Cory Diary : Insurance Policy Returns

In my early article, decided to surrender my GE Dynamic Prolife with Cash Policy. It has been with me for more than 27 years. I originally planned to surrender it years ago but was tied up and other constraints. Finally, I am able to do it this week due to ability to do it more effortless now. GE has improved their process.

I am one of the sceptical guy who is worried what I will get when the policy surrendered as it will be too late to find out on surrender. Well, I finally got my answer this week. when i submitted my request and into my bank account. I kept records of most of the transactions. So able to do Return assessment roughly.

My XIRR returns is about 3.93%. If I have surrendered earlier by about 2.5 years, rough estimate assuming deducting away 2.5 years of premium, maybe about 4.2%. All this numbers are done quickly with my limited time and knowledge. Please dyodd and consult your own FA. Uncle is newbie when come to Insurance.

Compared to T-Bills, SSB and FD, this looks ok imo. Is a long 25 year wait but seems worthwhile if we considered this period. In-addition, that time 27 year old me don't even know about Stock Market. And today I have a sum to make this money work for me further.

Maybe I should include this as an achievement ?

Cory Diary

2025-0216

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Portfolio Updates

One of my key goal is to keep increasing my dividend income to cover expenses while hope to manage some growth through US Market. Therefore, the final holding in US market will be settling towards growth direction. For dividend income side, mainly SG local market specifically focus on Banks and Reits. 

US Treasury Bills ETF

Recently, I have tested out US Treasury 20Y and 10Y ETFs. The dividend distribution is monthly. Unfortunately, there are 30% withholding. As I understood, there maybe tax refund later by brokerage counterparty. This to me is not a sure thing so i will continue to monitor. At the same time, I decided to sell away 10Y treasury bill stock. I realised is not needed for my situation. I am not sure what to do with the USD cash yet.

Currently, 20Y T-Bill gives 4.7%. In good times it can been as a market buffer during recession period. The only down side is the USD Currency and because it is ETF, there is no date limit where capital will be returned to me in full if I wait long enough. To work this strategy well, my allocation may need to be larger. At the same time to boost my total dividend income.

Banks

Decided to push for more allocation with fresh fund availability. I just surrendered my GE Policy (Endownment) and could allocate some to it. The Banks yield are tempting. I will need to further study the implication and robustness of my decision. To add a special note, I plan to add Critical illness so is not going without insurance.

There are some concerns by an influencer on recent DBS result. One of the key point is that Q4 result is weaker than Q3. If we look at previous year Q3/Q4 comparison, there is also similar pattern. So it doesn't look like a concern to me. Probably some banking cycle going on or fluctuation between quarters. However, the Q4 result is much lower than Q3. About 13%. I look for pattern swing in prior quarters and this does happen. So is not conclusive. Based on the 6 cent increase and the quarterly 15 cents capital return, this seem to indicate to me the management is not worried.

There is also another concern raised on rising cost/income hiting 40% if we look at each quarter trend. However, YOY comparison seems ok. Q4 is likely a period the bank give rewards to employees and the size likely much bigger than typical years due to the strong banking returns. So again is not conclusive. I will probably investigate further before adding more into banking stocks. Is something I am eager to do as this will address my dividend income shortfall and portfolio growth over time.

SG T-Bills

Increasing my allocation sizing laddar continuously. This is to further increase my buffer in case there is significant draw down at the bank side in which I plan to hold long term. I find SG T-bills much harder to track so is not displayed in my Equity allocation. Same for SSB not in Equity allocation too. Their update frequency is too much. However, I want to to show all their allocation and this probably best resides in Networth Asset allocation.

That's all folks.

Cory Diary

2025-0215

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : DBS Investment thoughts

As you may know, DBS has just released its results, offering another amazing reward to shareholders. DBS is currently the largest allocation in our portfolio for the local market. Here's a summary of the rewards.

Quarterly Dividend Increase - The dividend has increased by 6 cents to 60 cents per share, implying a potential annual dividend of $2.40.

Future Quarterly Special Dividend - There will be a future quarterly special dividend of 15 cents per share for 2025 ( updated 2/16 - and assuming can last three years).

Three years indeed a long time, so it's not unfair to say that the annual dividend income could work out to $3 per share. At stock price of $45, this translates to a yield of approximately about 6.7%.

In DBS's latest quarterly report, full-year earnings were approximately $11.4 billion. The sustainable regular dividend ($2.40) accounts for about 60% of earned income.

DBS' book value has shown an increasing trend despite recent bonus shares and strong dividend distributions; theoretically, around 40% could be reflected in book value growth (though how much effectively flows through remains uncertain).

Does this meet a Wonderful Business Model ? 

Cory Diary

2025-0211

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : CPF Life for a change ?

CPF Life. Have been watching Youtubers on CPF Life. There are lots of discussion in Telegram on it. Then often then not, people will touch on return of investment of CPF life. And then will go on one should live to get as much from it as possible. This never get's into my head. Why on earth do we bothered about able to live longer to gain most from it, joke aside.

As I understood, CPF Life is an Annuity plan for life. In my financial plan, CPF is not the core of my retirement. Is useful as in it provides basic insurance protection. So what's more interesting to me is how much it will provides to cover my basic living expenses therefore some relief figures in my portfolio investment returns.

In fact, if one depends mainly on CPL life, chances are they likely do not have enough to invest outside CPF. This is simply maths. If one can cover with CPF 2.5% to 4%, either their expenses are lean or they have huge cash hordes in there. For my personal situation, despite my networth, the returns will not be able to meet my family financial lifestyle.

And this can be worrisome because I do not feel being extravagant. I would think myself as average or slightly above singaporean family scenario. If one is to dump most of their networth into CPF, there could be situation where we may find out much later in life that is not enough for the returns.

A 4% of 1M is just 40k annually. How many family have this amount in CPF ? If their lifestyle can be met, good for them. Personally I feel there are too many situations when more is needed due to changing circumstances and expectations.

One small suggestion for our government. Is it possible to invest our CPF money directly for all of us into the US equity S&P market instead of locking us into fixed 2.5% to 4%  returns. Based on 100 years of S&P500 record, achieving long term 7% seems not difficult. For bad year (or negative), the gov can guaranteed maybe 2% returns and so no capital loss for CPF accounts. For good year the gov can crawl back those losses in stages and mybe save off some % from the profit generated into fixed instruments to even out the distribution. What's this mean is we could see much larger gains of S&P flowing directly into our CPF accounts.

My Wishful thinking ?

Ps. We do not need a big team of GIC/Temesek to feed, just invest in S&P500 ETF will do.

Cory Diary

2025-0209

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Portfolio Walkthrough

There are certain amount of truth on long term pick of S&P500 ETF could allow layman investors to ride far with strong return. Will this implied for the next decade or two ? Is all probability and this solely rest on Fate of America and Currency. At this moment in time, that Index is elevated. Will it go higher ? That's hard to determine.

Is also true as well that when there is broad market draw down, chances are both Index and Individual stock pickers may suffer as well. One way to counter such situation in total return perspective is have bonds. Treasury specifically if one want to eliminate company risks. And for US, forex risk. In bad time there is chance the currency will strengthen with high yield and in good time vice verse. All this is probability imo.

In local context, T-Bills and SSB are good enough instrument to negate forex risk and capital loss. However, there aren't capital gain to talk about. So this can't hedge against Banks drawdown in crisis or recession situation. Ofcourse afaik.

Since my portfolio are mainly stock picks, I am the character type that want to beat against ETF if not to learn through the process and do better in next iteration. In this situation as in I do not have much lead way in term of early investing to compound, hindsight on America Economy, limited ammo vs expenses and risk tolerance.

This come back to talk through about my current portfolio again. Banks allocation increased steadily over the years to hedge against rate spikes when the portfolio is predominatly Reits. To hedge it successfully the Bank allocation increased significantly vs the Reit allocation. And then late build up into US market with smaller size for earning exposure diversification. In current context, why I am still heavily in Reits is the believe that the contract cycle will soon be over, and rental renewal catching up with the rate spike that tattered the Reit market so badly. Whether the rate stays high is not in the equation. Meaning Reits that cannot do well in this environment I will not be interested as much.

This equation left out forex risk and so foreign reits suffered significantly in-addition to high market rate impact and recessive local economy. Reason why this segment within the Reit sector should be scaled down to reflect their added risk despite their high dpu that time. Even reit such as Elite UK Reit with such a robust tenant (gov) get impacted severely. The strong S$ put their return further out. iReit situation is not as good imo and may take long time to recover. They won't suffer as much as US office Reits but is a low bar of comparison.

So how did Mapletree Ind Reit managed to overcome this odds ? For one they managed to seek out DCs in Japan with much lower Interest rates quickly. Will there be side effects, time will tell. They also have little or no exposure to EU whereas Ascendas does. In my perspective, I have been reducing my exposure to Ascendas due to low occupancy trend. They have not ben addessing the issue well despite stable dpu.

Interestingly there are Indistrial Reits like Aims Apac Reit despite their small size are doing much better than much larger Reits. They do put quite an amount of work to uplift their properties and this is despite large exposure in Australia which also see weaken currency earning. In what they suffer, i feel they make it up with having long term strong tenants. Nevertheless, investing in this Reit has to be scaled appropriate unfortunately.

A large reit in mind is Ascott Trust whom recovering from Covid period. The tourism market has also been coming back so it may takes some time to play out. There is volatilty in the reit so far and I am not completely sure on their earning power and dpu sustainability. It is worth some diversification so far.

FCT comes in a a key holding on income and stability perspective. They manage local suburb malls and is one that give me a lot calm to my investing. It has grown quite large hence there is some CICT now. It is an essential locally. While there are HDBs Coffeeshops and JB provides competition, they aren't the same but to provide sufficient value checks.

There are two non-reit non-bank local stocks in the portfolio. Netlink BNB Trust and Sheng Siong. Let me get Sheng Shiong quickly out of the way by saying I just sold off all to re-balance. A counter that has profted well for many years. I decided to finally let it go when the yield hits 4%, China exposure not walk in the park and recession hedge not needed since I have fixed instruments to cover. 

Net link bnb Trust always have the sustainability of their dividend in mind. As many may know, they have been increasing their loan but it may take a long time to hit the wall. Probably well over the next fee review. During this time, I hope to see what growth engine or so to speak increase in return they can manage. Is still in monitoring stage.

Finally, the US Market has been on peanut butter spread to capture growth. There is some hit and miss trying to optimise return. This is something I am still working on. Recent Deepseek does have impact on Nvidia, TSMC and ASML. But quite positive to Amazon and Goggle imo. There is also exploration in Treasury Bills to uplift fixed return and hedge against Singapore local investments.

That's all I have to say on my portfolio. Dyodd.

thanks

Cory Diary

2025-0204

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : First Month Equity

First month has just past after 2 years of strong returns. Within the month we have a large spike in the first weeks which than taper down as market losses momentum. Basically whatever spike from the bonus money ( probably ) received in Dec'24 into the market got pushed back down. We know the fundamental of the banks are strong so it is likely from the big boys act. 

Before the Jan week ended, the market woke up again with ferocity an push the banks back up again ( OA CPF funds ? ). But MIT dizzling into deeper red. On the US side, the market is riding back up nicely after the effect of DeepSeek impact correction which then tapered down some with tariffs rolling out on Canada, Mexico and China.

The portfolio ends up as follow. Will Banks continue rolling on the 3rd Year ?

The Jan month looks good. Feb'25 will be interesting as in how will Banks continue to perform and Tariff impacts roll-out. The month also see a draw down in Nvidia but fortunately other US stocks managed to lift the segment up through diversification in context on distributed large tech stocks and recent US Treasuries addition. The money of Treasuries come from Meta (ouch) and Msft ( hooray ).

The portfolio expanded TSMC and Nvda (averaging down). 

This can't end without outlining what's my plan so far. Avoiding Chinese/HK shares, Focus US Major Techs, Strong allocation in Banks, limited Reits invest ... and the return. See below.

There's more work to do.

Cory Diary

2025-0201

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Post-Retirement ROI (On) or ROI (Of)

Ideally we hope to achieve Return On Investment scenario. However, Return Of Investment aren't that bad either as long it can sustain our expenses till we passed. If we aren't clear their difference here we are. Return On Investment means the initial capital remains intact, and the income generated alone is enough to sustain one lifesyle. Most of us however will go through the Stage of Return Of Investment first where the capital has to be drawn down to achieve the expenses needed before we grow and fulfill the next level. Assuming same expenses and lifestyle.

Here's an example which I formulate myself on each stage of development. There are two main variables of control. Portfolio Size and/or Growth Target. Since this post is not about saving or efficiency, Expense is not something we like to control.

Example of Variables

Study the table closely. We could have a slightly larger portfolio size or achieve a higher growth rate with added risk that you might be set back financially instead. Ideally, both. Meaning larger portfolio and higher growth.

Inflation Rate increase is adjusting the Difficulty Level after you have achieved the Portfolio Size and Growth Rate. In above table from 3% to 3.5%. 3% is a long term inflation possibility.

Below is a sample table to compute the result above.

If we have review through various scenario, there maybe not much room for us to play around. One mis-step or major investment mistake could potentially set us back for years. We need to cherish every year of build up or we may have to push out our retirement plan to achieve certain lifestyle. 

Ofcourse if we can consistently achieve 15% Portfolio Growth Rate Long Term, you maybe qualifies to open a Master Class. Even a 10% Growth Rate could provides you a Strong Retirement Package. Now what happen if you only target 5% to 6% Portfolio Plan to eliminate Risk mostly. You will need a much larger sum of money to achieve similar lifestyle in retirement to follow as this could be impossible for many. It certainly helps on those who will lower the expense ( Life Game Difficulty level ). Is this what you really want deep in your heart ?

 

Cory Diary

2025-0126

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : US Market Strategy Re-Visited

In my earlier article, I written about interests in Big Tech or Large companies that has strong moat and leaders of their field. Primary reason is their earning powers. As I am quite new in this field and S&P500 is at high my thought is to use peanut butter strategy across a group of stocks. This is done in Year 2024.

With Bull Market into two years, will we see a third year Bull ? That's a million dollar question. Even if there is, we may not see it in Big Tech but could be other segment of the market. However, USD has been strengthening for some time since Donald Trump get elected. This currency is precious in the sense if we exchange them for it is not cheap. And if market take a negative turn is double whammy.

One thing we know is that cutting rate expectation has been reduced. From 4 to 2 cuts in Year 2025. Will this happen probably depend on the market situation as the year progress. However, TLT already reflected investor sentiments as below chart.

This will give a nice yield while we may have wait for some periods for rate to lower over time. The added risk imo is USD Forex. As I know there's no withholding tax for this but I am still researching and the best way to find out is to invest myself. Sizing is important as I am still learning. And this investment will help to boost some dividend as well. Nice adventure !

However, I have no funding and with strong USD, is quite costly to tap on my local fund. Hence, i need to re-balance existing US Equities in the portfolio which may have lesser potential. And this is what I did below.

With this move, I have some USD cash left for more re-investment. So why Meta and Msft. Not sure is worth to know from me. The important thing is I did the re-balance. Did you notice I also bought some VTWO. This is something Tom Lee has been shouting for since last year that small cap stocks may have good opportunity especially Big Tech is richly valued. VTWO is another ETF for small caps so that I do not have to know to pick. This is the second time i bought it.

With this moves my current portfolio as follow.

Cory Diary

2025-0118

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Expenses Review 2H 2024

Family Expense is something hard to control personally. There is so much to use or buy for our kids constantly. As they grow up, when one specific item is no longer needed, two new expense item appears. It's kind of losing battle. The need to constantly review our expenses is critical before it get out-of-hand. This is especially so as I have entered retirement phase. I need to make sure investment returns can cover increasing expenses or conduct planned drawdown as a mitigation plan.

    As such, there are two levers on managing my portfolio. The dividend portion and the growth part.

    The hope is that there will not be draw down of the equity portfolio within 10 years as I will hit age

    65 by then. This period like CPF, will allow the portfolio to compound.

Cory Diary

2025-0111

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Asset Allocation

An ongoing process that involves managing investments across various asset classes to optimize returns while controlling risk. With an impending loan renewal, it becomes crucial to make timely decisions regarding my financial strategy. The primary goal is to maintain these assets for sustainable income generation and to avoid liquidating long-term investments during times of need.

By incorporating savings accounts, Singapore government bonds, treasury bills, multipliers, investment cash accounts, and fixed deposits, nearly 30% of total assets are in liquid form. This allocation is significant, as it provides flexibility and security. I called this my Emergency Fund.

Emergency Fund serves as a vital financial buffer, providing access to funds for various needs without the necessity of selling equity or property. Here are some key areas where I plan emergency fund can be tapped:

Loan Reserve: Funds set aside specifically to cover entire loan payments.

Daily Expenses: Money allocated for regular living costs to ensure financial stability.

War Chest: A reserve for unexpected opportunities

Child Education: Future educational expenses

Medical Reserve: Medical emergencies.

Approximately half of this Emergency funds reserved for loan clearnace if necessary. However, the current strategy aims to avoid this scenario. As we approach loan renewal date, may consider releasing funds in stages to support investments while gradually paying down the loan. This method could lead to a reduction of the emergency fund by about 5%, most of liquid assets stay invested in fixed returns in Year 2025. The next stage is to release most part of the loan reserve depending on the contract in Year 2026.

Cory Diary

2025-0109

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Cory Diary : Equity Portfolio in Perspective

Cory Diary

2025-0107

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Net Worth

Been some time since I last post on Net Worth. The Logic is Net Worth is Net Worth. Don't add buffer, philosophy or personal perference into it. Basically, please call a spade a spade. What this mean is do not have filter lens to reduce or add the definition of it.

Net Worth implies Property Net Value (Sell Price after Outstanding loan), Surrender value of insurance products, the total recorded value of CPF, all Assets should be included and total returns of investment products ( Realised + Unrealised + Dividends ).

Ofcourse one could have their own personal buffer, cash flow view or investible definition but that isn't the True Net Worth. With that clarified, let's proceed with update.

Retirement Year

Year 2024 is retirement year which means there is compassion package. Still in the process of managing the cash. Therefore, the Cash/FD stack has a spike. Cash is still in process of being deployed safely.

Property

There is not much change in the property valuation and so the similar pattern just stack on top of it in Blue as we can see in months ending around of Year 2024. 

Equity

Equity did relatively well again for Year 2024 building on Year 2023 rebound. Large portion remains unrealised profits riding on Banks and US Market waves on long term basis. For new funding, majority will continue to be in fixed income.

Overall

Overall Net Worth achieved 21.4% increase in Year 2024  on average compounded 10.1% Growth Rate as below. This will probably be the last time able to achive such increase due to no more salaried income after.

For a salaried person as me, unless sizeable of networth in market, is not possible to have persistent double digit increase in Net Worth. This is basically Math. Which is why it works against common folks that do not invest generally and we will see increasing wealth gap as time past.

Investment Limits

With Scam abounds in today worlds, is illogical for a person to invest in non-official trading platform, friends private businesses or get-rich schemes. The risk is so high that one may lose their retirement money instead. Never trust our money to strangers. This leaves with only a few safe investment havens that I can do such as CPF, Singapore Saving Bond, T-Bills and Official Equity Trading Platform. They should be enough. After Expenses ...

Cory Diary

2025-0105

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Year 2024 Equity Result

Got a bad bout of stomach issue over the new year. Got myself into hosptal late at night, given a drip, some medicine and sent home. Bedridden for 4 days due to persistent stomach bloating pains after which finally subsides today. I will be doing a clinic follow-up today to see any long term remedy. Health is Wealth.

Got this off my head. Now how's my performance for Year 2024. 

Holding through Emotion Roller Coaster

If we include STI dividend, it will beat me a few percentage points in XIRR. For people who is new to XIRR is simply allowance for compounded return, money-weighted for irregular in/out of positions. Since is just a full year, the result is nearer to 17.4% returns for every $100 invested.

Despite STI performs better I am quite satisfied with Year 2024 result. Main reason being the Portfolio has significant Reits exposure which don't do so well this year. Year 2024 is also a concerted effort to build up US Market and I believe this is the direction to continue pursuing. The portfolio has grown over the past two years and it would have hit my personal target if I have not channel funding to Fixed Returns for Reserve.

So what are the key highlights for Year 2024.

1. Concentration on Banks help to uplift the portfolio. Willingness to allow Bank to exceed 10% allocation for a single stock helps to skew the result to match with STI Index. This move is an exception as bank is a unique asset class in local market that allow me to do that with much less concern. Offensive moves. From a low of 8% bank allocation in Year 2022 to more than 40% with re-balancing and fresh funds till Year 2024. And this despite reducing multiple times after the price ran up.

2. Cutting loss in Reits which has lesser chance for good recovery. Ie. Mlog and Sabana, locking capital in reits which is at higher volatiliy ie. United Hampshire Reit, containing exposure in oversea reits, and most importantly not injecting precious funds into new reits positions to antipcate recovery for capital gain. Instead focus is on strong reits that is able to command rental increase and maintaining dividends. Defensive measures.

3. Expansion into US market in larger way when I realised the earning power of Magnificent companies are much less appreciated. Strategy continues to be long term hold on them. Over the years this companies do well every year for the past decade except in 2022 which is a great opportunity that i missed.

Segments

If we are to explore by segment,

US market holds itself well negating Reit losses. As past actions cannot assume future, i did not anticpate Fed will cut rates quickly due to the economy is still runnig well depsite relatively high inflation. However it does rhymes which to me the cut will come. And when this happen at much slower pace, businesses are allowed to adjust and for that key reason i am not so worried on banks position though I wouldn't want to add more. 

What I find it tougher to estimate is the reit recovery. I make it a point few times that is the quick spike and not high rate itself that's the culprit. A strong reit will be able to comman rental increase for the cost. However, if the rental contract takes time to renew, the cost increase could not catch up in time hence lesser rental income therefore dpu gets hit.

Will Year 2025 be the time Reit will have new lease of life ? However 12 months are very long time in the market if the business aren't doing well. What make it worst is when there's politcal dimension to it. Hence, the reason to continue to avoid significant china exposure. It simply not worth the risk when we can get something good elsewhere.

Cory Diary

2025-0103

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Retirement Funds - Retire Series

Retirement is often viewed as the final chapter of one's career, and for many, the retirement package represents a significant financial milestone. This package can serve as a substantial boost to one's savings upon retirement, providing a sense of security and opportunity for investment. After careful consideration over several months, I have decided that my retirement funds will be allocated entirely into a War Chest—a strategic reserve for future investments.

Rationale Behind the War Chest

The primary reason for this decision is the current state of the market. We are already experiencing a bull market, which means that prices are generally rising. Entering this market with a large sum of cash could be illogical; instead, I believe it would be more prudent to wait for the next investment opportunity. Historically, markets operate in cycles, and while we are enjoying a bull phase now, it is inevitable that a downturn will follow. By holding off on immediate investments, I can position myself to take advantage of future opportunities when they arise.

In the meantime, I plan to distribute my funds into fixed-income instruments that prioritize capital preservation. Options such as Treasury bills (T-bills) are an excellent choice due to their low risk and government backing. T-bills provide a secure way to earn interest while ensuring that my principal investment remains intact. Additionally, other government-backed securities can offer similar safety and stability, making them ideal for retirees seeking to safeguard their capital.

Equity Portfolio Considerations

In addition to my War Chest strategy, I have allocated a significant portion of my net worth—approximately one-third—into equities. If the current bull market continues, this allocation could yield substantial returns. Investing in equities typically involves higher risk but also offers the potential for greater rewards compared to fixed-income investments. Therefore, maintaining a balanced approach between equities and fixed income is crucial for optimizing my retirement portfolio.

Managing Outstanding Loans

As an early retiree, I still have outstanding loans that need to be managed carefully. Having access to ready funding is essential in case of emergencies or unexpected expenses. This financial cushion allows me to navigate any potential challenges without compromising my long-term investment strategy or financial goals.

In conclusion, my retirement planning revolves around strategic decision-making focused on preserving capital while remaining poised for future investment opportunities. By establishing a War Chest and diversifying my portfolio across fixed-income instruments like T-bills and others, I aim to secure a stable financial future while being prepared for any challenges that may arise along the way. 

Cory Diary

2024-12-16

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Allocation Strategies and Performance YTD

This is quick interim gauge on portfolio performance so far with less than a month to go before the year ended. It looks like the Market may end better by year end. We will know when it arrives. The update today is on how my allocation doing in term of seeking performance and mitigation.

Basically, Reit losses managed to be well coverd by US market gains despite US allocation is much smaller in size. US allocation was around 10% whereas SG Reit about 40%.

Another thing to know is that SG Market Non-Reit performs much weaker than US Market too. The star performer is SG Banks which gain pushes the bulk of this year-to-date performance largely for the portfolio. Quite a number of Influencers got this wrong even for so called experts.

My logic is simple for a retailer me. The Bank business is good. Lowering rate is good for economy therefore mitigate losses in net interest income of banks. The yield is still good enough. Being so obvious, i have allocated sizeable portion to this year portfolio to mitigate Reits impacts which i said few times that it take a long time for the rental contract to measure up despite lowering rate. 

Quite a few retailers I know in telegram groups did similar intuitively on Banks as well and this works so well for all of us this year.  I still think there is still some tailwinds but we never sure. So always stay nimble. So what went wrong with the experts. I think they overthink too much whereas I do not need to understand too much at macro level.

As a constant reminder, investment is personal and this is how i manage my risk and personal situation with my limited knowledge and understanding. Please dyodd.

Cory Diary

2024-12-07

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Straits Times Index (STI)

Straits Times Index (STI) in Perspective

Coverage

The Straits Times Index (STI) represents the top 30 companies by market capitalization on the Singapore Exchange (SGX) Main Board that meet specific investability criteria.

Objective

The STI is designed to serve multiple purposes, including:

Creation of structured products.

Index tracking funds and exchange-traded funds (ETFs).

Use as a performance benchmark for investors.

Performance Overview

As of the latest data:

The YTD return for the STI is 18%, excluding dividends. In comparison, DBS Group Holdings has achieved a 49.5% return, excluding the impact of a 10% bonus share and dividends.

This performance indicates that investing directly in banks, particularly DBS, has yielded significantly better returns than the broader market represented by the STI this YTD.

Weightage of Index

The STI is calculated using a free-float market capitalization-weighted methodology, meaning that companies with higher market capitalizations have a greater influence on the index's performance. This approach ensures that the index accurately reflects the relative size and importance of each constituent stock within the Singaporean market.

Cory Diary

2024-12-05

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Recent Trades

Banks

In recent days, bank stocks have experienced a notable rise. Following a recent round of rebalancing, I observed a directional split between DBS and OCBC. I took the opportunity to sell some DBS shares and reallocate to OCBC, which helped trim my oversized DBS allocation of over 26%. In my view, while DBS is still buoyed by share buybacks and is undergoing a CEO transition, this move serves as a mitigation strategy regarding the new CEO and aims to secure a larger dividend from OCBC. This is a defensive measure. I am still deliberating whether to allocate more fresh funds into this segment, which currently constitutes nearly 40% of my equity portfolio.

Sheng Siong

There appears to be a near-term peak based on the Relative Strength Index (RSI), alongside a positive trend in the Moving Average Convergence Divergence (MACD). Broadly speaking, recession fears seem to be subsiding. However, there has been slight awareness regarding losses in overseas operations, and yield has dropped to approximately 3.8%. Given these factors, I believe it is a prudent time to take profits while retaining only residual shares.

iBit

The recent spike in Bitcoin (BTC) has allowed me to redeploy funds into Google, which is currently under-invested in my portfolio. I have no emotional attachment to taking profits; my focus remains on prioritizing stocks with solid business fundamentals. I intend to return to iBit in the long term as I see it as an insurance component for my portfolio.

Additionally, I have made several minor adjustments in the portfolio regarding allocation and cleanup, which I have chosen not to detail here as they are relatively insignificant.

Cory Diary

2024-12-04

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Cash Flow

Shifting to a Cash Flow Mindset in Money Management

As I shift my mindset to focus on short term cash flow in managing my finances, it becomes clear that understanding cash flow generation as a whole is essential, especially considering that most stocks pay dividends.

This concept is particularly important for those who do not possess significant wealth that can be safely parked in savings without worrying about potential shortfalls. For retirees and many others, being able to cover bills, fees, and expenses is critical, especially as these expenses are expected to grow over time. Therefore, putting every dollar to work and allocating it according to different risk levels seems like an intuitive approach.

Where to Start

To begin, I can gather current expense estimates and draft a plan outlining various income sources to support these expenses. For instance, let’s assume an annual expense of $100,000. To clarify, the table below uses arbitrary numbers for simulation purposes. In this scenario, the total income is 54% buffer on the annual expenses. [ updated error ] 

However, if I increase my estimated expenses to $135,000, the revised table would look like this:

With this adjustment, I now have a buffer of only 14%.

Analyzing Expenses

This analysis provides a valuable guide for managing my expenses. I could refine my calculations by reducing the allocations for retirement and insurance since I typically won’t receive my first payout until age 65. Additionally, insurance policies may need to be surrendered to access funds.

There are various levers to adjust in this financial plan. 

The fundamental idea is to continuously monitor and improve one’s financial situation while also maintaining motivation throughout the process.

If my planning goes exceptionally well, I might even consider including my spouse's expenses or other discretionary costs. If we find ourselves below our target income, we can optimize returns by reallocating savings or exploring other investment opportunities. The initial table heavily relies on equity and property incomes. As we approach age 65, additional pension streams will become available to us. However, there are always other options to consider as we navigate different levels of risk.

Conclusion

Adopting a cash flow mindset allows for better financial planning and resource allocation. By continuously assessing and adjusting our strategies based on our changing circumstances and goals, we can create a more secure financial future. 

Cory Diary

2024-11-25

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : How it happens - Retire Series

Reflections on Parenthood and Financial Planning

When my first daughter was born, we were overjoyed. It was an extraordinary feeling to witness a living being emerge from the love my partner and I shared—something that transformed my life from solitude to family. We were busy, but our finances were manageable. There was still a fire in my belly when it came to work, especially since it was pre-COVID—specifically, the year 2019.

The Decision for a Second Child

We decided to have a second child, Rui. However, this journey was not as smooth sailing as the first. We faced medical complications both before and after her birth, leading to rising medical bills and increased stress in managing our finances. Fortunately, I had been investing in dividends for some time, which, along with our jobs, allowed us to manage our expenses exceeding $130,000 annually.

The Challenge of Time

The hardest challenge we faced was time. Money often became a means to buy time, which we realized was incredibly important. Soon enough, we noticed that Rui's development was lagging behind her peers by one or two years, despite the care she received. We recognized that she would likely need more attention and support before entering primary school.

I hinted to my boss about any potential retrenchment packages, but there was no budget allocated for such initiatives. Eventually, significant organizational changes at the management level created opportunities for layoffs funding this year. Thankfully, I am qualified and given Early Retirement instead, which comes with much larger compensation.

Early Retirement

Over the years, I have simulated various asset and portfolio scenarios to support this decision. I started with achievable lower goals and gradually increased them as I refined our strategy while working and watching our children grow. Despite my previous efforts to calculate the amount needed for retirement, I found that it was never quite enough mentally. One just has to bite the bullet and take it. The rationale is simply that my children are growing up and my age cannot wait. I do not want to miss their growing-up period too.

Now that Rui is four years old and with limited time on our hands, I conducted yet another rough financial analysis based on the proposed early retirement package. Interestingly, I may also qualify for additional pension benefits due to a long overseas assignment. While it’s not a substantial amount, it could help offset local taxes.

Financial Position

Today, I believe with confidence to be a point where I do not need to draw down from my portfolio assuming my expenses stay at the current level including inflation. Same time I've reduced risk levels in the stocks I've chosen and increased my fixed income investments as an emotional buffer. Managing my housing loan effectively has provided leverage without becoming a burden; I've calculated this based on cash flow principles.

A crucial aspect of our financial strategy is that my partner is still working and has her own savings. This gives additional peace of mind. While I cover most family expenses, she manages her basic needs and occasionally contributes financially. This arrangement works well because I want her to build her long-term insurance savings for added emergencies.

Financial goal calculation is a moving target to start with. For instance, I initially targeted an annual investment income of $48,000 in my early years and later pushed that goal up to $60,000 or more in stages. To expedite this timeline, I implemented a plan for drawing down from the portfolio while also maximizing contributions from CPF (Central Provident Fund), pensions, and fixed income investments. 

Recent increases in rental income have also contributed positively. Although not all strategies were easily implemented or successful, starting early with saving and compounding made a significant difference. As we finetune the plan, we also make the bar higher when possible such as allowance for larger expenses or add inflation buffer. ( link on calculation )

Supporting Family

While it may be a taboo subject for some, I think it is important to share this as it can also be part of the critical equation when it comes to retirement. We do not hope to leave anyone behind. I have always contributed significantly to supporting my parents since my single days—a practice that continues today which I have refused to cut so far.

Fortunately, if necessary, I could reduce this support without significantly impacting their well-being; however, this would be a last resort as they are now advanced in age. There are not many years I am allowed to provide them.

Cory Diary

2024-11-16

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

Cory Diary : Portfolio Management Update

Democrats have suffered a shocking defeat. The concerns I have heard include illegal immigration taking away low-income jobs and depressing local wages, the unfairness faced by legal immigrants who waited in line, and the increasing number of Americans on food stamps in modern America. Many of them probably live worse than those in many developing countries. The numbers are staggering in modern America. Thoughts they should do better with Democrats for the past 8 years but it doesn't seem so.

It looks like Donald Trump has a significant amount of work to do to address this segment of the population. He has his hands full and will likely be quite stringent on foreign policies due to mounting national debt While keeping American employed. The well known concerns today are Inflation Increase which will impact Interest rates.

With this knowledge, we will continue to pursue allocation in the U.S. of strong global businesses to capture some growth for our portfolio. With limited knowledge of the U.S. stock market, I will continue to focus on just a few obvious key stocks that have a strong moat and are large corporations in the S&P500. The recent uptick has put all U.S. stocks in the blue finally ( Picture 1 ). This could easily turn red, but the current expectation is that it will grow more blue until year-end. How blue? No idea.

Pciture 1 : US Stocks P/L YTD

On the local front, banks continue to report strong results unabated despite lower net interest margins (NIM). Net interest income (NII) and other earnings continue to drive profitability across all banks. There are no clear signs of weakening. As our allocation is quite significant, I have done another round of rebalancing, reducing bank allocation back to 40% on this recent run-up. REITs encountered a steep dive in price, and this is where most of the raised funds went.

There are multiple adjustments that I will not mention here. Picture 2 is the current allocation.

Picture 2

With current high allocation in FCT, decided to add another counter CICT for more dividends and diversification. Delisted the investment account counter from the chart to make space for it. Adding another low growth REIT stock is defensive move.

Currently Equity Portfolio YTD performance as follow ( Picture 3 ).

Picture 3

The STI did better when we include their dividends, but I am happy with what I currently have always if the result is always that. The banks may still have some runway as they are above 5% yield. DBS's share buyback will likely mitigate on reduced dividend distribution fatigue in the future. So while they are going to buy at a higher price, this process makes the dividend even more sustainable. The price-to-book (P/B) ratio will theoretically go up if net tangible assets (NTA) remain stable; however, I doubt it will be much, if at all. The focus on banks remains on yield and payout ratio sustainability. 

In conclusion, the recent developments in the political and economic landscape underscore the importance of a well-considered investment strategy. As I navigate uncertainties, my focus remains on building a resilient portfolio that prioritizes stability and growth. By strategically reallocating assets, emphasizing strong businesses with competitive advantages, and diversifying my holdings, I aim to safeguard my investments while pursuing opportunities for returns. Ultimately, these decisions are driven by my commitment to achieving peace of mind for myself,  ensuring that I am well-positioned to adapt to changing market conditions and capitalize on future growth prospects.

Cory Diary

2024-11-09

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.