Almost unnoticed and creeping up silently, my index portfolio has grown over the years to become my number 2 portfolio today. It has grown from 8% at end 2017 to become 28% of my total investment this weekend.
Amazing growth! Even faster than my overseas portfolio, which has grown from 9% to 18% today on the same basis.
Although I am a bit surprised when I did the tabulation just now, in reality I should not be as I have on purpose pivoted from individual company shares to index investment two years ago.
While I traded the shares of individual companies when presented with the opportunity, I buy and hold for my index investments. It is very rare that I traded with them unless to do some intra-index portfolio adjustments. The reason is that I want my index portfolio to eventually become the one that is providing me with the bulk of my passive income.
Today, my local equity investments (i.e. individual companies listed on Singapore Exchange) is still my largest portfolio, at 56%. I hope to bring it down to 50% by end of this year by raising my holding in overseas stocks and index portfolio.
Unlike my local equity portfolio which gives me almost 5% dividend yield, my index portfolio can only deliver at best 2.5 to 3.0% annual yield. Hence, to meet my desired passive income for FIRE from index portfolio only, I would need a larger capital outlay. Not easy I know – I would try.
In case you are wondering, the lower yield on my index portfolio is because it contains bonds and gold ETFs.
I will definitely continue to grow my index portfolio because it attracts me with the stability – especially when it comes to the time comes when I have no more active income.
I would need the stability of passive income stream to be able to plan for daily routines, special activities and to sleep well in the night.
Will share more of my index portfolio if there are more interest from you.
Have a great weekend and investment week ahead.