Richer but can’t help feeling concerned with being over-invested

Starting this year, I occasionally blogged about my net worth. I calculated it based on (Total Assets – Total Liabilities). However, in defining “net worth”, I have left out the “bulky” and iliquid assets/liabilities like property and car. The reasons being it is difficult to translate them into cash immediately when needed, it is also challenging to assess its market value and as I called them – are bulky and can easy slew the analysis.

Following an analysis yesterday, I realised that my net worth has experienced a roller coaster ride very much like the local stock market through the last few months. And one new development from my analysis is the concern that I may be overly invested. If the local stock market really tanks, my net worth will decline significantly and I will really be in deep deep trouble. And this trouble will double or triple if you are into margin financing massively.

Below is the chart showing my net worth in last 8 months (Dec 2017 – July 2018), index to Dec 2017 number as 100.


It gained 10% by end of April 2018 but after that, it started to decline until June before picking up slightly in July to end at 106, +6% above my net worth assessed at end Dec 2017 => in some way, I am happy with it as I am “richer” now that I was 7 months ago.

However, what was most enlightening was that when I overlapped this with the STI by the similar indexing, I realised that the profile matches quite closely. STI also peaked in April before declining to June and picking up slightly at end July. The key difference however is that STI at end July 2018 is still 2% below the start of the year. The reason is the step cash increase from my annual bonus.

I have kept my cash level at 9 to 14% of my net worth throughout these few months. In other words, 85-90% of net worth is invested, mainly in companies and corporate bonds listed on the local stock exchange and the SSB. That may explain the similarity in the profile between my net worth and STI.

By the way, the increase in March were due to crediting of my annual bonus into the bank account. Net worth increased despite the reduction in STI. It goes to reinforce that the income from my job is still a major and contributor to my net worth.

From this analysis. Do you feel that I am taking on too much risk?

Is holding 10% cash sufficient? I remembered a useful article from AK last weekend on the need for emergency cash … I will need to spend some time to look into this => it’s not a good feeling to be so vested in the stock market … peace of mind is priceless


Any thoughts?

Have a good weekend folks.



  1. Glad that Net Worth is Holding On

9 thoughts on “Richer but can’t help feeling concerned with being over-invested

  1. Investment portfolio size matters after many years in the workforce with constant injections and growth. By then you will realize portfolio do not flow with STI index as well unless we micmick them similar. But we wouldn’t want them to perform similar unless is advantages to us.

    Liked by 1 person

  2. I hold about 10% cash only. Risky too. The assumption is that if I get retrenched I’ll be out there busting my hump working as a private nurse so I don’t think I will need too much emergency cash.
    Not sure if you are like me. Seeing too much cash sitting around hands will be itchy.

    Liked by 1 person

  3. Hi Warriortan, very nice food for thought. Coincidentally I was also reading an article yesterday about how being fully invested may not be a bad thing.

    To be fully invested means that you can potentially get the highest return in the long run by maximizing your funds. This is especially true for small capitals because we can always buy quantities of smaller businesses. We never know how long will the next recession come and we might lose out on these opportunities if we wait too long.

    On the other hand, we must also have the emotional capacity to also stomach volatility in the stock market, and trust ourselves. If the stock market drops 20% tomorrow, would you be able to take it? You must if you are fully vested, sit back and ride along with the “crisis” because eventually in the long run, everything will go back up again -probably even higher than it was before.

    Nevertheless like you said, peace of mind is the most essential thing. As of now I am about 42% in cash based on my liquidity. But that is also because I have a small portfolio.

    Maybe I should response to your article with a blog post? 😀

    Miss Niao.

    Liked by 1 person

  4. We are somewhat like you, a majority of our net worths are invested, keeping about 5-10% cash. I guess it really depends on individual to individual, just do what you are comfortable with. Since you start wondering, then it might be too much…

    How many zeros are hidden from the chart? Hahahaha.

    Liked by 1 person

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