Update on Goal and Strategies

Two years ago, I had set new investment goal and strategies. You can read about it here. A review was made in December 2016 and you can read about it here.

I would say I have a greater clarity and will like to update my goal and strategies. It’s not far off from what I set in 2015 but there more details are provided.

Goal and Target

Main goal is to achieve financial independence by 55. Stretched goal is to achieve financial independence by 50.

To achieve the above, I am aiming for a compound annual growth rate (CAGR) of 8% for my cash portfolio. My stretched target is to achieve CAGR of 12%.

Strategies

1. Allocating approximately 60% of portfolio to invest in companies (including REIT and business trust) that provides consistent and sustainable dividend. REIT and business trust will not take up not more 30% of the portfolio.

2. Allocating approximately 40% of portfolio to invest in companies that has growth potential. These companies should have great management that has proven track record or they have clear catalysts that will fuel their growth. Approximately 10% of the portfolio can be invested in potential companies that I might not have done my due diligence yet.

Implementation

In the past 2 years, I searched for ideas to build up my portfolio. In theory, I should have done my due diligence before making my purchase. However, that does not quite work out for me, as I am afraid that I would take up too much time to look at the company in depth. By the time, I decided it’s time to buy, the valuation might become too steep.

So typically I would take a small stake (relative to the portfolio) before looking more in depth at the company. Of course, the problem with this approach is that some companies will not fit my requirement and will fall out of my portfolio. Hence, there was a large amount of churning in my portfolio for the past 2 years.

Moving forward, I foresee less churning and my core holdings should remain pretty stable.

Monitoring and Review

For the past 2 years, I have also attempted to report monthly my actions and companies that make up my portfolio. I have decided to relook at how my reporting will look so that it provides the reader and most importantly myself the progress of my portfolio.

Alright, that is about it on this Sunday morning. My next post will be a report on my portfolio at the end of February.