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A Mid-Autumn Mooncake Portfolio

Happy Mid-Autumn Festival Fools!

It is that time of year again when we give, receive and, of course, savour those mouth-watering, ace-tasting, pastry-encasing, calorie-busting, scale-tipping, wallet-emptying, oven-baked delicacies with a lotus seed filling known as mooncakes.

Mooncakes, as we all know, come in different shapes and sizes. But if you think about it for a moment, that is almost like our personal stock market portfolios – they, too, come in different shapes and sizes

Some of us like the traditional mooncakes with a single salt-egg yolk in a lotus seed filling. But others might prefer the more contemporary varieties that could be filled with chocolate, durian paste and, in some cases, even ice cream. What will they think of next?

But I am a traditionalist, both in my taste for mooncakes and also my investing style. I like my portfolio to look like my mooncakes. Or perhaps it should be the other way around: I like my mooncakes to look like my portfolio.

I want a substantial but not too overwhelming filling of tasty income shares – much like the rich, thick filling of lotus seed paste in a mooncake.

There are lots of income stocks that could fit the bill. These could include the multitude of high-yielding Singapore Real Estate Investment Trusts (REITs), such as Ascendas Hospitality Trust (SGX: Q1P), Mapletree Greater China Commercial Trust (SGX: RW0U) and Lippo Malls Indonesia Retail Trust (SGX: D5IU).

Apart from REITs, a host of blue chips dish out a hefty portion of profits to shareholders too. SingTel (SGX: Z74), for instance, has been a consistent and reliable dividend payer, as has Dairy Farm (SGX: D01) that has demonstrated an enviable track record of dividend payments.

I also want some exciting growth shares, not unlike the single yolk in my mooncake, to help provide a bit of gritty texture. Unlike some consumers, I don’t want too many eggs, though. That would crowd out too much of the lotus paste and overegg the portfolio. I want just enough to add some contrast.

Growth can be the name of the game in Singapore – Peter Lynch would probably have a field day. From Super Group (SGX: S10) in the food sector to Raffles Medical (SGX: R01) in the healthcare space, Singapore could be said to be awash with growth opportunities. But it still pays to be cautious. Look for companies that are reasonably priced in relation to their growth potential.

Income and growth are all well and good. But what about a thin sliver of exhilaration that only speculative shares can provide. Just like the glossy crust on a traditional mooncake, there should, in my view, be no more than a thin covering of speculation. These could include the unloved palm-oil producers and unwanted maritime outfits that are just waiting for a global economic.

A stock market portfolio should, like a mooncake, be a thing of beauty to be savoured. It should take time to build. And if it is cooked well it should provide you with a lot of delight for a very long time.