Do you have an Asset Allocation plan?

I had coffee with a business acquaintance in April and he was sharing with me that he firmly believes in "asset allocation". 

As he works in a listed company, he also had a concentrated position in the shares of his company through the stock options. He has been gradually diversifying his exposure into private equity over the last decade and in early 2020, he decided to allocate a small exposure to crypto currency (bitcoin). To his amazement, the allocation to crypto has grown in value over this period by more than 3x. 

His philosophy is that when the allocation to a certain asset class becomes over-exposed (or allocated), he will then re-adjust the exposure to his "ideal" portfolio construction. Today he has one third allocation to private equity and a 5% exposure to crypto. 

I was intrigued and decided to map out my own allocation. To paint a more complete picture, I offset the loans against the assets in which the loans were taken out for. For example, I offset part of my home loan against the property and the remaining against the bonds portfolio.

This is how my asset allocation looks like today. Let me briefly summarize my thoughts on the different asset classes. 

Property - used to form one of my biggest assets in terms of percentage but it has declined over the years. It is also a reflection of the stage of my life.

Bonds - I am quite done with my bonds portfolio. All the bond interest that I received are squirreled into other asset classes. It will stay at this level or less going forward.

Private equity - I have been investing in private equity (initially directly into private companies) for a while now but only started allocating in a more regular manner into private equity funds from 2017. Today, it forms 7% of the allocation but it will grow quite significantly in the next 2 to 3 years as the cash that I set aside gets drawn down over time. 

Stocks - the allocation has been fluctuating as some of my stocks were sold after the run up last year. I will continue to increase my allocation to stocks.

Cash - a huge chunk comprises the CPF but the % will decrease over time. My intent is to have 20% to 30% in each asset class, thus I am currently over-exposed to cash and will be moving more to private equity and stocks over the coming years.

Crypto - still haven't found the courage or time or logic to invest in this "asset" but I may be tempted should the price of bitcoin continue to drop dramatically.

Happy Asset Allocating!