Cory Diary : Portfolio Updates

One of my key goal is to keep increasing my dividend income to cover expenses while hope to manage some growth through US Market. Therefore, the final holding in US market will be settling towards growth direction. For dividend income side, mainly SG local market specifically focus on Banks and Reits. 

US Treasury Bills ETF

Recently, I have tested out US Treasury 20Y and 10Y ETFs. The dividend distribution is monthly. Unfortunately, there are 30% withholding. As I understood, there maybe tax refund later by brokerage counterparty. This to me is not a sure thing so i will continue to monitor. At the same time, I decided to sell away 10Y treasury bill stock. I realised is not needed for my situation. I am not sure what to do with the USD cash yet.

Currently, 20Y T-Bill gives 4.7%. In good times it can been as a market buffer during recession period. The only down side is the USD Currency and because it is ETF, there is no date limit where capital will be returned to me in full if I wait long enough. To work this strategy well, my allocation may need to be larger. At the same time to boost my total dividend income.

Banks

Decided to push for more allocation with fresh fund availability. I just surrendered my GE Policy (Endownment) and could allocate some to it. The Banks yield are tempting. I will need to further study the implication and robustness of my decision. To add a special note, I plan to add Critical illness so is not going without insurance.

There are some concerns by an influencer on recent DBS result. One of the key point is that Q4 result is weaker than Q3. If we look at previous year Q3/Q4 comparison, there is also similar pattern. So it doesn't look like a concern to me. Probably some banking cycle going on or fluctuation between quarters. However, the Q4 result is much lower than Q3. About 13%. I look for pattern swing in prior quarters and this does happen. So is not conclusive. Based on the 6 cent increase and the quarterly 15 cents capital return, this seem to indicate to me the management is not worried.

There is also another concern raised on rising cost/income hiting 40% if we look at each quarter trend. However, YOY comparison seems ok. Q4 is likely a period the bank give rewards to employees and the size likely much bigger than typical years due to the strong banking returns. So again is not conclusive. I will probably investigate further before adding more into banking stocks. Is something I am eager to do as this will address my dividend income shortfall and portfolio growth over time.

SG T-Bills

Increasing my allocation sizing laddar continuously. This is to further increase my buffer in case there is significant draw down at the bank side in which I plan to hold long term. I find SG T-bills much harder to track so is not displayed in my Equity allocation. Same for SSB not in Equity allocation too. Their update frequency is too much. However, I want to to show all their allocation and this probably best resides in Networth Asset allocation.

That's all folks.

Cory Diary

2025-0215

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

Telegram Cory Channel <= Link to Channel

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

Cory Diary : First Month Equity

First month has just past after 2 years of strong returns. Within the month we have a large spike in the first weeks which than taper down as market losses momentum. Basically whatever spike from the bonus money ( probably ) received in Dec'24 into the market got pushed back down. We know the fundamental of the banks are strong so it is likely from the big boys act. 

Before the Jan week ended, the market woke up again with ferocity an push the banks back up again ( OA CPF funds ? ). But MIT dizzling into deeper red. On the US side, the market is riding back up nicely after the effect of DeepSeek impact correction which then tapered down some with tariffs rolling out on Canada, Mexico and China.

The portfolio ends up as follow. Will Banks continue rolling on the 3rd Year ?

The Jan month looks good. Feb'25 will be interesting as in how will Banks continue to perform and Tariff impacts roll-out. The month also see a draw down in Nvidia but fortunately other US stocks managed to lift the segment up through diversification in context on distributed large tech stocks and recent US Treasuries addition. The money of Treasuries come from Meta (ouch) and Msft ( hooray ).

The portfolio expanded TSMC and Nvda (averaging down). 

This can't end without outlining what's my plan so far. Avoiding Chinese/HK shares, Focus US Major Techs, Strong allocation in Banks, limited Reits invest ... and the return. See below.

There's more work to do.

Cory Diary

2025-0201

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

Telegram Cory Channel <= Link to Channel

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

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

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

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

Example of Variables

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

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

Below is a sample table to compute the result above.

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

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

 

Cory Diary

2025-0126

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

Telegram Cory Channel <= Link to Channel

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

Cory Diary : US Market Strategy Re-Visited

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

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

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

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

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

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

With this moves my current portfolio as follow.

Cory Diary

2025-0118

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

Telegram Cory Channel <= Link to Channel

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

Cory Diary : Equity Portfolio in Perspective

Cory Diary

2025-0107

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

Telegram Cory Channel <= Link to Channel

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

Cory Diary : Portfolio Management Update

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

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

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

Pciture 1 : US Stocks P/L YTD

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

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

Picture 2

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

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

Picture 3

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

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

Cory Diary

2024-11-09

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Year 2025 Strategy

With just three months left in the year, it's an exciting time to watch how our portfolio might perform as we approach the final stretch. It's also a good time to reflect and consider adjustments to our investments for the new year.

Earlier, I mentioned shifting part of our allocation towards the U.S. market. Increasing that exposure significantly will depend on higher returns from the U.S. market, which could provide the buffers we need after careful consideration. If those returns don’t materialize, this roughly 10% allocation may remains through 2025, as the plan is to rely mainly on internal growth.

Allocation of U.S. equities will be somewhat like a "peanut butter spread" across strong businesses, with varying weightings on a few. It's quite hard to predict which will perform best, but over time, the earning power of each should drive them forward. Minimum expectation is that these investments earning should outperform local banks. The risk lies in macroeconomic factors where the entire market could be driven down.

REITs and banks will continue to dominate the portfolio. Depending on market conditions, fresh funding may either stay invested or be redirected toward fixed-income instruments like T-bills. Another alternative could be reducing loan exposure.

For local portfolio adjustments, the focus will be on gradually weeding out underperforming companies, regardless of whether they are currently profitable. This will happen as opportunities arise. Releasing capital from these positions will allow reallocation to higher-yielding stocks, aiming to boost dividends, which are expected to remain flat for 2024 unless we take action. We have to be careful not to increase holdings just for the sake of it. Considerations include whether the price is running ahead of itself, yield returns, future expectations, and cash flow situations.

Here is a snapshot of current equity portfolio. The return of Microsoft (MSFT) to support the peanut butter strategy plan.

New Funding

Our goal remains to optimize and grow the dividend stream, even with a significant portion of funds tied up in T-bills, Singapore Savings Bonds (SSBs), and multiplier accounts that we try not to touch. The big catalyst is the boost of funding from retirement payments. There are a few options to consider, and the final plan may be a combination of these:

Pay Off Housing Loan: This can be reserved in case re-pricing does not work out. Ideally, we would continue to extend the loan so that we can use the money for investments with higher returns. For this reserve to work in the future, we probably need to park the funds in capital-protected instruments until utilized. The downside of this plan is potentially losing the key funds that can help generate significant income.

U.S. Equity Boost: U.S. market valuations seem relatively rich. There is reluctance to further increase exposure, as the "peanut butter strategy" has been completed. I would prefer to invest after a market correction for a margin of safety if we are to tap into these funds. Another concern is the lack of dividend play in this segment while we wait. The only situation where I would consider adding is if there is a rebalancing of the existing portfolio allocation towards weaker stocks.

Increase REITs Allocation: Earnings-wise, REITs are still not able to match the banks. While there is a lowering of Net Interest Margins (NIM) for the banks, there will be a lag in the implementation of lower loan costs for the REITs. Most of them won't see significant cost reductions, if any at all. The timing is not right for this yet, and there is a warchest of funding if needed.

Increase Banks Allocation: Currently, the portfolio has significant exposure to banks already. The appetite to further increase this segment may not be good as interest rates have started lowering. There is a limit to how much we can increase, and it may not work for the fund. If there is a major correction, it may be helpful to tap some of the funds, but this also means existing profitability will be impacted.

Fixed Returns: Current fixed returns are coming down; however, they are still relatively high. This option can also be considered an expanded warchest—a safer option with sufficient income. It's a good reserve to support major emergencies, such as paying down the home loan if forced to. There is a time factor in this for the housing loan. It appears that a large segment will probably be allocated here for opportunities or needs.

No Chinese stocks yet. Sleep well.

Cory Diary

2024-10-10

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Portfolio Equity allocation updates

Here's a quick update on what i did so far recently.

Sold a small chunk of DBS. Taking profits. This shares were acquired during the recent correction of Yen Crisis. Free money must take else lightning may strike. LOL. The rationale is quite simple. 6% yield on one of the world safest bank is not hard to pick. Even if there is a reduction in NIM this not going to hit the dividend largely because the payout ratio is only slightly more than 50% of earning unless management really want to. What makes it even more attactive is the NII which is still growing.

One of the learning I picked up is if the position is for trading, we need to treat them so too when is time to sell. And this is what I did exactly for recent share sales. And my allocation for DBS on my equity portfolio reduced from 28.8% to 27.6%. Good move right ? Well, wrong. Reason being I am expecting new large fund inflow (hopefully) coming in next month. And if i am to deploy them, i could be buying back those shares I just sold.... Well, we human can't be perfect. We can learn to try to ... end of story.

That's all i did mainly. Ah yes, i did bought back alphabats at higher price. darn. The plan is to have kind of peanut butter spread on a small group of selected US Tech stocks. So I may buy back Msft when market allows. Trying to minimise my transaction as this group of shares are in cash management account that don't go easy on trading fees.

Finally, what's the score so far ytd ? Meaning, from closing value on the last day of trading last year till today.

August has been kind to my portfolio. Hopes this end well for everyone by year end.

Cory Diary

2024-0901

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Yen Carry Trade Crisis

The recent Carry Trade Crisis is a wake up call on how vulnerable our market is. It also reminded us we can't time it but will happen when it accidentally got triggered. The mosre important thing to me is what did I do considering I just recent expanded my US segment to 10% of Equity Portoflio.

My Nvidia position went negative together with recent addition in iBit and Tom Lee's favourite Russell 2000. Amazon took a beating as well but as most of the shares were acquired much earlier the impact today seems mute for recent days recovery. I sold off Msft to lock-in profit so as to mitigate the portfolio and now I have excess USD to content with. As the overall US positions are relatively small the impact is not enough to put a dent to the portfolio.

What really hit harder is when SG Bank stocks are sold down as well. This drives the DBS yield to more than 6.5% range which i deem too attractive not to collect more bank stocks. Yes more .... .  It doesn't makes a lot of sense unless people are forced to sell. Probably many people do carry trades to buy local banks or on margin long. See below allocation.

However, it doesn't trigger my warchest yet and the market starts to recover after Japanese authority reassures the market they aren't Alan Greenspan. This guy has a sadist strategy that market has to bust before boom at national level.

What I sorely missed in this sell down is to buy more Meta. Otherwise I think we are good to hold on most of the portfolio. Do I miss Microsoft. Probably not yet. Will we see a V-Shaped Recovery ? hmmm

Cory Diary

2024-0815

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : An Insight into DBS CIO Hou Wey Fook

I chanced upon an article about DBS Chief Investment Officer Hou Wey Fook. I have noticed him since his appearance in The Woke Salaryman interview. As an engineer who has excelled in finance, his educational background likely provided a solid foundation. I admire his advice and thinking, so I wanted to do a quick comparison for reference.

Hou Wey Fook's Investment Strategy

1. The Barbell Strategy

   • Income Generators: Assets that generate consistent income, such as Singapore T-bills, government bonds, Singapore REITs (Real Estate Investment Trusts), and Singapore bank stocks for their dividends.
   • Growth Equities: Investments in companies that are innovators, disruptors, enablers, and adapters. These are best-in-class global companies with wide economic moats – competitive advantages that enable them to maintain profit margins and market share in the long term.

2. Measured Exposure in Gold ETFs

3. Additional Retirement Income from CPF SA income for retirement.

4. Well-Diversified Portfolio: Prefers bonds ETFs rather than single bonds.

5. Income and Growth Allocation: 60% of his portfolio is in assets that generate regular income streams, while the remaining is primarily in growth stocks. It is likely that, closer to retirement, the 60% weightage of income-oriented investments will rise further.

6. Universal Life Policy: Acts as a mortgage protector, ensuring that in unforeseen circumstances, his wife and children can continue living in the house without the burden of servicing the housing loan.

7. Drafted Wills: This saves his children from unnecessary emotional stress.

8. Real Estate and Lifestyle: He bought a landed home 20 years ago and owns a Tesla.

My Portfolio and Comparison

It looks like we have a similar strategy regarding the Barbell approach. Recently, I added Russell ETFs and iBIT. These are small positions, but I hope to grow the Russell ETF smoothly, in addition to the similar growth stocks we have. iBIT is an insurance product that seems to match his measured exposure in Gold ETFs.

He is 61, which is seven years older than I am. However, my growth assets are significantly lower at only 11%. I think my allocation is too conservative on the income side and may not be less risky considering the amount of REITs in the portfolio. This is something I need to address.

Regarding insurance and wills for the family, this is something I need to plan for the mid to long term. I don't think I can do much about owning a landed home as he does.

His top investing tips

Time in the market beats timing the market. Frequent traders often fall prey to anchoring bias, a cognitive bias where investors place excessive emphasis on an initial value, and fail to adjust it adequately as they acquire new information about the company or market conditions.  

Conduct thorough due diligence and invest in securities with strong long-term potential. With comprehensive research, investors are less likely to panic over short-term market volatility and make impulsive decisions that could harm their portfolio.

Start investing early, and limit what you borrow. To borrow the words of physicist Albert Einstein, compound interest is the eighth wonder of the world.

Cory Diary

2024-0728

CoryLogics Invest Chat - No Coin, No Porn, No Penny

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Portfolio Re-Balance and Result

From time to time, we may need to re-balance for the better or worst. There are people who swear we should do nothing but bear that in mind that doing nothing is a deliberate action too as is solely tied to one expertise. How often we trade depends on our capacity, knowledge, cost and likely emotional state.

The hardest to master is managing our emotional state so personal preference is to keep it at the most stablised level aka "Sleep Well Test". This could mean more re-balancing effort and regular monitoring of reports to contain unexpected risk level increase.

So what are the changes so far for 1H24 Portfolio ?

Deleted : Venture, Google, UOB (add/del), SABANA, UTD HAMPSHIRE

Added : iFast, TheHourGlass, Nvidia, OCBC

DBS/OCBC are the key profit drivers in-addition to dividend. Their large allocation shielded the portfolio. US Market is in net profit ytd. Reits are still in special care. A few of them such as iReit and Elite see large reduction in capital.

Currently,

Equity Portfolio XIRR YTD +4.5%

Investment Account Cash 7.4%

In-Progress,

US Market expansion, Nvda etc

Reit on-hold mainly otherthan special exceptions

SG Non-Bank opportunity

Cory Diary

2024-0704

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Turnaround of Reits

With the current high rate and coming Fed meeting announcement soon when will it be a good time for Reits turnaround in stock price ? Looking at the Rate (below chart ) which max spike in Aug 2023 and probably well felt by end of 2022, when will rental reversion be able to catch up assuming no more rate increase ?

If we are to take Mall Reit example assuming 3 years cycle of contract, full update maybe Aug of 2026. There are variables on reit types, management ability and probably loan cost which varied with their own renew or expiry. There is no definite answer we can know unless we are insiders.

To be safe, I would think early next year 2025 will be a good timeframe to review Reits allocation increase. Anything before will need good conviction, sizing and unique Reits performance.

Will rate cut helps ? Maybe shorten the wait accordingly. This could be a slow process of unwinding. So may not help much near term.

Cory Diary

2024-06-10

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Equity Portfolio Review

Equity Portoflio - 2024-0519

In this review, I'll provide a brief commentary on each counter.

REITs

There are 9 REITs in the portfolio after selling off United Hampshire. Ascott Trust yields look quite interesting. If there is a correction, there may be consideration to add a little more. This is despite strong bank yields, planning for necessary transition options.

Sabana Trust is in a more complicated situation as its share price could go either way due to ongoing internalization complexity. With current cash conservation needs, it seems a luxury to have exposure to this in my portfolio at this time. It poses elevated volatility risk. The pro is the strength of the REIT, which may mitigate some risk, but it's uncertain how much it can help.

Elite Commercial REIT is in a deep drawdown due to the ongoing UK macro situation. As the position is not significant in the portfolio and the REIT has mainly government tenants, I do not plan to relinquish the opportunity of a rebound if any. Currently, they aren't in distress and are well-capitalized from a recent rights issue. However, we can't say with absolute certainty there is no risk or surprise from what we don't know.

Mapletree Logistics Trust has recently been hit due to China exposure in their valuation and negative rental reversion reflected in it. Despite this, the REIT has managed the issue well. With management actions on how they position the REIT, it seems investors may take some comfort. Nevertheless, as an earlier article mentioned, asset sales to support income distribution are a fight against the Fed. They likely will pull through well. Planning for China macro-wise is much harder due to ongoing tensions between the powers. Technically, if we use MA 50/150, the chart has yet to reverse to an uptrend, so I will continue to monitor.

IREIT positions in the portfolio have been sized much smaller in proportion despite being popular among investors in foreign REITs. They have all the ingredients to be successful. This was the case before the interest rate spike and the Ukraine War. Unlike UK REIT, they are fortunate to have locked in their loans until 2026. Like most foreign loan exposures, the high rate spike and poor sector segment hit them hard.

Core Reits

There are currently 4 core REITs in the portfolio: AIMS APAC REIT, Ascendas REIT, Mapletree Industrial REIT, and FCT. They all have significant exposure to the local economy, which shields them quite well. Ascendas and Mapletree benefit from lower loan rates as well. Their well-managed hedging and fixed loans help keep their DPU stable.

AIMS APAC REIT used relatively expensive perpetuals before the rate spike, which tied them over well for the past years. With the perpetuals scheduled to expire, it may face much higher costs for their loan or perpetual rollover. Being a small REIT, I decided to reduce the position by roughly 40%+ to reduce portfolio volatility from top REIT allocation to the last of the core REITs. FCT is strong in suburban malls. They too face daunting loan costs over time. Nevertheless, it has a strong business, and I am happy to hold it through its current allocation.

US Stocks

Amazon, Microsoft, and Tesla roughly make up 3% each. They are all strong in their respective markets with world-leading businesses. Currently, they hold less than 9% of the portfolio in total. If opportunities arise, there may be consideration to expand in this segment. I am quite comfortable with what I currently have. Microsoft and Amazon are expected to provide a strong base support that will keep this group steady. Tesla is quite volatile but can have explosive upside if they execute their developing projects well. The hope is not to further inject fresh funds into US stocks unless there is a good rationale. The main reason is I already hit my 50s and view cash flow from dividend stocks as a key priority.

Banks

DBS and OCBC have outsized allocations in the current portfolio. UOB, which had a small allocation, was sold just before results. As mentioned earlier, they are a hedge against REITs due to high rates impacting them. So far, they have nicely filled the capital loss gap on the REIT side well—too well, as high rates continue to prolong. There is temptation to inject more funds into them due to the high yield they can provide over the REITs. What's more, they have a good business environment. Unfortunately, this could put the portfolio at higher exposure risk to one segment. Not my time.

Non-Bank Local Stocks

Venture, Sheng Siong, and Netlink NBN Trust. Venture is a test with a very small allocation. There hasn't been much investigation into it, whereas Netlink and Sheng Siong are more familiar. Both latter stocks are sized to support the portfolio if the economy goes into distress. There is no motivation to expand their allocation further.

The latest report from Netlink is within expectations but also reminded me there aren't catalysts out there yet that can mitigate their direction long term on cash flow. This can grow into a problem if not managed carefully. Sheng Siong is boring but awesome as usual. They have a lower yield; however, there are opportunities.

Cory Diary

2024-05-20

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Sell in May and go away logic

As a dividend investor, this principle has never crossed my mind. It seems more aligned with a timer or short-term investment rationale. Coincidentally, many REIT and BANK stocks go ex-dividend in May. As you may be aware, stock prices typically drop upon going ex-dividend. This might give the impression that the local SGX market is down, especially for counters that offer substantial dividends in this region.

What makes this time particularly noteworthy is the market's response amidst an environment of inflation and high rate, where banks are performing well, while REITs have already rebounded from lows. This trend holds, with the exception of US REITs, which are experiencing a serious downturn.

The portfolio is invested in several markets, which can be categorized as follows [positioned at the bottom right].

With REITs and banks combined comprising more than 76% (after selling off UOB before ex-dividend to raise cash), the portfolio was expected to experience drawdown symptoms as they went ex-dividend. However, the portfolio returns achieved another all-time high. Perhaps this is simply a positive market pump, but I foresee further potential in the banks as they report record profits this quarter.

Note : Top Left, Year 2022 drawdown but not as deep as Year 2020 Covid year which aren't reflected in the chart due to it occurs in the mid of the year which then closed up before the year ended.

Nevertheless, it's a good time to capture a snapshot of today for future review.

Cory Diary

2024-05-012

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Equity Portfolio Adjustments Amid Market Uncertainty

Shifting Strategies

As we navigate through the intricate landscape of investment, it becomes imperative to reassess our equity portfolios, especially in the face of fluctuating market conditions. With the Federal Reserve hesitating to adjust rates as expected and a mix of thriving and sluggish markets, it's time to delve into the strategic adjustments made in recent weeks.

Dropping Google

Despite its dominant position, Google appears to be lagging in the rapidly evolving tech landscape. Questions arise about its adaptability and potential disruption. Personal experiences with Google's desktop functionalities and YouTube recommendations have been underwhelming, with concerns about malware hijacking further exacerbating the user experience. While Google still holds prominence, and I will be back quickly. Meantime, cash raised from the sale.

Adding UOB

Amidst the goal of mitigating portfolio volatility, a strategic move was made to incorporate UOB into the equity mix. With a sizable allocation already in DBS and OCBC, UOB's inclusion diversifies the bank exposure effectively. This decision brings the banks' allocation to 36.5% of the equity portfolio, offering a hedge against REITs exposure while supporting dividend strategies. Despite prevailing concerns, current pricing suggests banks are not overvalued, with recession risk looming as a key watchpoint.

Monitoring Distressed Stocks

The portfolio hasn't been immune to challenges, with certain stocks facing continuous declines. Specifically, iReit and Elite Commercial Reits have experienced capital losses attributed to macroeconomic factors such as high interest rates and exchange rate fluctuations. However, their valuations remain comparatively stable against US Office REITs, prompting a decision to maintain positions, anticipating potential recovery as market conditions evolve. The fortunate thing is they have been sized-investment so their impact is not significant so far. Each year we can only afford a few small lemons so we need to constantly remind oursleves in our picks and allocation.

Conclusion

In the ever-changing investment landscape characterized by global market dynamics, proactive adjustments are essential to optimize portfolio performance and manage risk effectively. By scrutinizing each component and adapting strategies accordingly, portfolio can navigate uncertainties while positioning for long-term success. As we progress through 2024, vigilance and flexibility will remain paramount in capitalizing on emerging opportunities and mitigating potential setbacks.

Cory Diary

2024-03-22

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Review of Current Reits Position in the Portfolio

There are 10 Reits in the portfolio of varying allocation which together take up about 50% allocation today. The current Top 3 Reits allocation are Ascendas, Aims Apac Reit and FCT. The Bottom 3 Reits allocation are Sabana, United HS and Elite Comms.

Ascendas Reit - Hold to manage size allocation

Aims Apac Reit - Hold to manage size allocation

FCT - Accumulation stage when opportunity arises

Mapletree Industrial Trust - Hold to manage risk allocation

Mapletree Log Trust - Allocation Trend will be lowered due to acquisition

iReit - Hold to manage risk and size allocation

Ascott Trust  - Allocation Trend will be lowered due to acquisition

Elite Comms GBP - Hold due to GB local issue. Monitor.

UtdHampshReit USD - Hold to manage tax and risk

Sabana Reit - Hold to manage risk. Monitor.

Predominantly Foreign Asset Reits

Foreign based SG Reits are iReit, Elite Comms, UtdHampshire. All three therefore has forex exposure and in recent times suffers from reduced income in SGD. On top of this, inflation is relatively much higher than SG and Interest Rates Cost have seen much higher impact on them. Business wise the basic fundamentals look ok though not perfect. They could be a lot worst if they are in US Based Office Reits as WFH in oversea countries likely can be a long drawn normalcy.

While most of the higher allocated Reit positions are well into positive territory YTD, the higher yield Reits are in deep losses. The only consolidation is their relatively smaller allocation in the Reit segment of the portfolio after suffering large capital losses last year as well. This is not surprising due to most of this are mainly foreign assets whom faces much higher cost in recent time.

Industrial/Business Park/Logistic Reits

Ascendas, Aims Apac, MIT, MLT and Sabana are all Industrial/Logistic Reits of varying degrees. They enjoy relatively good business in current environment. Strong Rental reversion in a number of them. Interestingly, the smaller Reits like Aims Apac and Sabana did very well in rental reversion. All of them has a good plan and control of their debts. DPU looks stable.

Retail and Hospitality Reits

FCT and Ascott are in Malls and Hospitality respectively. They also enjoy strong business. With FCT being a Core Reit in the Portfolio other than Ascendas. The strength of FCT is their suburb Malls on well located area. A key necessity meeting and transit points for most commuters and well positioned for daily necessities. Is a Reit that we expect to be able to weather all Emotional Storms from the Market. Recently they have managed to sell off some non-key assets which is quite a positive move in current higher cost interests impact.

Ascott Reit is more a recovery play from Post Covid whom suffered deep impact from lock down and lack of tourism businesses during Covid period. Recent rights issue has been disappointing as we are in current higher rate environment and therefore large asset acquisition do not benefits shareholders. This is reflected in recent poor share price performance.

Overall

Worst time of Reits maybe over for major part of it however there are hangover issues with fundamentally weakened reits that will drive them lower as time passes. For the past 2 years the banks have counter balances the weakness of Reits in high spike rate environment. This help to ride the Portfolio over this volatile period.

Is also time now that I plan to do re-balance my portfolio with the longer term view of their trend. As usual, i will put integrity of the reit managers and their alignment to minority shareholders as utmost importance even though is with the expectation that the sponsor will try to take some off the table for themselves.

And finally whenever opportunity arises, i will tap into some warchest. There are voices out there that the market may turn worst. I will probably adjust my pace slower when tapping new funding. The good thing about all this is that SSB and T-Bills which has grown sizeable for the past 2 years, help to retard my funding release.

Cory

2023-1006

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Portfolio of Mainly Reits and Banks YTD Performance '23

Reits in the Portfolio

Investing in Real Estate Investment Trusts (REITs) can be a lucrative endeavor, but it comes with its unique challenges. In this article, we will explore the dynamics of REITs in investment portfolios and address common misconceptions.

Understanding REIT Vulnerability to Rate Hikes:

REITs, like any other investment, are influenced by market forces, including interest rate fluctuations. One key factor to consider is that rental contracts for REITs are often signed for years before renewal. Even if a REIT has rental escalations and triple-net leases built-in, rising loan rates can still affect their performance. It's worth noting that non-REIT companies can also face similar challenges due to loan costs.

Adapting to Changing Market Environments:

Some REITs face fundamental changes in their market environments. For instance, the rise of Work From Home (WFH) arrangements in the United States has impacted US Office REITs. In Singapore, there are a few US REITs with significant exposure to this trend. It's crucial to monitor such changes and be ready to adjust your portfolio accordingly. 

Performance of Different REIT Categories:

In the current environment, certain REIT categories have shown resilience. Local Retail Mall REITs and Industrial REITs have performed above average. Foreign Data Centers and Business Park exposure, such as Mapletree Industrial, have also weathered the storm. Year-to-date (YTD), many REITs are on the path to recovery from the rate spike costs incurred in 2022.

The Challenge of Foreign Exchange:

However, not all REITs have fared equally well. Take, for example, Elite Commercial REIT, which is UK-based. Despite strong tenant occupancy and double-digit positive rental reversion, foreign exchange fluctuations and loan costs have significantly impacted its distribution. When investing in REITs with significant overseas exposure, careful sizing and risk management are essential.

Dispelling the REIT Myth:

There's a common myth that US Office REIT crashes therefore all REIT are lousy investment using a few examples and paint a dark picture on the entire industry. This bias view is misleading, as many companies fluctuates on downtrend during rate hikes for the short term too. It's important not to oversimplify market dynamics. Evaluating a REIT's performance over a single year doesn't provide a complete picture.

Diversity in the Local Market:

The local market offers a wide range of REIT options. While Capitaland and Mapletree family REITs are popular choices, there are numerous others to consider. For example, Ascendas has delivered impressive returns over the past two decades, even at its current valuation. While past performance doesn't guarantee future results, it's essential to understand that rate spikes take time for REITs to digest and can present buying opportunities and attractive capital gain or yield on cost in the future.

Only few are badly hit due to US Office Exposure. A good example of typical reit that many local investors buy are Capitaland or Mapletree family. They form bulk of many local investor interests and form components in STI Index today.

A good example will be Ascendas as below. More than 300% returns excluding dividends over 20 years even at current fallen price. While we cannot be certain Ascendas will continue to perform in the future we should understand rate spike takes time for Reits to digest and could be a good opportunity for one to collect. In no way we are recommending any Reit stocks and one should dyodd.

More than 300% capital gain over 20 years excluding strong dividends

Banks in the Portfolio

Incorporating banks into the portfolio has been a strategic move. DBS and OCBC, for instance, have demonstrated resilience, benefiting from high interest rates. They are poised to continue performing well in the medium term. Allocating a portion of your portfolio to banks can serve as a hedge against other segments, while still providing attractive yields.

Challenges in Bank Diversification:

Unlike REITs, which offer a diverse range of options, the local banking sector has limited choices. This concentration risk should be careful when expanding more into this sector. Recent forays into other segments, such as Venture, have posed challenges, reinforcing the need for caution and thorough research. The plan will then be to only further expand into banking sector when opportunity arises. This could mean reserving more dividend cash in the meantime.

Portfolio Performance

Year-to-date, portfolio has achieved a 9.3% XIRR return, with Q3 '23 expected to show a slightly better improvement. REITs are gradually recovering, and their returns may expand as new contracts are negotiated. The only caveat remains foreign exchange volatility, which is beyond our control.

In conclusion, navigating REITs in your investment portfolio requires diligence and adaptability. Market dynamics are complex, and one must not oversimplify the factors influencing REIT performance. Diversification and careful sizing are key strategies, whether you choose to invest in REITs or explore the banking sector. Remember that past performance is not indicative of future results, and it's essential to stay informed and make well-informed investment decisions.

Currently, I am pretty comfortable with what I have in the portfolio. And the feeling today is we should have a better performance before the year ended.

Cory

2023-0902

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

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

Cory Diary : Quick Snap on YTD Equity Returns 2023

The year 2023 has been an interesting time for my investments, with a focus on FD likes, SSB and T-Bills while neglecting CPF. In light of the challenges faced by dividend stock investors last year, I have been diligently monitoring my returns this year. Personally, I believe that diversification remains crucial for long-term success, as it allows for a stable portfolio that helps me maintain a calm and steady mindset, even if it means potentially sacrificing higher returns in the long run.

Investments in US Stocks

One area that has been particularly fruitful for me this year is the US stock market. However, I am still in the process of identifying my third stock there. I must admit that it might be a bit late to make a move, considering the significant run-up the market, particularly the Nasdaq, has already experienced.

Portfolio Returns YTD

Here are the Year-to-Date (YTD) returns of my portfolio as of December 31, 2023. Do note the YTD Return percentage is against the stock allocation and not portfolio level returns.

Impact of Inflation and Fed Decisions

Recently, the inflation report was released, indicating another significant dip in rates. This leads me to believe that the Federal Reserve (Fed) is likely to pause, which, in turn, may drive the REIT market higher in the coming weeks. Additionally, if the economy can effectively mitigate any recessionary impacts, the banking sector is expected to benefit as well.

Conclusion

As I reflect on my investment strategy in 2023, it is evident that a cautious and diversified approach has served me well. While the US stock market has been a source of positive returns, I acknowledge the importance of thorough research and timing when entering such markets. With an eye on inflation and the decisions made by the Fed, I remain optimistic about the potential for further gains in the REIT and banking sectors.

Cory

2023-0614

CoryLogics Invest Chat - No Coin, No Porn, No Penny ( Limited to Invitation )

Telegram CoryLogics <= Link to Telegram Chat

Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.