanged, the securities used to implement it may occasionally need to be reviewed and updated as new securities become available.

Disclosure

The Bedokian is vested in CFA.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

References

https://phillipfunds.com/phillip-sgx-apac-dividend-leaders-reit-etf/

https://sg.amova-am.com/general/funds/detail/amova-straitstrading-asia-ex-japan-reit-index-etf-sgd-class

https://www.reitas.sg/wp-content/uploads/2026/03/SGX-Research-SREIT-Property-Trusts-Chartbook-Q4_2025.pdf