Q & ACategory: InvestmentPWP Smart Capital Allocation
Alfred Lua asked 2 months ago

Dear KC, 
I have just listened back to the PWP Smart Capital Allocation webinar which I was not able to attend in live. 
I am writing you because I have some doubts after listening to webinar. Of course, to be a smart capital allocator, I am planning to increase the rate of return for my overall portfolio and wealth to shorten the time required in order to achieve the goals. 
However, there are some of the doubts as below. 
First, There is no debt ratio consideration in increasing the RONW by leveraging more. It can cause difficulty and liquidity problem in cash flow when loss of incomes and fluctuation of the market happened. 
Second, some of the examples and advised may not be practical. I know all the suggestion may be only for reference only. Eg, I will be putting myself in very high leveraged position if I refinance too much in order to get the RONW higher. Anything can be happened in anytime. 
Third, can you advise me for a more holistic approach or strategy or suggestion to increase the overall RONW without compromising the chances of losing and high leveraged position. I can provide my personal RONW Sheet for better study. So that, I can change and take action more practically.
As Mr. Warren Buffett said, ‘Only when the tide goes out do you discover who’s been swimming naked’. I am a kind of person who put myself in a very safe position. I would prefer to miss the opportunity rather than make a wrong mistake. I believe we can achieve high return with low risk in value investing. 
At the end, I am just a normal person who like to learn and share of the knowledge and insight of financial intellectual. I am nobody and doesn’t plan to do any for commercial purpose. All I want is just to improve myself and increase the return of my overall wealth and to be a smart value investor. There is no offence here. 
I am looking forward to your favorable reply for further discussion.
Thank you. 

1 Answers
KCLau Staff answered 2 months ago

Thanks for the feedback. 
You will know where you can get the best return. Meaning you know what works best in your case.
For example, if you have no confidence in an investment, leveraging up is just going to do more harm than good.
The key is to make yourself competent and skillful in those area. 
It is not wrong to invest passively through ETF, roboadvisor and very diversified portfolio.
If you wish to discuss your case further, you can email your details to me. I couldn’t promise to look very in depth in your case due to time constraint. But I will give you a reply.