Are You Putting All Your Eggs in One Basket?

[Dennis Ng]

Everyone has heard of the saying:"Do not put all your eggs in one basket". However, there are many people who still do this, abeit sometimes unknowingly.

How many of you are putting all eggs in one basket? Please answer honestly yes or no.

How many of you have investments denominated in Other Currencies?

If you do not have, you are putting all your eggs into this ONE Basket called the S$.

I can share with you people who have regretted making this mistake.

The Japanese who only have money invested in Japan before the bubble burst in 1989 would still be crying today. Why? Tokyo stock index peaked at 40,000 points in 1989, after waiting for 20 years for the market to turn around, NIKKEI is now only about 10,000 points, or still lost 75%, so much for "Buy and Hold" as advocated by most Financial Planners.

The indonesians who put all their money into Indonesian rupiah before 1997 are still crying today. Why? In 1996, 1 US$ equals 2,500 Indonesian Rupiah. In 1998, at peak of Asian Crisis, 1 US$ equals 16,000 Indonesian rupiah. After patiently waiting for 12 years, currently, 1 US$ (even though US$ has weakend against most currencies), still equals about 9,500 rupiah. The indonesian still lost 74% of his money.

So by now, you probably understand why I have investments into UK Traded Endowment, French Fine Wine and Land Banking?

By doing so, I have investments into sterling pounds, Euros, US$ and Canadian dollars.

I do NOT put all my eggs into one basket. Do you?

If you still do despite my sharing of the painful experiences of Japanese and Indonesians, I really have nothing else to add.

Just make sure we all know that we are ultimately responsible for ALL our investment decisions.