Cory Diary : Equity Allocation Jul'21

iReit Global

Recent change includes the long awaiting Preferential Offering (PO) finalized. The excess allocation result is kind of surprise yet not. CDP share has more than 2700% excess allocation in term on original rights allocation. This is in consideration that share size is minuscule.

On Custodian account side which is where main bulk of iReit shares are, it is slightly more than 100% excess allocation again in term of original rights given. If we have applied for double the excess, there is likelihood we would have got it as well based on others feedback. This is a surprise. On hindsight, which is a bitch, PP is quite small relative to PO. Well sometimes it takes experience to get through. And then proceed to shade a little off the portfolio to right size the exposure assuming the trading price maintains.

SGX

Is on the tear again. Blogged many times on the significant undervaluation. It has keep growing. Unfortunately we couldn't chase as valuation is an Art especially so when we have sizeable exposure already. It is also one that provides the balance factor on different market sentiment days. It has the potential to grow to join the big 5 of the portfolio allowing more diversification and stability needed to compensate on smaller bond size.

Allocation

Bond investment reduced to 11% but in actual there is expansion in CPF allocation which is not part of this scope. Any interests on Bond/CPF can read ( Here ). Reit allocation lowered to 48% despite recent PO. This is mainly due to reduction of Aims Apac Reit from recent run up. I was second guessing potential rights issue which I have no plan to take up hence the change but on second taught there is possibility of merger which has been rumored for a long time.

We have seen good gains of the portfolio this year. However, there is still room to grow till the end of the year as it has laggards such as Malls and Industrial Reits which will benefit from the recovery of Covid-19 despite hiccups. Maybe we will see 15% allocation if all stars aligned.

Dividend Returns

Dividend generation at sustainable level for the portfolio hits 60k. ( If we leave as it is without injection and say 2% growth, and some dividend growth as well, we will see 4k more dividends each year. This is rough estimate as we need more data with time to get the trend right. The formula will be portfolio value x 2% growth x 5% yield + 2% growth x annual dividend. ) Some injections will push the annual dividend increases to 5k. What this mean is it will take 7 to 8 years for dividend to grow to 100k annual on conservative estimate if we let the portfolio runs on with limited intervention. However, the portfolio which has been living on 7% annualized returns for past decade. So it can be done in 5 years or less. A long stretch goal. Wishful thinking ?

Cory

2021-0722

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 : The Waiting Game - Dividend Investing

If you are thinking about holding on to the share to collect dividend long term then today Diary is not about it. I have mentioned many times the price of not being in the market. If we use absolute proportion in percentage term say 1 year is 6% yield. 5 years roughly 30% cost for staying away from the market. Therefore is quite risky strategy to play as it can be equivalent to a self create major crash to oneself.

However, there will be times market is so irrational that you wish to buy low to improve your future returns. This happens when there is great fear in the market. Even if one can overcome it, you must have the money to execute it. And this is a dilemma.

Here's an interesting chart on iReit global on the March'20 rout of the market for a fundamentally strong stock. Probably 50% discount. Why people sell after looking through the hindsight mirror is really amazing. What is damn wrong with this Reit stock which we are suppose to collect dividend that people sell at such a low price other than broad market issue.

Interestingly, the best opportunity happens when we could tap on some reserve funds just enough to push us ahead. For example I could reduce my housing installment buffers from 3 years to 2 years. Since I have such fund park in SSB, I would need to rationalise what I could lose doing that. It needs to align with better rates so that I can get them back later.

Releasing fixed deposits are obvious way other than saving. So maybe the best time to retire is when you can get your golden handshake or retirement package. The money has to come in time too. Very Risky ? Maybe so. Dyodd. Since every crash is different. Ideally you have some money lying around. Borrowing maybe interesting option but doesn't seems to align with my upbringing if is for stock market.

Rich ones may try to sell their home quickly if the property is still holding up well and channel the fund to stock market. Savvy ones may try margin borrowing. What are my options ? Maybe a fund that is available due to speculative trading. Is where we cut loss on our long quickly when there is market rout. What others ? 

Will the above chart happen again. You bet it will. Maybe investors will get smarter. Then it can be due to someone being force sold. And that can easily happen when we do leverage in stock market even on fundamentally strong stocks like Ascendas, DBS etc. People just go haywire in market crash. And is a Heaven for dividend yield player.

Cory

2021-717

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 : Year 2021 Mid Year Performance

Is quite "Miraculous" that for the past 1.5 years Portfolio has been registering reasonable profit despite how damaging Covid does to our way of life and therefore economy. The fortunate thing is that we still have our jobs. I am still able to get most of my stuffs online. Taking care of both our toddlers at home full time.

One key lesson I learned for this period is not to ignore growth stock therefore initiate my investment in Overseas market. To-date after some adjustment from my initial stakes, I have them consolidated to 4 which combined, is nearly 8% of my Equity portfolio. They have finally registered positive returns after my bad start in technological stocks early this year. I am still in long learning curve and will increase my stake over time. They keep me excited at night.

At the same time, I have released some bond shares to increase my warchest which now grew to more than 6 digit figures. I have applied excess for iReit shares and hopefully this will increase my dividend further. My goal is still to continue to push for higher dividend annually for cashflow which has been great on covering my housing loan. Property is a hedge against inflation plus rental support with comfortable leverage regulated from risk else MAS will not be doing their job. LOL.

One key concept I believe in is very hard for interest rate to increase. I have multiple articles mentioned on this. There maybe fluctuation in-between but the rate overall will stay low. So allocation wise, shares investment is about 40% of my Net worth. Depending on who we talk to, some may say I invest too much while others could feel is too little. I do not have a good answer yet other than reaching a balance level that I can sleep well. And that could well be the answer.

If you have read my earlier article, my focus is on Portfolio Size and Expense variables. ( link )

Which reminds me that I need to continue to find ways to grow my portfolio in a safe manner to support higher expenses.

For the first half of this year, absolute return finally hit near to 7% YTD and just 3 % away from STI Index which has been performing very well this year. Chart on the right. Is a creeping fight, back to back as my portfolio do not have enough Bank shares to grow with STI. Neither do I have enough growth stocks. So to able to close the gap over this time, I am happy. There is still more work to do.

Dividend wise Collected $30,729 which is on track to hit on sustainability basis more than $60k this year. ( 5k jump from Year 2020 ). Portfolio Size hits another ATH ( Chart on the left ) but that includes War Chest in trading account which has ballooned.

I am excited how this will end for Year 2021 with few surprises on my cards

1. Lifting of Bank Curb

2. Oversea Stocks Dynamics

3. iReit PO and Excess

4. Further recovery of Reit shares

5. Vicom result

6. Netlink BNB Tr surprise, if any

7. Currency as my portfolio now have many different exposures

Cheers

Cory

2021-0701

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 : Sustainability of Dividend Income

In this post I like to blog about how I try to rise and maintain my conviction in dividend investing. When we talk about dividend investing, the play is about total returns of the stocks. Therefore, DPU + Capital Gain/Loss. What this mean is the measure of shareholder total returns in any of this forms.

Realized gain is actually not so fruitful exercise other than incidental situation to rebalance the portfolio or when there is fundamental change in the company. If one does not have the main mindset of continuing run the dividend business through compounding the portfolio growth with long term skin in the game, this strategy will be painful to your Health. haha. So the first mindset is, we don't realised capital gain or cut loss unless specific condition as mentioned is needed.

Quality Companies come with a price. Reits performance are usually ties to Sponsor, Credibility, Capability and Business. A good sponsor provides support of low funding cost when Reits borrows from the bank. The Reit/Sponsor Credibility is the most important however but as long it satisfies enough returns in a Win-Win situation, investors will be willing to push up prices. Management capability play a big part too. Another key area is the business type. I won't be interested in Ship Business as their depreciation is real and heavy whereas investment in properties are much more robust and can even grow with inflation. 

Yield is tricky. Forward yield is more relevant than current yield when comes to long term investment. It helps to support price and if it doesn't, an opportunity to average down for higher dividend returns in the future with lower cost. Current yield can spikes due to decrease in stock price. So one must do their home work to understand the mechanics on price decrease reasons. If a Reit is sold down without good justification, is a gem to get them. However if we are anticipating consistent poor performance or ticking time bomb ie. First Reit sustainability of contract, high yield can also be a Warning to avoid. When a yield keeps going lower but DPU maintains well, this likely due to increase in stock price. That's mean the Reits are probably doing it right and if this can last over a long time it will look more expensive. There could be situation where the DPU drops with increasing stock price. The Market may feel good about the future but one has to make sure stock price can be sustained.

Business Risk comes in many form. Short Lease, Depreciating Currency, Poor Future Contract, Poor Cycles, High Borrowing Cost, High depreciation, High maintenance cost, High Perpetual Cost, High Gearing, Bad acquisition/Sales, High Taxes, ... . If we feel a specific event could change the dynamics significantly, we may need to re-balance or cut loss. This has nothing to do with whether I still make money from the current investment or not.

Diversification to me helps to mitigate my wrong choice. ie. Retail Reits. For example I use to have CICT mainly. But today FCT is more but I still retain some CICT. In-addition I have MCT on accumulation path for months. Many decision needs not be 1 or 0. Of course to maximize profit, we may have to do that and this are probably for Experts. Am I ? It also depends one's risk appetite. Between counters I may do within sector rebalance as needed with changing market situation. There is also need to look at broader and deeper diversification such as Industrial Reits due to Covid.

This result a Portfolio of Reits where we can play around the allocation with specific needs. If we do this right, we will see compounding growth in Value and sustainable Dividend over many years. After learning for many years, maintaining a dozen stocks of Reits are not really hard because the business usually are not difficult to understand unless one try to be picky say between 1.1 or 1.2 performance differences. And I could be wrong and still be ok and will not be left far behind. Will there be a day we will see a large fall in our portfolio. You Bet ! A 1M size on large crash say 50% drop, is 500k capital loss. A big test on you. Will you Hold, Buy or Sell ?

Thinking ....

Cory

2021-0611

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 : Where are we now on Reits ?

Many of our quality local Reits are now in the range of 4%-5% yield. This is still much better than keeping the money in the banks enjoying miserable returns. One could say that well the stock price can fluctuates therefore potential for capital loss. However this is true if we trying to time our capital returns through trading and not about investing in the business.

When we look into our investment holistically, is a businesses that provides us returns in addition to recovering markets from Covid Impacts. Therefore chances are we will also have capital gains in near to mid terms. However such gains are in the mercy of the market sentiments and macro conditions. If one is to own a business, does it really matter whether how the auditor value your NTA (Stock price) or the criteria should be how much cash flow it is generating into your "CEO" pocket.

On this perspective, a well established business, can provide constant positive returns way above bank saving, fixed deposits or even CPF interests rate. The key measure will be sustainability of the business, growth and income. What if we continue to wait it out. The risk is lowering rates and therefore lower yields. Every quarter or half yearly reit investors still receive the dpu in which the returns could be buffered up for further compounding against market direction.

For the more savvy reit investors, we could look into Reits dominant in oversea markets denominated in US, Euro or Pounds. This Reits are views more risky due to currency, foreign market condition,  regulations and signs. Why "Signs". EHT has taught investors a big lesson on how screwed up it can be and that just looking at yield is a recipe for disaster. Taking a rear mirror view, a young unknown mgmt team, major shareholder selling, a depleted ship, poor travel reviews on its hotels, ....

We can go further on with Sabana, Lippo or First Reit. That we need to monitor our investments on what Sponsor or Management do. Sometimes integrity go a long way than just initial years of good returns track record. It can be their long fishing line too. Don't be their fish ! Always be prepared to Cut loss.

Now I look at the few riskier reits using Elite Com as an example. Elite - Con - old builds, limited contracts. Pro - Has started paying dividends. Government tenants. Premium rights issue. Weighted the Pro and Con. Based on current information, I could put some. This will help push up the portfolio yield a bit. And that's the bit we need. However don't be a sleeping investor. We have quite a number of screwed cases. Do our Maths. Close scrutiny on the management and sponsor. Track records. Be less forgiving.

Final note, look at Reit as a Simple to understand Business you would like to own for long term, and chances are we will do well in the investing journey.

Cory

2021-0416

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 : Misconceptions of Dividend Investing

From experiences that I had so far, here's the collection that one should watch out or be reminded on the misconception of Dividend Investing.

1. Yield is Everything

This cannot be right. If Yield is all that's matter, investment of such can be automated to the highest yield and nothing left for other lower risk assets. Does this make sense ? Money where got so easy to earn. Want to gamble, go Casino better because better odds !

In reality, one needs to filter out High Risk from the portfolio before allocation of different other risk levels before yield. As you notice, I do not have EHT, Lippo in my portfolio. High Risk Reits are a Time Bomb. Is a matter of when.

First Reit is managed out from the portfolio in Year 2019 with cut loss at 0.945 when the risk is not worth to hold. And that is at a year where the Portfolio has a Record Profit of 20% XIRR. A mindset of never ever feel rich to lose money.

2. Rights are bad for dividend Investing

Any old time Reit players will tell you there is good opportunities to profit from Rights Issue. And if we are to go this dividend path, one should not be feared of Rights Issue. Is it exactly this fear that allow people to profit from you.

In solid Reits so far such as FCT, CICT, Ascendas, Mapletree etc even without subscribing to Rights does not mean your DPU will be materially impacted. Do nothing can still be ok.

3. NAV Valuation

Can be quite misleading. One recent example is First Reit where their NAV is off rental income from the property. However how is the rental derived can be from complex negotiations between the Reit Manager and the Sponsor or the Tenants where there can be consideration for other compensations that is material. This is make worst if there is credibility issue with the Sponsor who artificially jack up the property prices to the Reit they controlled.

4. Gearing

The formula for Reit is Total Debts / Total Asset. Any other formula that you read from Quarterly, Half Yearly or Annual Reports are just to communicate a better result view. Another way to give the impression of lower gearing is through Preference Shares which is not counted into debt therefore one has to be careful.

5. Capital Gains

Dividend investing doesn't mean we lose out in Capital gain or loss. While the stock price tends to come down upon ex-dividend, due to constant earning of the underlying businesses, the stock generally will fill back the gap. And with ever decreasing rate, the attractiveness of profitable businesses can push up the stock prices. But one do have to remember they aren't tech stock and should never have such mindset on their performance. Like many stocks, they also float with the market tide but with varying degrees. There will always be good and badly run Reits.

6. Cost of Debts

Ability to raise fund with lower cost makes running a company much easier. So this helps in your stock selection when we are ranking similar companies except cost of debts !

Cory

2020-1213

Cory Diary : Trading Log 2020-0814

Due to Work-From-Home, Trading has increased despite very busy hours with my new born as I will managed time in-between caring for her as a relaxation instead of sleep. I will need to change this before sleeplessness becomes a norm.

SGX

Over months I have built-up a position in this counter after the large drop due to MSCI discontinuation. My thoughts is that this is financial, exchange, digital and Covid Proof. And the market over-reacted. Considering the situation in Hong Kong right now, I think MSCI moves probably not so good politically.

Below is the new interface of SGX Portfolio page. This is good improvement. Do note only track shares accredited to it. 

Yield wise, the increase in DPU is a positive move of SGX. And I am looking into their growth opportunities. Personally i feel they have many opportunities in the fintech future.

VICOM

The yesterday report of lower returns are not unexpected as the information is publicly known previously. My last position was June prior to the share splits so I did not sell at the top. I would think this may reflects on SBS Transit as well so avoided any new position on it. Both counters will be interesting to monitor.

DBS

Continue to average down on DBS as I feel the dividends able to provide is no brainer investment which is much better than my Reits. This is in-addition to the profitability. Unfortunately, MAS direction results Bank reducing their payout to 60% caught me by surprise in the sense Singapore Local bank gives me the impression that they are much more conservative in their operations compared to their oversea counterparts. So if any business is worth to lend, they would have the money.

The only risk which I have mentioned multiple times are Digital Banking Licenses which is an unknown risk which could put another big dent on Temasek earning after Keppel, Singtel, SBI, SBM, SAT, SIA ... are performing relatively poor. My list needs to be validated as I am using my untrained memory. Do the additional licenses timing be adjusted further or should it be curtailed ?

ACCORDIA GOLF TR

The long wait has finally arrived with the buy over of all the golf assets with a further price increase thanks to some key shareholders. From here, I learn that to have this folks are great. 

Relieved myself of recent increased position and some partial sale of existing holding as I am not very familiar with the entire returns process or any uneventful. The hope for remaining is we can have new surprises or my unknown that can further improve existing stakes as I will walk to the end probably as a learning experience.

The con of the buy over is that this counter provide good yield which will put a dent to my dividend plan. So I am in the process to mitigate but need to care that risk is also managed.

ASCENDAS REIT

Cleared all my positions when it run up recently. Manage to buy back in stages to build it back up after Ex-dividends. Due to this move, my dividend received has been reduced by more than 75% from this counter in exchange for capital gains. My final position is slightly smaller in shares from starting and overall I think a slight net increase compared to if I have done nothing. The experience is a not so fruitful exercise. Broker happy and I do not have loss.

The reason I buy back most of my shares are due to Ascendas is I feel is a key stake in any dividend portfolio. The yield has comes down slightly due to Covid but largely due to price increases. For later reason, one should not use yield to justify not buying back as it will be a big mistake. The counter is no longer my top position but certainly my best profit counter YTD.

There are more trades on others but I think today I have talked enough.

Cory

2020-0814

Cory Diary : Lowering Yield Continues

Fixed Deposits and SSB Returns

Rate continues to drop. Holding the 10 year SSB now has effective rate of 0.88%. What this mean is for every $1,000 invested, $8.88 per year of interests (On Average) provided I hold till end of 10 years. Probably a price of a Taxi trip ? That's how bad it is now.

A check on DBS bank Fixed Deposits the rate is 1.3% for 18 months which seems much better. So the older SSB offer of more than 2%, I may want to hold them tightly. It has become a "gem" within SSB universe.

ASTREA 3.85% BOND

Using some calculation with YTM, I compute the dividend is in range of 2.7% currently after cost with potential for slightly more due to contract clause. Assuming this Bond is as good in reliability as many safe bonds, this is rather good returns at current market price.

N6M / QL2 - iShares J.P. Morgan USD Asia Credit Bond Index ETF. This ETF is regional and has return currently at roughly 3% based on latest dividend which is marginally higher than Astrea above. The risk is the dividend has been coming down for past many quarters. ( see below) I am still learning on this and will keep monitoring.

STI ETF - Year 2020 Yield 4.5%.

This is traded in SGX like shares. Dividends are distributed twice a year.   Prior to the Dividend cap by MAS, Banks have about 35.6% weight-age of STI. Singtel about 7.8% but expect them to reduce their dividend. Reits about 15.1% if i totaled correctly. And expects to reduce too due to Covid. Therefore Year 2021 may dip to possible 2.7% yield range however this could be further reduce with increasing capital gain.  Please DYODD. 

Cory View

Line them up against the yield/growth of bank (60% div cap) and Reits ( Quality ones ) ..... and then few quarters of relatively large Covid impact periods. What should be the acceptable stock price of local banks and local Reits be valued with Growth in perspectives and when the beast unleashed ?

Cory

2020-0812

Cory Diary : Trying to be Optimistic

To be frank I was kind of frustrated this week. 

Ascendas Reit ( Must have Stock for Dividend Player which I blogged previously) continues to run up this week to another all time high after selling half my position because I do not think market sentiment can be so exhilarating. I could have a couple of grands more.

I also decided to clear Ascendas-iTrust batch for a quick trade forgetting the result is coming up at the end of the day. It did a good price jump the next day to my dismay. What am I thinking ? Which probably cost me another grand.

MAS also announced 60% cap of bank dividends for Year 2020 to my surprise despite the banks are well within their capacity to provide more. This will decrease my dividend by a mile. This dividend cap affects market sentiment and the moment I bought MCT, the counter starts its correction.

Hong Kong virus situation hits another waves and social distancing is reimposed. This affects MNAC operation which show no emotion in reflecting into the stock price. This is bad because I just bought another batch for the yield. 

To top it off, PRC Covid-19 cases start climbing and CRCT weaken some for me to scope a batch of stocks. As I was deliberating to sell days after as there is a little gain in the backdrop of the broad market weakness, I did not execute it at that moment. The price then move to negative territory. .. ...

Not forgetting my Diary subject line, 

I manage to sell a batch of Ascendas Reit at $3.62 on ex-dividend day and bought back at $3.53 before the day ends. I am still not yet near my original allocation though since I first sold.

As for Ascendas-iTrust, the price weakened, and the delta is now within a few days fluctuation. Don't feel so bad now considering I have fewer counters to manage, and cash raised.

MAS calls for dividend cap put a dent on my dividends this year as Banks are core position in my portfolio. It could have been worst like Banks in UK where they could not distribute even a single cent for Year 2020.  With the reduced dividend from SG Banks, this put my investment at lower risk in current Covid Climate. I am not perfectly happy for the exchange but nonetheless there is some positives out of it at a time when many businesses are struggling.

Company like SIA with state support and major rights issue, I am not sure is sufficient as market speculation is Year 2024 full recovery. People who still buy a stake in it, i salute you for your "National Service" but I think valuation can be create or destroy out of thin air and not with our Real Money in such circumstances. Is just passing of wealth from one investor to another that's all.

The HK government has relaxed their Covid measures probably due to business pressure, and my stake in MNAC is smallish. But I feel personally in such congested location, Malls are the way to go when we recover so the future is what we should think about. Same applies to CRCT on yield front. So I am ok to hold on for cash flow for long term play in a diminishing yield portfolio..

Lastly,  MCT purchases are at relative low price. Despite the price went lower after, feel serene that I am able to hold another Maple counter after I sold this last year. Long term likely hard to go wrong.

What an unforgettable  week ! Key lesson is as blogged earlier that we need to diversify as a retailer and whatever largest holding we have, expect the unexpected.

Cory

2020-0802

Cory Diary : Increasing my active investment for Passive Dividends

The Goal

The Covid-19 throws a spanner on increasing Portfolio to $1.3M quickly from 1.2M as in we need to be careful in our investment injection by $100k which is part of Warchest. So why this amount ?

.

Here's the link because of the compounding effect @1.3M per my lifestyle. (contingent to yield 5.3% able to maintain @ 1% growth). However if the stock price keeps increasing but business fundamental weaken or not enough improvement, the yield will be lowered. To compensate it, higher cash inject will be needed or expenses reset as we age. Hope I don't lose you by now !

Let me explain again using Reit term. if the stock price increase by 1% (Growth), and we have corresponding reduction in yield say -1% (DPU in cents maintain), it kind of neutralize the compounding effect. This is not good as we lose that year of compounding. So DPU has to increase accordingly to maintain the yield. If is not which could be, and to bring the portfolio backup,  we need to increase our investment through injection or we spend less to support the injection. Get it ?

Of-course we can increase our yield by investing in riskier asset to maintain it but this is not sustainable long term and will mean Portfolio keeps getting RISKIER over time .... . And that is Dangerous which some people may make, like me on what I feel right now  ? LOL

Therefore, come to think of it, is not so easy as the calculation is a simplified model. To mitigate it therefore using above example, if 1% growth of 1.3M that is equal to $13k has to come out of Real growth. When there is no DPU growth, we need to inject in this amount of $13k or spend less to support it roughly.

This is why advocating dividend re-investing is important or injection from saving if you have a job as changing stock aren't easy for same quality. But the key is capital gain has it's price to fulfill for dividend investing.

Something new today.

Cheers

Cory

2020-0726

.

 

Cory Diary : Re-Balance Strategy

Saw this Video by John ( link )on impact of Covid-19 to people in West getting evicted. The impact on economy is so great and wide to everyone, relative to people that die from it is relatively small in percentage. Hopefully common sense prevail and strike a good balance. What can we do to avoid it in the first place not to run out of money ?

There is this solid couple doing Dividend Investment Strategy. They retired recently despite iron rice bowls. Their sharing is awesome. Link right below. Many thinking I shared.

Our Alternative to Timing the Market (Maximize Returns & Reduce Risk)

One key point I like to highlight is Re-Balance Strategy. What is it ?

To Optimize Return and Minimize Risk. This is something I will put special focus. But what is it actually ? I would think exposure that I feel is getting riskier and try to par down stake at optimal price. This will mean there should be an upper limit cap. to minimize risk. And diversification is key.

Finally, being Average is so great !

Cory

2020-0630

Cory Diary : Asset Investment hierarchy of needs

Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his 1943 paper "A Theory of Human Motivation" in Psychological Review. 

Broadly a sample I got as follow,

Maslow's hierarchy

Similarly for Investment, there are a lot of psychology involves in how we manage Greed and Fears. This can be classify by level of risks individuals willing to take but with the the ratio (equivalent to assets) adjusted as one progress on asset levels below.

This is depicts from Left to Right as one net-worth increases. A simplified model. In reality, asset between classes may have situation could not flow freely such as if one introduces Pensions or CPF layer which could limits.

The logic that we fulfilled the basic minimum on cash holding which could increase with changing circumstances but nevertheless small in area in the triangle but the absolute figures likely larger. Follow by different level of investment risks.

One key point to look at is the SSB where the area on left is larger with just 100k investment whereas the right triangle the SSB is much smaller but has 200K allocated. This is primarily due to much larger asset base as one progress in life.

The dividend investment increased significantly in area and absolute as well as one build up dividend investing with potentially  taking into consideration of diversification.

The Property can be home or investment property. Some would feel this should be at lower level.  I would agreed if is home to be one of bottom but property usually comes later especially when the government do a good job of providing to the masses when we are much younger than our oversea cohorts. 

As one's career develop and salary increase, and existing home get paid down, chances are we could afford an investment property. Then the peak is more off investment purposes. In some society, renting is common, and not necessarily a need to own one.

The main essence is if one meets the basics, psychologically we are much more prepared for investment dynamics and ride better between bulls and bears while highly vested in market or making investment decision.

Cheers

Cory

2020-0621

Cory Diary : Dividend Report Jun'20

Recession or not for Dividend Investor, the mentality is always Dividend please come. This is true till we are hit by Covid-19 Black Swan event which continue to play out 6 months into the crisis.

One of the key believe is that as long the business is stable, dividends will be relatively stable. It is "Bond like". Is a time where most of what Cory believes get challenged. It  is as seems someone up there do this purposely.

Do we change ? Not if we are relatively diversified in our strategy. For example CMT is one of core stock. Despite that it is less than 10% of the portfolio. So with recent income retention by CMT, the Portfolio dividend continues to churn.

In fact, with such dynamic market, this is where new gem can be found into one's basket of stocks. So when there is new opportunity arises, instead of expanding CMT, we can secure a new dividend stock. There are many ways to do this including tapping more of the warchest.

As of now YTD, dividends received $24,990. There is more to come before Jun end. The theoretical dividend roughly $60,500 which is about 14% increase by year end compared to Year 2019. Total dividend received since tracking $350,340. Cheers, Covid or Not

Cory
2020-0615

Cory Diary : Market Recovery

Market Recovery

We just have the steepest decline in STI in March. And when Circuit Breaker (CB) kicks in and enormous Covid-19 packages to support the economy,  is already on purpose that we will not have V-Shape recovery simply because it was once extended and now follow by gradual openings. So the Index is also more like an "L-shaped" with a bias elevation for gradual recovery as below STI Index chart. With Index at -14.5% and judge by recent just one week 6% recovery, is not impossible that at the ending part to be a "Slanted U-Shaped" though chances are the probability is lesser.

This week Banks make major recovery, though the banks segment in my portfolio is smaller is still a large part of the portfolio, and it just flows with it though slightly slower.  As today, Cory Performance YTD is back to positive by a hairline of 0.02% to be exact and 14.5% above Index (excluding index 1st half div). Theoretical max annual div $59k. Key stocks that I can remember off-hand are Ascendas, CMT, DBS, OCBC. STI Index, Netlink, CRCT .... which totaled about 20 stocks.


Market Relapse

The market may face a situation as we are opening up that we could see spikes in Covid-19 community cases but will we have to return to "CB" again ? Personally I think is unlikely we will face a spike similar to dormitories infection scale in the country. As previously mentioned, we have learned how to manage it through social distancing and mask. Neither will it be tenable for the country to go through CB again and another round of same Covid support packages. It will also be a little embarrassing for the ruling party to face coming election with confidence. 


What this mean is the economy has to continue to open. And if there is major cluster infections, we will have to ride through it. How to work around this with other countries will be tricky. So the economy will churn on. Many of us who can will probably continue to Work-from-Home ( WFH ) to void major cluster happening in Offices. However, most of the businesses such as Show Gallery, Malls and Restaurants are likely to stay open. 


A historical day for Cory of finally breaking even in Investment for 2020. Great day for Dividend Investing and staying vested. Hopefully it will last ! I am sure many others do too. As I type, DJIA staged near 1K point recovery above 27K in trading hour due to better job figures. Looks like Trump may have what he wanted.


Cory

2020-0606

Cory Diary : Reits/Trust Portfolio Review Mid-May Period and Performance Report

In 14th April article, I did a Reit/Trust Portfolio review. Here's the link. Since then how has my portfolio goes ? This article needs to read contingent to this link which I won't be repeating here but will be better to have more complete read.

ASCENDAS-ITrust
Some return on this. Took 50% profit and leave the rest for longer term investment. Rationale is Business Park is lesser impacted and DPU will not be badly hit. There is some future DC play but I like to get some buffers.

ACCORDIA GOLF TR
Hold decision looks right as the price is stable. Is still a speculative and asset play. They are a bit slow in the offering which probably due to Olympic delay and trying to time for cheaper price with Covid situation in Japan.

AIMS APAC REIT
Riding with the market. Quite please with the quarterly report.Due to risk allocation I could not expand more. This is small reit but their management looks good. Hopefully they stay that way and not lapse.

ASCENDAS REIT
See some run up since then. Nice rebound. A Core position for me. The yield is not so (typo) high so I wouldn't want to expand more. So happy with what I have as the business is a rock.

CAPITAMALL TRUST
Waiting for up turn when CB measure is relieved. Doing some trading.  Continue to hold as I have confidence in Singapore to ride through this despite recent dormitories issues. Matter of time the public and gov may have to face the Virus head-on and live with it.

CapitaR China Tr
No change ad continue to hold. Positive with the Malls ability to return. Yield is good. And the chinese measures are stringent enough to prevent major outbreak. Life will return to normal but business wise we have to see how it goes politically.

IREIT Global
One of the Reit which corrected quite significantly though unjustly few months ago. At today price, this counter manage to broke even as I trade in/out taking good advantage of investors emotion dynamic with global markets.

MAPLETREE IND TR
Cleared completely for counter consolidation with good gains.

FRASERS L&I TR
Received strong gain for just 2 months investment period. I am out on this one as the profit is too good and the upside is limited imo now. Is a good Reit and the yield still ok but I feel there is time for everything.

MAPLETREE NAC TR ( Updated )
With the onset of possible demo, decided to clear this position. For the short duration investment period, the returns are pleasing. It would have been larger have I sold all earlier.

NETLINK NBN TR
Staying on-course. Happy with the amount of exposure I have. Not much to say except similar to earlier link.

FRASERS CPT Tr
Finally make my return on  this counter with some initial purchase. I think hard on this one as I have CMT but the customers are not exact the same. It also provide some Alpha and the price is quite beaten but the future is there. Retail malls have been hard hit due to CB. The cases in community is getting into the right direction so any relieve from CB is good news. Singapore cannot do without malls.



PORTFOLIO
Portfolio 55% Reits/Trust and 17% Fixed Investment allocations. Currently I feel the portfolio is well-balanced.  All the changes and plan are for peach of mind which mean I do miss out some gains. One misgiving is the non-reit side which I sold Sheng Siong for lesser profit and since ran up much further. Market is funny because it only ran up in the midst of Covid and not earlier. Expanded Bank segment earlier also help to push some gain and dividends but this has to be quickly scale down slightly as i feel the allocation is too large. Hopefully this do not reduce the gap performance with STI.

Cory Portfolio -7.7% P/L YTD.
STI -21.6%. ( exclu. div) so probably -20%.

Some balance cash raised for next round of investment. Two more weeks to go. Looking forward to Worker recovery and business to re-start. The focus in my mind is how to shield from external macro factor slightly more.



Cory
2020-0516

Cory Diary : Performance Apr''20

Mentally I have been preparing for the day as when the portfolio gets bigger, every 1% drop translate to much bigger absolute figures. In Year 2008 GFC, the portfolio suffers about 50% losses however the losses amount to $50,000. In Year 2020, the portfolio got hits with more that 24% loss however this translates to $250,000 loss. 5 times highers but with less than half % portfolio reduction. This are just Math and if we are to go through stock market history this can happen. If this doesn't happen, we probably not investing enough.

To mitigate this issue mentally especially so for a salary person, my idea is to Buffer the Fear from the market. This is one primary reason why investment in bonds, gov securities and fixed deposits. Even emergency cash is higher. So what is not seen in equity tracker is SSB, FD and Cash but we do have bonds as it is traded in SGX. There are few times I am tempted to sell my SSB but decided it does not make sense considering they are delivering 2%-2.5% guaranteed for many years to come.

Cory Portfolio has a mixed of STI Index, Bonds, Reits, Blue Chips and a small percentage in SMEs. So when the sell down begins due to Covid-19, Banks, Reits and STI Index are heavily sold down. However, core stock assets continue to be held. In fact some injection is done to collect stocks on the cheap slowly as previously mentioned. There is also some re-balancing to consolidate and invest.

As of today, the stock portfolio is -6.5%.  XIRR about -6.9%. STI Index at -18.5%. So by such measure we are 12% ahead or roughly 10% if we include STI ETF dividends already distributed.

There is still good amount of cash to buy if the market turns south however I am reluctant to tap them unless we have clear trend that the market is getting much worst or the worst is over.

There are few things which I did. One is doing some trading between the volatility. There is not much fundamental to speak of but just a relative risk assessment when market mis-priced certain stocks. This happen a lot more nowsaday.

The month of May will be interesting because we know a lot of dividends get distributed usually on this month which probably explains why "Sell in May movement". This year quite a number of dividends got retained or cut. Well I could be wrong but no plan to do major changes in my portfolio. If the sell down is a little severe I could start my buying again.

As for stocks selections, there are quite a few I would avoid other than the usually S-Chips.
If we go by sector will be Transport, Commodity, Hospitality, Medical and Telco Stocks. Most SMEs and Penny Counters. This left with me STI Index, Banks, Reits and a selected few generally. 



Cory
2020-0520

Cory Diary : Performance YTD 4/18 and aftermath

This few months has been interesting experience. For new investor is harrowing ones. If I could remember we are near the time frame where SARs basically stabilized and market was in recovery process. Covid-19 impact is not the same in the sense we have Trade War, Currency War and Oil Impacts going-on all rolled into one. This Pandemic is much more wider hitting shores of Europe and Americas. How long this will take is anybody guess.

For me personally, birth of 2nd Daughter, increase Job Scope and some personal harrowing life experiences all rolled during this period.  Expenses will be expected to shoot up though not as much as first born. My wife chipping in to help on nappy and nanny expenses. She sold all her shares before Covid-19 really hits. Shiok ah ! More money for my investment. 😂

At one time my portfolio is down $250k which is 5 times of Year 2008 GFC amount but interestingly I do ok mentally but just a bit fuzzy when wife called me on some errands. Well, STAYING VESTED in market is so important because portfolio recovered significantly for my Portfolio setup and selection. I want to mention this because different selection may gives different result. I still have about 50% warchest to play with. Don't think we are out of the wood yet because I can't confirm. LOL

Reits gearing increase to 50% is the positive step to take as this will alleviate needs for rights issue with deferred payment of tenants. Even without this deferment, I think this should have been done for GFC 2008 as well that time. Anyway this is just regulatory paper play. Just like USA unlimited QE. Thanks for this, the world probably adverted Depression. Depression is not the emotional aspect that I am referring to in case some new investors thought this is what I mean but certainly will lead to if the GREAT DEPRESSION is not adverted. This event if one is to search through history is horrible to the poor and middle class. We will stop complaining of the money printing because the cost is much much cheaper. It may rewards the Rich but not everyone.

Taking stock on current portfolio status. Reits/Trusts abut 59%. Fixed Equity 16%. Portfolio yield dropped to 6% because of recent "market euphoria". Is not the perfect description of it as we are still in recovery phase or ...... ( touch wood). Performance wise -8% roughly. We have 10% gap between me and STI Index.  Slightly lesser after considering Index dividends issued. Starting to take stock of my loan, asset, FD, SSB, emergency funds and free cash again for the next stage of development. Yes, the more cash the merrier ... 2 more weeks to go.


Cory
2020-0418

Cory Diary : Reits/Trust Portfolio Review

Have not been so active here and expects to be in the near future unless market keeps me more excited. I have taken up writing , drawing cutie, and recording down my plans literally on paper. I find this keep me interested as I pan out my stock plan when the market  beat down my portfolio. Recent weeks the portfolio looks much better as Reits re-bounded.

I made some new acquisition recently which I would have not, if not due to Covid-19 driven prices. My portfolio YTD is smaller than End Year 2019 by about 6.5% excluding cash. However one interesting thing is Year 2019 theoretical dividends $53,144. Achieved $52,899. For Year 2020, theoretical dividends $62,168. So about $10K free dividends more. So if the market goes lower, I would probably hit for another $5k or more dividends.

Below is the stock list in my portfolio which I like to talk briefly on each of them. This are just Reits/Trusts in today scope. I think going through why I have them is important because we need most of them in sound footing to deliver or well mitigated.


ASCENDAS-ITrust
This is recent buy. A price I would never imagine to attempt Pre-Covid. Is my search for non-sg exposure that I decided to have some on this which is heavily discounted. Is an infant position. Reason being India Covid-19 situation is also being played out.

ACCORDIA GOLF TR
Have been holding to my existing shares since Pre-Covid if I could remember. The non-binding proposal to buy the golf course is taking longer than expected. Japan aren't handling perfect so far which probably put this into extended limbo. Nevertheless I feel this is a hold type of situation.

AIMS APAC REIT
One of the niche ones around. Being Industrial Reit means it will not be as impacted as retails. However there is still large GDP impacts and the stock price got a large hits. After averaging down at low prices, the price is recovering so to speak but I am reluctant to add even more. The yield is good but I don't see dpu will be significantly impacted for now. This is one guru that I respect top position but I am just a smaller fry to follow.

ASCENDAS REIT
King of Reit. Cannot miss this one. I have been trading on this for long time. At one point zero position. A 5 digit gains ytd and a sizable position build up. As Business Park and Industrial play, the impact similar to other Industrial Reits on current situation.

CAPITAMALL TRUST
A core reit position that I retained in my portfolio that took a major hit it rides down with the virus impact spreading across the society. As in DBS case, there is limited room for me to average down due to the large exposure. I did play with trading positions and took small profits of similar positions. At near to 7% yield, even without dpu throughout this year, I would consider CMT a steal.

CapitaR China Tr
Have some on lowered prices before it goes deeper down in pricing. This is one Reit that I have the opportunity to initiate and buildup overtime as the price goes lower. Quite happy on this. Reits in China I prefer to ride alone with establish players. So only this one I would consider. The yield is great and again I would not have build-up without the price being lowered significantly.


IREIT Global
A Reit with investment in Germany previously. In bad times, this Reit is a gem. The yield is good at current 8%. I was buying near to 10% for some of my lots. Unfortunately there is always fear and I do not hold more than 5% allocated. The fundamental and sponsors are good. On hindsight this should be around 7% allocation considering I am looking for non-sg exposure to increase on. The discount is still good despite price run-up but I need to allocate some discount  to recession situation which could last same or longer than Covid does.


MAPLETREE IND TR
Small position in this and unfortunately the price run-up just when I released some large lot of trading positions. Not something I would cry about as the yield is so so but the fundamental works well against Covid situation due to DCs and Industrial Parks. I think it will take another major drops for me able to collect back as dividend play.


FRASERS L&I TR
So glad to be back on this counter and with a good enough position build up before the price start running up. This is the stock I picked that do not have much sg exposure and Industrial. The merger with FCOT did not damp my view much as the yield is good and is heavily discounted from it's high. 


MAPLETREE NAC TR
Another position that I manage to buy-back and buildup. This counter has two blackswans badges. Riots and Covid if we put tradewar aside. I think there is still room for price appreciation for this one but allocation wise I won't be be increasing near term. 


NETLINK NBN TR
The world can collapse but near to mid term, the returns will be hardly impacted as users stay at home. Is currently near to the year start prices so I would thing that theoretically with the major printing press going on. we could bet on much more better valuation. I am satisfied it stays same.


As I mentioned, have been playing pens and papers recently. Unless the market significantly reverses it gains today, STI would have achieves 38.2% Fibo nicely. The next level will be 50% percentage points around STI 2715. Is a middle of not much support lines. Being conservative, I would have the support at STI 2678. The higher will be 2752. Personally I think highly unlikely the market will extend to hit 61.8% Fibo range of STI 2834 so quickly. If so, I would start some sales.


Staying vested seems so nice today as I realised trading just ended.


Cory
2020-0414