Having the 5% Annual Yield Target Helps Shape My Investment Approaches

Yesterday X’mas eve dinner with my extended family was nothing fancy but it was a nice and cosy family dinner around our dinning table.

It is such moment that makes me feel that it doesn’t take much for one to feel contended for and be grateful. I feel the same in personal investment.


black haired woman hugging gray pillow near glass panel window
Photo by bruce mars on Pexels.com


Many of my regular readers would know that I am contended with a 5% annual yield from my portfolio. You may think that I have this target ever since I started my investing journey many years ago … no, no, far from it, in fact, it came to me just three years ago.

Before that, I was speculating … hoping … dreaming. I made some money from speculation but from time to time, I got burnt big time.

I cannot remember how the 5% target started … maybe because I got tired of the “thrills” of speculation or maybe because of some books or blogs that I read that woke me up (like AK) or maybe because I felt a deep sense of confidence loss in job security and I need a more stable alternative income or maybe I just got “wiser” suddenly …


No matter what the reason may be, this 5% annual yield target has stuck with me from that moment onwards. It has been my “North Star” since then, guiding me in my investment decisions and approaches.


Having the 5% annual yield target changed my investment approach drastically. Well I still speculate from time to time but it is no longer my big aim in investment … in fact, it is only a tiny part now.

Because of this new target, I started to …

(1) divide my equity portfolio to Income and Growth. My Income portfolio are dividend yielding shares that I want to depend on for “Income”. I would be hesitant to sell and even if I do, I would trade and still keep a core holding. On the other hand, my Growth portfolio contains shares that may not distribute dividends and I don’t intend to keep them for long term. Some are just for short term trading gain.

(2) create a new “INDEX” portfolio that contains ETFs and unit trust – investing in bonds, equities, Gold and Reits. It is a portfolio that I literally plan to “buy and forget”. I started “low trading cost” monthly investments using POSB Invest, with Maybank initially and later Phillips and most recently with MoneyOwl. Today, it is a sizeable portfolio and I am determined to continue to grow it as long as I can with my active income.

(3) diversify and invest in bonds. More precisely, Singapore Saving Bonds. I still feel that it is the best form of investment tool that Singaporeans can have. I am glad that I managed to max up my SSB entitlement, which was increased this year by drawing funds from my equity portfolio into it. Today, I am also following the SG Government Bonds and may from time to time, invest small amounts in it. I almost brought into US Treasury Bonds ETF earlier this year too when the Fed interest rate peaked but I hesitated because of the 30% withholding tax and missed it.

(4) diversify beyond the shores of Singapore into Hong Kong and USA. I consider Hong Kong as a platform into China as many big Chinese firms are listed there. So, with both markets, I achieve geographical diversification and gain exposure into the 2 biggest trading economies of the world. I just got a lot more serious in building up my “international” porfolio this year. To many of you, I know you probably think that I am already many “rally” years behind … but I think it is better late than never. I am likely to put more attention in building this “international” portfolio in the new year.


Together, these few portfolios have brought me closer to the 5% annual yield with a level of risk that I feel is sufficiently diversified.

I hope this helps to provide some inspiration to you that personal investing doesn’t mean you need to make a lot of money in a short time to be considered successful.

You define success for yourself and you will make a difference to your journey towards FIRE.

Merry Christmas folks.



3 thoughts on “Having the 5% Annual Yield Target Helps Shape My Investment Approaches

  1. Hi,
    Nice reading article.
    Can I check wo you something? – for your ”Growth” portfolio, do you have any “percentage” at which you will usually sell shares!!

    Liked by 1 person

  2. Hi,
    Nice reading article.
    Can I check wo you something? – for your ”Growth” portfolio, do you have any “percentage” at which you will usually sell shares!!

    Liked by 1 person

    1. I used to have 10% gain but nowadays I apply less often … I trade around a core holding. But 10% remains the first milestone that I will thinking if I should take profit …


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