Coming from a computer gaming background, one of the earliest questions that popped into my head was this – what would my portfolio look like in the end?

In massively multiplayer online role-playing games (MMORPGs) context, “end game” commonly refers to the most challenging content that is only accessible to players of the max. level. In max. level MMORPGs content, there are roles most commonly classified into the holy trinity :

  • Damage Per Second (DPS) – deal high damage but very poor defensively
  • Tank – redirect enemy attacks toward themselves to protect other players
  • Healer – keep the DPS and Tanks alive

In the end game, everyone knew which role he or she has to play, and pretty much spend all their time in the game preparing for it – that’s easily tens and hundreds of hours spent!

Hey, who said finance bloggers are boring folks?


Unlike MMORPGs, the world of investment does allow you to change your strategy fairly easily at any point in time. Lucky us! Unfortunately, the market is not very forgiving towards our past mistakes, though.

Warren Buffett had this to say (just ignore the religion part) :

The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do.

Beyond Index Investing

Most questions people ask me relate to index investing, but a rare few goes beyond index investing.

While I don’t consider myself an expert on index investing (I’m far from one actually), I don’t mind putting myself in the shoes of the “leading learner”. Hopefully, by helping you to ask the right questions and compile the correct information, it will make your journey an easier one than the one I took.

I’ll be honest with you. I have no idea what I would eventually do, even though I do have some thoughts on it. I have broadly categorized my investment journey into two phases, the growth stage and the sustenance stage.

Pre-Retirement / Growth Stage

My current stage is the growth stage via an index investing strategy. Disclaimer – my index investing strategy is not necessarily a passive one. But yes, I do advocate a methodological approach based on fixed rules in terms of managing and rebalancing an index portfolio.

Many people find it easy to advocate index investing, but the execution is the fuzzy part that most people fumble at. Just take a moment to think about it. My Bogleheads inspired lazy-portfolio requires rebalancing periodically, which is hardly what I would consider a truly passive approach.

Your portfolio could easily look like this after a bout of market volatility. Indeed, the act of rebalancing forces you to sell high and buy low, resulting in what could possibly end up as market beating behavior.


Post-Retirement / Sustenance Stage

After growing my portfolio, what’s next? Index investing relies entirely on the market performance. Thus, the question I’m interested in finding the answer to is this – what drives market performance?

I’m inclined to agree with Ray Dalio’s explanation of how the economic machine works, and that the following three factors drives the economy over the (really) long term. All charts are credited to Bridgewater- “How The Economic Machine Works”.


When we aggregate the three factors, we get something like this.


With index investing fundamental reliance on market performance and the assumption that whatever we are investing in (e.g. equities and bond) would increase in value over time, the argument seems to be sound as long as we have an decently long-term horizon. Yes, there may be fluctuations in the short term but we should all be good in the long run.

Well, unless we get caught at the bottom of the long-term debt cycle just when we’re approaching retirement. The basic advice for this problem is to gradually increase your bond allocation percentage with age, which would make your portfolio more “tanky”. Still, a market correction or crash is still going to hurt your portfolio like crap.

The problem exacerbates because at the sustenance phase, we are also drawing down on our portfolio since we have no income. Somewhat of a scary thought huh? Especially when we do not know how long the downturn will last.

Just because we used index investing to prepare for retirement doesn’t mean we have to use it during retirement. At this phase of my life, I would probably be more concerned with cashflow rather than portfolio growth. The end game is retirement itself, and it is not a tangible object that can be defeated. As long as we’re alive, we need money to sustain our lifestyle. The true end game is when we die.

With this shift in objective from portfolio growth to income-replacement, a logical alternative is to re-focus my portfolio into one that is driven by predictable income by combining a variety of instruments that are available – CPF Life, HDB Lease Buyback Scheme, SGS Bonds, Singapore Savings Bonds, Fixed Deposits, Corporate Bonds, Fixed Income ETFs, high-yielding stocks, REITs, etc.

This is one area I’m still thinking about. Lucky (or unlucky, LOL) for me, I still have quite a long way to go before I absolutely have to tackle this issue.

How about you? What is your end game like?