My secret weapon to investing

Container of eggs

“Hey, Ron, share with us your investment strategy leh!”, I get that a lot from friends often.  Yes, I have made a fair number of investments in my time.  Some successful ones, some not so.  But do I have an investment strategy?

Well, come to think of it, I never really had one, a so-called strategy when I started my “investing life”.  I like to invest in stuff that I use or companies that resonate with me.  For example, I invested in Lululemon shares because I like their technical athletic apparel and in film making as well as artificial intelligence.  Pretty varied, eh?

As I start to search for an answer, there is one thing that keeps coming back at me.  And I think it is my secret weapon to successful investing.  Now, come closer and let me whisper into your ears… “diversification”.  Yes, diversification is the key to success in investing.  “What? That is no secret at all”, I hear you cry.  Very true, but the secret is applying it diligently.  More often than not, as amateur investors, we do not put theory into practice.  So, ladies and gentlemen, the secret is applying the not-so secret weapon called “diversification” every time an investment decision is made.

As I began to write this, my mind brings me back to my past.  After all, the past shapes our present as we mould our future.  “Ah Hee-ah, remember not to put all the eggs in one basket!” Huh? But I have only one basket leh.  My grandma used to shout at me in Hokkien as I walked towards the chicken coop at the back of the family house when I was seven or eight years old. It is such an old cliché but one to bear in mind especially when it comes to investments.

In my mind, there are three key factors in the diversification process.



We need to decide what we want to invest in.  Shares, bonds, cash and structured notes are examples of the various types of investment products we can invest in.  Variety is the spice of life and it is so true when it comes to investing.  Hence, one should invest in various type of products.



Once we have decided on the type of investment products, we then need to determine what investment channels to use.  We may decide to invest directly e.g. buying shares of a listed company or through a unit trust that invest in, say, bonds.  Or invest through a crowdfunding platform which seems to be “in-thing” these days amongst the tech savvy folks.



And within each investment channel, we should further apply the diversification theory.  That is to say, if you are investing via the unit trust channel, ask yourself whether you want to invest in a few different funds that cater to different risk profiles so you can spread out your risk.  Or when buying shares directly on the stock exchange, make sure you spread your investment dollars across various companies. Or within a peer to business lending platform, diversify your investment to as many loans as possible.


Now, if you can achieve a balance with these three factors, I am pretty sure you will be in for a relatively smooth and successful ride as far as your investment journey is concerned.  Brings to mind the three-layered tea I love so much.

High risk investments when approached and managed properly can be turned into acceptable risk investments which yield attractive returns.  Take the world of peer to business lending for example. You invest in 20 different loans of $1,000 each at an average interest rate of, say, 12% per annum.  Assuming 10% of the loans you invested defaulted.  In a simple scenario, you will only have earned less than 2% return (not that exciting, right?) because whatever interest you have earned will mostly be negated by the loss of capital.  However, not every borrower will default on day one.  In fact, this is extremely rare.  If on average, defaults happen half way through the tenor of the loan, your actual loss of capital is only 5%.  Overall, you will still be up about 7% which is not a bad return for loan investments which is generally safer than equities.  By diversifying your loan portfolio, you would have averaged out what is reasonably high risk investments on a standalone basis into a group of investments that have acceptable risks, yet delivers attractive returns.


You can better manage investment risks by seeking out platforms that look at loans in a detailed, customized manner to ensure as much risks as possible are considered and mitigated.  This will enhance your rewards for the amount of risks that you take.  At Minterest, this is what we do best.

Granted, there is much more to say about the diversification process.  For example, we also need to take into consideration the investment time horizon, investment goals, tolerance to risk and how correlation between investments will determine the success of an investment portfolio.  But for now, I just wanted to share with you that the secret is not about another theory but applying a well-known theory into practice diligently.


As I am finishing this article and reminiscing a bit more, I doubt my grandma was worried about me dropping the basket and breaking the eggs.  I think she just wanted me to make more trips (only one basket, remember?) between the chicken coop and the kitchen so that I will get some exercise for the day.  You see, I was a little fat child, then.

Till next time, may your investment journey be a profitable one!

For more information about this article, how you can diversify your investments or if you just want to ask anything under the sun, please send me an email to [email protected] or visit us at

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Shaun Tan

Loan Executive

With 6 years of financial planning experience, Shaun has helped many individual and corporate clients achieve their goals. 

Shaun is passionate about life and adventure, and is a licensed divemaster who enjoys bringing the joy of the underwater world to others.