The Best Investment Yet To Be?
It has been a year since I wrote this article “Why I Hired a Fund Manager” and I wrote that “I would like to enter Full Self-Driving aka autopilot mode, for true passive income”. I engaged 4 different fund managers from various companies and gave them a sum of money each to invest. In my latest update titled “Update on Fund Managers Q2 2022”, I wrote about the 4 different fund managers I have worked with.
Today, I will be giving a one year performance review, since they are all vested between the end September 2021 to mid October 2021 period, so it should be 1 year thereabouts. FM1 was the average performer at -21.8%, FM2 and FM4 were tied for worst performer at -28.7 and -28.1% respectively. FM3 was the best performer at -7.3%. The benchmark is S&P 500 which performed -14.18% in the same period.
The reason FM3 outperformed the index was because the funds were placed in money market funds during most of the bearish period, so staying out of the market saved the portfolio. However, I am not sure if this way of outperforming the market by avoiding the market is the best method. So 25% (1 out of 4, statisticians would cringe) of the fund managers hired outperformed the market index, which is quite in line with how only 20% of professional fund managers outperform the market. (https://www.spglobal.com/spdji/en/research-insights/spiva/)
It has been 3 months since I sold my investment property and more than a month since I joined a MAS licensed financial advisory company in Singapore as a Licensed Investment Advisor. Getting the exams done and being licensed is surprisingly fast and pain-free. My first steps in this business is to find the best instrument to invest in. I needed to find a way that allows me to invest in “autopilot mode for true passive income”.
Immediately after joining the industry, I started talking to every expert I can find in order to find something that speaks my language. I believe I have found “The Best Investment Yet To Be” as it fits all my requirements. I did extensive back-testing and financial modelling to find a portfolio that best performs in most market conditions and time-frames. I allocated 50k (my first tranche) to this portfolio to test this TBIYTB portfolio.
Since 1 Sept 2022 to 8 Oct 2022, portfolio TBIYTB is -4.6% compared to the S&P 500 -8.1% and I am truly amazed because this portfolio outperformed the S&P 500 in a huge way while remaining fully invested and I did not have to do anything. I will continue to invest into this portfolio over the next 12 months and monitor this portfolio.
The next logical steps would be to fire the 3 underperforming fund managers, and keep monitoring the performance of FM3. I will also consider increasing the funds managed by FM3, when he decides to stop staying in money markets.
I think I will be a very happy passive investor and if anybody is interested to join me in my investment journey, feel free to contact me to find out why I decided on this portfolio TBIYTB and why it is likely to outperform 80% of the professional fund managers in the world.
Relevant Links
Why I hired a Fund Manager: https://medium.com/@singaporeanlandlord/why-i-hired-a-fund-manager-a2624df88bae
Update on Fund Managers Q2 2022: https://medium.com/@singaporeanlandlord/update-on-fund-managers-q2-2022-6182d619075d
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