What to do with your asset allocation?

With the latest property cooling measures, another avenue for investing one's money is reduced. With the negative perception of Gold Investing (Genneva, Gold Guarantee e.t.c), less money will flow into those avenues. There is a possibility that equities could do well given that  it's one of the few remaining avenues where money could flow into, especially given the monthly money printing by the United States and the ultra low interest rates. As our name implies and having always given a consistent message since the inception of this blog, dividend yielding stocks is still the right way to go. As usual,if in doubt, keep a 50% cash and 50% Equity of dividend yielding stocks. How about Gold and non-dividend yielding stocks with a high beta that could see capital appreciation? I feel that investing is to buy into something that gives a return immediately and not based on the whims and fancy of the dynamic market which is so darn difficult to read and easily manipulated by some big fish, even if one is an excellent technical analyst. Buying Gold and non-dividend yielding stocks is more of gambling instead of investing in my dictionary.

A friend asked me what she should do with the money.

If one is putting funds aside for retirement:
A possible avenue to 'invest' could be dumping some cash into SRS to enjoy  an immediate risk-free guaranteed gain of a reduction in taxes based on one's income bracket and waiting for any Equity correction to use the SRS funds to snap up some dividend yielding stocks. But one can only dump about 12Kyearly due to the cap. Optimum age group to do this are for those above the age of 45 years old whose income bracket is generally higher, shorter lock-in period and the 12K yearly deposit from 45 years old could possibly attract no taxes at all when one is to stretch out their yearly withdrawal. Anyway, if you are 45 years old and above, you are probably greatly affected by the new property rules.

If one is putting funds aside for property investment while waiting for a major correction(happy waiting....):
A possible avenue to 'invest' could be dumping some cash into CPF OA to enjoy a risk-free 2.5% which can be used to pay for a property investment or possibly even snapping up some dividend-yielding stocks if a major correction should occur.

The above 2 options faces some restrictions so if one wants maximum flexibility, put in bank!

Options options options. Thats the beauty of life!