To The Moon

🌟🌟🌟Would I put all my money into just 1 stock?  Or would I diversify into many?  I would put all my money into just 1 stock if I have a crystal ball and know in advance which stock would be a winner.

However since I do not have such a crystal ball, I would certainly opt for diversification. My favourite way of diversification is through ETFs.  ETFs provide me with  the power and strength of many stocks for the mere price of just 1 trade.   Diversification helps to balance out my investment portfolio because if some industries or markets are underperforming, other investments from different industries or markets could be outperforming.  This means a well balanced, diversified portfolio can help maintain growth even if certain investments are in a slump.

Another strategy that I believe in, is having a long term horizon.  This means investing for the long term and holding onto investments for years versus short periods.  It is really hard if not impossible to predict short term changes in an investment's value.  But over longer time periods, it can be a lot easier, especially if I am well diversified.

That is why I have plain vanilla ETFs as well as Thematic ETFs in my core portfolio. 

My best performing ETF is currently $Energy Select Sector SPDR Fund(XLE)$ with 48.9% gains.  With the ongoing wars in the Middle East and Ukraine, XLE has been a steady performer as it represents the US Oil Giants such as Exxon Mobil, Chevron Corp and $Occidental(OXY)$  (Warren Buffett's favourite oil stock) which have benefited from the ban on Russian oil by US and its allies.  The expense ratio of XLE is 0.10%.  The current dividend yield is 3.3% paid every 3 months. 

I am up 20% in $SPDR Portfolio S&P 1500 Composite Stock Market ETF(SPTM)$ SPTM tracks a market cap weighted index that covers the entire US market cap spectrum.  In just 1 trade, I gain access to 1510 US stocks representing the small, medium and large cap stocks.  The Top 10 holdings include the Magnificent 6 plus $Berkshire Hathaway(BRK.B)$  , $Eli Lilly(LLY)$   and Broadcom.  Tesla had just dropped to number 11.  The weightage of  the Top 10 holdings is 29%.

The expense ratio is only 0.03%.  The distribution yield is 1.34%, paid every 3 months.

I have also invested in $STI ETF(ES3.SI)$  which I have gained 8%.  This includes the 3 Big Banks, DBS, OCBC and UOB.  The Straits Times ETF represents 30 of Singapore's strongest stocks.  The expense ratio is 0.30%.  The current dividend yield is 4.5% paid every 6 months. 

As a small retail investor with limited funds, I believe that having a well diversified portfolio through ETFs and a long term horizon is the key to success in investing.

While I may not enjoy the meteoric rise of stocks like Nvidia, I also do not feel the anxiety and worry when Big Tech like Tesla plunged 28% year todate.  Instead I can enjoy the slow and steady returns from my ETFs which is also a great source of passive income while waiting for capital growth.  No need to pick winning stocks as the Fund Manager rebalances the holdings of the ETFs periodically keeping the best and leaving out the non performing ones. 

ETFs also offers me great value for money versus investing in single stocks. 

All in one stock or diversify?  It depends on each individual's goals and risk appetite.  For me it is Diversify.  Diversify into different stocks, different geographical locations through the awesome power of ETFs.   That is my favourite way of investing to achieve my goal of FIRE - Financial Independence Retire Early.

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