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Interview: If You Had $250,000, How Would You Allocate it?

Recently, during an interview, I was asked this question, to suggest a possible portfolio allocation for people (Singaporeans) in their early 30s, with $250k of investible cash to start with. Here is my answer in full:

If you only have $250k to start with, I would suggest a diversified approach of various asset classses to maximise returns.:

  • 25% allocated to cash (war chest)
  • 10% to cryptocurrencies
  • 20% to trading account
  • 20% to commodities
  • 20% to businesses, startups, angel investments
  • 5% to stocks, REITs, ETFs

Currently, the bulk of the holdings is in cash, since the market is pretty “risk-on” at the moment with much political and economic uncertainty about trade wars and real wars. Hence, I only included minimal stock holdings, as the stock markets (S&P 500)are at 8-9 year highs, so I will wait to buy in at a lower price should the opportunity arise.

One important factor is the 20% allocation to trading account, as this generate monthly cashflow from stocks/forex trading to continue growing the total portfolio size aggressively, which can then be allocated to other asset classes within the portfolio.

10% to cryptocurrencies is considered a “wild bet” which could be a zero or hero; lastly 20% to businesses is for people who have some prior experience to invest directly in businesses, or start their own. Personally, my portfolio includes several businesses, including a cafe and pub.

I have allocated 20% to commodities, as commodities are likely at their cycle low. The GSCI (Goldman Sachs Commodity Index) is one of the main benchmark for commodity prices, and the (GSCI/S&P 500) is used to measure the prices of commodities relative to stock prices. Currently, this measure is at a 50-year low, which suggests cheap commodities as a potential investment.

I have excluded real estate from this sample portfolio, as I do not include “own stay” property as an investment asset, and $250k is too small for any major property investment. For my own portfolio, i have invested in several properties as I feel that the Singapore property market will continue to rise for the next 5-10 years.

I have also excluded fixed income, as for Singaporeans, the CPF (SA account at 4%) is pretty much similar to a “risk-free” high-yield bond, hence it serves well as the fixed income component of the portfolio. For my own portfolio, i have hit the minimum sum, which will provide a good safety net for retirement.

I hope this has provided you a good template to start building your portfolio, but do keep in mind that ideally you should be looking to rebalance your portfolio every 1-3 months.

Exclusive Interview at the WWCC 2017

Last month, I was interviewed at the World Wealth Creation Conference (WWCC), and I shared some insights on my 15-minute trading system and also had a short discussion about Bitcoin. I talked about the large potential of Blockchain and cryptocurrencies in general.

Since then, the prices of cryptocurrencies have continued to soar. I will be following up with a new blog post on my full crypto strategy for 2018 very soon. Stay tuned! 😀

Update: Answer to Triangle Puzzle (At Last!)

This is a follow-up to this post I made last week:
A Simple Puzzle that Stumped Many of the Brightest Minds – Can You Solve It?

2016-05-11 00.36.43

 

HERE’S THE ANSWER:

Although it looks simple, the trick is that such a triangle simply cannot exist. The maximum height can only be 5, as show in the diagram below.

impossible triangle

Read more: https://www.quora.com/What-is-the-toughest-question-ever-asked-in-any-interview/answer/Prashant-Bagdia?srid=h4JL

 

SO IS THERE A REAL ANSWER?

Technically, yes, if you consider a 3-Dimensional (3D) triangle. 😀

3d triangle

Read more: https://www.quora.com/What-is-the-toughest-question-ever-asked-in-any-interview/answer/Job-Bouwman?srid=h4JL

 

Hope you enjoyed this brain-teaser, have a great weekend! 😀

A Simple Puzzle that Stumped Many of the Brightest Minds – Can You Solve It?

2016-05-11 00.36.43

Yesterday, my friend gave me this interesting puzzle, which he said was one of the most difficult interview questions he had seen.

I immediately gave 30 as the answer, but he said that it was wrong.

Can you figure out the trick? 😀

P.S. I will be revealing the answer very soon, so stay tuned! In the meantime, feel free to post your answers below!