Jul 5, 2019

Cory Diary : Returns Rationalization

Since last blogged, the market continues to surge for yield stocks which portfolio benefited from Reits/Trusts exposure with low growth of the world. This is despite being peppered with bonds, preference, blue chips and SMEs. In the ever lowering yield quest which I have doing for past years, people like me will chase for whatever they feel safe hence lowering yield of stable instruments. Of-course unstable ones tag along as well to help build up the next crisis as and when it rolls. On and off we may have "Hyflux" or "Swiber" moments. Sorry folks. Not my intention to gloat over such but to constant remind that I could fall as well and is important not to be too carried away.

Currently achieved Xirr hits 37.2% if annualized for the year.
Xirr using year end date hits 18%. ( Roughly Profit Yield )

It has been a long time since we hit this higher level of returns. Those were the days !  In the past my portfolio was much smaller though. However at this moment this year profits in % term has been quite stunting considering portfolio has grown considerably. The absolute profit size is easily 4 years of my typical saving rate from my salary income.

Naturally my plan will be more and more conservative as the market goes higher to protect my gains. Dividend investors are more towards unrealised gains " to milk the cows"as dividends are as ... Music Lyrics "Always on my mind .... "

Using target of 50k annual dividends, profits for the 6 months+ is well over 3 years of dividends. Can it get better ? Sure just smaller increment as we compress the yield. Will the risk go higher ? Likely if the barrier to entry becomes so low that businesses starts to undercut each other.

With low growth in the world, the next cherish commodity is growth after "maturing" yield. In the extension of current stable yield concept, we hope for stronger stable growth iced with good dividends. Searching around maybe left the banks which I do have. Again buffered it up this week. Then we have digi-bank to worry ... life is like that. Don't complain.

One thing for sure, Portfolio has to grow over time. How to do it is the question.



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