What was up in September? Just some readings, nothing much…
Well, I was reading Bill Bernstein’s article on commodities futures, and the related diehards conversation 53278, in which Bill Bernstein explained his article in plain English (see reply 14), and conversation 53367. From what I learn of the article and conversation, I think like any other insurance, investors should not expect high return from commodity futures as a portfolio insurance; I would take returns from commodity futures as bonus. If anything, I would be concerned with whether the low correlation with stock and bond will continue. Of course no one knows for sure and correlation changes with time. So investors with commodity futures exposure and a well diversified plan should be discipline and rebalance regularly. For me as a new investor, I will concentrate on building the core of portfolio and leave the commodity futures allocation aside, until I am comfortable with it.
I was also reading “The Bogleheads’ Guide to Investing”. It covers basic but practical points on many aspects of investing and serves as a good starter kit for beginner. I find the rebalancing guideline in the book useful and would adopt it for my portfolio. Though I have a few chapters to go, it was an enjoyable read so far and I recommend it to all new investors. For those who want to preview the book, the good news is twenty three personal finance bloggers will each reviews one chapter of the book, over the month of October. I can’t wait to read them 🙂
Looking forward into October, it is fund contribution time. I will need to pool my monthly savings, dividend and interest from various accounts to make the contribution. According to my asset allocation plan, it will be my first allocation to Europe and Japan, besides a top-up to REIT. I will also be including my CPF-SA fund into my portfolio as fixed income. However, a small portion of the CPF-SA may need to be invested to bring the portfolio back to its original equity-bond ratio. Looks like a busy month ahead.