DEEP RESEARCH · 2024 PERSONAL PENSION REVIEW
[Personal Pension Investing] 2024 Personal Pension Review
A year-end memo on maintaining the 100% U.S. Treasury position since November, pension-investing principles, and risk control for 2025
0. Bottom line first
There has been no position change since November, and I do not expect one for the time being. Unless U.S. stocks become attractive to invest in, the personal pension will remain 100% in U.S. Treasuries.
If U.S. Treasury yields are around 4.5%, I am satisfied for now with just the annual interest income from Treasuries. I have maintained the position since investing on November 13. Treasury yields have risen slightly versus the 4.5% level at the investment point, but because of the exchange rate, the position is still profitable in my view.
1. Pension-investing principles
- Long-term diversified investing: Pension investing is fundamentally long-term, so risk should be managed by diversifying across assets such as stocks, bonds, and alternatives.
- Flexible weight adjustment: If undervalued or overvalued asset classes are clear at a certain point, concentrated investing can be considered when needed.
- Connection with the whole portfolio: When allocating pension assets, I consider not only the pension account but the entire asset portfolio and adjust strategically.
- I currently hold 100% U.S. bonds at a 4.5% rate. This has advantages in terms of exchange rate and return, and it also hedges the fact that my general portfolio has more than 100% equity exposure.
Long-term foundation
Pensions are long-term assets, so multiple asset classes should normally be considered together.
Clear opportunity
When undervaluation or overvaluation is clear, allocation can be adjusted flexibly.
Whole-portfolio view
I do not look at the pension alone; I also consider total equity exposure across the whole portfolio.
2. 2024 review
In 2024, the return was not bad compared with the years since I started pension investing.
2024 was a year when pension investment returns were not bad. In my personal investing account, U.S. stock Palantir performed quite well, but InBody, which has a large weight, and semiconductor materials, parts, and equipment names added after December have not yet performed as hoped, especially InBody, the largest weight. Still, I have high expectations for next year.
In the pension account, the strategy of concentrating on U.S. Treasuries from November maintained stable returns and produced satisfying results. For pension investing, I think it is better to relax and let go of excessive greed. From 2025, however, I will start DC-type investing.
3. Words to remember for 2025: hard-won, easy, and complete victory
These are words I recently saw on a neighbor blogger's post that I want to remember for 2025.
| Type | Meaning | Investment meaning |
|---|---|---|
| Hard-won victory | 50% victory | It creates courage, and even when losing, only 50% needs to be recovered. |
| Easy victory | 70% victory | It can create laziness. |
| Complete victory | 100% victory | It can create arrogance and invite a 100% defeat. |
Takeda Shingen reflected on a case where, without his strategist Yamamoto Kansuke, he led 8,000 soldiers to suppress rebel local powers but suffered a crushing defeat against Murakami forces of only 4,000. One lesson was that he had been intoxicated by the feeling of victory from prior battles.
“In general, a 50% victory is the best, a 70% victory is middle, and a 100% victory is the lowest. A 50% victory creates courage, a 70% victory creates laziness, and a 100% victory creates arrogance.”
Shingen, who considered arrogance his greatest enemy, later competed fiercely under the Furinkazan strategy from The Art of War.
4. Why I switched to 100% U.S. Treasuries
Interpretation: This is also why I switched to 100% U.S. Treasuries in November even though U.S. stocks were rising well. Rather than chasing complete victory, the decision was to manage whole-portfolio risk with the mindset of a hard-won victory.
I hope neighbors continue their investment journeys by keeping their principles for the rest of 2024 and the coming new year. I hope everyone prepares for a healthy and happy year, and I should also set my 2025 plan before the year ends.
Sources
- Original Naver Blog post: https://m.blog.naver.com/PostView.naver?blogId=star_of_self&logNo=223707313674