Cory Diary : Market Drawdown Logic

Dividend Investing always have the idea that as the stock get cheaper we can buy more shares cheaper. At the same time we get more and more dividends. Capital loss is not meaningful as there is confidence the price likely returns if is not short term even long term we can wait. This is logical when the business fundamental is not significantly impacted and we are still seeing the cashflow coming in to provide dividend. Collecting dividend while we wait is a very happy exercise mentally.

Bottomless Pit

What-if is growth stock that hardly has any dividend ? This becomes tricky in market drawdown. In growth stock, PE can move from low to high gear and back. What this mean is money created out of thin air or vaporize with sentiment as money is not in the pocket literally. Strong companies will not escape punishment even with almost perfect score as people will still focus on the imperfect and blow it off with broad market. People who continues to average down in a down trend market will be suffering for a long time mentally. There is no base support. It can be a bottomless pit as valuation is just a paper exercise till something change the course.

The market is well known to be 6 months ahead. So if rates impact till year end means Early June is the time we re-evaluate our thoughts again. So much on Growth Stocks. Needless to say is not the same logic as dividend investing. Our brain needs to switch a bit on this and timing maybe critical even when we cannot do well on it. As usual exception always applies just in case someone like to shoot my thought.

Cory

2022-0430

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Cory Diary : Trading log 2022-0422

Quick updates on recent changes to Equity portfolio. Attained Potential $66k annual dividend with current equity setup after some re-balancing across the portfolio.

Tesla

Further reduced Tsla allocation to 11% on each upside swing in stages. The volatility is slightly too high for my comfort so is best to do it when the US currency in still in my favor. The latest sale is right after result which registered another fantastic quarter for Tesla. No doubt I am still learning on growth stock dynamics. Yesterday Netflix significant sell down is another reminder after Facebook (Meta Platform ).

Still bullish on Tesla however slowly realised that there is always drawdown which I can collect patiently when comes to Growth Stocks. Is 11% allocation just right ?  Frankly I don't know. Maybe it needs to grow in lock step with the portfolio size. Each time Tesla go on upticks, it becomes top allocation in the portfolio and I will shave a little which even after still has sizeable allocation. So it depends on many moving wheels I guess. And achieving a balance that I can sleep well..

DBS

The allocation has increased to 7.4% but decided to clear off all OCBC shares that recently collected. At this size, chances are will further increase the investment when opportunity arises primarily due to more than 4% dividend yield which is quite attractive for a bank stock else we can stay put and focus on dividend stocks through reits.

There are thoughts that P/B ratio historically is expensive which I agree but it makes sense to hold DBS for the dividend level it helps compensate at current price level. 

Sabana Reit, Aims Apac Reit and Daiwa House Log Reit

Make the mistake of selling too much ( roughly 60% ) through profit taking and the fear of major correction for high yield reit. Decided to buy back some at higher price to maintain the needed dividend while keeping the allocation in mind.

The latest report again show robust Sabana performance so the current 2.5% allocation will give me peace of mind. In peace time, Sabana allocation will go higher but we know Fed is in lock steps to increase rates. Likewise, there is some minor adjustment to increase Aims Apac Reit while reduced slightly on Daiwa Reit. This three Reits have been risk adjusted on allocation which provide strong dividend yield to the portfolio.

FCT

Further increase my allocation to this Mall Reit as I am still quite bullish on the defensiveness of suburb malls. The only weak link is the the Fixed Rate debt is relatively small compared to other reits. The other Reit which has sizeable reit allocation in the portfolio is MCT which just reported robust result.

At 12.9% allocation, this is probably the max I will go for this stock at portfolio level while malls on recovery path. The current yield is slightly below 5% based on my personal metric. 

Sheng Siong

The last stock is increment allocation to Sheng Siong. This is a defensive stock which has good growth potential and strong business fundamental. This help to compensate a bit when the portfolio sold down some Netlink BNB Tr last quarter. This provide some diversification from Reits while providing sufficient dividend the same time which is something nice.

Cory

2022-0422

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Cory Diary : DBS Multiplier Experience Sharing

Often we need to have some working cash, immediate cash or emergency needs. So able to optimize this amount of idle money will provide some returns. Fixed Deposit rate is bad in current environment and not as flexible. Even if rates continue to increase, is still low.

Conditions required for DBS Multiplier as follow currently. This could change. Currently to enjoy the max benefit we need to park $100k as below table. This cash can move out to other saving accounts as needed for use.

Under the My Account tab, DBS will track it monthly on your earning from Multiplier.

Following 4/5 criteria is met. So we hit 2% for the $50k and 3% for the next $50k as long eligible transactions meet $30k. This can come from salary, dividends, share transactions, credit card etc. Obviously I will not increase my credit card spending to meet the condition.

There are two types of returns below given on different day. If we are to add them all up, totaled $212.35 for  the month. Which mean a potential income of $2548.20 for the year.

We have formed a basic layer of income stream. Nice way for money to grow money.

Cory

2022-0410

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Cory Diary : Alignment of Net Worth Tracker

Have been thinking lately on how to simplify Net Worth tracker while trying to optimize asset such that they work harder "Passively" the same time. One of the way is to segregate the tracker lines to reflect efficient use of asset. Regroup similar attributes one to same group. See New Chart below.

Non-Productive Assets

Fixed deposits (FD) and Cash Saving should be in a group that formed the lowest base on the tracker. Their interests are small versus some other actively managed assets. This segment is not productive and is for daily working needs, emergency cash, regular bill payment buffers and even money market funds (MMF)  of investment accounts. Having them classify together gives a better view on non-productive assets.

Investment Streams  ( Red )

The recent setup of Multiplier ( DBS High Saving Returns ) with the goal to hit 3% max ( 2.5% on average ) take some planning and significant cash to invest ( 100k fund for $2.5k annual interests ) but  provides a much better returns than FD/Cash. This will be called Investment Streams as new term coined to align with the desire to have multiple streams of income which will have it's own group that includes Equity, Bonds, CDA & Property for productive assets.

Stacks

Within the Investment Streams, Equity ( Orange ) and Property ( Blue ) stacks single out to have a better view on their allocations. As see from the chart, the property segment takes a much smaller proportion to Equity which is a key engine for the dividend income. However the potential income from Rental is not small. More than 50% of current dividends. This is important to mention. In-addition to provide diversification. However, large funds are tided to SSB for emergency buffers due to loan. With 2.3% in SSB ( Low risk ), this means possible loss of 5k annual dividual income has it been use in Reits ( Higher risk ). Net is still worth it as property income from rental is much higher due to inherent leverage.

There is one time change due to underlying definition change from previous chart due to redefine of MMF as Non-Productive Asset. SSB, CDA and Multiplier as Productive ones. 

So how do you like this new methodology ?

Cory

2022-0402

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Cory Diary : Performance Q1'2022

Performance Q1 2022 ( +1.9% YTD )

In Q1 2022 we see significant run up in STI index due to Banking sector which is similar to what happen in Q2 2021. However Year 2021 performance manages to catch up significantly which ended the year in good positive notes. ( see link ).  As we move near to end of Q1'2022, the portfolio managed to end in positive territory with a smaller gap against STI Index. And end up with Positive 1.9% YTD.

Cory XIRR 1.9% vs STI 9.1% YTD

Dividends ( Equity )

Dividends for Q1'2022, $ 16,282 which implied monthly average of $ 5427. The current annual target is $64k. There is no surprise so far and is per expectation. Continuously looking for way to further increase the dividends by making idle cash more efficient from other pockets of the net worth.

Tesla

If we do comparison below between STI (Pink), Tesla (Blue), DJIA(Green) and Nasdaq (Red) on YTD, Tesla has a good run up in the last 2 weeks after falling behind for months. This shown again ability to hold through volatility is critical to profit in US market for stock that we have conviction in and shown to show strong business fundamental.

Tesla currently has 13% allocation in the equity portfolio after reducing the position 3 times and because the volatility still too high. Tesla still occupies top position in stock allocation despite that.

Reits

Have a nice recovery across a number of Reits in the portfolio. Even MCT registered a small loss after averaging down and hitting 5 digits negative when they first announced the merger. At 5% plus yield across many of the branded Reits they are still quite attractive for long term planning. FCT also stage a strong rebound with reducing Covid measures.

Wilmar

Just initiated a small stake in this commodity company. Hopefully not a painful lesson fee.

Cory

2022-0401

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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.