I went on to do a few more indices, namely KOSPI, HSI, Nikkei 225, BSE, FTSE, JKSE and plotted them on the following chart together with STI and S&P 500.

JKSE and KOSPI are the two best performing market indices on a 10-yr annualized basis and Nikkei 225 and FTSE are the two worst performers. For simplicity sake, if $1,000 is invested in every of the above indices, the portfolio would be something like this:-The $8,000 portfolio would have grown to $24,769 today (since 1998), an annualized returns of 11.96%.

But that does not mean jumping into these markets right away either using “chasing strong” or “contrarian” methods. Instead, going forward, using allocation methods (such as core-satellite with systematic rebalancing approach) coupled with “drip in money” will be a better way for most investors as it eliminates market-timing risk. While you do not get the best profits, you also do not make the most losses.

The key objective of this approach is to preserve/ grow the purchasing power of the value of money (NOW) to be on par (or better) than inflation.

NOTE:
Please also note the above indices do not necessarily represent an appropriate portfolio by any standard. Please seek professional advise before you make any investment.

Last 5 posts by Wayne Koh

• Last Run for SRS - December 9th, 2008
• First review of the Straits Times Index (STI) - September 11th, 2008
• United Global Healthcare Fund Sep 08 update - September 11th, 2008
• Try out new ways.....upd 5Sep2008 - September 9th, 2008
• Portfolio Rebalancing - September 8th, 2008