Cory Diary : Bao Jiak Dividend Updates

Bao Jiak !

Most of the Year 2022 dividends have been collected so is a good time to reflect. Since embarking dividend strategy 9 years ago, the strategy has slowly accumulated  into a strong foundation to the portfolio cash flow.

The portfolio is make up of Reits, Trusts, Bank, Transport, Basic Essentials and Growth stocks. With Reits usually more than 50%. And Growth stocks hardly provide any dividends.

The Logic of Bao Jiak 

Year 2022 Annual Dividend Received $69,222. A large jump from last year due to a small dip in Year 2021 as capital gains prioritized before ex-dividend. On Cumulative Logic the dividend received crossed half a million dollar mark. This is expected as is just Maths. Bao Jiak !

The Portfolio Dividend Growth Rate using XIRR is 9.1% whereas average growth per year 14%. Contrast it to average dividend yield of 5.5% in current market stocks. So getting compounding logic into our thinking is important. The compounding effect from fund injection over the decade basically builds it up from small. So don't belittle the small fund size as it will grow very quicky from constant compounding of growth, dividends and Injection.

At this Rate of Strong Growth for this 10 years, a dividend portfolio realistically may not be able to maintain the rate using just capital injection as it will outgrow salary and expense needs. Exception applies from capital gains or as in some cases privatization. Is a good problem to have as this mean we have mostly optimize resources that we are willing to risk into the market and likely we have past our prime anyway.

Layered Investment

In current high interests environment, the plan is to continue to fund fixed returns in SSB, T-Bills, FD Promo and Multipliers. This will provide stronger foundation to support base line income with capital protect and flexibility needs. So Equity dividends growth maybe limited in further growth next year.

 

Cory

2022-11-25

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Cory Diary : Stagflation - Net Worth

Stagflation

When we have high inflation and at the same time stagnation of growth or outright recession, this is Stagflation. This is quite probable in current high inflation scenario where Fed continuously hike rates. There is a risk we may hit stagnant growth or recession but Inflation still stays high.

In such scenario, we want to have some investment protected and reasonable returns secured. Capital gains will be much harder to achieve in Equity. Likely Investment Instruments will be CPF and SSB for long term. T-Bills and Banks Saving promotions for short term. Appreciate the availability and kudos to the government.

However increase in interest rates for CPF so far seems much tougher for the government to do though it can happen. SSB hitting 3.47% currently looks much more attractive. So it maybe feasible to work out a plan again to maximize SSB again that will secure 10 years of strong rate fixed returns issued by Sg Gov. This is assuming the rate will come down mid term.

For short term, high interest rates from Sg T-Bills and Three Local Banks are available right now. This will be the next layer that I could focus on. Banks Promo will be preferred due to liquidity reason. With this plan in mind, and significant annual equity dividends increase achieved, decided to sell Astrea bond. In-addition, did some currency trades selling USD in stages in preparation for local market investment. All this help to release sizeable funds for new opportunity. Couple with funding from my spouse we could ride out stagflation better.

Net Worth

Hits on the economy keeps getting longer. Net Worth seen a reduction of -2.1% YTD.

Stagflation will lower equity portfolio due to poorer earning and rising cost generally. Even property asset can be impacted if this worsen. People who want to retire may want to extend their job over this period as available cash or fund saved is best use for investment for future earnings.

Be Safe. We are in unchartered territory.

Cory

2022-11-20

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Cory Diary : This is the One !

For a long while I have been hoping for a correction so that I can scope in low to expand my dividend size that I could collect annually. What I didn't tell myself is that this could also mean the whole portfolio has to go down with it to fetch it.

Obviously on hindsight we should sell and buy back later before the correction. However I am not qualify to be a god. We could try some but to risk the entire portfolio do requires god mode level. So my take is considering most of the stocks picked are quality stocks of strong sustainable DPU at least in my own perspectives we can just ride it out.

We have gone through Covid, Inflation, Ukraine War, China Tech/Edu Clamp down, China Property Crisis, Tesla/Elon/Twitter Volatility, China Drought, Zero Covid, Rate Hikes, Liz Truss Saga, Weak Yen and Supply Chain issues. Each with severe punch below the belt on the Portfolio and each could be classified as Black Swan Events of varying degree. That's through a len of negativity. And maybe more to come.

Hold on, isn't that exactly what we dividend investors wanted to be able to increase our dividends meaningfully maybe just not so many swans .... ? Last count annual dividend has exploded up by almost 40% with constant minute size injection as the market crumbles. If the absolute number maintained, the annual income could be insane at personal level. That's a golden opportunity for a 10% dent on the portfolio which is cheap vs Global Financial Crisis.

The only real issue I have concern is Right Issue with deep discount and to minimize this there are few ways I need to be prepared for it. 

Namely,

1. SSB

2. Multiplier

3. Cash Saving / FD

As for averaging down, i have been focusing only on stocks that likely will not give deep discount so that we can skip the subscription if needed. Cash is King now and want to use it wisely without added risk. This averaging down routine could be now over since I last blogged on inflation movement which turn out as expected. ( link ). Hopefully we can enjoy the ride back up till year end.

Cory

2022-1114

Cory Diary : Hedge of Cory Portfolio

This is more like after thoughts for perfection. In the portfolio we have few stocks in this turbulent times. Namely DBS, Sheng Siong, Netlink BNB Trust and recently addition of Comfortdelgro.

 

They likely to do well or ok with higher rates. DBS for ability to benefit from higher interest income is a given. This is further confirmed from their management.

Sheng Siong is a recession proof stock for basic necessity. They are the more attractive place to go when things get tougher for everyone.

Netlink bnb Trust for a long time has concern with their fee structure renewal with lowering interest rates in the past. What a change now with rising rate. Recently they have also taken step to ensure continue investment into building and therefore improving their future returns stability on fees.

Lastly, Comfortdelgro which has been driven down in price. It has already been mentioned on sustainable model when come to transportation. So fees will keep pace with cost.

In-addition to above equity portfolio, renewing SSB batches to further improve the interest income is also a good choice on different investment layers.

Finally able to pen down my thoughts. Cheers.

Cory

2022-11-10

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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.