My Portfolio Strategy (as of September 2025

As of the end of September 2025, my portfolio is structured with a defensive tilt, aiming for stable long-term growth while limiting exposure to short-term market swings.

Market Outlook

I view the current market as being in a transition phase—from an earnings-driven market to a reverse monetary policy cycle.

  • Policy rates are likely to move lower going forward.

  • Inflation is temporarily subdued but remains uncertain, with room for further increases.

This backdrop shapes the way I allocate my assets.

Portfolio Allocation

Equities: 25%

  • Global equities: 8%

  • U.S. equities: 3%

  • European equities: 2%

  • Emerging markets: 12%

I emphasize emerging markets, which carry higher risk but offer stronger long-term growth potential.

Bonds: 20%

  • U.S. short-term Treasuries: 10%

  • Global bonds (ex-U.S.): 10%

I hold short-term Treasuries to capture yield while limiting duration risk, and diversify further with global bonds excluding the U.S.

Commodities: 25%

  • Gold: 15%

  • Silver: 5%

Gold serves as the core defensive asset, protecting against currency debasement and inflation uncertainty. Silver, while more volatile, plays a complementary role and is capped at 5%.

Covered Call Strategy: 5%

  • JEPI (U.S. equity ETF with a covered call overlay)

This adds stable income while dampening equity risk.

Cash: 25%
A quarter of the portfolio remains in cash to ensure liquidity and flexibility during market corrections or new opportunities.

My Commentary

This portfolio is deliberately defensive. As such, if equities rise further, I will face a significant opportunity cost.

Currently, my actual portfolio still has a higher equity weighting, but I plan to shift toward this target allocation by year-end.

From a probability standpoint, I believe the likelihood of equities rising another +10–20% from here is lower than the chance of a 10–20% decline. Given the sharp rally in recent months, I expect a correction phase rather than a continued surge.

I am not anticipating a crash. However, even in the event of a 30% drawdown—or an extreme, historical-level 50% decline—I would remain mentally stable thanks to my cash holdings, U.S. short-term Treasuries, and a steady stream of salary income.

Conclusion

The current environment remains uncertain, with both monetary policy and inflation direction still in flux. In this context, I aim to balance growth and protection by diversifying across equities, bonds, commodities, income strategies, and cash.

Maintaining a 25% commodities weighting is a distinctive feature of my portfolio, reflecting my focus on capital preservation. Ultimately, this defensive posture allows me to stay invested with peace of mind while being prepared for potential downside risks.

Comments

Post a Comment

Popular posts from this blog

Today’s Macro & Geopolitical News (2025-12-29)

United States With the year-end shortened week underway, focus shifts to the “FOMC minutes” and fine-tuning expectations for early-2026 cuts (markets are prone to think in terms of the “late stage” of the easing cycle). The policy rate is reported in the 3.50–3.75% range; the near-term tug-of-war remains between “how the slowdown unfolds” and the risk of inflation re-accelerating. In housing, pending home sales and house-price indicators tend to drive headlines; the key question is how much elevated rates continue to restrain demand. Equities, after strong year-to-date gains, can be dominated by rebalancing flows; thinner liquidity can amplify day-to-day swings. Europe For the covered date (overseas: 12/28), fresh headlines on major data/monetary policy are limited (news flow typically thins into year-end). Rates sit at elevated levels—Germany 10Y around 2.86% and UK 10Y around 4.51%—reflecting a tug-of-war between disinflation and fiscal/supply dynamics. With holiday-thin trading, bot...
Read more

Today’s Economic & Geopolitical News (2026-01-02)

United States Early-year positioning is again clustering around “AI + data centers,” with sovereign-style capital tending to favor U.S. assets tied to digital infrastructure and AI—supportive for U.S. risk assets at the margin. At the same time, diversification pressure remains a medium-term theme: newer pools of sovereign capital often originate in emerging markets, which can create periodic rotations away from a single-country concentration. Holiday-thinned liquidity can make price action more position-driven than news-driven; the market can swing between “Fed path pricing” and political headlines. In the near term, attention tends to tilt from “growth prints” to the combination of capital cost (long yields) and liquidity (risk appetite) . Europe Bulgaria’s entry into the euro area underscores continued expansion of the currency union: it can reinforce institutional stability, while reviving scrutiny on fiscal rules and cross-country divergence. As an integration milestone, it can a...
Read more

Today’s Economic & Geopolitical News (2025-12-31)

United States The Fed cut the policy rate by 25 bps to 3.50–3.75% at the December meeting, but the minutes highlighted a wider range of views—making further cuts in 2026 more likely to be gradual and data-selective. Some observers note that a government shutdown can disrupt the continuity of official statistics, pushing market attention toward early-year labor and inflation prints. Housing data suggest cooling: FHFA home prices (Oct) rose +1.7% YoY, implying that improving “price stability” could complement lower rates in supporting activity. Market implication: a tug-of-war between “insurance against slowdown” and “sticky inflation” likely persists; if long yields don’t fall cleanly, equity upside tends to become more selective. Europe European equities were supported by banks and resources, with the STOXX 600 pushing toward the 592 area—showing resilience even in thin year-end trading. The ECB remains centered on a 2.00% deposit rate (in a hold phase), balancing disinflation against ...
Read more