To The Moon

We are 3 weeks into 2025 and have another 49 weeks to go before 2025 bows out.

Will it be graceful or disgraceful bow out ?

Afterall, as investors we have the chance to control our investment-destiny again, this new year.

There are 5 things we could do best to avoid mistakes in our investment journey.

#1 - Don’t Rush When It Comes To Investing.

Stocks performed very well in 2024 and to a certain extent in 2023 as well.

Investors, new & old alike might feel it's too late to invest.

Given that the above is untrue, what should an investor with more cash on hand (than he should), do?

It is important to remember that some investors might hesitate to invest due to concerns about high stock valuations.

To minimize regrets, consider gradually investing over a few months, instead of all-in-one go.

The 'dollar-cost averaging' helps investor to avoid the stress of trying to time the market.

Also, avoid investing heavily in assets that have recently performed exceptionally well.

High past performance often suggests higher valuations.

Diversification across different investments is key, both in terms of (a) timing your contributions and (b) the types of assets you choose.

One salient example is definitely worth considering, to dollar cost average (dca) into is $NVIDIA(NVDA)$. It is trending “lower”, off its peak. (see below)

In the short term, it may be facing “restriction” headwinds as geopolitical tension between US and China continues to unfold, in the midst of a returning President who has a mentality that is tangent to normal people.

#2 - Globalize Portfolio Through International Stocks

This strategy is beneficial for younger investors or people who still have a long-time horizon and can withstand potential market fluctuations.

Investing internationally offers several advantages, including potentially higher returns due to lower valuations.

Furthermore, international equities often provide higher dividends and offer diversification benefits by including sectors like financials and industrials, that are less prominent in the US market.

If you are feeling adventurous like investment guru Michael Burry, could consider red chips stocks that are severely undervalued and may remain so until the Chinese economy recovers; that in itself is a million dollar question.

Personally I prefer $JD.com(JD)$ over $Alibaba(BABA)$ and its a lower entry price point and an equally well managed company. (see below)

Just be painfully aware that it might be a long “hold” for this pedigree stock to return to its former glory, with the US determined to keep the Chinese economy “depressed” for as long as possible.

#3 - Investors Near Retirement To De-risk Portfolios.

Investors approaching retirement, particularly those over 50, should consider gradually reducing their exposure to stocks.

Although an all-equity portfolio may have performed well, it's crucial to mitigate risk as retirement nears.

Research indicates that individuals often retire earlier than anticipated, sometimes due to unforeseen circumstances or simply a desire to enjoy retirement sooner.

Therefore, it's advisable to gradually increase allocations to safer assets like bonds & cash, especially in your 50s.

• This provides flexibility and helps ensure a sustainable income stream during retirement.

• Bond yields are relatively attractive, offering a more competitive return potential. It’s a bonus that 10-years and 30-years treasury yields are on the rise again, recently.

I confess, I am not verse with US Treasury bonds especially the buying, holding and eventual selling of them. Will need to do more homework on this.

**Note : Readers with financial advisors, maybe could pick their brains ? And share here, for the Tiger Community benefit ?

#4 - Don’t Predict Interest Rates When Looking at Fixed-Income Exposure.

Recent market trends have demonstrated that a traditional bond investment strategy, focused on long-term bonds, has not consistently yielded expected results.

Rising interest rates have negatively impacted bond prices, contrary to previous expectations.

A more prudent approach involves a portfolio of high-quality, short- & intermediate-term bonds.

These bonds offer stability during equity market downturns while minimizing exposure to interest rate volatility.

Avoid complex bond strategies and prioritize a straightforward approach with a focus on high-quality, shorter-duration bonds.

Times have changed, so must investment strategy, despite product remains largely intact.

Based on Morningstar’s “recommendations” (an investment research & financial services firm) below are the Top 8 Best Core Bond ETFs for 2025:

• $Fidelity Total Bond ETF(FBND)$. 12 months performance is -2.52%.

• $iShares Core Total USD Bond Market ETF(IUSB)$. 12 months performance is -2.14%.

• iShares Core US Aggregate Bond ETF

  (AGG)$. 12 months performance is -2.55%.

• iShares Total Return Active ETF(BRTR)$. 12 months performance is -4.07%.

• Schwab US Aggregate Bond ETF(SCHZ)$. 12 months performance is -2.90%.

• SPDR Portfolio Aggregate Bond ETF(SPAB)$. 12 months performance is -2.75%.

• Vanguard Tax-Exempt Bond Index Fund ETF

  (VTEB)$. 12 month performance is -2.48%.

• Vanguard Total Bond Market Index Fund ETF

  (BND)$. 12 month performance is -2.43%.

#5 - Inflation Complacent !

In 2025, it is very important to avoid complacency about inflation.

And there are plenty signs of concern about inflation in the market.

To protect your portfolio, include investments that can withstand inflation.

• Stocks have a strong historical record of outperforming inflation over the long term.

• For fixed-income assets, consider including inflation-protected securities like Treasury Inflation-Protected Securities (TIPS) or I Bonds. This is especially important for retirees.

Include inflation-protected bonds in your portfolio to the extent that you hold bonds.

According to Saxo Singapore, 2 possible inflation-protected bonds for considerations:

• Vanguard Inflation-Protected Secs Inv (VIPSX)$.

• Federated Hermes International Dividend Strategy Portfolio (FIDPX)$.

Do you think your portfolio needs of a review and revitalization, to ensure stocks and products relevance in this new way of investment, as highlighted by Morningstar (especially point #4 and #5) ?

** Note: All stocks, ETFs and funds shared in the post served as illustrations only; not investment advise.

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