For many years, I had less than 12 counters in my portfolio. Even when I started to dabble with US market in 2017, the number was around 20. However, with the rebooting of my portfolio in 2020, the number kept increasing and now I have a total of 62 counters!
Why so many? How can I manage to closely monitor so many?
The short answer is I don’t. At least not all of them in details.
Given that I have built this portfolio for one and a half year now, I have a better sense of how I want this portfolio to work to achieve my target of at least 8% (stretched goal 12%) CAGR over a 5-year period. I am now able to provide more details on how I organise the portfolio. And that should also explain why I do not need to monitor closely all the counters.
Tiers
The idea of putting stocks of a portfolio in different tier is not new. Most investors do that in one way or another. I am not going to re-invent the wheel and am just going with the common labels of Platinum, Gold, Silver and Unknown.
| Tier | Criteria | Number of counters | Percentage of Portfolio |
| Platinum | $50k and above | 3 | 27% |
| Gold | $25k and above | 11 | 38% |
| Silver | $8k and above | 14 | 22% |
| Unknown | less than $8k | 34 | 12% |
I have decided to use the absolute value, instead of the position size as the criteria for the tier. Using the absolute value provides me with a clearer sense of the risk I am taking in placing my money in the counter. It also provides a guide on how much attention and time I am going to spend on the counter.
As seen from the table, while I have a total of 62 counters, the top 28 counters account for 87% of the portfolio. In fact, the top 14 counters already take up 65%! So guess where I put most of my attention to?
The Platinum and Gold Tiers
| Platinum | Gold |
| iFAST | Capitaland China Trust |
| Micro-Mechanics | DBS |
| Parkwaylife REIT | Frasers Centrepoint Trust |
| Keppel DC REIT | |
| Mapletree Industrial Trust | |
| Mapletree Commercial Trust | |
| OCBC | |
| SGX | |
| Venture | |
| Apple | |
| Shopify |
There is no distinct difference between the Platinum and Gold tiers. Once I have a stake of 25k in a counter, it is one business that I am fairly confident of for the long term. The Platinum tier is simply an award for the counter that is able to double the Gold criteria. None of the counter begins at Platinum Tier. They either get into the tier due to additional investment and/or price appreciation.
Six out of my eight REIT counters can be found here. It is not surprising as one of my portfolio’s intent is to generate passive income through dividend. So they are a natural fit for it. And since REITs are fairly simple to understanding, I actually do not need to spend too much time to monitor them.
The Silver Tier
| Silver | ||
| AEM | Arista Networks | Netflix |
| Ascendas REIT | Intuitive Surgical | Starbucks |
| Mapletree Logistics Trust | Mercadolibre | Tractor Supply |
| Raffles Medical Group | Microsoft | Ulta Beauty |
| UMS |
This group of counters does not necessarily have a weaker business than the Gold tier. There are more US counters at this tier as I allocated less resources to the US market. So it is harder for them to get into the Gold tier. Having said that, I bought them for growth and if they continue to grow their business, their price will appreciate accordingly and eventually they should be able to move into the Gold tier.
The Unknown Tier
| Market Cap | Number of counters | Example |
| less than $5 billions | 8 | Flugent |
| between $5 billions to $15 billions | 12 | Fiverr |
| between $15 billions to $25 billions | 5 | Etsy |
| more than $25 billions | 12 | Crowdstrike |
This tier is typically occupied by US stocks with smaller market caps and/or stocks with very high valuation. The smaller caps have good long term potential but volatility is also a lot higher. Some of the counters I like a lot but are highly valued currently. There are also larger cap here but due to one reason or another, I am unsure of how much it can grow in the next few years. Basically, this is a group of counters in which I have yet to build up sufficient conviction to hold a larger stake.
They might get into the other tiers in time to come or be dropped from the portfolio. Their future is unknown, hence the naming of this tier. I will not be listing them out as they will be a lot more fluid but I will not be silent about them. When it’s appropriate, their names will still appear in this blog.
Going Forward
Due to volatility of stocks in general, there might be instances that the counters enter or exit the tier due to changes in their prices. For each case, I will decide if it is necessary to change their tier based on my understanding of its business and their outlook.
Looking through the list, I do see some of them having the potential to rise into the next tier and a few will do that pretty soon. I also think that with better understanding of the counters in the Unknown tier, there should be some consolidation in the next few years. Hence, I am hopeful that in 3 years time, there will be more counters in the Platinum, Gold and Silver tiers.
| Tier | Currently | Possibly by 2024 |
| Platinum | 3 | 6 |
| Gold | 11 | 14 |
| Silver | 13 | 15 |
| Unknown | 35 | 15 |
Towards Financial Independence 