Cory Diary : Re-Balance Strategy

Saw this Video by John ( link )on impact of Covid-19 to people in West getting evicted. The impact on economy is so great and wide to everyone, relative to people that die from it is relatively small in percentage. Hopefully common sense prevail and strike a good balance. What can we do to avoid it in the first place not to run out of money ?

There is this solid couple doing Dividend Investment Strategy. They retired recently despite iron rice bowls. Their sharing is awesome. Link right below. Many thinking I shared.

Our Alternative to Timing the Market (Maximize Returns & Reduce Risk)

One key point I like to highlight is Re-Balance Strategy. What is it ?

To Optimize Return and Minimize Risk. This is something I will put special focus. But what is it actually ? I would think exposure that I feel is getting riskier and try to par down stake at optimal price. This will mean there should be an upper limit cap. to minimize risk. And diversification is key.

Finally, being Average is so great !

Cory

2020-0630

Cory Diary : Net Worth - Just looking at the Chart

This update shows the impact of Covid-19 to Net Worth. The top green and white lines include property net value but won't be reflective in current scenario due to much reduced transaction for reference. If the crisis deepened, we should see the Property net value to reduce and therefore lower level lines.

The Cyan line is the liquid line and current YTD is roughly the same as start of year. Basically recovery of the stock market and some saving from the first half year. At personal level there is V-shaped recovery in asset.

The Yellow line is the investment in Stock market and Gov securities which in total maintained. Showing some similar story of nearly a V-shaped recovery. However, equity dividend expectation has increased to $62k at current invested amount.

With major items like Tax, Parental allowances, Confinement costs and most of normal cost for 2nd daughter delivery already paid, 2nd half should see higher net worth unless the stock market has 2nd dip. This is mitigated with sizable FD, SSB and cash. Investment wise,  retaining dividends, saving and 75% of warchest amount remaining for it.


Cory
2020-0628

Cory Diary : Asset Investment hierarchy of needs

Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his 1943 paper "A Theory of Human Motivation" in Psychological Review. 

Broadly a sample I got as follow,

Maslow's hierarchy

Similarly for Investment, there are a lot of psychology involves in how we manage Greed and Fears. This can be classify by level of risks individuals willing to take but with the the ratio (equivalent to assets) adjusted as one progress on asset levels below.

This is depicts from Left to Right as one net-worth increases. A simplified model. In reality, asset between classes may have situation could not flow freely such as if one introduces Pensions or CPF layer which could limits.

The logic that we fulfilled the basic minimum on cash holding which could increase with changing circumstances but nevertheless small in area in the triangle but the absolute figures likely larger. Follow by different level of investment risks.

One key point to look at is the SSB where the area on left is larger with just 100k investment whereas the right triangle the SSB is much smaller but has 200K allocated. This is primarily due to much larger asset base as one progress in life.

The dividend investment increased significantly in area and absolute as well as one build up dividend investing with potentially  taking into consideration of diversification.

The Property can be home or investment property. Some would feel this should be at lower level.  I would agreed if is home to be one of bottom but property usually comes later especially when the government do a good job of providing to the masses when we are much younger than our oversea cohorts. 

As one's career develop and salary increase, and existing home get paid down, chances are we could afford an investment property. Then the peak is more off investment purposes. In some society, renting is common, and not necessarily a need to own one.

The main essence is if one meets the basics, psychologically we are much more prepared for investment dynamics and ride better between bulls and bears while highly vested in market or making investment decision.

Cheers

Cory

2020-0621

Cory Diary : Dividend Report Jun'20

Recession or not for Dividend Investor, the mentality is always Dividend please come. This is true till we are hit by Covid-19 Black Swan event which continue to play out 6 months into the crisis.

One of the key believe is that as long the business is stable, dividends will be relatively stable. It is "Bond like". Is a time where most of what Cory believes get challenged. It  is as seems someone up there do this purposely.

Do we change ? Not if we are relatively diversified in our strategy. For example CMT is one of core stock. Despite that it is less than 10% of the portfolio. So with recent income retention by CMT, the Portfolio dividend continues to churn.

In fact, with such dynamic market, this is where new gem can be found into one's basket of stocks. So when there is new opportunity arises, instead of expanding CMT, we can secure a new dividend stock. There are many ways to do this including tapping more of the warchest.

As of now YTD, dividends received $24,990. There is more to come before Jun end. The theoretical dividend roughly $60,500 which is about 14% increase by year end compared to Year 2019. Total dividend received since tracking $350,340. Cheers, Covid or Not

Cory
2020-0615

Cory Diary : Sector Allocation May '20

Prior to the Bank run up recently, I was a little over allocated in Bank segment. This is in consideration of STI Index as well as some of the shares that are in trading. So it was traded off when the bank did the initial run up. This increase a little bit of cash which I have some allocated elsewhere. As we know now, banks continue to run up.

Unsurprisingly, the performance between Portfolio against index narrowed a little but just a little to about 14.5% gap. The bank weight-age if I could remember is about 26% of STI Index whereas Cory Portfolio after consideration of Index shares will be lesser than 15%. Fortunately the broad classification on Services, and Reits segment also register some good run up. 

One thing I did in Year 2020 is to ensure I have enough representation in Banks which unfortunately met Covid-19. With the yield that high and looks more sustainable, it makes sense to hold it over others. It gets tough to increase the allocation now despite relative good yield. 


Cory
2020-0609

Cory Diary : Market Recovery

Market Recovery

We just have the steepest decline in STI in March. And when Circuit Breaker (CB) kicks in and enormous Covid-19 packages to support the economy,  is already on purpose that we will not have V-Shape recovery simply because it was once extended and now follow by gradual openings. So the Index is also more like an "L-shaped" with a bias elevation for gradual recovery as below STI Index chart. With Index at -14.5% and judge by recent just one week 6% recovery, is not impossible that at the ending part to be a "Slanted U-Shaped" though chances are the probability is lesser.

This week Banks make major recovery, though the banks segment in my portfolio is smaller is still a large part of the portfolio, and it just flows with it though slightly slower.  As today, Cory Performance YTD is back to positive by a hairline of 0.02% to be exact and 14.5% above Index (excluding index 1st half div). Theoretical max annual div $59k. Key stocks that I can remember off-hand are Ascendas, CMT, DBS, OCBC. STI Index, Netlink, CRCT .... which totaled about 20 stocks.


Market Relapse

The market may face a situation as we are opening up that we could see spikes in Covid-19 community cases but will we have to return to "CB" again ? Personally I think is unlikely we will face a spike similar to dormitories infection scale in the country. As previously mentioned, we have learned how to manage it through social distancing and mask. Neither will it be tenable for the country to go through CB again and another round of same Covid support packages. It will also be a little embarrassing for the ruling party to face coming election with confidence. 


What this mean is the economy has to continue to open. And if there is major cluster infections, we will have to ride through it. How to work around this with other countries will be tricky. So the economy will churn on. Many of us who can will probably continue to Work-from-Home ( WFH ) to void major cluster happening in Offices. However, most of the businesses such as Show Gallery, Malls and Restaurants are likely to stay open. 


A historical day for Cory of finally breaking even in Investment for 2020. Great day for Dividend Investing and staying vested. Hopefully it will last ! I am sure many others do too. As I type, DJIA staged near 1K point recovery above 27K in trading hour due to better job figures. Looks like Trump may have what he wanted.


Cory

2020-0606

Cory Diary : SSB - Singapore Saving Bond

SSB - Singapore Saving Bond

With the market crash due to Covid-19, many people is tempted to maximize the rebound by investing in the stock market at lows. And is at this very moment, cash is running low. Cash is basically King in March and still today in June.

One of the way to raise cash is to sell bonds or unwind your fixed deposit positions. So there will be great temptation to release SSB back to the government. I was exploring this idea too which I have max out my SSB between 2 to 2.5% quite long time ago to a trader mind.

I put this into deeper thoughts and decided Not !

1. SSB is a place where I secure my fund to support my home loan repayment and as a emergency fund too. I have yet reach a stage where i can sleep soundly putting this money to work in stock market. Logically I should but I feel my life will be shorten by 5 years from worries if I did even I could gain some monetary rewards.

2.  At 2 to 2.5% this is way better than current new issues or fixed deposits in the market.

3. $200k is quite a lot of money to stuck in there. But I would caution and ask people in similar situation as me to think further in another way.

If one has $500k asset, $200k is 40% of net worth. That's a big chunk but necessary because it is a defensive line. If one is to grow his wealth to $1,000K, that's only 20%. So as one wealth grows, the amount in SSB by ratio get smaller. That's the essence. Fill the bottom safety nets. Whatever overflowed, we can put wherever we want. Over time, we will spring !

But it may takes a long time for many. Yeah, this mean you aren't ready yet.


" Maybe I can explore my fixed deposits. Oh no. Better leave it for 2nd Waves just in case.... ... "


Cory

2020-0602