Cory Diary : Portfolio Updates

Introduction

In the current high-interest-rate environment, various Real Estate Investment Trusts (REITs) have begun raising funds. While the reasons behind these actions vary, one potential factor is the possibility of earning fees from these transactions for REITs. However, it's important to note that the exact motivations of the REITs and investors may differ, and a comprehensive understanding requires further analysis. Considering this situation, it may be worth exploring whether regulatory measures, such as requiring a significant shareholder consensus (similar to an en-bloc sale), could be implemented. Additionally, it is crucial to ensure that any deals undertaken by REITs are truly accretive.

Strategic Deals

One notable example is the recent deal executed by Mapletree Industrial Trust, which leveraged low-cost funding from Japan to acquire local properties. This approach appears to be a sensible strategy, allowing the REIT to make the most of favorable borrowing conditions while expanding its portfolio. Another REIT worth mentioning is Aims Apac Reit, which maintains transparency by openly communicating its intentions and strategies. It is worth noting that a significant portion of the funds raised by REITs is allocated for future Asset Enhancement Initiatives (AEIs), which is a valid allocation given the chairman's personal investment in the REIT when the share price dropped. These recent market conditions have displayed considerable volatility. As for iReit, the right issue seems straight forward accretive deal based on proforma detail. This will help reduces concentration in Germany.

Evaluating Accretive Deals and Dilution Concerns

Interestingly, some REITs provide explanations for the dilution of their distribution per unit (DPU) resulting from share dilution. This raises questions about the necessity of such explanations, as accretive deals should ideally enhance overall value for unitholders. 

Portfolio Adjustments

In terms of my own portfolio adjustments, I have initiated the process of increasing back Ascendas, Sheng Siong, Mapletree Industrial Trust, and Aims Apac, alongside diversified investments such as Microsoft (MSFT), and Banks. Conversely, I have decided to release my holdings in CDG back to the market.

As always, readers are advised to seek professional assistance and take responsibility for their financial decisions.

Cory

2023-0607

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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.

Cory Diary : Navigating Crisis - Net Worth

The COVID-19 pandemic brought forth unprecedented challenges, impacting economies and individuals' net worth worldwide. As I reflect on my own financial journey, I can't help but recognize the profound influence of property value increases, strategic investments, regular income, and the responsibilities of parenthood on my net worth during this crisis. In this article, I will share my experience and highlight the significance of these factors in shaping my financial well-being.

Real Estate Market Challenges and Surprising Property Value Increases:

Like many others, I faced uncertainty during the pandemic, particularly in the real estate market. However, amidst these challenges, a remarkable trend emerged - property value increases. As I owned residential properties in desirable locations, I witnessed firsthand the unexpected appreciation in property values. This surge greatly contributed to the improvement of my net worth, as individuals sought larger living spaces and took advantage of favorable mortgage rates during the crisis.

Mitigating Volatility through Diversification:

Diversification played a pivotal role in safeguarding my net worth amidst market volatility. By diversifying my investment portfolio across various asset classes, including real estate, stocks, and bonds, I minimized the impact of losses in one sector while benefiting from the property value appreciation in another. This strategic approach not only stabilized my net worth but also provided me with opportunities for growth during uncertain times.

Cash Reserves, Emergency Funds, and Regular Income:

Another crucial aspect of protecting and growing my net worth was maintaining adequate cash reserves and emergency funds. The availability of liquid assets provided me with a safety net, enabling me to handle unexpected expenses, job instability, or business disruptions caused by the pandemic. However, it is important to note that regular income from salary played a significant role as well. Despite the challenges in the job market, having a stable source of income allowed me to maintain financial stability and meet my ongoing expenses. The combination of regular income and strategic investments helped offset any stagnant growth in non-productive assets, ensuring a positive net worth trend.

Parenthood: Balancing Expenses and Prioritizing Future Security:

Over the past four years, the addition of two children to my family significantly impacted my overall expenses. The responsibilities and costs associated with raising children, including healthcare, education, and daily essentials, necessitated careful financial planning. While these expenses undoubtedly had an impact on my net worth, they also brought immeasurable joy and fulfillment. It became imperative to strike a balance between providing for my children's needs and ensuring long-term financial security.

Adjusting Financial Strategies and Priorities:

Parenthood prompted me to reevaluate my financial strategies and priorities. I became more focused on building a solid financial foundation for my children's future. This involved adjusting my investment portfolio to include long-term savings and education funds. While these changes may have temporarily slowed down the growth of my net worth, they provided a sense of security and peace of mind, knowing that I was taking the necessary steps to provide for my family's future.

Conclusion:

The COVID-19 pandemic presented significant challenges to net worth growth, with stock market volatility and stagnant growth in various sectors. However, my journey taught me that property value increases, strategic investments, regular income from salary, and the responsibilities of parenthood all played pivotal roles in shaping my net worth during this crisis. By owning residential properties in desirable locations, I experienced firsthand the positive impact of property value appreciation. Diversifying my investments across asset classes, maintaining cash reserves, and having a stable source of income further fortified my net worth.

Parenthood brought increased expenses and prompted adjustments to my overall financial strategy. The costs associated with raising children, such as childcare, education, healthcare, and daily necessities, added a significant burden to my monthly budget. However, I recognized the importance of prioritizing my children's well-being and future prospects.

To manage these increased expenses, I implemented several strategies. First, I carefully reviewed my budget and identified areas where I could make savings without compromising the quality of our lifestyle. This involved cutting back on discretionary spending, negotiating better deals on necessary expenses, and seeking out cost-effective alternatives.

Additionally, I explored other financial instruments that could potentially benefit my children's future. I researched and invested in low-risk investment options that would gradually accumulate value over time. This approach not only allowed me to grow my net worth but also provided a source of funds that could be tapped into when necessary, such as for college tuition or other major expenses.

In conclusion, the COVID-19 crisis has highlighted the importance of various factors in shaping my net worth. Property value increases, strategic investments, regular income from salary, and the responsibilities of parenthood have all played instrumental roles in my financial journey. While facing challenges, such as stagnant growth in non-productive assets and increased expenses due to raising children, I have learned to adapt, adjust my strategies, and prioritize long-term financial security. Through careful planning, diversification, and a focus on both short-term stability and long-term growth, I have been able to navigate these uncertain times and continue on a positive net worth trend.

Cory

2023-0519

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Cory Diary : iReit Review

During a recent conversation on Telegram, someone asked me about the risks associated with iReit Global, a Singapore-listed Real Estate Investment Trust that invests in income-producing properties in Europe. While I had previously done some due diligence on the investment, I had put it aside and couldn't remember when. However, in today's economic climate, debt management is more critical than ever due to rising interest rates. While not all REITs have felt the full impact yet, those that have will likely need to weather the effects for several more quarters.

Fortunately, iReit Global's management has taken steps to mitigate risks, as shown in a slide shared by the company. They have identified and addressed risks such as interest rate risk, refinancing risk, and concentration risk. However, it's important to note that all investments carry some level of risk, and forex risk, in particular, may impact the REIT's earnings as it is listed on the local exchange and the SGD has appreciated by approximately 7-10%.

The COVID-19 pandemic has also impacted the real estate market, including the office segment where demand has decreased. While this may affect iReit Global's portfolio, it's important to note that their properties are located in Europe, where the situation may differ from other regions. 

Overall, iReit Global may be a suitable investment for those seeking exposure to European real estate, but it's important to consider the risks and monitor the REIT's performance regularly. It may be helpful to seek the advice of a financial professional to determine if this investment aligns with your investment goals and risk tolerance.

Cory

2023-0513

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Cory Diary : Property Curbs

Investing in property in Singapore has been a popular choice for retirement planning due to the rental income and capital appreciation it can provide over the long term. However, it's important to recognize that past trends and government policies do not necessarily guarantee future performance.

An analogy that can be used is that of a kettle whistle. When the pressure in the kettle gets too high, the whistle sounds, and the heat is lowered to prevent the water from boiling over. However, over time, more energy is added to the kettle, and it will boil again. This is similar to how government cooling measures can temporarily slow down the real estate market, but economic conditions, population growth, and consumer preferences can impact the market over the long term.

Personal experiences with property investment can vary. For instance, I have an investment property that I purchased more than a decade ago when the government introduced curbs. In addition to the possible rental income, the capital appreciation of my property has probably resulted in strong 6 digits in capital gain excluding costs.

However, it's worth noting that the current state of the market may not be ideal for investment. The Singapore Property Index, which tracks the performance of the residential, commercial, and industrial sectors of the real estate market, has risen significantly in recent years. While past performance does not guarantee future success, the high market prices suggest that property investment in Singapore may be more challenging than in previous years.

While property investment can provide benefits, it's important to consider the risks involved. There are costs involved in maintaining and managing a property, and rental income and capital appreciation are not guaranteed. Additionally, factors such as location, property type, and market trends can impact the performance of an investment.

In conclusion, property investment can be a viable option for retirement planning in Singapore, but it's important to approach it with a clear understanding of the risks and considerations involved. The kettle whistle analogy highlights the temporary nature of government cooling measures, but it's important to research the market, consider the risks, and make informed decisions based on your individual circumstances and experiences. While past performance and personal experiences can provide valuable insight, it's also important to consider the current state of the market and whether it may be too high to invest in.

Cory

2023-0506

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Cory Diary : Equity Portfolio - Rate Spike Readiness

As I review my portfolio recently, there are quite a few changes that I would like to share. First, I presented a customized radar chart to help me visualize the performance of each stock. However, if you find it hard to understand, you can skip it and go straight into the highlights of each stock that I am interested in. 

As an investor, I recently made some changes to my portfolio that I'd like to discuss. Firstly, I decided to sell all my shares in Mapletree PanAsia Com Tr. Although I had a net positive return after 5 years of investing, I wasn't happy with the company's recent merger and management's actions. Additionally, the mall asset in Hong Kong is performing poorly, which doesn't bode well for the company. Given the current macroeconomic situation in Hong Kong, I felt it was time to move on and raise some cash.

On the other hand, I've decided to build a new position in Mapletree Log Tr. Although the macroeconomic headwinds make me unsure about investing in logistics, this company has a strong track record and is likely to do better than its peers. The investible REITs market in Singapore is also quite limited, especially with the recent high-interest-rate environment. As a result, I'm prioritizing debt management for any new investments I make.

Mapletree Log Tr's total debt as of March 31, 2023, is S$4,877 million, which is slightly lower than the previous year. Although the weighted average annualized interest rate has increased slightly from 2.2% to 2.7% over the past year, the company's interest cover ratio of 4.0 times is still relatively healthy, indicating it has sufficient operating income to cover its interest expense. However, the adjusted interest cover ratio has decreased from 4.2 times in the previous year to 3.5 times in 2023. Overall, the company's debt level and leverage ratio seem manageable.

The company has taken steps to manage interest rate risk, with 84% of its total debt hedged or drawn in fixed rates. Every potential 25 bps increase in base rates1 may result in ~S$0.49m decrease in distributable income or -0.01 cents in DPU per quarter. Additionally, about 77% of the amount distributable in the next 12 months is hedged into or derived in SGD, mitigating forex risk.

Moving on to my stock holdings, I've added to my stake in Microsoft incrementally. While I used to think that we couldn't do without Google search, I've recently been impressed with ChatGPT and have reduced my usage of Google search. The recent acquisition of Blizzard further boosted the stock price, although it remains to be seen if this will help Microsoft. Nonetheless, I've learned that it pays to wait when investing in growth stocks, given their volatility.

I've also secured a position in OCBC to balance my portfolio's REITs exposure, as my portfolio currently has DBS as its top position. While UOB is also an option, I found  OCBC's yield more attractive. All three banks are currently in a strong position, but we have to be mindful that their P/B ratios aren't cheap. Thus, I don't plan to add a significant stake immediately to rival the top 5 positions of my portfolio. As I focus annually on building up my dividend size, I'll be diligent in my investment choices. Currently, OCBC's management is flexible on future dividends, which means that the recent dividend may be volatile depending on the business.

Next, Sabana Reit has been performing well under the current management, delivering good returns. However, given its small size, it may be prone to volatility. The latest report shows that the Reit's returns may be negatively affected by a spike in interest rates. Therefore, a significant portion of the portfolio position was sold. If the high rates persist and the impact is not fully reflected, the next report could be negative too. As a result, the decision was made to take profits when good opportunities arose. 

Capitaland Ascott Trust

Finally, I've initiated a position in Capitaland Ascott Trust, which appears to be a well-managed REIT with a diversified portfolio of properties across multiple geographies and solid capital management position. As with my other investments, I'm prioritizing debt management in this position as well.

I've also made some adjustments to my stock holdings by trimming the top positions of Ascendas and FCT to achieve adequate diversification at the current portfolio size.

Please note that this is not financial advice, and I encourage you to do your own research before making any investment decisions.

Cory

2023-0501

Cory Diary : Family Income Stress Test

In light of the ongoing COVID pandemic and the economic restructuring that has followed due to high interest rates, I am concerned about the possibility of both my partner and I losing our regular sources of income. As I am not as young as I once was, it may be difficult for me to find alternative income streams that are suitable for my level of experience, which is why I have been considering what would happen if we were forced into early retirement income before reaching the official age.

To better understand our financial situation, I decided to calculate the passive returns we would receive assuming that neither of us is working. 

To prepare for this scenario, I calculated the passive returns we could expect from our assets assuming we are no longer working. The table above shows our asset allocation and the expected annual returns for each type of investment.

Please note that the table does not include expenses such as property tax, loans, and maintenance. The figures presented are based on the minimum return scenario and possible current returns given the dynamic nature of the market. The maximum return is not relevant to our situation.

Assuming expenses in the range of $8k to $11k, we hope that this simple table provides a sense of our financial situation. As always, readers should seek professional advice before making financial decisions and take responsibility for their choices.

Cory

2023-04-23

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Cory Diary : You only young once

It is important to note that the decision to retire is a personal one and depends on individual circumstances, financial goals, and personal preferences. However, here are five reasons to retire as soon as you can, as suggested by Azul:

Health: Stress can have a significant impact on our health, and working longer may exacerbate stress-related health issues. Retiring earlier can provide an opportunity to prioritize health and well-being.

Time: Time is a limited resource, and as we age, it becomes increasingly important to use it wisely. Retiring earlier can provide more time to spend with loved ones and pursue passions and hobbies.

Build Relationships: Building and maintaining relationships requires time and effort. Retiring earlier can provide more time to invest in existing relationships and build new ones.

Passion and Hobbies: Retiring earlier can provide the freedom and time to pursue passions and hobbies, which can bring joy and fulfillment to our lives.

Avoid Procrastination: The desire to work one more year can lead to procrastination and delaying retirement. Retiring earlier can help avoid this tendency and provide a sense of accomplishment and satisfaction in achieving retirement goals.

Cory

2023-04-10

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Cory Diary : Net Worth Allocation

Millionaire

In 2023, achieving millionaire status in Singapore after 20 years in the workforce is not an unattainable feat for those with reasonably good jobs and savings. The compounding effects of CPF and Property appreciation have made it easier to reach this milestone. However, missing out on either of these can have a significant impact on one's finances.

For those who have not yet reached millionaire net worth, this could be due to personal or family commitments. However, it is important to note that a million dollars today is not the same as 20 years ago. Assuming a typical job that allows for annual savings of $24k, a 3% annual increase with no investment or a 4.5% return on investment can make a significant difference over 20 years.

Below table tells you the differences in total after 20 years. 

Managing Risks

Investing in something that provides a 4.5% return, such as CPF SA at 4%, is a good base as the capital is protected. Reits, stocks, properties, SSB, and FDs are also options, but it is crucial to ensure that the principal is not compromised and to understand the cost of capital if investing outside of CPF.

Recent research on millionaires shows that equity is not the primary path to wealth. Cash, bonds, property, and business also play a significant role. As a salaried worker, it may not be possible to have a business, so it is essential to allocate net worth across different categories. The chart below shows a typical allocation for net worth, but it is important to note that movement between categories over time is necessary to arrive at this point.

Overall, achieving millionaire net worth is achievable with discipline and smart investment choices. Building a diverse portfolio and allocating net worth appropriately can help achieve financial goals and provide peace of mind in the long run.

Net Worth Allocation

Below is chart that I am tracking into. As a typical salaried worker I do not have business. There is minimal buffers in my computation so no sandbagging. What we don't see is the movement overtime between the categories to arrive at this point. For example one could have sold a property and realised large amount of cash previously. So read it as current status on allocation.

Chart allocation of Net Worth

Broadly speaking, this looks quite similar to peace of mind plan. I would like higher value in property allocation and this take it's own time to materialize as in possible property appreciates while other categories reduces through expenses when we step into retirement mode.

Cory

2023-03-29

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Cory Diary : Navigating Risks in a Volatile Market - Equity Portfolio

Banking Crisis

After a brief hiatus from my blog, I'm back to writing about my equity portfolio and recent market events. With the collapse of several banks, regulators are enforcing quick resolutions to avoid contingencies. The Federal Reserve has been clear about the risks involved, yet some banks like SVB continue to take risks, leading to poor risk management and the risk of losing Other People's Money (OPM) for the sake of performance.

The Middle Class

In the past, high-risk investments like those seen in Lehman Brothers in 2008 were a major concern. But today, even low-risk treasury investments can lead to failure if investors become complacent. The recent US rate path to fight inflation shows why the Fed is determined to bring down inflation rates, as basic necessities are becoming increasingly unaffordable for the poor. The middle class is also at risk, as a 9% annual inflation rate could result in a loss of $90k in purchasing power for someone with a net worth of $1 million, which could vaporize a lifetime of savings.

The next inflation report theoretically we could see another reduction. See above Inflation rate chart and we can understand why. The previous year on month has a spike. Again is all about meeting expectation.

Equity Portfolio

To balance my largely REIT-focused portfolio, I've had to increase my bank stake despite the rising rates and high PB ratios. I chose DBS Bank as a long-term performer in the STI Index, with sustainable and conservative returns. On the other hand, my experience with Prime REIT has been disappointing, with poor returns despite management's trying to paint a different picture. After learning my lesson with small-sized positions, I decided to clear off my tiny position in the REIT.

I've also been doing some trading with Mapletree Logistics REIT and have now completed my Mapletree collection with a slightly larger stake. While HK's future looks uncertain and US DCs and rates aren't favorable, I still have sizable positions in Mapletree Pan Asia Commercial Trust and Mapletree Industrial Trust, as they are better off than many others.

Overall, with the recent banking crisis and inflation risks, it's important to stay vigilant and invest wisely in a balanced portfolio to avoid losing hard-earned savings.

Cory

2023-03-25

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Cory Diary : iReit Review of Annual Report

One of our building's tenants vacated in December 2022, which caused a drop in vacancy. However, we are currently in advanced discussions with a potential new tenant, so the vacancy period is expected to last another two months.

Another factor affecting our DPU is the currency exchange rate. The Singapore dollar has been strong in recent years and appears to have bottomed out, barring any unforeseen events.

Our DPU has decreased by double digits in the latest quarterly comparison, primarily due to the factors mentioned above, as well as cash retention and management fees.

We have no loan renewal issues until 2026, and our effective loan rate is currently at an incredibly low 1.8%.

Overall, the current stock price already reflects most of these factors. However, with an annualized yield of 7.7% and the possibility of higher returns after the new tenant moves in, we may see another adjustment in the next quarter. Nonetheless, even with a worst-case scenario yield of 7%, the REIT remains an attractive investment option.

Cory

2023-02-25

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Cory Diary : Investment Questions to ChatGPT

Question 1 : Singapore

Question 2 : Ukraine

Question 3 : China - USA

Question 4 : REITs

In Summary, the answer is quite shocking and amazingly intelligent. The innovation of this Language Model can be use by Humanoid easily in the future. I think they have achieved a major breakthrough on the impossibility.

Cory

2023-02-15

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Cory Diary : Net Worth 2023 Feb

Net Worth

The year 2022 had a significant impact on my net worth, with a reduction for the first time in 15 years. This is not uncommon for salaried workers, as annual savings from salary may not be enough to compensate for market downturns that can affect the portfolio. However, I am pleased to report that within the first month of 2023, the stock market rebounded, pushing my net worth well into the positive for the year. This demonstrates the importance of investing in strong businesses and holding them through market fluctuations.

Year 2023 Strategy

Baseline Returns

My strategy for the year is to continue filling up T-Bills, SSBs, and fixed deposits with high rates. The aim is not to beat inflation for these emergency and war chest funds, but to ensure that I do not lose much in an inflationary environment. I will also continue to maintain the dividend achievements from 2022.

Rebalance

I plan to rebalance my portfolio by shifting investments from weaker businesses with high portfolio allocations to stronger ones with low portfolio allocations. I will prioritize non-REIT investments to achieve a more diversified balance.

Volatility Risk

To reduce volatility risk, I will impose more stringent allocation caps for stocks that have been performing well in business and stock price. This is a lesson I learned from the market conditions in 2022.

Foreign Income Risk

I will give more thought to expanding stocks that have a majority of their income in foreign currencies, as this can increase risk. I will take steps to reduce that risk by being more cautious.

Although the Fed is slowing down rate hikes, we are not out of the woods yet. I will remain cautious while staying invested in the market.

Cory

2023-02-05

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Note: The articles on this blog are my personal opinion and are shared for informational purposes only. Readers should seek professional help when making financial decisions and be responsible for their own choices.

Cory Diary : Mapletree Industrial Reit Info

This Reit is one of key holding in the portfolio. It has years of long term record performance. Recent quarters we have seen some tough market condition especially higher interest rate cost. The Reit just announced their result and this post will be on my read up and highlights due to my vested interests. I may provide some personal view however this is from fast read up and understanding so please dyodd. For those who read the report directly, you may want to skip my post.

DPU and DRP

Mapletree Industrial Trust Announces Distribution per Unit of 3.39 Cents for 3QFY22/23. Annualized yield of 5.5% from this week price.

There will be DRP however with 1% discount I do no plan to consider at all. However with rising market, this maybe attractive for some.

Result

Comparison with 2Q, there appears to be some cost cutting measures as expenses are reduced with reducing revenue however dpu is up slightly due to capital gain and release of some cash withheld earlier.

Completion

Completion of the first block of the new high-tech industrial redevelopment project at Kallang Way in November 2022

Summary

Can see the management working to continue alignment with shareholders. Despite rising rate, the rising cost is contained. The coming Fed report expects to see another round of rate increase though smaller. This Reit is 3rd largest allocation in my portfolio. Not going to see much surprises and upside is limited in result performance perspective.

Decided to only reduce my allocation from the recent increase back to previous size to reserve more cash for other opportunity as the Reit stock price rebounded this week. May reduce further just a little more if the Reit continues to run up. Continue to be on the high side of the portfolio allocation forming a stable base for some core dividend. The main down side is possible macro environment.

Cory

2023-0128

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Cory Diary : Life Style Creep Part 2

This is continuation of earlier post on Life Style creeps expenses running out of control. ( link ). With the year ended for 2022. 2nd Half data collected for analysis for comparison to 1st Half data.

There are some costs taken out for relative comparison. For example Home Loan and Insurance as they kind of covered from corresponding returns from it. If we  include them the expenses will be way above the data listed in the table.

The expenses reduction for 2H 2022 is about $11,614 which kind of much more than the saving planned from 1H 2022. One for the key reason is structural saving from Nanny expenses when my elder go nursery. Credit cards expenses came down which has most of my daily expense in it. Have not run through the details but I suspect medical cost, some food and transport.

In a nutshell, expenses came down 11% comparing 2H'22 to 1H'22. However YoY, is still up 12.7%.  There maybe some accounted due to inflation however quite certain there are family lifestyle developed which we can't go back easily.

Cory

2023-0123

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Cory Diary : Year 2022 Performance

The Year 2022 is one of the bad year in stock market. There were tons of bad news one after another. Black Swan comes in a Swam. While STI is in green, the index in my view is not a strong reflection of the actual environment most investors are seeing unless ones are just mainly into Singapore banks.

Equity

As I remember during GFC, Portfolio were down more than 50%. However, for the year 2022 Cory  XIRR is down -12.8%. This is the 2nd worst after Year 2008 GFC. In absolute, today portfolio size is far greater than the one during 2008. It has been 15 years.

More than 50% drawdown is mainly due to Singapore stocks which are mainly in Reits. This are generally neutral mentally as from investment and cash flow perspective, we are getting more shares cheaper as their fundamental is good despite rising rate environment. This form bulk of cash flow dividend play strategy. To mitigate rights issue at this bad time, any new cash injection will be on Reits that is less likely not to give heavy discount if it does any. Theoretically it does not make sense as spiking rate environment is not conducive to shareholder returns to do rights issue as the loan will be expensive.

The other losses are mainly due to Tesla and some aspect Msft in the US Market. This are growth stocks which I embarked for long term. So far I am still quite bullish on them despite dramatic price falls of Tesla.

As in any investment, profit and losses are part and parcel of the investing game. Is how we size them such that we can sleep well. As we can see from this experience, even with less than 10% exposure in US market, we can see them taking sizeable loss onto the portfolio. A humbling experience even though the amount invested in this segment is sized with Year 2021 profits.

Net Worth

This year bonus is smaller than last. When totaled up, -1.6% reduction in asset. This is the first time we see reduction due in large part to Equity, and Personal Expenses which I plan to blog later.

There is another plus that mitigate the fall which is property value has gone up slightly in Year 2022.

Assets Allocation

Another view of the asset. There is some focus on fixed returns due to strong interest rates. They act as reserve for emergency and opportunity. Decided not to do CPF top up for now to allow more flexibility and higher rate income.

Cory

2023-01-16

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Cory Diary : Financial Investment Updates

Have not been posting lately so thought is good to document down current Market situation and actions I did. First in recent days, Tesla has faced significant down hill in stock price. As I mentioned before in  previous article, growth stocks that do not provide dividend basically means there is no cushion or support to stock price when market in down turn or bad news.  It's market valuation basically determine by market forces which can be macro or engineered through different investment instrument.

I suspect the deep sell down in Tesla likely is due to popularity if investors selling put options for income that suffered the recent meltdown. Despite reduction in Tesla investment, and lower allocation down to single digit percentage, the capital loss is still quite sizeable. So on hindsight I should have reduced further my allocation to minimize the extreme volatility. The reason why the portfolio is mainly dividend based investments.

The Base Line Investment Support

In-addition to Equity, continued to do SSB renewals to higher rates. This is quite welcome as the bulk of the investment is for housing loan emergency needs and managed to lock strong rates for next 10 years. Will continue to renew various batches as opportunity arises.

Short term Cash in Saving is further reduced by taking up 6 months T-Bills. Managed to get recent 4%+ batches. This is carefully timed to need of cash flow.

Another good news is DBS Multiplier has adjusted the interest rates to 4.1% for those that meet all the conditions which I did. Keep in mind that the rate can also be easily adjusted down when macro force changes.

Also did some Fixed Deposits at 3.8% rate. Not that great but enough to park it for 5 months such that I can only use it 5 months later from my itchy hands.

Saving Cash

Continue to review and adjust this segment of Cash constantly to make sure every bullet tapped from it is efficiently utilized to support dividend income. There is huge temptation to average down into Tesla however I am past my Prime and Risk Tolerance. Nevertheless will constantly review my thoughts and maybe do micro injections if there is good buffer. The basic idea for me is Tesla is selling a dream of generational wealth so the investment is long term. Longer than Reits therefore the allocation is more absolute rather than in percentage to portfolio.

Cory

2022-12-29

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Cory Diary : Stagflation - Net Worth

Stagflation

When we have high inflation and at the same time stagnation of growth or outright recession, this is Stagflation. This is quite probable in current high inflation scenario where Fed continuously hike rates. There is a risk we may hit stagnant growth or recession but Inflation still stays high.

In such scenario, we want to have some investment protected and reasonable returns secured. Capital gains will be much harder to achieve in Equity. Likely Investment Instruments will be CPF and SSB for long term. T-Bills and Banks Saving promotions for short term. Appreciate the availability and kudos to the government.

However increase in interest rates for CPF so far seems much tougher for the government to do though it can happen. SSB hitting 3.47% currently looks much more attractive. So it maybe feasible to work out a plan again to maximize SSB again that will secure 10 years of strong rate fixed returns issued by Sg Gov. This is assuming the rate will come down mid term.

For short term, high interest rates from Sg T-Bills and Three Local Banks are available right now. This will be the next layer that I could focus on. Banks Promo will be preferred due to liquidity reason. With this plan in mind, and significant annual equity dividends increase achieved, decided to sell Astrea bond. In-addition, did some currency trades selling USD in stages in preparation for local market investment. All this help to release sizeable funds for new opportunity. Couple with funding from my spouse we could ride out stagflation better.

Net Worth

Hits on the economy keeps getting longer. Net Worth seen a reduction of -2.1% YTD.

Stagflation will lower equity portfolio due to poorer earning and rising cost generally. Even property asset can be impacted if this worsen. People who want to retire may want to extend their job over this period as available cash or fund saved is best use for investment for future earnings.

Be Safe. We are in unchartered territory.

Cory

2022-11-20

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Cory Diary : This is the One !

For a long while I have been hoping for a correction so that I can scope in low to expand my dividend size that I could collect annually. What I didn't tell myself is that this could also mean the whole portfolio has to go down with it to fetch it.

Obviously on hindsight we should sell and buy back later before the correction. However I am not qualify to be a god. We could try some but to risk the entire portfolio do requires god mode level. So my take is considering most of the stocks picked are quality stocks of strong sustainable DPU at least in my own perspectives we can just ride it out.

We have gone through Covid, Inflation, Ukraine War, China Tech/Edu Clamp down, China Property Crisis, Tesla/Elon/Twitter Volatility, China Drought, Zero Covid, Rate Hikes, Liz Truss Saga, Weak Yen and Supply Chain issues. Each with severe punch below the belt on the Portfolio and each could be classified as Black Swan Events of varying degree. That's through a len of negativity. And maybe more to come.

Hold on, isn't that exactly what we dividend investors wanted to be able to increase our dividends meaningfully maybe just not so many swans .... ? Last count annual dividend has exploded up by almost 40% with constant minute size injection as the market crumbles. If the absolute number maintained, the annual income could be insane at personal level. That's a golden opportunity for a 10% dent on the portfolio which is cheap vs Global Financial Crisis.

The only real issue I have concern is Right Issue with deep discount and to minimize this there are few ways I need to be prepared for it. 

Namely,

1. SSB

2. Multiplier

3. Cash Saving / FD

As for averaging down, i have been focusing only on stocks that likely will not give deep discount so that we can skip the subscription if needed. Cash is King now and want to use it wisely without added risk. This averaging down routine could be now over since I last blogged on inflation movement which turn out as expected. ( link ). Hopefully we can enjoy the ride back up till year end.

Cory

2022-1114

Cory Diary : Hedge of Cory Portfolio

This is more like after thoughts for perfection. In the portfolio we have few stocks in this turbulent times. Namely DBS, Sheng Siong, Netlink BNB Trust and recently addition of Comfortdelgro.

 

They likely to do well or ok with higher rates. DBS for ability to benefit from higher interest income is a given. This is further confirmed from their management.

Sheng Siong is a recession proof stock for basic necessity. They are the more attractive place to go when things get tougher for everyone.

Netlink bnb Trust for a long time has concern with their fee structure renewal with lowering interest rates in the past. What a change now with rising rate. Recently they have also taken step to ensure continue investment into building and therefore improving their future returns stability on fees.

Lastly, Comfortdelgro which has been driven down in price. It has already been mentioned on sustainable model when come to transportation. So fees will keep pace with cost.

In-addition to above equity portfolio, renewing SSB batches to further improve the interest income is also a good choice on different investment layers.

Finally able to pen down my thoughts. Cheers.

Cory

2022-11-10

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Cory Diary : US Sept Inflation Rate

Market enters a terrible week again. Even though is far from Mar'20 flash crash, seeing the correction this week is still a reminder to us how market can tame us all.

US Inflation is closely watched that drives the market. Inflation rate for September 2022: 8.2%. CPI up by 0.4%. If we look at below chart, the drop is just 0.1% so still quite elevated.

What is not obvious is how to interpret the chart. Decided to look for another chart and draw up my analysis as below. The key highlight is the Rate of Inflation and YoY comparison.

My Home Work. Make sense ?

Expecting Oct'22 Inflation report to be much lower than 8.2% however Expectation is still the key on how much is enough. Since expectation is lower, we could see a continuous market run up prior to the report due to higher spike in Oct'21 and rate down trend prior to Oct'22'.

10th Nov will be exciting to watch. If the market react as expected before the result, I would take some off the table as mitigation. Hope I make sense so far.

What is the downside ? The last serious drawdown is in Mar 2020. If we use Ascendas as a reference,

there is about another 40 pts to go to hit that bottom. That's after more than 28% drop from all time high in 2020 excluding dividends. Assuming DPU not significantly impacted and with serious correction already happened that will be a solid entry point. Personally I don't think it will happen as explained on inflation projection but we should never say never as is just projection coupled with market reactions can varies.

Is possible to see 5%-6% inflation range by year end and don't get me wrong that we are happy with it. Even if this range happened, it could last a few more months before we can do another lower estimate assuming no significant macro events reason being the comparison year 2021 months on YOY basis is relatively low.

Cory

2022-1015

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