Well said on the matters of fees!

My original two fund portfolio is exactly VWRA+VAGU at a 90:10 ratio, which by the time I retire I should able to survive out of selling bonds alone for a good while, and anywhere between 10% to 40% bond have fair and varying optimal portfolio success rate, but I opted to not buy any bonds for now and likely stay 100% equities forever.

My reasons are:
1. I don't see a reason to buy bonds when I have at least 20 year on my horizon, I need accumulate as hard as I can right now to get compounding working.

2. I seek to keep a healthy amount of emergency fund in MMFs or other low risk assets, and minimizes my monthly commitment that I can survive at least 1-2 year of market downturn and unemployment without liquidating any equities.

3. Bonds in general isn't in a great place right now, it's likely not going to give much if any return at all for foreseeable future and it's really just a weak store of value option in my opinion

4. We have access to EPF/SSPN as amazing pseudo-bond options. This is the most important thing to us Malaysian Bogleheads IMO compared to US recommendations. We have forced saving at a decent rate in EPF, and SSPN Prime gives good steady return with very good liquidity and overall ease of access, with both platform easily providing 4%+ safe returns*. EPF alone is a great analogue to function as 20-50%++ bonds to your DIY equities portfolio.

*While the cynic in me has little confidence in the government, both of this vehicles affect enough people that I'm sure even the government will think twice before messing with them. If EPF or SSPN goes kaput, we have bigger issues.

I would love to get comments, thoughts and counter point to reasons #4.

Definitely, I have zero confidence in MYR too, I don't keep any MYR aside from basic spending and emergency funds - and even then I'm seriously considering making my emergency fund SGD instead of MYR.

In my case my EPF contribution is mandatory, so whether I like it or not I'll already have this stable asset that I can eat from when I retire. For your case I definitely won't recommend putting more than the tax relief threshold. You should seek bonds then if you want to have some ballast asset in your portfolio, tuning the amount to your risk appetite and investment horizon.

I strongly dislike FD because of the lock in and given FD absolute terrible rate right now that has no end, a high yield saving account, MMFs (specifically Versa or SA simple that has next to no fee and sale charges) sounds like a better idea.

Or just buy some VAGU, it's cheap right now 😆

If u go 100%, you must be mentally prepared to experience volatility, including something like a 30% or more fall in your portfolio. Most people can't handle that.

What bond to buy that are good? So far I see the bond ETFs not doing so well also. Might as well just continue DCA in good stocks or ETFs.

Mathematically and historically, obviously the younger you are it's more ideal to have more equities for maximum possibility of growth over the very long term.

Emotionally however, not everyone can handle the volatility of a high equities portfolio, as evidenced in the number of people who get sad at single digit dips in some platforms. Some people even more than -5% dip start to panic le and sell to realise loss.

So need to adjust your strategy to your risk appetite.

Bogleheads will call that market timing, which is against their principles.

And what makes your risk appetite change?

Making decision on feeling and tinkering with your portfolio too often is detrimental more often than not.

Portfolio success rate are often much more fragile on investor behavior than whether it makes another 0.5% more than the other fund.

I wouldn't go to the extreme length of one of Bogle's anecdotes, where he recommended someone to just deposit and never peek until 30 years later.

But you should have a an investment policy statement, documenting what you hold, why you hold them (this is very important when you are tempted to switch to other asset), and under what conditions you are allowed to change them (e.g. net worth, age). Having it and having the discipline to follow through will prevent your "appetite changes" after a major loss affecting your portfolio.

If you allow yourself to switch assets and allocation at will, you are more likely to cause damage and decrease your portfolio success rate.

And, you need to review the conditions you've set for yourself too. "I'll increase my bond allocation when market feels uncertain" is a rather poor reason in my opinion. Your asset allocation should be based on something more fundamental, like "If another 2008 happen, I do not believe I can endure an extended 30% drawdown. I can stomach 15% drawdown at best and according to portfolio backtester, that meant (sample number) having 40% in bonds".

Then perhaps you would have a clause that "I will only allow once allocation change per year when the decision is well reviewed and at least 3 months has passed since the decision is made and it remains logically sound".

Finally, you execute the change while rebalancing your portfolio on such dates to save on fees and hit multiple bird with one stone.

At least, that's what I do myself and I am interested to receive opinions on that thought process.

I don't think direct bond is easy to buy at low amounts, but I wouldn't know much about that regardless.

From a liquidity and longevity standpoint AGGU is pretty much widely accepted as the better option, as well as AGUG. VAGU is a pure personal preference since Vanguard reduces ongoing cost when possible on their own.

In general I do believe Bond ETFs are much more easier to work with, and easier to sell when you need the cash and doesn't miss out on coupons as much when done so.

Yea true also if focus too much on US treasuries alone. Will have more risk if something bad happens to US debt (such as a default).

Will buy some AGGG. At least will get dividend semi annually even if ETF price goes down.

this Reddit thread has given me an inspiration on how to utilize bonds:
https://www.reddit.com/r/personalfinance/co...y_bonds_at_all/

just found out Malaysia's own popular MMF (money market fund) is Versa.. interest payment being bi-weekly and able to withdraw next day (if submit before 2.30pm business day) is great! It is also SC approved launched just last year in Malaysia.
downside is they invest using MYR it seems.

Stashaway simple would be using USD. However withdrawal part then really slow usually 3 days at least.  And interest payment only done once a month. Both Versa and Stashaway Simple has a projected return of 2.4% per annum.



Just tested Versa with some small funds. Interface really clean. Find some referral code via google so that will get RM10 on first 100.

I support the formation of this Bogleheads Local Chapter. I've mostly relied on "investing from singapore" guide on the bogleheads wiki, since there aren't any malaysian guides written so far. Thanks to the good forumers on LYN forum, I have been enlightened to the ways of Bogle investing.

BTW, are there advantages of choosing VWRA (USD) over VWRP (GBP)? They are just different currencies, but the underlying assets are still the same. I have read an article on the bogleheads wiki regarding Non-US investors and ETF currencies.
Based on the above statement, are there any significant advantages of VWRA over VWRP? I am currently using IBKR. Does IBKR offer better conversion rates from USD/SGD vs GBP/SGD?

There are a few way to approach this, but I'll explain my personal logic and see any of then seems convincing to you.

1. I prefer my holdings to be denominated in the currency I am most likely to use when retired.

2. SGD is very pegged to USD.

3. Brexit dollars.

because, what is low now can still goes lower or stayed low for a long duration of time,..

these certain emergency funds has its purposes in your overall wealth portfolio... has their purpose changed since they are 1st set up?

unless that emergency funds has a value that could last your > 3 yrs or you can access your money in EPF soon...that is another equation in question liao...

It might go down even lower. Estimate another 4 more times interest rate will rise by Fed. As long inflation level is high.

You can prepare by putting some cash in IBKR, to prepare to buy when u feel it's the right time.

lol, I had the exact same dilemma! Just think of every horrible scenario that involves touching your emergency fund and project it happening in the next few days. Quite morbid but it worked for me, haha.

Previously anything China don't touch now it is soon anything US don't touch. Wait it will go down further. Emergency fund don't touch please

Now I am touching countries outside US China small capital to try diversify away from China,US for new investment. Existing already invested stay put.

Don't time the market. When in doubt, zoom out.

Nobody knows if it's going to go up or down tomorrow - you could be dropping 100k into current price thinking it's 30% off, but it could just as well be the best price you will see in 10 years. Or, the ATH you bought at next month could be the last time you ever see this price for the rest of your life.

Let's say you miss this "dip" and the market goes up 10% in the following months when you can finally buy in again - the difference in 10-20 years is minimal at best, because you only won one coin toss, you will still need to go through the rest of the coin tosses.

Emergency fund is emergency fund, if it isn't an emergency, don't touch it. It's there to safe guard your investment and it's a key player in your portfolio.

Just make your regular deposits every month, do a lump sum if you had a windfall that you don't need right now. Don't invest money you need. Close the app and live your life, don't look at the market every day.