Capital Allocation

For large corporation, capital allocation is to maximise the company/ shareholders’ value, usually one of CEO or CFO priorities.

In my view, capital allocation is equally important for an individual.

Capital allocation allows me to think how should I allocate my wealth to different assets, ie stocks, FD, properties  and bonds, with the objectives to create stable cash flows and maintain reasonable investment return.

My current capital allocation ratio (high level):
Stocks  ~20%, average dividend return 3%
Cash/ War Chest  ~40%, average interest return 1%
Property ~15%, NIL (need to pay loan interest)
CPF ~25%, average coupon return 2%

Overall return is not fantastic, kind of conservative capital allocation. This shall change this year when opportunities arrived due to market uncertainty.