Cory Diary : Retirement Equity Portfolio Size

In my Quest for FIRE, the journey has not been easy but fruitful. Why do i say that is because FIRE aren't the Life Goal. Is the Experience that is key. While is commonly felt Experience got to do with going on holiday, this aren't what I meant. Is too narrow.

Life experience is about family, learning, building, helping, gaming, vacationing etc and FIRE helps to facilitate that. Example the pain and achievement going through NS combat vacation or simply as getting a driver license. Not everyone can go through the same experiences. Some have their own preferences. 

Having work for more than 25 years, thought is time to try and focus on many other stuffs. Formulated ones and those not. One of the hardest thing to let go is that of salary which will be quite sizeable by now and hard to let go mentally. The middle ground maybe trying to reach work life balance. Maybe tilted more away from work on the expense of promotion and increment.

Nevertheless, i thought is time to do another exercise on - Do we have Enough to Retire ?

The angle we will do is to pre-determine the expense and then verify with corresponding Equity Portfolio Size. For a dividend income portfolio, estimating the annual dividend maybe easier. For a growth portfolio, then we need to estimate the growth. For our case, will be both since my portoflio is mixed and probably we can pro-rated them accordingly.

The scenario will be expense is 9k monthly with 3% inflation. Taking into many factors into consideration like age, loan, non-equity income etc we can determine the portfolio size than can last by adjusting the size to our liking for our age to last.

The assumption is non-equity income size is more or less fixed by my age to support basic needs. Expanding this segment on low return can be wasteful unless warchest which can lowered your portfolio amount. There maybe situation where people can live more on non-equity income such as rental. In that case, adjust the Non-Equity side accordingly.

Below a sample computation. Select the picture for clearer view. 1M Starting Portfolio size to support 9k monthly expenses at 3% inflation can last till age 96 for me. There is drawdown of Equity portfolio to zero. There will be some inheritance from some non-equity allocation and property after. Not that bad.

The parameters can be changed to suit ones condition. I tabled few permutations to see how this go.

The finding is quite interesting which I am so keen to share so that people can avoid the danger.

Scenario A and B, just 0.5% inflation difference can set you back 7 years of retirement.

Scenario A and C, for 200k more, you likely have excess after your last breath despite drawdown.

Scenario E, a situation where your children will love you deep deep. Portfolio is divergence. There is no drawdown and probably grow beyond your dream hopefully.

Scenario F, if expense go out of hand and inflation increases too. Portfolio can only last 28 years despite larger 1.5M Portfolio size. The danger of Lean Fire is obvious.

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2024-0805

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

Cory Diary : 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.

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2024-0728

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Cory Diary : Ascott Trust Investment Review

Ascott Trust

Ascott Trust just released their result. The DPU reduced about 8% YoY but is only 1% if we exclude forex. The table to explain as follow. Base case 5.4% yield. Include other gains 5.7% yield at price 0.895. Price did not drop much after result which likely priced in somewhat currently.

The business is robust and growing at 11% growth. Compared to Bank which give similar dividend range. Is a good diversification from high bank allocation portfolio. High rate seems like has much lower impact to them as they can adjust their cost better. Their loan currently is not expensive which may not be always will be my assumption.

Debt management looks ok and Well staggered.

Cory Diary

2024-0726

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

Cory Diary : Personal Finance Ratios

Updates on Recent Financial Ratios

Started focusing on financial ratios to better assess personal financial situation and hopefully avoid unnecessary distress. Here’s a summary of the key ratios I'm monitoring:

1. Net Property Value (NPV)/Equity Ratio

67%

This ratio helps in determining how much allocate to equity with acquired property. Typically, we can manage fluctuations in equity over time. However, Property values usually increase locally, and based on this ratio, actions might be needed on either side of the balance.

For a single property, having a larger equity base seems logical to maximize returns and ensure diversification. This helps avoid being property-rich but cash-poor. However, this might not suit everyone, especially those wary of equity investment risks. In our case, the property value has been rising, which positively impacts this ratio.

2. Bond/Equity Ratio

43%

Common in many investment books, this ratio for us, includes Singapore Savings Bonds (SSB), Fixed Deposits (FD), Multiplier, and Treasury Bills (T-Bills) for the bond portion. Working cash is high enough for us to include Fixed Deposits. For us, the 43% includes housing loan emergency funding, which is substantial. This ratio has been decreasing due to increasing capital gains in equity to our surprise as we have invested consistently into T-Bills and SSB.

3. Pension/Net Worth Ratio

15%

This ratio measures dependency on pension funds as a safety net for managing our lifestyle. It also indicates available funding for investment. We prefer not to allocate beyond required contributions from work, focusing instead on the necessary safety net amount. This ratio can also be applied to equity or property instead of net worth. We aim to understand how much we invest in higher-risk assets. For us, meeting the Full Retirement Sum (FRS) is sufficient, though some might prefer a higher amount for added security.

4. Loan/Reserve Fund Ratio

145%

This ratio considers funds reserved for housing loans that don’t affect our emergency funds. These reserve funds can partially serve as a war chest. Our 145% ratio indicates the reserve fund cannot fully cover the outstanding loan but good enough to last us to get things in order.

In essence, Reserve fund need to be safely invested and so it could be a liability if we are confident to get much more than typical guaranteed investments. So it becomes our Bond fund.

Is a little tricky what is the idea ratio be. Defintely we want to have enough runway when there is need to unwind. But we also hope it can last as long as possible till say our cashflow can handle the monthly instalement. So this can be quite different between individuals.

As I want to retire early if possible, the goal certainly will be full reserve coverage of the loan. However, I am comfortable to handle loan as long is sustainable to drive more returns. Full coverage also mean other variable ratios may go out of whack. Which means larger networth needed or we have to pay down the loan to somewhere.

Current loan at 1.5% Fixed is a steal. It won't be in the next renewal.

5. Emergency Fund/Annual Expenses Ratio

162%

I recently calculated our annual expenses and multiplied them by 1.15 to include additional support from my partner, and we have about 19.5 months of buffer when the ratio is computed.

This buffer excludes SSB, Multiplier, and T-Bills. Includes working cash, as we don’t have a dedicated account for emergency fund. Funds are spread across various cash and fixed deposit accounts.

6. Cash Flow / Annual Expenses Ratio

122%

Cash flow is obtained from investment, income, rental support, fixed returns etc. With this number, theoretically Networth should climb consistently as long we keep working and investment not badly affected. However, this value likely varied annually as portfolio size gets bigger whereas salaried income is at much slow pace.

Actions

The Ratio that may need to watch is Loan/Reserve Ratio. Not that the reserve amount could not cover the loan but cash flow ratio needs to manage like any other business.

The whole idea of the loan is to drive or leverage for more returns elsewhere. So if they are fully locked in reserve to minimise the loan risk, then we need to ensure they have sufficient returns. 

The easy way out is not to retire voluntarily. Each month income is a boost to the reserve.

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2024-0708

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

Cory Diary : Family Expenses 1H24

Have done a few blog on Expenses. Another half year has passed, and I am excited to table another review on how we progress in escalating expense containment. We have some discussion on why out expenses keep growing and it will good on how we progress after 6 months.

As table shown, it appears we have managed to stop the problem. 1% expense increase for 1H24 compared to 2H23. This is on the back of additional Travel and Private Tuition Fee.

There is a special bill exception that we allocated to 2H23 and 1H24 instead of amortizing across say 5 years. Even if this is considered in the last two halves, the expenses look ok.

Can safely say our expense range between $9.6k to 10.6k range. Do note as in previous article, partner supported probably additional 15% expense. This work out to 132k annual expense. Interestingly we do not feel we have lavish lifestyle.

With this expense amount, we can work out passive income, investment return, rental support etc to ensure we can manage our financials.

Cory Diary

2024-0705

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

Cory Diary : 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

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2024-0704

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

Cory Diary : Emotional Management

Managing emotions in the stock market, especially during periods of market highs or when a particular stock like DBS is at an all-time high (ATH), requires a disciplined approach. Here are some considerations and strategies I can think about using this portoflio below as an example :

P/L YTD

1. Assessing DBS Investment

Current Portfolio Allocation: Evaluate how much of my portfolio is currently allocated to DBS. If it's a significant portion, consider whether this aligns with my risk tolerance and investment goals.

Risk Mitigation: DBS is sized to mitigate high-rate scenarios. Assess if increasing your DBS allocation further fits within your risk management strategy.

2. Criteria for Decision Making

When deciding whether to sell, hold, or buy more DBS shares, consider the following criteria:

Fundamentals: Evaluate DBS's financial health, growth prospects, and market position. If fundamentals are strong and justify a higher allocation, holding or buying more might be prudent.

Valuation: Assess whether DBS is overvalued or undervalued relative to its historical metrics or industry peers. High valuation might warrant caution. For this case sustainability of the dividend.

Portfolio Diversification: Ensure overall portfolio remains diversified across sectors and asset classes to mitigate risk. Limited alternative.

3. Taking Profit

Profit-Taking Strategy: If DBS has generated significant profits for the portfolio, consider taking partial profits to lock in gains and rebalance your portfolio. This can help manage risk and reduce exposure to a single stock.

Reinvestment: Reinvesting profits into other assets or sectors can help maintain diversification and potentially reduce emotional attachment to a single stock.

4. Managing Emotional Threshold

Establish Rules: Define clear rules or thresholds for when to buy, sell, or hold based on investment strategy and risk tolerance.

Stick to Strategy: Avoid making emotional decisions based on short-term market movements. Stick to  predetermined investment strategy and criteria.

5. Long-Term Perspective

Quality Investments: Focus on investing in fundamentally strong businesses with good long-term prospects. Quality investments can provide stability during market fluctuations.

Patience: Markets fluctuate, and stocks go through cycles. Having a long-term perspective can help reduce the impact of short-term emotional decisions.

Conclusion

In summary, managing emotions in the stock market, especially with a stock like DBS at ATH, involves assessing portfolio allocation, using objective criteria for decision-making, considering profit-taking to rebalance, and maintaining a disciplined approach aligned with your investment strategy. By focusing on quality investments and diversification, you can better navigate market volatility and emotional biases.

Currently, doing nothing. The logic is simple. Bank is to hedge Reit. So sell at this time seem bad idea as it may or not get worst for Reits. Adding more DBS is no too as it may exceed my mental treshold should DBS got hit.

Cory Diary

2024-06-15

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

 

Cory Diary : 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

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

Cory Diary : Net Worth Update and Milestone Achieved

With the help of Equity and Income, Networth reached a new milestone. Just a week ago I was wondering what it takes to cross the networth line firmly. I don't have Nvidia to help elevate ( Sibei Fomo ), Tesla not moving (at least not crashing. Touchwood) and I decided not to adjust the Net Value of my property to be more conservative.

As it turns out, bank stocks, salary and some benefits pushes it over. There is no celebration or anything. I keep it quiet at home as it arrives quietly as I feel there is a need for more to support family expenses.

Still watching the Non-Productive Assets (above chart) size which has sizeable amount in Fixed Deposits. I should have them split out from regular low interest saving accounts but too lazy. Anyway not so worried because some of them is denominated in USD FD enjoying good rates.

Property may have gone up another notch $PSF in low volume. So decided to put this increase in valuation on-hold till we see a stronger number. With the cost of building new apartment costly the market somehow need to reflect them into the equation.

So what it takes to be euphoria. Maybe much higher sustainable dividend income returns.

Cory Diary

2024-06-02

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Cory Diary : Cory's Investment Insights

Emergency Fund

Personalized Emergency Fund Calculation:

Individual Circumstances: Emergency fund needs vary based on personal circumstances such as age, job stability, housing loan, and other financial obligations.

Expense Coverage: While experts recommend 3 to 6 months of expenses, this may not be adequate for everyone, especially those closer to retirement age or with significant financial commitments like housing loans.

Long-Term Considerations: The emergency fund should be sufficient to cover expenses until the investment cashflow can reliably support your needs. For example, if it will take 6 years before your investments can cover your expenses, a 6-year emergency fund may be more appropriate. 

Housing Loans Impact:

Significant Financial Obligation: Housing loans can greatly impact the size of the emergency fund needed. A $1M home with a $5k monthly payment requires careful consideration.

Depleting Emergency Funds: Paying off a housing loan with emergency funds can leave you vulnerable. It's important to balance loan repayment with maintaining a robust emergency fund.

Income Streams:

Dependence on Income: If your financial plan relies on rental or dividend income, these should not be counted as emergency funds since they are intended for future needs.

Economic Stability: In regions with generally stable economic conditions, like Singapore, the likelihood of finding work is higher, but still, one must be prepared for the worst-case scenario.

Investment Risk

Young Investors and Risk:

Risk Tolerance: Young investors are often advised to take higher risks because they have time to recover from losses. However, this advice must be tailored to individual financial situations.

Critical Funds: For young couples, a significant sum like $100k might be needed for major life events (wedding, home, children). Losing this in high-risk investments could be devastating.

Weighing Risk vs. Needs:

Early Financial Milestones: Before risking essential savings, consider the importance of the funds in question. High risk can be suitable for surplus funds, not those needed for immediate, crucial expenditures.

Risk as a Percentage of Net Worth: As your net worth grows, the proportion of your portfolio you can afford to risk might increase. However, early on, preserving capital can be more crucial than seeking high returns.

Starting Small

Slow and Steady Growth:

Initial Capital: Starting with a small capital doesn't mean you should take excessive risks to grow it quickly. Consistent, smaller returns can be more beneficial in the long run.

Compound Growth: Over time, regular savings and moderate returns can compound significantly, leading to substantial portfolio growth without taking undue risks.

Incremental Growth: As your career progresses, your ability to save and invest larger amounts will increase, accelerating your portfolio's growth.

Personal Journey:

From Small Beginnings: Many successful investors start with modest amounts and focus on steady, incremental growth rather than seeking quick, high-risk returns.

Consistency: Regular contributions and disciplined investing practices build a strong financial foundation over time.

Conclusion

Investment strategies should be personalized, taking into account individual circumstances, risk tolerance, and financial goals. Emergency funds should be sufficient to cover unexpected situations without compromising long-term financial security. Young investors should balance risk with the need to preserve critical funds for life milestones. Starting small with a focus on consistent growth can lead to substantial long-term success.

Cory Diary

2024-05-28

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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 : 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

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

Cory Diary : 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

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

Cory Diary : MLT Result Review

MLT is one of the smaller allocation in the portfolio which I intent to grow when opportunity arises. However, this is on the premise that the Fundamental of the Reit, the Returns of the investment and Risks are better understood before ploughing more and more into it each time. This review is a quick and dirty fast way to get a basic understanding too.

The Reits are relative large and seen recycling of assets in their managed properties during this high rate environment period. A possibilities of DPU support too. Currently 6.6% DPU Yield.

They are also exposed to Weaker China Environment. About 20% of the Reit. But if we include HK that's about 40%. They are well diversified across asia regions.

The result has been "well managed" looking at the footnote. Good thing about large branded reit. So the question is this sustainable. Currently NAV 1.4 which looks quite align to the traded price. Will they have more recycling to go ? Possibly.

Debt Management

Low cost at 2.5%. Quite surprising. No weakening in ICR.

Added 5/12 to better reflect debt profile

Conclusion

When i first start the review, I am quite concern with the HK/China exposure. And a quick reflex is a Hold of this counter. However, the financials, the size and the stability the management provided so far do bring some comfort that there maybe enough Risk/Reward ratio to ride the dragon returns. One thing to note is not sure how effective or duration on the recycling part as I am not familiar with this but I guess this maybe something to monitor and learn.

Cory Diary

2024-05-03

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

Cory Diary : Sheng Siong Result Review

No surprises. Do well as usual. Operation data excellent. High cash level helps to boost their fixed returns which is quite substantial. Their total return in my perception typically lower than banks but strong stable returns. A good diversification from portfolio heavy in other sectors. A boring and steady company.

Foreign Operation

This is something like the growth engine of the company. Which may spring surprises one day.

They are very careful on the expansion not to derail the company profitability.

Dividend

Continue to grow. Annulised 4.13%. ( Local banks currently range between 5.5%~6.5% range )

It has the basic essential attribute and can do ok in poor economic situation. 

Cory Diary

2024-05-01

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

Cory Diary : Portfolio updates

Cory Diary

2024-04-21

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

Cory Diary : Equity Portfolio 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

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

Cory Diary : Net Worth Update and Milestone Achievements

It's been a while since our last net worth update, and I'm excited to share some positive developments. The primary catalyst for the upswing is the increased valuation of our properties, a conservative estimate that has significantly contributed to the overall growth.

Let's delve into the numbers:

1. Property Valuation Boost:

A noticeable uptick in net worth, with property valuation being a key driver.

Despite a year-to-date equity dip of 1%, we've successfully elevated our expected dividend plan to nearly 70k.

2. Strategic Investment Moves:

Our investment accounts are currently on the lower side due to substantial deployments.

Notably, we've strategically reduced the size of our saving cash, redirecting funds into safer assets for fixed income, as reflected in the downward slope of Non-Productive assets.

Surprise Milestone Achieved

An unforeseen milestone has surfaced - the current fixed-rate loan at 1.5% still has a year and a half remaining.

Conducting a stress test, we've realized that, by combining our main saving cash with SSB, T-Bills, and FD, the total amount surpasses the outstanding housing loan. This implies that, in retirement, we could potentially pay off the loan without selling any equity, providing financial security for daily expenses.

As an added comfort, once the housing loan concludes, our outstanding loan will decrease, creating an additional buffer for potential working capital needs.

Potential Milestone - Divergence Growth

One of our challenges is managing family expenses exceeding 100k annually, a figure that continues to rise. To mitigate this, we need to explore avenues to control or slow down the increase. Successfully achieving this would eliminate the need to draw down investment capital, which currently generates crucial dividend income for daily expenses.

Looking ahead, there are two potential strategies: reducing or slowing the expense growth or expanding our portfolio size to generate larger dividends.

In summary, our financial journey has witnessed positive trends, and we're strategically positioned to navigate potential challenges and embrace future opportunities.

Cory Diary

2024-02-24

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

Cory Diary : Expense 2023

Currently on routine half-yearly tracking family expenses. To be exact the tracking is based on the outflow from saving account. Before I start it off there are a few items or assumption made.

Figure includes

• "Home Loan"
• A few one-off Medical Expenses - Therapy Sessions etc
• On/Off there maybe Bonus Company Share Sales
• Parental Allowances

Figure excludes

• Income Taxes. I help cover my partner too.
• Partner contributed to some expenses. Assume 15%. May Revisit later on this assumption.

Full Year Comparison

To set the right expectation, it maybe quite big-eyed to see saving jumped 65% for Year 2023 when income do not rise as much. 13% includes company shares sold. Saving is typically a small subset for me due to family, housing, transport, holiday etc. The important rationale is that if we able to keep our expense in check, all the income increase will be channeled to saving. Hence, we see large % increase in saving.

1st Half Year Comparison

Cash Expenses do increase significantly due to many reasons. However, what is interesting to know is that for 1st Half comparison YoY.

There is basically negative cashflow for 1st half of Y2023. Lumpy Tax. What to focus is the cash expenses YoY 47% Increase but overall expense only 9% up. Compared to Full Year chart, the expense 42% as is much more actively watched in 2nd Half of Y2023

Sharing on Expense Ways

Obviously this aren't a sharing of low expenses. Is not intended initially when I start to write this article but strikes me that i could share what efforts have been put in to slow down expense increase with family as this aren't easy ....

1. More instances of more simple home cook food and outside meals.

2. Tighter control on transports. We do more walking.

3. Reduced Fruits wastage and less expensive varieties.

I wish there could be more. There aren't. Is so easy to blow our budgets. What keeps the mood up is the Net Worth still on increasing path. Maybe this is the way to control expense in moderation while increase total assets. We still need to keep fighting the demon within.

Cory Diary

2024-02-19

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

Cory Diary : Cash Flow against Assets Investment

A quick show on investment returns supporting cash flow compare to asset invested. Each set of matching colour between the 2 charts for comparison. Left is Asset allocated. Right is the corresponding cash flow returns from it.

Rental Income is the net after interests portion of the monthly loan and maintenance fee. Further 20% cut on rent to be conservative. It is an expansionist for my cash flow though not much as Equity. View it as much lower risk even though on leverage and potential capital gain.

Retirement and Insurance segment includes CPF. Keep in me this is paper exercise as I won't be withdrawing my CPF OA/SA after 55. And the monthly amount in RA will only happens after 65.

Dividends are basically from Equity. Do note some stock don't give dividends therefore reflect weaker cash flow. Itself tells a story on how we want to plan it between growth and dividend.

Saving Cash is high due to bonus and de-risk of the portfolio before Year 2024 started. Looks like a key priority to have it reduced.

Ending with Equity and Property are the two key pillars that go beyond their asset allocations when come to supporting cash flows. The worst is to leave cash in saving account. Need to make them to work obviously.

Keep in mind not to lose capital on whatever we do.

Cory Diary

2024-01-23

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