Cory Diary : Portfolio Management Update

Democrats have suffered a shocking defeat. The concerns I have heard include illegal immigration taking away low-income jobs and depressing local wages, the unfairness faced by legal immigrants who waited in line, and the increasing number of Americans on food stamps in modern America. Many of them probably live worse than those in many developing countries. The numbers are staggering in modern America. Thoughts they should do better with Democrats for the past 8 years but it doesn't seem so.

It looks like Donald Trump has a significant amount of work to do to address this segment of the population. He has his hands full and will likely be quite stringent on foreign policies due to mounting national debt While keeping American employed. The well known concerns today are Inflation Increase which will impact Interest rates.

With this knowledge, we will continue to pursue allocation in the U.S. of strong global businesses to capture some growth for our portfolio. With limited knowledge of the U.S. stock market, I will continue to focus on just a few obvious key stocks that have a strong moat and are large corporations in the S&P500. The recent uptick has put all U.S. stocks in the blue finally ( Picture 1 ). This could easily turn red, but the current expectation is that it will grow more blue until year-end. How blue? No idea.

Pciture 1 : US Stocks P/L YTD

On the local front, banks continue to report strong results unabated despite lower net interest margins (NIM). Net interest income (NII) and other earnings continue to drive profitability across all banks. There are no clear signs of weakening. As our allocation is quite significant, I have done another round of rebalancing, reducing bank allocation back to 40% on this recent run-up. REITs encountered a steep dive in price, and this is where most of the raised funds went.

There are multiple adjustments that I will not mention here. Picture 2 is the current allocation.

Picture 2

With current high allocation in FCT, decided to add another counter CICT for more dividends and diversification. Delisted the investment account counter from the chart to make space for it. Adding another low growth REIT stock is defensive move.

Currently Equity Portfolio YTD performance as follow ( Picture 3 ).

Picture 3

The STI did better when we include their dividends, but I am happy with what I currently have always if the result is always that. The banks may still have some runway as they are above 5% yield. DBS's share buyback will likely mitigate on reduced dividend distribution fatigue in the future. So while they are going to buy at a higher price, this process makes the dividend even more sustainable. The price-to-book (P/B) ratio will theoretically go up if net tangible assets (NTA) remain stable; however, I doubt it will be much, if at all. The focus on banks remains on yield and payout ratio sustainability. 

In conclusion, the recent developments in the political and economic landscape underscore the importance of a well-considered investment strategy. As I navigate uncertainties, my focus remains on building a resilient portfolio that prioritizes stability and growth. By strategically reallocating assets, emphasizing strong businesses with competitive advantages, and diversifying my holdings, I aim to safeguard my investments while pursuing opportunities for returns. Ultimately, these decisions are driven by my commitment to achieving peace of mind for myself,  ensuring that I am well-positioned to adapt to changing market conditions and capitalize on future growth prospects.

Cory Diary

2024-11-09

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.