How I am using roboadvisor, Syfe to invest in US equities: A portfolio breakdown

Photo by Aditya Vyas on Unsplash

The early September US stock market correction presents perhaps a good opportunity to invest in US equities [Up to $100 if you use my promo code — read to the end]

Here are the makings of a stock market correction:

  1. Apple and Tesla’s stock split came into effect.

2. US stock market defied analysts and bulldozed its way to multiple highs, spurred by perhaps millennial and younger retail investors investing through Robinhood

Sure enough, the correction came last Thursday and Friday (Sep 3 & 4).

Following months of multiple new highs led by Big Tech, investors have started profit-taking. The bubble was created the Fed’s stimulus and the exuberance from the Apple and Tesla stock splits. The selloff saw Apple falling to a low of $111 and Tesla dropping to $370, as well as declines in other tech companies like Alphabet, Amazon, and Docusign.

For many retail investors, the question on our minds is: Will prices continue to slide or is it time to start investing?

This was a long-awaited correction for me. I have long wanted to have exposure to US equities but hesitated because analysts had repeatedly warned of a crash, from around June onwards. But, after reviewing reports on Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, I made the plunge and invested into Syfe’s Equity100 (details below). What I gathered was that Mr Powell will continue with Fed’s policies of low interest and more stimulus; this was reassuring to investors.

As far as the latest reports I’ve seen, no one is predicting a crash like March now. What we’re seeing is what some have termed a ‘healthy’ correction.

Here’s what I plan to do: Dollar cost averaging. Continue to squirrel away what I can into US ETFs and blue-chips. Why? Because of lessons learned from investing right before the Covid-19 crash.

I started investing into stocks in January this year. When the market crashed, I kept my holdings but stayed out of the markets altogether. In late April, as the market picked up, I then continued to pump funds into my holdings. By then, I had missed the lows. If I had just calibrated my investments by averaging down, I would have surely seen better returns.

The lesson is simple: consistently invest but average down so that you don’t miss the dips.

Background on Syfe

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Photo credit: Syfe

Syfe is led by founder & CEO, Dhruv Arora, who is a former with Swiss investment bank, UBS. Equity100 itself is managed by Richard Yeh, a former associate professor at NUS Business School.

The company has two other products:

  1. Global ARI — their highly-diversified flagship product
  2. REIT+ — a portfolio focused on Singapore REITs

I shall not delve in the (1) and (2), as I have not invested in them. My interest was on Equity100, a product launched very recently in July. The portfolio contained ETFs that are very attractive to me: Invesco QQQ, S&P500 ETF (CSPX) and US consumer staples XLP. Here are the companies in these ETFs:

· QQQ: Apple, Microsoft, Amazon

· CSPX: Berkshire, Johnson & Johnson, Visa

· XLP: Walmart, Coca Cola, Costco

Here’s the weightage broken down by (i) companies and (ii) ETFs:

i) Companies

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ii) ETFs

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Now, I just started so I’ll update on the performance in due course. I saw nearly 5% returns in my first week. This was quickly wiped out with the stock market correction last week, due to selloffs of Big Tech stocks.

So, warning: Do not invest in Equity100, if you’re not prepared to see losses. I foresee that Big Tech will get back on track, and I am hopeful that they will lead the charge for a lot more growth. US companies have generally been able to expand into overseas markets well, especially Big Tech. I trust that they’ll do well and will keep practicing dollar cost averaging, even as these companies see potentially further lows. It’s a discount, in my opinion.

As always, please do your own research when investing.

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