Cory Diary : Making money work for you

Most people work on salaried income. Spend like 9 hours or even 15 hours a day.  And If you are in this mode of life and trying to get out from this rat race, there is limited options. One of the popular option is to join the long queue with aunties and uncles and hope to strike TOTO. This seems to be harder than kenna strike by lightning but many aren't deterred by it. Cory sometimes go buy when he is down in morale ... but halfhearted. So even harder to strike. LOL

Uncle Cory thinks he should work on a more viable option. That's to have money. And hatched his plan more than a decade ago by saving money. And then he saw the property bubbles come and go. Stocks market bubbles come and go. Even Fixed deposits "Bubbles" come and go ... Every $100, 000 loses $3, 000 annually to inflation ... ( Cory must be "Rich" .... to let this happen  ! ). Are you too ?

After going through Math, Uncle Cory decided to hatch another plan that is really really viable. That's to make money works for him. This time he probably get it right. One of the main reason is that the effort invested is little or using his spare time to learn as Cory needs to work. Of-course Cory needs to have money to Work. He has .... if you remember his first plan. LOL.

That doesn't mean is a linear process as Cory can do in parallel. Amount is never too small.  The experience gained and incremental saving will be compounded for the future. However Cory aren't savvy enough to use leverage other than technically the property loan which also means avoid stacking the risk to uncontrollable level.

So as you can see, Cory is kiasi and kiasu. I think most NORMALs are ! So that's what Cory do below. Depending on situation,  money is apportioned due to regulation and needs through below.


CPF

Investment is very limited when it is "Sure Win". The obvious one is CPF which are systematically saved and contributed. Is not like we have a choice anyway but nevertheless on paper they have saving, contribution and interests elements build into it. As many would know, is politically not so correct to promote to everyone. Cory has a friend who curse day in and out on it that is not our money and that is a fraud but then he plans to reserve it for his children education. huh ?! 

Cory have another friend who is on the extreme end and keep topping up money into CPF till millionaire status however he is a savvy investor, and supporter of establishment. Maybe Life is full of irony and Cory takes is that Investment and political view should not mixed. Cory plan is not to touch them for investment, and optimise enough OA into SA. Maybe some experts got better ideas. Cory is just sharing his current plan.


Bonds/Preference Shares

The next "safer" ones probably are Bonds/Preference Shares on the local banks. Is quite unimaginable they will collapse or write down. However, never say never. Leman Brothers is a living proof. Unique exceptions aside, generally I would assume our local banks are next best things to Gov guaranteed.

Between CPF and above, probably Singapore Saving Bonds (SBB) for more protective funds. Limited to $200 k of 1.7% currently. Not very exciting but good enough for those who are conservative like Cory. However don't get this wrong. The devil is always in the detail and so is goodies. Cory is vested between 2%~2.5% range and is only single digit percentage of his net worth. Most importantly, is money reserve for emergency and loan installments back up which could otherwise by in Fixed Deposits.


Fixed Deposits / Cash

The worst thing to do is too have ample cash in Saving bank doing nothing. Cory typically only needs certain amount for emergency cash flow needs. A large portion of it parked in Fixed Deposits which can earns 1.4% easily. So got this FIXED. You can try other banks .... . Just make sure is really safe.


Equity

Is a path to wealth expansion for those who do not have a really good paying jobs. However, the market is ruthless on those who make mistakes and could set you back for years financially. Cory struggles on who should be in it. Having swim in the shark-infested water for many years and still surviving doesn't mean many can. However, to reach financial independence faster, Cory thinks this is the main path other than building up a business ourselves if we have the right attributes.

This year is especially good for dividend investors due to Cory thinks are the building up of wealth after property curbs and the money printing world wide. Money has to go some where and they end up in stock markets. However this class of investors look for safe investment and REITs and Bonds are quickly identified with.

We know what happens to Risky bonds, and investors learned some big lessons from Hyflux and Swiber that yield is not the primary. Within the REITs universe there is different classes of them too. Again some investors will have to pay school fees if they think all REITs are the same and are only along the line of yields only.

Some REITs are US denominated and from limited experience in US market, is better for Cory to leave this class alone. Life is much more simpler to layman Cory. 


Property

One thing Cory learned from his Condo, is location. The $psf shoots up after Top.  Leverage to the max as the loan is cheapest. So Cory has more cash to deploy elsewhere but not to spend ! Age matters. Young people can maximum their loan period. Condo maintenance very high ... but renovation is cheap as most is already build-up. At the end of the day, is nice to have a shelter over his head. Maybe Cory needs a bigger head now as he finds his Condo too small.


Philosophy

So what is Cory investment philosophy. Simple lah. Don't lose money. 

If we have studied solid "Blue Chip" REITs, the price fluctuations can be quite significant. This may convince some investors that timing matters. While Cory do not disagree to it, what matter is how can to execute them. For example this year REIT returns easily come in with 20% returns. Is a GFC impact to those who stays out in a single year alone create by oneself ! Will the price correct ? Why not. But to hold on to our investment or to re-balance them is another Cory article. A good problem to have.

The mindset for REITs investment is to think it as cash flow. Say 5% yield of initial capital returns. Stock price will fluctuates. Looks for those that can grow. Doesn't matter whether is 0% or 10%. They can be apportion into the portfolio accordingly to risk levels but they all have to be solid REITs and not those that sponsors dumped, mismanaged or have integrity issues. Most importantly the business behinds this REITs are solid or not, and that can build value over time.

Lastly, performance is DPU + Capital Value. How they play around it, we value them appropriately.


Happy Reading and Belated Happy Deepavali 2019 ... sorry ... started to write this piece on that day ... so busy this week.


Cory
2019-1030

Cory Diary : Performance Oct'19

Oei ! Too early lah. Still got a week leh. What's the hurry uncle ?

Next week uncle no feel good leh. Don't be so rigid can ? ( Uncle Cory cheated the time to report good result cannot meh....  )

Seriously why today ? ... All Time High ( ATH ) lah. Next week not sure can maintain or not. I don't want to miss the mountain ... so report first. Shiok right. Lucky Cory Portfolio is not listed else sure kenna ....

Why Cory worry  ? Let's look at STI first ....

STI Long Term Bull, Short Term Dunno !

Based on CoryLogics, STI approaching a resistance after bouncing off from multi-year support as expected else it will be major correction at minimum.  See link on last reasoning in Aug. i think which is basically a broad strategy this year on STI Performance in earlier articles as well. And well I am comfortable to have large stake in STI Index as a buffer for Reits profitability protection.

Finally cleared Facebook. Portfolio now all Singapore team. YTD Cory Xirr 19.1%. (updated for privacy). If we remove Bonds/Preference holdings, Portfolio would have been 23.1%. STI Index 3.81% (excluding dividend).

What's next ? Lack of ideas now. Thinking how should I further protect my profits but need to stay vested for rest of year and ensuring enough dividends for next year. So many asks. So little ideas.

On top of this I have different ideas coming up for next year.

1. Re-Balance some part of my portfolio to lower cost fees
2. Holding back purchases maybe to later part of next year
3. Key deliberation on Bank Stocks, Bonds and Preference Shares Strategy



Cory
2019-1025

Cory Diary : Telegram Craze

Have been trying out new channel of investment sharing. As above is called Telegram. For what it matters, it functions similar like an apps chat hosted by Telegram. You will need mobile number to register.

The advantage therefore we can have hundreds of people in the chat group. There are many different groups for different interests. Manage to get myself into a few Singapore investment groups. I have seen Foods, Jobs, .... but don't get yourself into trouble like Nasi Lemak Group which were in the News recently for spreading pornographic materials. For the political savvy, there is one by our Prime Minister Lee Hsien Loong.

To join the private group they require "link" invitation but you can try search to get the public ones using keyword of interests. Ping me if you need specific investment groups for invites. There is a few SG Reits groups which are more align to my interests. However, there are others for knowledge.

Telegram Chat certainly moves faster than the traditional media channels that I am in use. And there is more responsive helps from others. The Apps is much lighter therefore faster to read, share, stored and communicate.

Few things in the news recently. Reits Reporting season. CMT DPU up 4.8% YoY Cheers, another strong quarter.  Keppel shares limited acquisition by Temasek, cheers because I have it in STI Index  .... . And one not so good which is Aims Apac Reit secondary listing which cause the share price to drop and hovers around $1.38.


Cory

2019-01021

Cory Diary : Asset Allocation Review 2019-1014

A month past since I last reviewed my asset allocation. Time really flies.  YTD Asset increased by 21% thanks to equity market in-addition to regular salary income. Manage to consolidate some of my cash to Fixed Deposits which provide quite good 1.4% returns to my surprise. I have been neglecting them .... . With reduced Cash level at 3.8% of Net Worth (see chart) this is probably the minimum I would go for now. There is some timing involves to support Housing Loan payments with added buffers of-course for emergency needs.

With Saving amount hits absolute base line level needs, near and mid term future funds from Salary and Portfolio probably can now be put more into active service or likely building up the warchest further as in Fixed Deposits.

Cory Investment Portfolio YTD increased by 18.4%. Which roughly tally with the profits recorded this year with a little cash injection to top it off. At this point, maybe I should let the fund runs.

Cory

2019-1014

Cory Diary : Why Dividend Investing is so "Exciting"

Remember in my younger days, RM will furnish us with the idea that investment  today, 10 years later sure Huat with annual 10% based on past 10 years track record. And they will show you the charts on why so. What they didn't tell you is not in the contract is not guaranteed and  the other is that they won't be around few years later to service you or you are't around anymore to bother (touch-wood). The key is don't sell in short term. Probably high sales charge or they will still be around and need to answer to you. lol

Fast forward today. Is there anyone really can guarantee good returns after 10 years ? If so, Banks wouldn't need to sell to us. They will be happy to do it themselves.  I am sure institutions will be happy to invest too. Why bother to grow an army of RMs to service thousands of retailers. 

With Reits that is strong and growing, DPU management has become an expected norm. This will last as long interest rates are low or to be better said, borrowing cost is low relative to earning. Hence the term we hear about Income Ratio (ICR).  It has become a performance metric to drive managers too. That's not easy in execution. 


Why Maintain or Growing DPU is so important ?

So when someone tells me DPU YoY only up 1%, I am smiling till my teeth drop already. Why ? Ascendas Reit has run up significantly for a number of years. This year "just" 23% YTD excluding dividend. See chart below of Ascendas Reit with Dividend Effects !

To grow DPU or maintain for 10 years are not that difficult to find nowadays as long we have Good and Credible Managers however this is not given though. The thing to overcome is Price Anchoring. Will we pay for something that is 23% more expensive from a year ago  ?

Seriously, if I have spare money, I would. Reason being Retailers ask is, "Show me the Money - Sustain-ably". The logic is quite simple. Think of the investment as long term. DPU maintain or increase. This is better than bond already. The cash flow generated covers living expenses. If there is reduction in stock price, we need to look at it in context. Is there fundamental change in the business ?

Next, Trump announced Preliminary Phase 1 deal. Probably due to Biden presidential bid took a hit. The Chinese probably feels a little shaken from it. However, this is far from a complete deals. I doubt it will ever till Trump gets re-elected. What this mean is interest rate will remains low for foreseeable future.

So someone asked. Can I buy MCT today ? Very hard to answer. 7 years of dividends from this year stock price increase. One thing I feel that is never late to invest. Break up our purchases just to be vested some and then see whether we need to average down or up much later. Maybe choose other Reits ( lol ). Don't fall into yield traps. Not all Reits the same. Who knows MCT share price can take another 7 years of dividends leap again. Realistically, the key is how low a yield we are willingly to accept. SSB is like 1.7% range for 10 years. Your take ?

Cory

2019-1012

Cory Diary : Reits Investment Logics

When Recession comes, most investments will be affected. This applies to Correction as well.
Interestingly, this are one of the best time to buy. The question is what stock to buy and will we buy ?

In the last recession, Reit stocks price like many other non-reit investments are badly hit. STI Index reflects the poor situation too. If we are to use today thinking, and understand how the mechanics of how Reits work, one would wonder how can things can go so bad in stock prices.

Basically, Cash or the lack of it as everyone "Hides" them when is one of the best time to invest. Many is taught about the gearing lesson and the dilution of it. Buying during this period do goes against Human Nature of trying to run away from the problem. Trying to do the opposite differentiates the man from the boys. Cory froze in Year 2008. Not that bad. :)

In 2008, many stock prices cut into half easily. Will this happen in next recession ? Never say never. However, with ample liquidity today. And better understanding by investment communities on Reits. Chances are we won't be able to see such deep cut for the next ... next ... (never mind... Cory no crystal ball). There will always be exceptions.

In essence, the DPU of Reits or in another relative term with current price such as yield, say 5% as an example provides the cash flow to one financials as dividend. Multiply it with say 5 year periods will be 25%. That's a recession depth. To be more precise, there are compounded effect and the gearing component especially on properties. And the growth factor which cannot be ignored as it can double dividend gains over the 5 years period too if we pick our stock carefully, and safely to optimize our chance.  


Recession Survival Recipe

1. Able to Survive : Gearing, Loans, Occupancy, 
2. Able to perform "V-Shape" Recovery preferred in stock price : Stock Price
3. Continue to profit from the business during this bad days : DPU
4. Strong Sponsor

Not all Reits the same. Cory want to avoid bad surprises and knives cut. The Gem in Reits are not the Yield but the Growth and Stability that it can perform. Yield is the extras.


Cory
2019-1011

Cory Diary : All in Our Minds

There are many times I am asked to take profits. Reason being people has the conception that cash is the safe harbor. A rest point before we venture out again. This mindset is not wrong when one trades for a living especially speculative short trade.

Post today is I hope to share how Cory thinks from another perspective. Often we hear people make so and so $Xx,xxx but then lose it all or worst in negative. The angle I do is to treat profit earned as part of base capital in every new year.

Let's say I started with $500k in 2018 and ended with $580k. That's 80k profits. In Year 2019, I will treat $580k as my new cost structure (or base capital) thereby zero-out my profit. Why we do this is to overcome the human weakness of "Feeling Rich" and lose them back to the market.

When we do this long enough, for some reason cutting loss is more a mechanic nature rather than a pain-in-the-heart. Interestingly, we could also sell a stock at say $1.50 near end of Year 2018 but buy them back in Jan 2019 at much higher price sold earlier. Is like hyped on a Jan market trend trading mechanism. Fortunately, I do't this often ! Cory aren't crazy but it does happen sometimes .... ... ...

Since Cory Portfolio is ignited on every first day of new year, safe harbor has no meaning from previous year trades. Therefore, Cory result is often Year-to-date (YTD) meaning is the measure of Profit or Loss  from 1st Jan base to current date figure. This keeps Cory on toes and not feeling rich. Historical past year trades are just for "Glorification" use only, nothing else.

If Cory feels the market going to crash like 2008 GFC, he can relieve all his counters as he wanted but that's not because he has make enough profits. There is no relevancy between getting out-of-market and having make or loss enough.

Is all in our minds.


Cory

2019-1008

Cory Diary : Reits Comparison

Often we have a list of Reits in our radar. The more savvy one may probably just choose one. To mitigate risk, I tend to have them with different proportions. The question will be how do we apportion them. 

Here today I have 4 of them to think about. Namely, Ascendas Reit,  Mapletree Ind Trust, Frasers Com Trust & iReit Global.  As usual my investment decision is agar-agar. They are all quality reits in my opinion.

There are few key notes in my head. Singapore is near recession whereas US market are still relatively strong.  AR has weakening AUD earning - Australia exposure. MINT recently has rather good bargain on US Data Centers in-addition to what they have. Stronger USD helps too. Ascendas has future earning from Grab building and recent Australia acquisition. AR is largest locally. MINT may have impact from HP Inc downsizing concern as this maybe a risk depending on their BTS lease term with the company.

Overall, I would think MINT yield should be lower (correction) due to better quality earning. And I will be ok to pay more than A Reit. This thinking could change with time though.

How about Frasers Com Trust ? There is some concern in the market whether they can maintain their DPU. However their major was resolved with space able to be rented out to google. There is still risks from Microsoft. Overall the risk is reflected in their higher 6% yield compared to AR and MINT.

With recent blogged iReit in the limelight by famous blogger, the market was moved by it due to low trading volume. There are also other bloggers who are not so positive about it. Nevertheless at 7.6% yield there is some market concern. Is pure Germany play and rather concentrated in a tenant. I have 2.5% allocation currently.

Maybe ratio of AR 12%  :  MINT 9% :  FCOT 6% : iReit Global 3%. This will stagger my yields and risks in REITs.

Make sense ? Now wait for some correction to drive towards the percentage. Those that exceed probably I will put a hold instead.

Cory
2019-1006

Cory Diary: Importance of staying invested 2019-1005

Importance of staying invested to beat inflation is a psychological battle after GFC 2008. People tend to wait for the next major crisis or at least a correction. This is especially so when we have many headline news or risks and worries. 

While the concept is possible in theory, the timing or execution is not easy reason being because of the opportunity costs. Reits yield over the years have climbs down from double digits to 5% range. However, the cumulative capital gains and dividends are of considerable size. (See table)

The Gratification comes in when we go beyond inflation beating to actually profiteering from our investment. And to see our portfolio continuously growing in good years while mute in down. Overall, we just need to see more ups than downs to win the game.


Recession Fear as we are on our 11 years of economic growths since Year 2008. 2020 could be mute or small increase in profitability. What I could do is to continuously apportion my portfolio to more "Fixed returns" by percentage while in absolute number can still be larger in non-fixed investment. This could protect my down side while continuously to have larger growth in portfolio size through re-balancing. That's the strategy.

Cory

2019-1005

Cory Diary : Expenses 2019

This year is quite special .... I have a lot of one-off items ...for example baby expenses. However we know that to bring a baby to adult, there is probably a string of one-off expenses over many years. Maybe "amortization" probably is a fairer way to deal with it. We need to recognize it as regular cost of business ! 

There are many other one-off items such as Renovation, Alter, Cremation Niches, Medical Surgery, Hospitalization, Medical checks, Confinement  ... this are debatable. Nevertheless they can be big ticket items or summation in total. Ignore them at your perils.

And we have the regular ones like Taxes, Nanny, Parent Allowances, Installments, Holidays, Baby Misc ...

If one plans to retire, make sure we plan them into our annual expense plan with good buffers. Don't simply jump into FIRE through hard core saving. You will be surprise like I do this year on how bad it can goes on how expenses blow up. After totaling up major items that i could find, the expenses YTD is S$117 K... ( ouch ). 

The fortunate thing is that my Liquid asset and Net worth are still trending up. The first is due to Stock Market and Regular Job, and the later with added Property Valuation Growth (Cashless by the way).

Anyone like to retire now ?

Cheers

Cory
2019-1003

Cory Diary : Portfolio Sector Allocation Report

Has been away for a week long family holiday .... ( Fretting ). Expenses are like shooting star right now. Original plan today is to write something on expenses but 10/1 comes up and probably is more exciting to update how is Cory Portfolio so far first.

Cory Top 7 Equity Investments

1. STI ETF

2. Ascendas Reit

3. Frasers Bond

4. Frasers Com Trust

5. Ascendas-h Trust

6. VICOM

7. Mapletree Ind Trust

Cory Portfolio has Bond/Pref to calm his porcelain heart. He can't take much stress. The index do their numbers too which totaled with Fixed investment hits 33.7% allocation. To calm further, Cory has SSB outside Equity Portfolio which is use to support Housing Loan (Emergency). This damped investment returns but is done deliberately.

Telco allocation is actually Netlink BNB Trust. The position is relatively small after taking profits. Telco stocks are struggling a little so is better to avoid for now. Of similar size is the Banks which provide a little upside volatility.

Particularly excited about Ascendas Reit because as previously reported scope more on higher low.  Managed to buy some MINT back as well though is net negative. VICOM has been a cool winner considering Cory is late in the game on this one. Is better to be late than never. Key is to size our position appropriately so that we can average down nicely or enjoy the ride up.

Cheers

Cory

2019-1001