Cory Diary : Post-Retirement ROI (On) or ROI (Of)

Ideally we hope to achieve Return On Investment scenario. However, Return Of Investment aren't that bad either as long it can sustain our expenses till we passed. If we aren't clear their difference here we are. Return On Investment means the initial capital remains intact, and the income generated alone is enough to sustain one lifesyle. Most of us however will go through the Stage of Return Of Investment first where the capital has to be drawn down to achieve the expenses needed before we grow and fulfill the next level. Assuming same expenses and lifestyle.

Here's an example which I formulate myself on each stage of development. There are two main variables of control. Portfolio Size and/or Growth Target. Since this post is not about saving or efficiency, Expense is not something we like to control.

Example of Variables

Study the table closely. We could have a slightly larger portfolio size or achieve a higher growth rate with added risk that you might be set back financially instead. Ideally, both. Meaning larger portfolio and higher growth.

Inflation Rate increase is adjusting the Difficulty Level after you have achieved the Portfolio Size and Growth Rate. In above table from 3% to 3.5%. 3% is a long term inflation possibility.

Below is a sample table to compute the result above.

If we have review through various scenario, there maybe not much room for us to play around. One mis-step or major investment mistake could potentially set us back for years. We need to cherish every year of build up or we may have to push out our retirement plan to achieve certain lifestyle. 

Ofcourse if we can consistently achieve 15% Portfolio Growth Rate Long Term, you maybe qualifies to open a Master Class. Even a 10% Growth Rate could provides you a Strong Retirement Package. Now what happen if you only target 5% to 6% Portfolio Plan to eliminate Risk mostly. You will need a much larger sum of money to achieve similar lifestyle in retirement to follow as this could be impossible for many. It certainly helps on those who will lower the expense ( Life Game Difficulty level ). Is this what you really want deep in your heart ?

 

Cory Diary

2025-0126

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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.

Cory Diary : US Market Strategy Re-Visited

In my earlier article, I written about interests in Big Tech or Large companies that has strong moat and leaders of their field. Primary reason is their earning powers. As I am quite new in this field and S&P500 is at high my thought is to use peanut butter strategy across a group of stocks. This is done in Year 2024.

With Bull Market into two years, will we see a third year Bull ? That's a million dollar question. Even if there is, we may not see it in Big Tech but could be other segment of the market. However, USD has been strengthening for some time since Donald Trump get elected. This currency is precious in the sense if we exchange them for it is not cheap. And if market take a negative turn is double whammy.

One thing we know is that cutting rate expectation has been reduced. From 4 to 2 cuts in Year 2025. Will this happen probably depend on the market situation as the year progress. However, TLT already reflected investor sentiments as below chart.

This will give a nice yield while we may have wait for some periods for rate to lower over time. The added risk imo is USD Forex. As I know there's no withholding tax for this but I am still researching and the best way to find out is to invest myself. Sizing is important as I am still learning. And this investment will help to boost some dividend as well. Nice adventure !

However, I have no funding and with strong USD, is quite costly to tap on my local fund. Hence, i need to re-balance existing US Equities in the portfolio which may have lesser potential. And this is what I did below.

With this move, I have some USD cash left for more re-investment. So why Meta and Msft. Not sure is worth to know from me. The important thing is I did the re-balance. Did you notice I also bought some VTWO. This is something Tom Lee has been shouting for since last year that small cap stocks may have good opportunity especially Big Tech is richly valued. VTWO is another ETF for small caps so that I do not have to know to pick. This is the second time i bought it.

With this moves my current portfolio as follow.

Cory Diary

2025-0118

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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.

Cory Diary : Expenses Review 2H 2024

Family Expense is something hard to control personally. There is so much to use or buy for our kids constantly. As they grow up, when one specific item is no longer needed, two new expense item appears. It's kind of losing battle. The need to constantly review our expenses is critical before it get out-of-hand. This is especially so as I have entered retirement phase. I need to make sure investment returns can cover increasing expenses or conduct planned drawdown as a mitigation plan.

    As such, there are two levers on managing my portfolio. The dividend portion and the growth part.

    The hope is that there will not be draw down of the equity portfolio within 10 years as I will hit age

    65 by then. This period like CPF, will allow the portfolio to compound.

Cory Diary

2025-0111

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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.

Cory Diary : Asset Allocation

An ongoing process that involves managing investments across various asset classes to optimize returns while controlling risk. With an impending loan renewal, it becomes crucial to make timely decisions regarding my financial strategy. The primary goal is to maintain these assets for sustainable income generation and to avoid liquidating long-term investments during times of need.

By incorporating savings accounts, Singapore government bonds, treasury bills, multipliers, investment cash accounts, and fixed deposits, nearly 30% of total assets are in liquid form. This allocation is significant, as it provides flexibility and security. I called this my Emergency Fund.

Emergency Fund serves as a vital financial buffer, providing access to funds for various needs without the necessity of selling equity or property. Here are some key areas where I plan emergency fund can be tapped:

Loan Reserve: Funds set aside specifically to cover entire loan payments.

Daily Expenses: Money allocated for regular living costs to ensure financial stability.

War Chest: A reserve for unexpected opportunities

Child Education: Future educational expenses

Medical Reserve: Medical emergencies.

Approximately half of this Emergency funds reserved for loan clearnace if necessary. However, the current strategy aims to avoid this scenario. As we approach loan renewal date, may consider releasing funds in stages to support investments while gradually paying down the loan. This method could lead to a reduction of the emergency fund by about 5%, most of liquid assets stay invested in fixed returns in Year 2025. The next stage is to release most part of the loan reserve depending on the contract in Year 2026.

Cory Diary

2025-0109

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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.

Cory Diary : Equity Portfolio in Perspective

Cory Diary

2025-0107

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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.

Cory Diary : Net Worth

Been some time since I last post on Net Worth. The Logic is Net Worth is Net Worth. Don't add buffer, philosophy or personal perference into it. Basically, please call a spade a spade. What this mean is do not have filter lens to reduce or add the definition of it.

Net Worth implies Property Net Value (Sell Price after Outstanding loan), Surrender value of insurance products, the total recorded value of CPF, all Assets should be included and total returns of investment products ( Realised + Unrealised + Dividends ).

Ofcourse one could have their own personal buffer, cash flow view or investible definition but that isn't the True Net Worth. With that clarified, let's proceed with update.

Retirement Year

Year 2024 is retirement year which means there is compassion package. Still in the process of managing the cash. Therefore, the Cash/FD stack has a spike. Cash is still in process of being deployed safely.

Property

There is not much change in the property valuation and so the similar pattern just stack on top of it in Blue as we can see in months ending around of Year 2024. 

Equity

Equity did relatively well again for Year 2024 building on Year 2023 rebound. Large portion remains unrealised profits riding on Banks and US Market waves on long term basis. For new funding, majority will continue to be in fixed income.

Overall

Overall Net Worth achieved 21.4% increase in Year 2024  on average compounded 10.1% Growth Rate as below. This will probably be the last time able to achive such increase due to no more salaried income after.

For a salaried person as me, unless sizeable of networth in market, is not possible to have persistent double digit increase in Net Worth. This is basically Math. Which is why it works against common folks that do not invest generally and we will see increasing wealth gap as time past.

Investment Limits

With Scam abounds in today worlds, is illogical for a person to invest in non-official trading platform, friends private businesses or get-rich schemes. The risk is so high that one may lose their retirement money instead. Never trust our money to strangers. This leaves with only a few safe investment havens that I can do such as CPF, Singapore Saving Bond, T-Bills and Official Equity Trading Platform. They should be enough. After Expenses ...

Cory Diary

2025-0105

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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.

Cory Diary : Year 2024 Equity Result

Got a bad bout of stomach issue over the new year. Got myself into hosptal late at night, given a drip, some medicine and sent home. Bedridden for 4 days due to persistent stomach bloating pains after which finally subsides today. I will be doing a clinic follow-up today to see any long term remedy. Health is Wealth.

Got this off my head. Now how's my performance for Year 2024. 

Holding through Emotion Roller Coaster

If we include STI dividend, it will beat me a few percentage points in XIRR. For people who is new to XIRR is simply allowance for compounded return, money-weighted for irregular in/out of positions. Since is just a full year, the result is nearer to 17.4% returns for every $100 invested.

Despite STI performs better I am quite satisfied with Year 2024 result. Main reason being the Portfolio has significant Reits exposure which don't do so well this year. Year 2024 is also a concerted effort to build up US Market and I believe this is the direction to continue pursuing. The portfolio has grown over the past two years and it would have hit my personal target if I have not channel funding to Fixed Returns for Reserve.

So what are the key highlights for Year 2024.

1. Concentration on Banks help to uplift the portfolio. Willingness to allow Bank to exceed 10% allocation for a single stock helps to skew the result to match with STI Index. This move is an exception as bank is a unique asset class in local market that allow me to do that with much less concern. Offensive moves. From a low of 8% bank allocation in Year 2022 to more than 40% with re-balancing and fresh funds till Year 2024. And this despite reducing multiple times after the price ran up.

2. Cutting loss in Reits which has lesser chance for good recovery. Ie. Mlog and Sabana, locking capital in reits which is at higher volatiliy ie. United Hampshire Reit, containing exposure in oversea reits, and most importantly not injecting precious funds into new reits positions to antipcate recovery for capital gain. Instead focus is on strong reits that is able to command rental increase and maintaining dividends. Defensive measures.

3. Expansion into US market in larger way when I realised the earning power of Magnificent companies are much less appreciated. Strategy continues to be long term hold on them. Over the years this companies do well every year for the past decade except in 2022 which is a great opportunity that i missed.

Segments

If we are to explore by segment,

US market holds itself well negating Reit losses. As past actions cannot assume future, i did not anticpate Fed will cut rates quickly due to the economy is still runnig well depsite relatively high inflation. However it does rhymes which to me the cut will come. And when this happen at much slower pace, businesses are allowed to adjust and for that key reason i am not so worried on banks position though I wouldn't want to add more. 

What I find it tougher to estimate is the reit recovery. I make it a point few times that is the quick spike and not high rate itself that's the culprit. A strong reit will be able to comman rental increase for the cost. However, if the rental contract takes time to renew, the cost increase could not catch up in time hence lesser rental income therefore dpu gets hit.

Will Year 2025 be the time Reit will have new lease of life ? However 12 months are very long time in the market if the business aren't doing well. What make it worst is when there's politcal dimension to it. Hence, the reason to continue to avoid significant china exposure. It simply not worth the risk when we can get something good elsewhere.

Cory Diary

2025-0103

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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.