My Investing Journey: Part 2
Doubling Down on Savings & Strengthening Financial Protection
In the first part of my investing journey, I shared how I took my initial step to secure my family’s financial future. If you haven’t read it yet, I encourage you to check it out here: My Savings and Investing Journey.
Fast forward to 2017, my younger son had already started school, and the cost of living in Pakistan soared. I realized it was time to double down on savings and strengthen my financial protection further.
This realization led me to Zurich International, where I opted for three key plans:
Vista Plan - Education
The Vista Plan is to help me save for my sons’ education while also contributing towards retirement. I contribute $850 each month, totaling $204,000 in twenty years. What I appreciate most about this plan is that it will allow me to partially withdraw funds at times of needs: 2025 ($35,119), 2026 ($35,825), 2029 ($41,472), and 2030 ($43,546) to cover education costs, while the remaining balance continues to grow for the future. It’s a straightforward way to meet both short-term and long-term goals.
Term Life Insurance - Self
To better address financial risks, I separated my life insurance from my investing plan this time. Though, I already have a life cover for Dhs5000,000 from State Life Insurance in Dubai as part of my Jeevan Saathi and Endowment Assurance Plans, but for better peace of mind, I insured my life with Zurich International for additional $1,000,000 at a monthly premium of $343.89. This is a 20-year policy that also includes additional coverage for critical illness and total permanent disability.
Term Life Insurance - Wife
I also insured my wife’s life for $500,000 with a monthly premium of $102.38. This decision came with a lighthearted joke—I told my wife that if something happened to her, I’d use the money to send my sons to boarding school!
Performance of Vista Plan
When I started this plan, I knew little about investing or capital markets. I relied on Zurich’s Automatic Investment Strategy, which allocated my contributions into diverse, moderately risky funds; US Adventurous 40%, US Performance 40%, and US Blue Chips 20%. While I rarely checked their performance, I trusted the global market-linked returns.
Occasionally, I reviewed the value and remained content with what I saw.
Once I delved deeper into the world of investing, I realized the plan's annualized returns (XIRR) of around 5% were relatively modest, observing that the Global Technology Funds of BlackRock and Fidelity delivered above 17% annualized during the past five years.
After gaining confidence and experience in capital markets, I decided last month to take control. Following research, analysis, and discussions with some friends, I switched to a my own strategy with these allocations:
BlackRock World Technology (40%)
BlackRock World Financials (30%)
BlackRock World Energy (20%)
BlackRock World Health Sciences (10%)
I believe this strategy aligns with potential opportunities under a Trump 2.0 presidency. Technology (40%) is poised for growth due to reduced regulatory constraints encouraging innovation. Financials (40%) could see profitability improve under deregulatory policies boosting market activity. The energy sector (20%) might benefit from a focus on traditional energy sources and reduced environmental regulations. Lastly, health sciences (10%) could thrive with expedited drug approvals and increased innovation.
With this new allocation, I plan to continue monthly contributions to Zurich International, actively track the US equities market, and adjust my strategy based on economic and political developments in the US.
Next Diversification Plan
Today, my portfolio spans Pakistan, the US, Cryptocurrencies, and Gold. I’m now exploring mutual funds through my bank (Abu Dhabi Commercial Bank) in the UAE, aiming to invest regularly in UAE and GCC equity funds. This diversification to relatively a stable and growing region will help taking another step in my financial journey.
Thank you for following the second part of My Investing Journey. I hope my story inspires you in your financial planning. Stay tuned for the next episode, where I’ll dive into my transition to active investing through the Pakistan Stock Market.
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Happy Investing!