hesitant: allocate $200k→ETF+stocks

Posted on by tiger40490 rendered_on [ Thu, 6 Mar 2025 ] 22:15 UTC

Q: why I don’t want to increase my US-stock-index allocation from 1% to 10%, despite the observation on many smart investors including Kun.h, Venkat, MMM
A: Main reason is current income vs windfall appreciation. See other blogposts.

The most popular and safest index ETF show very low dividend yield, below 3% if I’m not wrong. In contrast, My rental properties deliver much higher and (arguably) more consistent current income while appreciation may be higher or lower than SP500.

  • Suggestion: I might want to cherry-pick my dividend stocks, but very time consuming and won’t reach SGD 200k.
    • Actually, I have up to 10k in USD
  • Suggestion: buy some gold to hedge my equity exposure

— U.S. housing plan:
Warning: My U.S. housing plan will become dependent on U.S. stock market ! If market is down for a long time I won’t be able to liquidate my stocks for housing needs.

However, I am not among the desperate immigrants burdened with high rental burn rate [1]. Even though I have a family of four, my burn rate will remain under control, and I have nonwork incomes to sustain long-term renting.

Sugg: split the allocation into two parts, with a 30% portion invested in gold, but beware the negative current income. Remember my overseas rental properties generate current income to relieve my pressure in the high-cost NY region. Gold doesn’t help directly, but it provides some cushion/buffer for stocks.

[1] Deepak CM’s discussion came to mind, but I think his double-income-single-kid brbr is actually quite comfortable.

Let’s ask Deepak!

— literature and mainstream investor experience on US index ETF

I think majority of US retirement accounts (including mine) rely on US stock ETF (beside international stocks and U.S. bonds). I think this has been a major support for U.S. stocks esp. index constituent stocks. Self-fulfilling prophecy.

— #1 justification for allocation increase: diversification from SEA properties

I feel Beijing^SG^KHM^PH offer some diversification as these markets are not correlated.

Still, it’s good to have U.S. stocks and gold as diversification.