Cory Diary : US Sept Inflation Rate

Market enters a terrible week again. Even though is far from Mar'20 flash crash, seeing the correction this week is still a reminder to us how market can tame us all.

US Inflation is closely watched that drives the market. Inflation rate for September 2022: 8.2%. CPI up by 0.4%. If we look at below chart, the drop is just 0.1% so still quite elevated.

What is not obvious is how to interpret the chart. Decided to look for another chart and draw up my analysis as below. The key highlight is the Rate of Inflation and YoY comparison.

My Home Work. Make sense ?

Expecting Oct'22 Inflation report to be much lower than 8.2% however Expectation is still the key on how much is enough. Since expectation is lower, we could see a continuous market run up prior to the report due to higher spike in Oct'21 and rate down trend prior to Oct'22'.

10th Nov will be exciting to watch. If the market react as expected before the result, I would take some off the table as mitigation. Hope I make sense so far.

What is the downside ? The last serious drawdown is in Mar 2020. If we use Ascendas as a reference,

there is about another 40 pts to go to hit that bottom. That's after more than 28% drop from all time high in 2020 excluding dividends. Assuming DPU not significantly impacted and with serious correction already happened that will be a solid entry point. Personally I don't think it will happen as explained on inflation projection but we should never say never as is just projection coupled with market reactions can varies.

Is possible to see 5%-6% inflation range by year end and don't get me wrong that we are happy with it. Even if this range happened, it could last a few more months before we can do another lower estimate assuming no significant macro events reason being the comparison year 2021 months on YOY basis is relatively low.

Cory

2022-1015

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Cory Diary : How do SG reit performs ?

How do Singapore Reits on average perform so far. Using FTSE ST All for reference, only down about -11% in a turmoil year. 

Now how does S&P 500 performs ? No kidding, down more than -20%.

And if we consider dividends, performance gap is even wider. So is this surprising ?

Using another data point. Looks like Reit still do better long term but this is US.

https://www.fool.com/research/reits-vs-stocks/

How about SG reits. If we stick to "Branded Reits" likely outperform the US reits as a number of them have more than doubled in value over the years.

Cory

2022-1007

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Cory Diary : Performance YTD 9 mths

For the past few weeks the market has been in turmoil again. As it goes lower I have been averaging down bit by bit. At the same time I have done a refresh on one of my current SSB tranche for higher rate and holding back my cash in Multiplier (DBS). Compared to the crash of Covid Mar'2020 the current portfolio still some way up there. ( Pic 2)

Performance

Pic 1 Performance

Portfolio wise, STI index has been holding up relatively well thanks to the banking sector. However my portfolio (Pic 1) suffered hits on dividend stocks and Tesla lower shipment last night. Added the end point in the chart as I was not tracking closely for past few weeks. The gap has widened against STI. For mainly dividend investor, cheaper market means BUY unless you are trying to time and able to sell at the top of the cycle which is way past this period. 

Portfolio Fund

Pic 2 Portfolio Fund

Portfolio value has decrease by about 9% YTD with Dividend Play segment accounting for just half the losses. However dividend maximum expectation has risen for year 2022 to S$73k. Last year dividend received was only $53k. YTD received $56.5k. The power of collecting at low while DPU maintaining steadfast.

Staying Invested

Pic 3 P/L Returns

Finally, one should not lose sight on long term return as market correction or crash is part and parcel of investing long term. Staying invested is still the way to go especially in high inflation environment where cash get smaller each day.

Staying Motivated

At this time, having CPF, SSB, Multipliers and fixed instrument capital protected is a bliss to mental well-being. Even property helps. Still not enough ? Looks at the annual dividend to get !

Cory

2022-1004

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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.