Cory Diary : Asset Allocation 2024

Asset Allocation Evolution

Asset allocation is a deeply personal process, shaped by changing circumstances and needs. It often reflects a combination of factors that influence the way we structure our finances. My current setup is no exception, and as time goes on, I anticipate shifting towards a more streamlined approach that better aligns with my evolving goals.

Idle Cash

Currently, idle cash makes up 2% of my portfolio, spread across multiple accounts. Managing these funds has become increasingly complex, and while I could reduce the number of accounts without impacting my overall strategy, I’m mindful not to add more, as it requires more time and effort to manage.

I primarily use two accounts: one for salary and daily expenses, and another to consolidate investments, insurance, and loan payments.

Simplification

As I age, simplifying my asset allocation is a priority. For example, I’ve been considering releasing the 4% allocation I currently have in life and savings insurance. This doesn’t mean I’ll go without insurance. One of the policies is linked to a rarely used savings account, which I’m also considering cutting.

With my recent retirement, my pension allocation will be dissolved and redistributed. However, I’m still contemplating how best to reallocate those funds.

Cory Diary

2024-10-05

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Cory Diary : Asset Allocation Update 2022-0318

The buzzword this month is STAGFLATION. Per Google, persistent high inflation combined with high unemployment and stagnant demand in a country's economy. Interesting there aren't high unemployment yet mixed with Great Resignation Wave which is kind of a pull event. Interestingly inflation is up due to supply issue of Covid with added dimension due to Ukraine War on Oil & Gas. Raising rate quickly will not be going to help much instead cost more to service the debts.

What's this implied is they are two separate problem and when it is conflicting, is there alternative or to focus on one first. Inflation hits all whereas unemployment hits on unemployed. Since there aren't significant unemployment the focus will likely be inflation and this could mean persistent rate rise in gradual manner such that we do not wake up the unemployed monster. Well, the Fed could still increase the pace if they have confidence that we are far from it. However it seems inflation is unavoidable just mitigate. From yesterday Fed decision on 25 bps hike this implied is better to have higher inflation than recession which kind of make sense. The market rally. This is a critical milestone and I feel is the right decision to support incremental changes.

Few key changes reflected into the Pie Chart. Firstly exercised some of company share awards. This has been valued zero in net worth. Have been doing this exercising routine so that in the event of unexpected this sizeable amount will not be in limbo. The increased cash expanded the Fixed Deposit allocation.

Secondly, the investment Account reduced some by actions to max out Multiplier allocation this month for 3% target. This stream of additional income gained traction hitting 2% for last month. Not a lot but this help to build up low risk segment of the portfolio and allows me to sleep well.

On Equity side portfolio year to date is down 2.8% (updated end of market US time). Decided to sell remaining baba shares just a day before it gallops down again therefore zero investment in china now. The Chinese Tech stocks have  huge rally this 2 days but I won't be entering back due to lack of conviction. This will fill some war chest as some funds have been used to raise bank allocation to 6.7% for a more balance portfolio. Is clear that we cannot ignore to have some stake in the bank despite digital banking risk.

On the property investment side there is increment increase in the $psf transaction but as the volume is low decided not to reflect into the net worth. Rental market do see sizeable increase in rent which seems to indicate genuine demand for housing after the last curb on property. So any further increase in ABSD or TDSR seems punishing people who really needs them. 

CPF has grown some after doing another round of top-up to max out CPF allocation. This 2 years are important for my age because SA allocation is at it's highest through VC3AC process. The only top up possible now VCMA or Child CPFs. I think there is no hurry considering there can be good opportunity in the market which has been lows for some periods.

Lastly, with the significant increase in FD/Multiplier segment, I should start to plan to reduce my saving cash. We will see if the investment cash runs out.

Cheers,

Cory

2022-0318

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Cory Diary : Net Worth Trend Updates

Net Worth Chart

The trend continues on polynomial curve upwards on an average rate of 9.8% for the past 14 years compounded. This is despite a large portion of the asset resides in lower returns instruments which implies the needs for annual salary income plus equity returns to supplement. The hope is for property value to match along which just got dashed in the wake of new property curbs. However, is a matter of time inflation has to be reflected into them.

For Year 2021 continued growth, this is happening due to mainly Job Bonus income and better Equity Investment returns. Company also benefited from the Covid situation and we have a better adjustment too. The liquidity curve is slowing down which reflects increasing expense ( daily and housing loan repayment ), allocation of cash into CPF and voluntary housing fund into CPF done last year. The gap will be widen further when we top-up CPF this month.

The Security/MMF ( Orange line ) is on the uptrend due to increasing efficiency of investment. Therefore the space gap makes with Liquidity ( Red line ) is the idle cash and fixed deposits. This are getting smaller till 55 as CPF is top up till Age 55. The known retardation is the coming FCL bond maturing which will release cash and provides some widening.

Last year property value is flat however the blue line is on consistent rise due to the monthly loan repayment. Insurance surrender value has went up a little. Representation between the blue and red lines. Likely the blue path trend will remain so for years to come.

To maintain the current Net Worth trajectory, Job and Equity investment will continue to be depended. As equity returns can continue way beyond retirement, the hope is that we divert sufficient fund over time to reduce salary income dependency. Interestingly, the company do a good job to ensure this do not happen easily by continuing to increase the compensations such that it looks like they will be always the main driver from income unless we have significant contribution from equity investment returns.

Asset Allocation

Introduce CDA for Child Development Account. A segment which did more than enough required top-up last year to match the baby bonus. The scheme is good but CDA can be better if is well supported throughout the growing up period till they are in workforce or army. This will further help relieve the cost of parents and allow the child to have additional safety net on education and living expenses.

Saving Cash at 6.5% seems still quite large especially when there are additional 3.3% FD. Probably 5% will be sufficient for cash level. Inflation will be high but the market likely weak so maybe wise to achieve a balance between them. If there are alternative to overcome both this could be interesting. For now looks like nothing much else to act further.

Plan for 2022

The current macro condition on tapering execution is a done deal. The talk now is on interest rate hikes after. Even with those rolling in, the rate is still low and do not see sufficient interest rate returns in saving banks. Housing loan rate will remain affordable for years to come. And in time, Reits will be back thriving in inflationary world till the the rate overshot which will take a long time to happen unless the Fed trigger happy.

For now, Fed actions could put an end to mindless investment injection into unprofitable growth stocks that do not have good degree of success. The recent years on SPAC deals are symptoms of this happening. A lot of shareholders value is destroyed and this will be reflected when results are materialized. The impact could overflow to other segment of the economy however degree of impact is expect to be much smaller.

For three years in a row the portfolio has robust returns from equity. This year will be good to be flat if not better. However if there is a loss, need to be quick in mitigating them. Growth stock achieved 14% allocation in Equity Chart. Not shown here.

Primary Tasks

1. CPF Top-Up to Max ( VC3AC )

2. Increase Investment in Growth Stocks. Need to explore how much.

3. Dividend Target 60k

4. Sell Vested Stock allocation

5. Put a portion of the emergency cash into Fixed Deposits

6. Use more stroller instead of cab

7. Trip to Tainan for Holiday

8. 8% minimum warchest allocation 

9. 5% - 5.5% cash allocation

10. No major adventure. Look for mitigation investment strategy.

11. Annual Parent allowances - completed

 

Secondary Tasks

1. Children CPF Top Up / CDA Top Up

2. Personal MA Top Up

3. Try S&P500 if there are enough correction

PS. 3 yr old daughter starts to learn to sing on herself today

Cory

2022-0108

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Cory Diary : Asset Allocation - Oct'21

Equity Markets rebounded in Q3 across the world mostly. Not sure this is a reflection of inflation climbing. However the taper conditions do push the Banks price. What's is also interesting is that the Reits Market at least on reporting wise are getting much better too even though the old age fear of higher rate put a dent on Reits pricing. In any business, a well run ones, the cost will typically be absorbed by tenants so there's not much fear in reality when we hold longer term.

In terms of Net Worth, reached ATH mainly due to rising Equity Prices that was lagging a little bit. Tracking to 8.9% increase YTD. There is some helps from all segments of the markets.

Asset allocation wise, key changes are Equity, Bond/Pref and Investment Accounts from last reported. There is larger allocation into Equity Markets from Bond/Pref and Investment Accounts.

Like to mention Net Property Asset did not see increase so far despite all the news about take up rate and stronger pricing in new property launches. It seems to hang at a limbo probably reflecting the Curbs measures really holding back on re-sale market currently.

Looks forward to year end which is just 2 months away. However this also means another year will soon be past. Humanity cannot escape time. Investment Returns always need to include consideration for time.

Cory

2021-1027

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Cory Diary : Asset Allocation - Mid Year '21

US Market is up last night. So I could see a few more Ks into my equity valuation today. Tesla reported strong volume increase shipment however news of a fire on a new tesla model broke out too. So coincidence. A check on my mobile app shows PE 680 with a Market Cap of 654B. 52 Wk high is 900 and current stock price is 678.90. Therefore 32% down from peak. People who has stayed the course since 2 years hits 10 baggers even with this correction and so is Elon Musk wealth.

For most people who is not running a business and drawing monthly salary to grow wealth, will need to active manage asset to reach financial goals. This is not saying bosses no need. However for average people, we need to find ways to utilize our asset and invest safely as they are hard earn money. Again not saying Elon money is not hard earned. Not investing basically put our retirement at risk. And the first step is to know our asset and the strategy we go about it on each stage of our wealth.

There has been some updates on asset allocation recently. Net worth has increased since last update so we need to view it with that in context. ( link )

1. Property Asset has recent transactions which ascertain the valuation

2. Consolidation of free cash to investment account

3. Emergency cash in Fixed Deposits but reduced.

4. Gov Securities reserved mainly for housing installments backup

5. Bonds reduced further

With above changes, cash saving allocation has reduced to 5.1%. Over time if there is no major change to living capital needs in percentage wise, it should get smaller with time. There is not much to do in CPF/Pension, Property Net value and Insurance allocation wise.

Total up equity, bonds and gov securities, they cover about 50% of asset in which more than half of which are gains or non-salary returns. The important part is not the gains but the future cash flow that it can generates for retirement. 

The Problem

The current investment account size can drives for a few years of expected dividends increase or allow one to increase in growth stocks that could earn multiples. Is it worth the cost to park so much here as War Chest for major correction use ? Let say dividend share each year 5% return. For 3 years will be 15% returns. Will there be a major correction within or right after 3 years ? Needless to say it has to be more than 20% correction to worth the while. Maybe even 25% minimum for one to take the risk as well.

People tend to be blind-sided on Equity Investment portfolio returns and forgot about idle cash impacting overall returns which is not measured. Moving idle cash to investment account therefore is a logical move and then assign some measure to it. Will need to think through this. What should the typical opportunity fund size be ? Maybe one should deploy the fund in stages whenever there is opportunity in the market and not due to major correction.

Cory

2021-0703

PS. 51 on countdown to 55

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

Cory Diary : Financial Updates

Salary

To most people, the largest impact will be Salary Income. Well, at least for my generation. :) Within the organization we have been asked to prepare a small list for possible retrenchment if there is insufficient attrition. This is not like we are doing bad. The company is doing quite well but I guess the top management always like to see constant lifting of performance bar, talent flows, cost structure etc. It does cross my mind whether should I ask for voluntary however money is always not enough even though financially I am quite ahead on average. 

I am now in the mode to work as long as possible as I am on my comfort pace. The idea of constant cash injection into my saving account, occasional Bonus and then Stock rewards in-additional to other benefits can be quite "addictive" rather than the fear which I think always lies right at the bottom which will surface occasionally when I feel not enough money to invest. To put in easier context to understand, every month of work remuneration equals to a paid holiday vacation for the family. That's how hard to let go.

In-addition to that, able to contribute actively in the workforce and seeing products you are part of is always fulfilling other than being in constant InTouch with the industry and people. Often as well the satisfaction of able to lead and guide members of my team and colleagues will feel rewarding as it does need certainly level of seniority skillset often lacking in the company. I have seen people who work on projects for many quarters when the scope is not really practical or required. This is a sign of lacking experience people who can close them in minutes. So much effort spend on useless projects. Maybe there are too many Project Managers just to keep everyone busy and paid.

Asset Allocation

It has been some time that I have not been Tallying up my asset. I feel the need to do this to move forward as there are competing areas we need to review, balance and invest. Cash, salary, dividends, trades, loans, credit, local/oversea, current/non-current are all the moving parts. How much buffers or spare cash after emergency, housing etc. There are many saving and investment accounts to check. Basically it boils down to Cashflow and Return. To move I need to have a good view on past and current for the future. This is how I derive my Total Net Worth too. Asset wise reach ATH due to gain in company stocks else I think is a flat quarter. Kind of lucky.

There need to be comparison when I talk about adjustments. Here's the previous post. ( link )

Investment Accounts

There's a decrease in investment account as I invested more. Cash is up too. So Probably I could re-balance them. Fixed deposits are now mainly in oversea accounts as I plan to eliminate most of FD locally. Emergency cash is now saving cash. Similarly, Bond will be on downtrend except for SSB which is under Gov securities.

CPF

CPF has expanded due to top ups. And this hope to be annual affair before Age 55. I plan to try out SA investing just to have a good ideal on the Shielding Process. Overall, CPF is a portion of retirement plan and my expectation is Stock will really be the key after I retired.

Expenses

There is a few big ticket items. One is I feel Rei needs a boost in immunity and decided to provide her a RSV. 1K cost in nanny for each girls. A coway air purifier. Coming expenses will be new set of clothing for Xin as she has reached 2 year old. Tax Payment. Have been contemplating to move to a larger apartment but currently at back burner. This could change anytime.

Tesla

I did a quick glance through the recent correction in US Market and most of the spike has been worn off and is back to the manageable slope of growth path. Having step into US market proper, there are opportunities that I could setup more funding on them. One of my favorite is Tesla. Right now the invest amount is minimal but I could expanded my investment exponentially if opportunity arise. Market can still come down as valuation wise is still quite rich across the board.

Tesla is already a profitable company in 2020. However, the profit looks emerging which means trying to use PE to rate them will give you a very high value which looks very expensive but misleading. Price has swing down from 800s to 500s and back up to near 700s. The swing is wild which I never expects that being new to this market.

For Tesla current PE ratio is 1083. Astronomical number. However the earning could doubled quickly from 0.64 to 1.28 and the PE could come crashing down to 500s. I am not saying it will be this for sure but for a high growth company which is just profitable, the potential is there. The EV Car is real and selling well and limited by it's production capacity. Is a calculated bet as they are a prime mover of the industry just like Apple on Mobile Phone. You know they are doing well when there aren't need for Sales People. The signs are all there of a successful company on a path of prosperity.

I am quite excited with US stocks even though they are still a small portion of my overall equities.

Reits

Singapore Reit market has been shaken by recent yield spike despite the overall yield is still very low in the grand scheme of thing. So I am quite confident to continue to add. The Reit yield is now quite attractive for example Ascendas and MINT both hit more than 5%. I did a timing trades selling significant portion of my Ascendas when the price peaks to a point I sold too much and need to buy back some just in case I am wrong. That's a good move this Q1 and has been in buying back mode since. That's a few coway saved.

Later batches do takes time to build up as purchases are spaced out in case the retraction drawn out is long. I do not want to be a in situation that my precious fund dry up too early which will be bad for the mean values and missing out a much better yield returns. This also helps to maintain sufficient War Chest which are pooled together not to get depleted before any major crash.

Trading Accounts

Finally, to make thing slightly complex I have a few trading accounts. Trading cost is now a growing concern for me as this point of time. I have been using DBS Treasure for a large portion of my trades now. The transfer of fund is also make easy being connected to the saving accounts. However for US trades I am still going through Poems - Cash Management. We will explore later as we grow over there.

Dividend

Dividend wise for Q1 is a little slow. In summary. Take this with quarterly and half yearly in context for different stocks. Theoretical max is now $57k annual as each time there is market draw down I will start buying bigger which helps to boost my dividend. I hope to be able to achieve $60k mid term.

Syfe

Starting to explore Syfe and probably a few more similar products if any out there for diversification. This is more for legacy planning on how my family can continue to invest in a more assisted way. And will likely to do some try out as this will be easier for wife to manage instead of stock pickings. I have never been keen on Unit Trusts as to me is a black box that can be easily manipulated or affected by a few individuals. I could be totally wrong on this perception but I will still be ok. Robo Advisor platform maybe a new dimension of investment which seems much better, harder to be manipulated and we have more controls. Anyway i could be wrong but is first step in learning.

Cory

2021-0316

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

Cory Diary : Assets Allocation 2020-1224

With the year coming to end soon, I want to provide finishing touches on my overall assets allocation. And this is with context that I will continue to spend more time oversea for a few more years before my first kid will starts schooling which I would then decide should they go to private and then international school or be back for good.

There are few good news and bad ones. The good news is that I have been informed about my year end bonuses and glad that it is better than last. Really Christmas Presents I told my Boss. To top it off there will also be shares which will only be vested in stages. While the value of the stocks have risen which result in smaller number of shares given out, prior years company shares already vested will see a good capital appreciation.

The bad news are my elder daughter got enterovirus after few days of high fever which finally subsides with rashes mainly on her lower limbs. We are still puzzle how she got it considering no one else had it. Now we need to make sure it doesn't spread to the newborn. So for this past week has been quite tiring to ensure this won't happen. The first born was smooth sailing. The 2nd birth was to give me the true experiences of fatherhood. But I would recommend Nobel Prize to anyone who can produce Vaccines for this Viruses.

Regarding my assets allocation, if we are to take a peek on Nov report ( link ) , the pie has increased with stronger stock market performance. Key changes are as follow.

Equity allocation has risen from 29.9% to 31.2%.  Bond has also increased from 7.7% to 9.5% which is temporary due to one of the investment is going to end soon.

Investment Account has reduced after I am able to find enough replacements for the funds from AGT which was suspended for delist.

Closely related to it is my saving account which has seen some reduction due to CPF Housing refund completion. I have also tried out VCMA and still deliberating whether should I max out my CPF MA. Keeping in mind of year end salary and bonuses coming in soon which will expand my saving. I will probably do in stages over a few quarters if decided to proceed.

To top it off, I have match 3K to my newborn CDA account. I will probably not add more before I have my own CPF accounts manage right.

Merry Christmas

Cory is now a year older ...

2020-1224

Cory Diary : Asset Allocation Updates - 2020-1110

What I see ...

With the American elections kind of over, the Win by Biden is not clean unfortunately. There could be rounds of litigations. So this may linger longer than expected. Will there be blackswan ? 

At the same time, appears the world is emerging out from Covid-19 as Vaccines started making large progress. Interestingly, each major countries have their own "Sputnik" to show off. Maybe time to get off the rubbery stocks if one is invested. I don't have such issue. ha ha. .. .. ...

Across the causeway, things aren't getting better. While locally here, the progress on green lanes is on the way. Hopefully, our neighbor do not add more complexity to the situation as the island is getting back to the New Normal. This will help the Reits and basic social services. Will banks suffer the same fate as Telco when introduced with uneven competition ?

As I grow out of 50th, retirement financials will be key as I have two toddlers to care for. Some people may feel why that late. Frankly I feel timing has not been better. We come to this world to experience life and given the opportunity and affordability, I would try. I do not want to miss something and wasted the chance in this life when we can. 

There will be now more focus on getting CPF sized right with the right characteristic suitable for the family. At the same time maintaining the right balance on equity front to generate enough dividends and hopefully growth in risk mitigated manner. I still have housing loan to pay up so cashflow from rent will be something to watch. This is in addition to making sure our parents are cared for. Quite a delicate balance.

Lastly, do I look forward for grandkids ?  No lah.  Think I have what is needed to experience life full circle already. Maybe just to make sure the girls are given the best chance to succeed. Since young, I have always been self aware of my limited ability so already feel blessed in achieving something I never dream of today.

Finally, never takes thing for granted. Treasure what I have. Don't make the mistake that the Grass is always greener on the other side. 

Cory

2020-1110

Cory Diary : Feeling stuck in current Portfolio growth momentum

This post stuck with me for weeks in draft mode before I have the courage to release it. Reason being I feel stuck in current portfolio setup. This is finally released when iReit Global release the rights issue today. Read on ...

For the past few weeks, I was wishing to squeeze more juices ( cash ) out of my portfolio lately but feeling quite difficult. On one hand I need to watch for dividend returns and the other holding to some core positions that I don't want to sell. However with current listless market in SG and turmoil in US Market, there maybe opportunity for some low hanging fruit pickings if we are to see major tech correction happening which may pull the whole market along.

Still in Transition Chart

In-addition, the lines blurred between what can be use for investment aka War Chest and what is Reserve for Emergency or other needs. Therefore I decided to create a segment called Investment accounts. This will be my War Chest which is also primarily cash holding area for stocks sold as they are separate accounts from saving. In POEMS account situation, it is also Money Market Fund therefore not idle in returns. Above is still in the work. Here's previous update ( link ).

With this iron out, is clear to me what I can do with each accounts.

Saving and Fixed Deposits

I could explore some of my fixed deposits and see which I can terminate earlier now. After reviewing the 4 batches I have with DBS Bank, one of them expect to expire next month. Remainder on Year 2021. Since there is a large one near expiry, i will wait it out. This will release some funds. 

In-addition, I also have some cash saving in foreign accounts and some amount will be moved to investment accounts. 

Reprice my Housing Loan

Just found out the deal today. Is quite a significant downward adjustment by DBS. Other than the lowering interest rate another reason I suspect is the coming competition of Digital Banking. Not surprisingly the lock-in period extend to 5 years but the fixed package is attractive now with flexi after. This do gives peace of mind for years to come.

The downside is that FHR24 after 5 years can be tricky as such a long period usually drives higher rates even though currently is lowered. I guess mitigated by one free conversion. Overall this will reduce my monthly repayment loan some but won't see a sudden cash saving. However the cash reserves need to support this loan will be reduced quite drastically as I have more than 5 years of emergency funds currently parked for it in SSB, Cash and Fixed Deposits.

DBS just told me i need to wait a few more months more before I could re-price as the penalty for breaking current loan contract is high. I will wait out as is not pro-rated. Expects to Save $333 monthly or $3996 annually !

 

CPF

I borrowed a little money from my own CPF account that time to give myself a slightly larger boost in cash flow when I purchase my investment property. The more i look at it especially at current low interest rate, the more I feel the decision is bad as the Accrued Interest i need to pay back is growing as the cost is widening. I should return the borrowed back to my own account. It doesn't make sense for me to earn fixed deposit of less than 1% and need to pay back 2.5% to CPF Account. And if I have to  shift the returned money to SA account, the cost is even wider ! What am I waiting for ..... . Ok need to work on clearing it. Maybe 10k at a time till zero. First I need to get my eNets working ...

CASH LEVEL

On conservative level, I am able to generate about $58k ( comes down to 53.5k after some iReit Sales ) of dividends and with the additional $4k contribution from SSB will then totaled $62k (57.5k). SSB is where I reserve for housing loan, with current dividends, I reckon there is no need to have too high a bond allocation now. Hence I plan to reduce my Fixed deposit and Cash level amount instead since SSB provide better rates.

Dividend Re-Investing

Usually i don't specially manage the reinvestment of dividend received. It will just go into my saving pool and manage as portfolio injection. So is opportunity based. I will be slowing down my procurement and keep most of the juices in Investment accounts.

Child Development Account

Just top up $6k through account transfer recently. However only the first 3K will be matched.  For POSB CDA, up to the first $50k will enjoy 2% Interest rates. So currently she has at least 12k after Baby Bonus Matching and initial 3k grants.  There are restriction of use so this cannot be classify as emergency fund. Unused sum will continue to progress to different level of account as the child grows. So is a long term thing but the rate will change. Something to note of. In-addition I have propose to my wife on possible CPF top-up for the kids as she is wanting for some form of saving for them.

Cory

2020-0922

Cory Diary : May'20 Performance and Financial Review

Broad View

For the past 5 months the market has been rattled by Covid-19 and is still on-going. Things seem to get better when they learned more about-the virus and how to manage it more efficiently. The amount of rescue packages are so significant I am not sure how long we can sustain this amount. To be fair, the hope is for a quick V-shape recovery without significant lost in jobs.

Coming June, with the pace of opening up expects to gear up, things may not be the same again. The cost of business is going to get higher which could mean our expenses are going to go up as we have to move past the on-going virus in our community and needs for engagement with the world. Post-Covid will be a phase of managing Covid and not no more Covid. Not unexpected, there will be "Green Lane" between countries providing a network of safe passage for their passengers and therefore their economy. The channels between China-Singapore will be important for tourism.

Over the week we have on-going crisis between US and PRC in which HK is now the battle ground. I have seen how Americans beaten Russia (Cold War), Japan (Economic Miracle), and how they take on Venezuela, Iran, North Korea, Libya, Syria,Zimbabwe, Cuba, Iraqi, Indonesia , Ukraine Issues into submission, War or Economic destruction. Each time they prevail by Hook or by Crook. Things could look uglier. "Is a fight like I am willing to take a stab as long you take more."" So one of the concern is will it be like a two steps fall we faced in Year 2008 GFC. 


Investment

The main reason I do investment in stock market is to get meaningful returns to support retirement by not taking too much risk for a gamble on a quick-rich scheme. This is reflected in capital injection in net has been fluctuating zero and as of today is not quite observable so far on additional investment. Due to that as you can see below Pie Chart, my savings are up. Stock Equity portion reduced with increase in bonds.

There is a lot of capital recycle and re-balance through opportunity based quick turnaround trading. So if I am to put broadly between Pre-Covid and now, I would say the portfolio size remains about same (including investment cash), small loss currently but with much higher dividends yield of $58k currently vs $53k in Year 2019.  Squeezing out 5K for a 5% yield product requires S$100k for that matter. So you could say I just got 5k more dividends out of thin air but this is in context that a few of the stocks I have will report lower dpu such as CMT and CRCT (I presume).  The Portfolio is more robust today as is structure with increase bonds and more defensive counters or recovering ones.

In portfolio management I have the experience of being easily succumb to fallacy of large number of counters that we could take reckless risk on the rationale that is just a few percentage of the overall allocation. Therefore I have more than fair share of fees to be paid to the market which over time can be costly to portfolio compounded returns. This have changed much in recent years to control such behaviors of feeling rich.

There are still times where it is unavoidable due to black swan or misstep that we encounter lemons. This is where portfolio sizing comes in and ability to cut loss when needed. I would be careful to say that mitigation is not itself justification for higher risks. As I wrote this, remembered a passage in Michael Leong Investment book on his thought process of cutting loss during major recession which I adapt with some modifications to suit my risk profile and retirement needs. Basically retaining core investment and doing timing trades for obvious.


Performance

For the month of May performance, P/L YTD -3.8% (Xirr - 4.1%). This is much better than STI Index YTD -22% (or very roughly -20% after taking it's div into consideration). So the reduction of bank segment kind of improves a bit. The higher cash build-up and higher dividends in the portfolio is what I wanted for now. I would probably have to see what's next when the economy opens up.

Retail Reits have been enjoying recovery in their prices with easing of Covid measures. To be factual there is still some way to go to Pre-Covid level but regardless one or two steps fall this counter is for long haul. Nevertheless most others Reits are somewhat within the fluctuation boundary prices then or above. Having half the portfolio with Reits/Trust surely enjoyed the recovery provided we do not have lemons within. ie EHT. This is something I need to constantly remind myself to not go just for yield or to gamble recklessly.

To end, do invest safely and with due diligence. This time can be different but we never know.


Cory
2020-0530

Cory Diary : Asset Allocation Review

The first day of trading for Year 2020 started with a Bang when the P/L hits more than 7 K and it seems like we will have a good start for the year till someone backside itchy and taunted Trump. Here's what I found.

"Iran Supreme Leader Ayatollah Ali Khamanei taunted Donald Trump over the embassy attack."  

"Iran says Trump ‘can’t do a damn thing’ ."

As usual Trump tweeted. ‘He should have been taken out many years ago!’

Iran Generals dead in Iraqi's soil. And we celebrated the second say of trading with a reversal.Thank you everyone ! The good thing is I am still net positive for the year. And this tiny margin could vaporize as well.

Since last reported my Asset Allocation Tracking in Oct'19 I think is a good time to do this now again as there is nothing much to shout about on investment .... joking !
Not surprisingly the Saving continues to increase due to year end salary and bonuses. Some dividends came in as well from the Ascendas-h Tr cash distribution which is now merged as Ascott Trust. I also paid most of my major bills and allowance.

The volatility, and weaker USD for the past few months maybe a good opportunity to invest in USD. I could look for 2.5% Fixed Deposits or higher 3% plus structured products that is capital protected. Currently in exploration stage. But decision can be as quick as next week. 

I think the cash allocation needs to go below 3% to 4% consistently for efficient growth of capitals that do not need much work from me. I can earn quite an amount of interests. 


Net Property did not change much though I did notice an increase in property valuation from the transactions. For Year 2020, I am thinking of a plan for the account that pays for my loan to be self-sufficient. That's mean the cash-flow in > out for the entire loan duration. Not sure this can be done but it has to be safe and only need for me to check once in a blue moon. 


MMF is up due to some Equity sales before year ended 2019 which will be reserve for opportunity while collecting interests in cash management account. Equity has a target for dividend in Year 2020. Year 2019 exceeded. So I like to keep this in mind to continue the trend.



Cory
2020-0103

Cory Diary : Asset Allocation Review 2019-1014

A month past since I last reviewed my asset allocation. Time really flies.  YTD Asset increased by 21% thanks to equity market in-addition to regular salary income. Manage to consolidate some of my cash to Fixed Deposits which provide quite good 1.4% returns to my surprise. I have been neglecting them .... . With reduced Cash level at 3.8% of Net Worth (see chart) this is probably the minimum I would go for now. There is some timing involves to support Housing Loan payments with added buffers of-course for emergency needs.

With Saving amount hits absolute base line level needs, near and mid term future funds from Salary and Portfolio probably can now be put more into active service or likely building up the warchest further as in Fixed Deposits.

Cory Investment Portfolio YTD increased by 18.4%. Which roughly tally with the profits recorded this year with a little cash injection to top it off. At this point, maybe I should let the fund runs.

Cory

2019-1014

Cory Diary : Asset Allocation Review 2019-0913

The Asset grows about 1.6% from a month ago. Last reviewed asset allocation - here. This is an update with recent changes. Incorporated some feedback from fellow investors and did some adjustments. Now my Asset is a more effective team ! 

Saving segment % wise has come down despite moving dividends to it.

Equity seen larger percentage increases due to growing portfolio from returns and some cash injection. MMF no longer grouped here.

Fixed Deposits increased markedly from more placements and with MMF addition as it is earning reasonable returns. 

Cory

2019-0913

Cory Diary : Asset Allocation Review 2019-0810

Seems like it has been a while since last reviewed my asset allocations. Not that I do not like. I always have the curiosity on how they goes and prefer to check on them more often than not as I am a slow learner. Usually I will do a quick round of updates across my accounts and have them reflected. Thanks to excel, this is all done in minutes.

In this update, the computation is a lot more simple on a more conservative side of perspective angle. Saving allocation has been reduced to 10% but I think it can be further improve.


Liquid Cash Flows from Investments
Equity/Bond/Pref theoretical annual dividends : -
Gov Securities : - ( assume max 10 years )
Saving/FD : -

Investment Sub-Total : -


Maximizing Returns
Saving 10% allocation implied missing (updated for privacy)  possible earning. So I think maybe opportunity to tap more here in the future

Sub-Total : $0


Pension/CPF/Insurance
This will be buffer. Another is because I would probably tap on them after 65 yr old.

Sub-Total : $0


Rental Providence ( update : instead from income)
(updated for privacy) 


Cory Asset Annual Returns : (updated for privacy) 
I do have salary income. And I am still paying Insurance. For simplicity, they are excluded. I hope this is a realistic and simplified as I could get for estimating returns from non-salary income perspective. 

Happy to say this well cover my home loan today. 

My next goal is to increase my returns further to (updated for privacy)  annually from non-salary income with minimal risk.




Cory

2019-0810

Cory Diary : Asset allocation 2019 Jun

In my plan for retirement, if it happens, there could be draw-down in my net worth. Next question will be how fast. So I decided to do a rough update estimate based on what I have today.

Roughly, I could see return generation of 113 K annually. This could be generous on the property. Never mind. Just ignore me on that one. However, to meet short-medium term needs, FCF is more important. Which left me with 51.5K annually after removing Insurance, Property and Pension. And this is assuming I have surrendered my Insurance policy. I still have loan to pay up, which implied even with my net worth today, I could not afford to retire for the lifestyle I want to maintain after, without draw-down.

First thing to do is to tackle my most unproductive asset which is Saving. With Gov securities that can double up as Emergency and Housing loan support, there is no need to have such a high saving % allocation which has been my constant issue with saving rate from salary and bonus. This needs to cut down by a third of which I would have my SSB max. and then remainder to war chest.   This saving category includes cash management account which is giving reasonable interests. 

Secondly, my backup plan is to sell my property after 7 years and would switch to further OCR region to increase the psf when I retired for at least same amount. This is not impractical from current caveats logged. However, my wish is to have another property instead and this will required environment to be conducive enough such as removal of ABSD, and my saving rate and investment are reasonable to generate growing dividends.

In a not so good scenario, where I decided to retire immediate,  and my investment returns turn sour. I would estimate 5% draw down after paying up all my loans from the start, will last me for at least 17 years. After which, I am left with Pension and Property. Then the option is to down-grade .... to finance more reasonable lifestyle and my daughter education. At 67 then, maybe is still ok. Still cannot tahan, then I will ask my wife to chip in (my last buffer of buffer which is to clean tables lol ... ) . ha.


Someone said : What about legacy ?

Uncle Cory : Simi lah. Down grade liao still want legacy. You only have one life to live.
...  Legacy is for the rich. Don't act rich if you are not.




Cheers

Cory
2019-0616

Cory Diary : Net Worth 20190519

Last previous blog here. 

The key change after 3.5 months are my Net Property Asset. Definition is the value of my property minus outstanding loan. This is then added to my Net Worth. The way to obtain value of my property is to access URA website for recent transacted values in $psf. And then do a conservative estimate of what my property value be if I have to sell it today.

Other changes includes increase in Singapore Saving Bond holdings (SSB) and increase in equity valuation due to capital gains. Both % figures hold well but SSB still reduces slightly in % wise. More cash today in my investment account and the unrealised gains from stocks outweighs the net sales. Dividends are straight into cash.

Despite that, saving reduced in % wise. Mainly because I have just paid my tax.  Proportionate  decrease due to significant increase in property net value. Slightly higher spending due to new cost for nanny. 


Cheers

Cory
2019-0519