Sometime i wonder if being too diversified is a bad thing? The biggest fear is not being able to react quickly enough to a global crisis like the one we experienced not too long ago. In the event of a market crash, i hope to reduce all exposure to US, Japan and HK and 50% of SG. Meanwhile it would be unwise to take advantage of the wonderful opportunity presented to us living in Singapore, the opportunity to play almost any market in the world. What is your exposure level to world markets?
I also analysed my investments in terms of sectors, the graph is below. I usually pay more attention to sectors because of the fact that certain sectors perform better during certain times of the year and during market cycles. You will notice that my exposure to commodities sector is minimal and i would keep it under 10%. I realise my exposure to REITs is 30% but i am not worried because they are mainly hospitality REITs for example Ascott and FarEast. I would be worried if REITs which are overvalued, for example FIRST REIT, K-REIT or CMA. All in all, I am gearing towards defensive stocks more hence my exposure to Consumer and Life Insurance sector. Which sectors should i get out of by end of this year? Definitely Oil & Gas, Commodities, Utilities and Manufacturing.
