Christopher Forbes from CMC Invest (Singapore) on the future of finance and long-term strategies for wealth building

Addressing the issue of investment uncertainty, Forbes brings up creating model portfolios to guide investors unsure about their investment choices, a move to counteract the misinformation they might receive from other sources. He proudly mentions CMC Markets Group’s latest initiative: an OTC (over‑the‑counter) options platform launching this year that allows for fractional options buying. “This will be part of both the CMC Invest and CMC Markets platforms. It’ll enable retail customers to buy smaller portions of options, similar to fractional shares,” he explains. “We’re democratising it such that anyone can participate in the options space.”

Forbes, whose personal portfolio spans ETFs (exchange‑traded funds), private equity, and a mix of alternative investments such as cryptocurrencies, whiskies and watches, shapes his investment strategies based on his extensive experience and comprehensive insights into market trends. In December 2019, for instance, he made a strategic decision to diversify his investment portfolio, which was primarily focused on equities and growth stocks, to include bonds for regular income. “I called my broker and asked him to buy a Vietnam bank bond and an Indian NBFC (non‑banking financial companies) bond. Both were trading at an effective yield of around 6 per cent, which was great at the time,” he recalls.

However, the onset of Covid‑19 dramatically affected the bond market, causing the prices of these bonds to rise by as much as 42 per cent, he shares. Initially frustrated with himself for not reacting sooner, Forbes engaged in extensive research, consulting with industry experts, and even a “Merlin”—a market or an industry person who can give you a small edge in the market or specifically, Vietnam and India in this case, he explains—in Singapore. “At the moment of maximum pessimism, I doubled down and walked away with a 90 per cent return and coupons over the next two years. That was a turning point for me in my investing career, as I played the game with a total understanding of risk, discipline, capital allocation and thinking holistically,” he says.

His advice to young investors seeking to build long‑term wealth: “When you’re young, you can take a bit more risk.” He highlights the growing trend of meme stock investments, driven by financial influencers on platforms such as Reddit and YouTube, but also cautions against the hazards of such investments, especially when there is a lack of understanding. “The dangerous side of this is when people don’t know what they’re investing into. That’s worrying to me. You need to have a bit of investment savvy and curiosity to do some research. I’d avoid chasing tips,” he says, adding that a common mistake he observes among investors is the impulsive following of trends. “The worst investors I see are just chasing every fad … Mondays [always bring about] a flurry of activities because … they read something over the weekend on Reddit.”

While he says “it’s important to diversify and have balance”, Forbes warns against over‑diversification in one’s investment strategy. Echoing investment legend Warren Buffett’s view that “diversification is diworsification”, he states: “Too much diversification is also a way to hedge yourself to zero and in fact lose money.” Most portfolios, he shares, typically include about 15 securities, some bonds for yield, property, private equity and a small allocation to alternatives such as Bitcoin.

He also stresses the virtue of patience. “When you’re hunting elephants, don’t get distracted chasing rabbits”, he says, quoting the late American business magnate and financier T Boone Pickens. “Good investing is really boring, as is compounding. The best investors in the world are patient.”