Cory Diary : Exploration of US Property REITs listed in SGX

The 1st US Reit stock tried recently is Prime Reit which has been trending down for some period. Is mainly Office Reit. Decided to plunge 1% amount of Equity Portfolio into it to kickstart my curiosity. The price dropped quit an amount after to my surprise. The learning is .... 1% allocation is still too much. Current yield more than 11%. 

2nd US Reit stock is United Hampshire Reit and likewise did the same with 1%. After a period of study, comfortable with the investment and increased it further. The stock price holds up quite well which I believe is due to mainly their Supermarket property portfolio which likely will do ok in high inflation environment that we are facing today. One thing I like is the selling off of their storage facilities. Current yield more than 9%.

There are a few other more of such US Property Reits that I have yet explore them. Reason why I do this US Property Reit  is that their yield has been driven quite high despite no visible serious flaw in the companies that I can decipher of other than their properties being in US, with my limited knowledge.

There is some kind of work around that allows the companies to pay dividends to investor without withholding tax. That's one of my concern actually which is why I did not explore them till recently when the their stock prices were driven down.

Finally, another issue to watch is USD quite strong. So new purchase we are buying the dollar at a premium despite all their printing. This reduced the sizing further that one willing to put in. Both companies have been listed for more than 2 years so they have paid out dividends many times. So this aren't a bird if you know whom I am referring to. Regardless the risk is something we need to explore. Many people still has bad experience from the flight.

Now, why I want this Reits. First, is some form of foreign diversification. No withholding Tax. USD denominated. Attractive tenants. Few years of dividends payments. This aren't hospitality or tourism related. The only reason I feel the stock price is trending down probably due to the yield compression from higher interest rate and current strong USD. Can they raise their rental price ? Will need to further deep dive into them.

Feeling Lazy ....

Cory

2022-0912

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Cory Diary : Jittery Market

Year 2022 Market has been Jittery. The funny thing is the market has been reacting as though they are surprised what Fed will do when they actually knew what it has to do.

There has been many Black Swan events if we are to broadly classify them. Ranging from Ukraine War, Covid aftermath, High Inflation, Extreme Hot Weather, China routs on Tech/Edu stocks, China Property Crisis, World Oil Crisis and to add the emergence of disruptor like Tesla on many fronts that pose to change the landscape of the auto industry.

For Mainly Dividend Investor as in perspective of Cory Portfolio, is like a similar beeps like in past drawn down which is surprising measured despite large growth in portfolio size. ( see above chart on draw down)

There are still a few months ahead but unlike Year 2021, I have not much feel to be in good profit territory for YTD performance. That's fine. We can wait while scoping up cheap stocks in stages. It has been good opportunity to collect.

Will there be cheaper price ? Maybe ... no one knows. I don't have crystal ball but is cheap currently.

Cory

2022-0902

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Cory Diary : Green SGS Bonds

Cut it short is 3% Fixed Return issue by Singapore government. If you notice is 50 years bond. This aren't Singapore Saving Bond (SSB ). A quick glance from Retailer perspective, this aren't attractive.

One of my main concern is with current situation. Inflation can go much higher and one will be locked into it. Well, SSB is around there 3% too BUT the Capital is protected by SG Gov if you decided to sell it before Maturity.

As I know SGS bonds can be traded on the secondary market – at DBS, OCBC, or UOB branches; or on SGX through securities brokers. The price of SGS bonds may rise or fall before maturity. In higher interest rate environment at low liquidity selling market traded bond could be bad.

With 50 years maturity, People in 40s and above may not see it alive to maturity.

Maybe for children ? Nope. I rather help them top-up in CPF ( Better Rates) and avoiding inheritance problems.

And with current CPF and SSB serving as a reserve and basic safety nets, putting more into low yield asset may not cut it and could be detrimental for retirement. 

Happy National Day

Cory

2022-0809

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Cory Diary : Ascendas 1H22 Report

Ascendas reported another set of strong results. A quick glance on below table.

10th Aug'22 is Ex-Dividend. At current trading price of $2.99 which translate to annualized yield of about 5.27%.

Adjusted NAV 2.31 (after div distribution) the premium is about 1.29 or 29% to NAV.

Debt Management

Summary as below which looks healthy.

Diversified

Ascendas has a diversified portfolio mitigating currency impact.

DPU

Initially I have concern on the quality of the DPU. But below table probably addressed it mostly by the Footnotes.

Can't ask more in this report. Diverse property, debt, dpu and premium are well covered. Is such Reits that always let me think twice on allocating my money to safer elsewhere for lesser returns.

This is a quick glance on the result but I have most of what I needed to look at.

Please DYODD.

Cory

2022-0803

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Cory Diary : Sheng Siong 1H 2022

Sheng Siong result is within expectation with Covid measures on decline. The China operation continues to be profitable. Other income is basically Government grants on reduction and Sheng Siong still managed to achieve stronger net profit.

Revenue decrease and that we probably assume Malls able to pull away from easing of Covid tension despite inflationary environment that Sheng Siong should benefits. Their report highlighted Q2 FY2020 as reference when Covid measures resulted elevated demands however Q2 FY2021 Revenue is still higher than Q2 FY2022. So something to monitor.

Nevertheless is still a pretty set of good result and maintain a place in my portfolio to counter Inflation and Recession.  Current dividend yield roughly 3.9%.

Cory

2022-0802

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Cory Diary : Returns Report on YTD '22 Inflation Theme

Tracker

To start it off doing Annual YTD is kind of short term tracking. Is trying to be nimble for opportunity and not an intention to make change on long term strategy unless we have details otherwise. For example the plan is Dividend Investing with Reits as the Core. However within Reits we have different segments and countries which we may need to juggle or mitigate short term.

Even on allocation itself between Reits, Non-Reits, Growth etc the allocation may need to be re-balance and adjusted over time against wider portfolio such as Bond and CPF including cash. Nothing is permanent in the sense opportunity and situations may arise that we need to act on. Ignoring them is a Strategy of Environment Changing our Portfolio Size therefore I rather be the Change agent.

XIRR YTD Cory -1% , STI Index YTD +2.8%

Performance

As above Chart, the gap of Cory Performance YTD has been closing up. Cory YTD -1% whereas STI Index YTD is at 2.8%. We still have 5 months to go and the world is still on unchartered territory. How the Supply Constrains, Recession, Inflation and War will shape the world by year end is still up in the air. Things could turn drastically down to Boom. 

If we look holistically, the strategy in current format is to fight inflation. Renewing to higher SSB, even going to higher yield bond that has dropped ironically, and expanding into stocks that have pricing power. However Recession is a different ball game altogether with significant hardship on those retrenched. Hopefully we will avoid that.

Inflation

So why is inflation so horrifying ? If I read it correct is the compounding effect. Taking from Worlddata for United States.

During the observation period from 1960 to 2021, the average inflation rate was 3.8% per year. Overall, the price increase was 829.57 %. An item that cost 100 Dollar in 1960 was so charged 929.57 Dollar in the beginning of 2022.

For June 2022, the year-on-year inflation rate was 9.1%.

This includes in particular energy (+41.6%) and food (+12.2%).

Singapore is better for the same period at 324%. On top of that governments are better informed and managed as the world advances economically. If we take the 1st half and 2nd half of the 60 years period, the data is 161% and 57.3% respectively. The later 30 years have been well managed.

To put this in context of the compounded inflation for Singapore,

1961 - 2022 : 324%

1961 - 1991 : 161%

1992 - 2022 : 57.3%

Using 1992-2022 period of 30 years, Purchasing Power reduced by 57.3%. An average of slightly less than 3%, this could be a good number to use in our annual inflation computation guide. 30 years also likely cover a large segment of people retired period.

Cory

2022-0730

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Cory Diary : FCT Q3 2022 After Thoughts

Frasers Centrepoint Trust just reported their result for the 3rd Q. Is a business update and there is no dividend as it is given out on half yearly basis. I wanted to do coverage of the result but after going through it frankly there is not much yet said or explored that is significant to mention.

The business is solid as a rock and well oiled. Providing key services and infrastructure need for Singaporean Lifestyle. And they are probably at the right balance and just have to keep rolling. The Rent looks ok per CBRE Research.

At 5.2% yield this is still much better than CPF or SSB. Obviously, there are risk in Equity and that is where portfolio management comes in to manage them. Taking our head off about stock and just thinking about having this business as yours. With the current business report and the services they provide, do we want to be part owner of it ?

Nice Spread Out of Assets

Like many businesses I owned FCT through stocks and is one worthy slot in my portfolio.

Pls DYODD

Cory

2022-0727

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Cory Diary : Sabana Results 1H22

SABANA INDUSTRIAL REIT’S 1H 2022 result is as Good as it can get in-line with expectation. Being consistent delivering and meeting high yield this makes the Reit quite attractive.

-   DPU was 1.59 cents, 7.4% higher y-o-y. A slight increase if we compare to 2H21.

    Yield of 7.07% annualized at $0.45 Stock Price.

There are items to monitor during this increasing rate cycle and Sabana has them listed as follow.

Capital Management

• Average all-in financing cost of 3.35%, interest coverage ratio at 4.0 times

• Aggregate leverage stood at 33.4%

Interest Exposure

• 75.3% of borrowings are on fixed rates with an average term of 2.4 years

• Every potential 20 bps increase in interest rates may result in $0.15m decrease in

distributable income or 0.5% reduction (equivalent to 0.01 cents) on DPU(1) per annum

If assume further 200 bps rate hike in total this year, that will be 0.1 cents impact to Sabana DPU. Yield will decrease to 6.7% which is still respectable. And this is assuming no further increase in rental income. This piece of info helps as ICR is only 4 times.

Pls DYODD

Cory

2022-0723

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Cory Diary : F.I.R.E - Financial Independence Retire Early

There are many ways to Rome and therefore different people different strokes. Being FIRE and retiring early doesn't mean we cannot do some work we like. It just gives us more options while fulfilling our personal goals.

Current Cory Plan

Layering Strategy is still emotional preferred way for me. Lesser stress and something to do !

- CPF ( RA = FRS at age 55 )

- SSB ( Max )

- Multipliers ( Max )

- Equity Dividends ( sizeable portfolio more than 1M )

- Equity Growth

- Rental Income

Plan B

For above not everything will be perfect and if specific goal failed or changed, there needs to be adjustment aka modification below depending on needs.

Modification 1 : Part time work maybe 500 to 1k monthly

- This is low hanging fruit if we just miss a little monthly income to supplement. It can be from hobby.

Modification 2 : Down grade Apartment to Studio or 3 rm

- Downgrade of lifestyle but still acceptable to lower expense and boost additional cash

Modification 3 : Hit/maintain Senior Position in current work that requires experience than time

- Significant Compensation and likely have Ample Lifestyle

Flexibility

Currently prefer just Modification 3 as option upon age 55. The reason simply of my expertise in my current work and strong compensation renumeration on efficiency return of income. Time is precious. Obviously it can provides uplift in living standard to family.

There are other options such as renting out rooms, lowering expenses, migration, 1M65 etc. This is not preferred personally but it can be good for others depending on their situation.

Cory

2022-0722

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Cory Diary : Investment Portfolio Allocation - Fighting Inflation

In this Portfolio Report, the focus is on the ability to generate more recurring income from dividends and interests when the market is at cheap. There is a fight in current saving to remain in Cash or CPF, Multipliers, SSB and Equity to grow the returns. Is like all cylinders firing at different fire power with varying safety levels.

Portfolio

From below chart, the "Bond" components constitutes about 28.6 % providing 2.5% to 4% interest returns. Growth stock which has little or no dividend, about 7.7%. Likely the limit I would inject for my age. So whether it can grow will be left to the business and the market. That's leave about 2/3 of the allocation to generate higher risk dividend income through Equity. Higher risk do not mean High risk especially when we are comparing to likes of SSB, CPF and Multiplier.

Note :  Net Investment Property and Saving Insurance excluded.

CPF

Personally two more max top before hitting 55 where SA allocation is max percentage wise. CPF is attractive for people near age 55 as we can withdraw OA and SA after FRS deducted. Currently there are no change in CPF Interests while everything else getting cheaper. So there are no rush to top-up till end of next year instead of Jan'23. This is assuming we can getting much better returns from the market.

SSB

Re-Investing SSB to higher rate bond is generally preferred over company bond basically because it is Capital Intact and with increasing rate. We can also re-channeled to Stock Market if there are big market crash. Exception applies. With increasing rate possibility, New Perpetual Share or Bond could suffers pricing loss and this is assuming the company fundamental do not affects the redeem later on. Only SSB allows investor to redeem as need with 1 month lead time without capital loss.

Multiplier

DBS Multiplier likely the first to use for War Chest after saving cash has been used up. Is also a good place to park cash that rivals SSB and CPF (after 55 excess of FRS). Better than SSB, it has no lead time and suffers no capital loss. The current Max of 100k is 2.5% on average.

Like CPF and SSB, Multiplier is part of the layers that provide emotional support as a safety nets when times are bad for people working towards higher risk products in financial goals.

Cash Injection Pace

At high inflation rate environment holding cash, the cost is high even though Cash is King right now. Continue buying Bit Size into investment products such as Reits and Bank as they stay low with time. We are buying cheaper in Inflationary environment. What a steal !

The hope is still waiting for better opportunity of a market crash on value segment so that we can inject much larger. This is not to say there will be crash but a reserve to have such. Keeping in mind reserves also needed for possible rights issue at huge discount.

Cory

2022-0718

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Cory Diary : How much is Enough in CPF ?

With the Popularity of 1M65 movement where we become CPF Millionaires by Age 65, people starts to realize that it can go much higher if one top-up their CPF to Max in their early years. Then this beg the question is how much is really enough before we forego our current living and outside CPF returns.

Don't get me wrong. CPF returns and Capital are kind of "Protected". The risk is vastly different from Equity or Private Bond Markets of varying Risks. However, to get 2.5% to 4% returns, the amount may not be sufficient for a lifestyle retirements that one's wish to have unless the capital is significantly more and if that is the case, you are rich anyway to manage it up to 2M65 or 4M65 in a low return environment, does not really matter because of the huge capital base.

To put into perspective, for a person who invest in 4% vs 8%, after 20 years the gap can be $2.4M !

We need to be rich enough to forego.

To add to this into another perspective, inflation is another killer. 1M today is very different from 1M in 20 years time.

Lastly, the risk is different and the gap of $2.4M is not free to take. One could also lose a big chunk of their investment in risky asset and perform much worst than CPF returns. It maybe better not to do anything or much outside CPF too. The answer probably lies between but where we can be ?

Cory

2022-0714

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Cory Diary : Net Worth Progress - Diversification of Assets Classes

Many have not seen or remember a period of high inflation before. There is not much experience. Our thinking shaped our recent memory or impactful personal event which formed our perception. People who are old enough as me may remember a time where we have 5% Fixed Deposits. I guess there is time for everything, just when ! We are far from the severity we seen in 1980s or 2008 of most recent.

Interestingly, the harder Fed tackle the inflation problem, the stock market seems to react better as this mean the issue will go away faster and not drawn out. What is surprising is that the employment figure still stays good. Hopefully they don't over-do it to bring down the inflation too fast. The economic heart may stop and enter into cardiac arrest.

Looking into Net Worth Portfolio of different asset class, not much has changed in recent months. How to read this chart is to lookout for the word "Stack". This mean it includes other asset class line below it.

For example blue line property stack includes non-productive assets such as cash represented by the green line..

Overall Net Worth

Overall Net worth is tracking back up due to Liquid Asset, Pension and Property Valuation. YTD -0.x%. Specifically investment property because I was expecting a double whammy falling like stocks instead the valuation went up slightly from recent dozen transactions of the market in the condo.

Home Loan Package

With the recent spiking of home loan package, fortunate to lock fixed 1.5% years ago for peace of mind reason. And this exactly happened as we have to pay more from floating package. Nevertheless, once inflation is controlled it may comes down quickly too as historically for the past 40 years rates are on downtrend.

Equity

Equity stack has been reduced due to negative return ytd and because some amount of stocks sold was used to build up CPF and DBS Multipliers.  Right now the portfolio is moving to a state of equilibrium again. The positivity is that Potential dividends moving toward $69k annual same time from constant injections on Bank and Reits Stocks.

NPA

Finally, the Non-Productive Assets (NPA) are trending up slightly. Will be buying back some SSBs in stages as time goes. The hope is still to utilize them into Bank or Reits if there are severe correction.

With current expenses, still couldn't retire .... unfortunately.

Cory

2022-0710

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Cory Diary : SSB Application and Strategy

For people who are still New to this. SSB is called Singapore Savings Bonds. This is not Treasury or Singapore Bond. Is issued by Singapore Government monthly and will last for 10 years. The total amount of all issues that we can buy is currently limited to $200k.

If we look up in DBS Bank Internet website as an example, we go to the investment applications.

And you select Singapore Savings Bonds.

And then select the issue available.

This issue is attractive for me as I sold some last month to be ready for possible market crash. It doesn't happen or yet. So I am buying back some each month as time goes.

Secondly, the rate for the newer issue is much better. Average 3%.

Thirdly, I can sell and buy anytime. Max 1 month lead time. $2 fee.

Hopes this help for those who are New to this.

Cory

2022-0709

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Cory Diary : Building Up Passive Returns - Income Streams

Equity Portfolio ( link )

The market has been on bad patches in recent months or years depending on the make-up of one portfolio. Not sure about investors but personally this can be one of the best time to re-balance, strengthen and build up a dividend portfolio.

One of the weakness in the portfolio is the persistent under representation of Finance stocks. Therefore, has been buying into DBS stock which provide good dividends. Size wise still not there yet due to concern with digital banking competition. Nevertheless, need to have enough investment into this area.

What best is to be able to buy with current yield reaching 4.9%. Price can get lower and recession might comes knocking. USA side there is speculation that we are in recession already. Currently preference is to go in slowly.

Competing against budget for Bank is the need to also buy Reits on the cheap which produces good yield. Need to constant inject in this area too.

Singapore Saving Bond, Multipliers, Pension and Private Bond

Have not been utilizing fully the CPF scheme. Only did top up in recent years with the elimination of company bonds. This money tied down long term so we can't touch it till later or 65 mainly for FRS amount.

With Rising Rate, the interest rates of CPF is falling behind. Decided to try some Astrea bond which is becoming more attractive as the price falls. There is capital risk so starting small. Nothing is permanent I guess.

SSB is also getting more interesting. Multipliers can be switched out any time. The idea is that as the equity portfolio grows bigger, the reserve in SSB and Multiplier can be managed down. Rich get richer rings here ?

Property Investment

Unlike Reit, property investment requires large sum of money even with leverage. The potential rental income is quite attractive. However one has to make sure the rental income keeps coming in which can be easily 50% of equity dividends received. For long term diversification, property is nice to have. Have to watch the loan payment consistently and making sure there is cash reserve in SSB for sufficient run way if one get retrenched and out of market permanently.

In Summary

Returns excluding salary works out to cover a big portion of Life Style Creep expenses. There is still a gap to close. Need to look around on making remaining cash works harder while smothering down the expenses (cost). 

Cory

2022-0705

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Cory Diary : Realization of Key Financial Variables and Sensitivity to Retirement Wellness

Has been working on a new set of key parameters of determining how it is going to work out with my retirement planning adding in logic on cash flow into play. The goal is try to make it more realistic. However this means a lot more mathematics using Excel. To save some headache, not going to show the spreadsheet on how it is calculated but just the results and variables which will described here.

Inflation

The first thing to hit the wall is how much inflation figure to use when current inflation is sky high. A quick search into the internet seems to suggest 3% is a figure of reasonable value. Putting too high and you will find money never enough whereas putting too low might undermine your lifestyle in the midst of your retirement. That's how scary inflation can be when you try to incorporate inflation into your assets and probably explains why Fed is desperate to tame it even if this causes recession. In another perspective, once we hit 80s spending will be slower and this will help mitigate expense rate misjudgment.

Expense

From below table achieving $8220 will be nice. Currently Portfolio is at 5% yield due to some growth stock and Non-Reit lower yield counters. An All Reit portfolio probably can achieve 5.5% yield. A market correction may give the opportunity to push for 6% yield which at this point of time will need some major correction to arrive but provided there is cash reserve to invest.

Investment Returns

On the flipside of inflation is portfolio returns. Unless one has gigantic net worth, most people may have to depend on retirement program and investment returns to support a reasonable expected lifestyle.

Some would say their expense is low and this could be very well be the choice when option is limited. Another pitfall is if one is to consider investment equation, there is not much room to wait for market to rebound in a market correction which can last for many years. Dividend strategy could be the better key to enable planned retirement with greater certainty and there maybe decision to make on how much to allow for growth stocks on the point of retirement. So using dividend yield will be a good gauge for equity which can be around 5%. One could also use decade performance to move up the needle a little due to growth stock or capital gains. Say 8%. So a middle ground of 6.5%.

Other returns of different yield from equity such as SSB can do direct addition on capital returns. So are CPF returns.

Click to see sharper picture

How Lasting is the Portfolio

What is a divergence portfolio ? Meaning over time the portfolio is growing in retirement phase therefore above consumption needs. This is a goal.

When I first started, the plan is to have a divergence growth in the portfolio. That's not easy which I found later and will need sacrifices once I have to feed my home loan. It will be good to plan one's lifetime in decumulation phase. Is counter intuitive in eating into one portfolio that generates income but that is probably likely most people will have to for their retirement. Able to last till age 100 will be reasonable as chance are there are some sandbagging already.

Buffers

At this point of time, the buffer is Insurance policies, War Chest and Emergency Cash. Later retirement can be a good option too.

In-addition, Part Time Work for those who do not have choice. The retirement cashflow is greatly relieved for one who can find some part-time work for a few hours. Reason being likely it will scaled with inflation on top of CPF contribution into SA and OA, and will supplement overall return even if is a fraction of previous full-time employment work.

For those who has strong preference for Inheritance, either Property or Divergence Portfolio can do. If one can do both that means likely far ahead from the rest financially.

Returns consideration into the Cashflow

Assuming one retired and no other alternative of income.

1. Equity

2. CPF

3. SSB

4. Rental

5. Multipliers

Scenarios

Scenario 1 simulated a lifestyle that requires 1.5M of 7% annual return to support $8220 expenses at 3% inflation rate. Portfolio able to last 50 years.

Scenario 2 bump up the portfolio to 1.6 M reaching divergence goal. Just $100k makes s a difference.

Scenario 3 pulls down the portfolio annual returns to 6.5% while maintaining 1.6M Portfolio size.

Portfolio able to last 50 years. Just 0.5% return difference.

There are many other variables depending on age, rental income, home loan size, CPF size etc. Many scenario one can do.

Cory

2022-0626

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Cory Diary : Life Style Creep

Coming to end of 1H'22. Long time since last tracked my expenses. With the global economy in gloomy atmosphere and stock market in tatter, it maybe prudent to increase one's saving when the inflation is high and hopefully able to channel it to cash generative assets to negate the rising prices.

Computation Logic

Has been quite some time since last reviewed family expenses. For simplicity excluded support from my wife which probably balance out roughly with her daily expenses taken from family pot while she shares some of the transport fares. Basically the Math is to extract out the expenses taken out from my saving bank that is digitally recorded for download.

To make the review more meaningful, Income tax, home loan and saving type of insurance removed to focus what's matter. This is more applicable to myself. 

Hopefully will give a good perspective of more realistic expenses to focus on. The expenses work out to about S$113 k for rolling 12 months period or 9.4 k monthly expenses.

What Is Lifestyle Creep?

In Investopedia, Lifestyle creep occurs when an individual's standard of living improves as their discretionary income rises and former luxuries become new necessities. The rise in discretionary income can happen either through an increase in income or decrease in costs.

It isn't entirely a bad thing but a progress but it can become a Monster when one's income falls or disappears. And this is my primary concern if one plans to retire.

Review

Most of the withdrawals are easily tracked in this saving account. Purchases via credit card is also paid out from the same account. So the data capture is quite robust.

Due to tiredness, we have get accustomed to taking car with our toddlers. Used to take a long walk instead when we have our first child. This item is now a good chunk in transport costs.

Food wise we have seen a spike as we stay at home mostly with delivery foods and going for more dishes. There is one time medical cost which will not repeat. A special Apple gift. A Hotel family expenses. And some misc items from oversea internet purchases.

Belt Tightening Operation

Despite there are items which are one-off it is not going to skew the total too much. In life there are likely many one-off of different events. Ignoring them is to our own financial perils which is why buffers are needed. After some discussion we decided to focus on list for the remaining 2H'22 expenses. 

First Category

The first category of items are on myself is to reduce my breakfast expenditure. Something which I can control easily without much sacrifice. Takeaway simplified and consume home-made kopi. This cut down expense some.  Next is night snack. Instead of bread plus others, it will be biscuits. Both cuts are much easier to handle.

Second Category

Second category related to children expenses. After consultation with wife, we decide to cut down on transport expenses to nanny's place. This may not be possible always such as raining days else we will take long walk with strollers more often. My knee feels tearing from the long walk so is not roller coaster walk. Long run I think is good for health. There is always temptation to take car so we shall see.

Next is nappy which is quite sizeable expense. The elder one is now three and toilet trained. There will be focus to reduce nappy use other than sleep. She has reached nursery age but we plan to have her spend a few hours after school to be taken care of by nanny. Expecting some ball park saving range. Sometimes out of tiredness, we will ask our nanny to help out on Sat. or holiday. This cannot go one. For two toddlers the cost could work out some saving.

Third Category

Our meals for our dinner is the next focus point. We often have food delivery service due to work and timing to fetch our children. The potential saving can be sizeable. Will target saving per meal for both of us.

In Summary

This works out to about below table. Looks like there is still some ways to go about in improving my financial situation. Will be vigilant in any non-essential costs to put some controls in place. However I have to admit, there is limit on what I can do when we have a family with kids other than raising income. To be realistic, at current measure we are not there yet of below 6 digits expense.

Cory

2022-06019

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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. 

Cory Diary : Time will Pass - Don't let the correction go to waste

If someone is to tell me when Covid just hit us in early 2020 on the disasters it will ensued after, I would find the going tough. To play back, Covid hits, 2nd Baby, Covid Mar'202 Crash, Covid lock downs, Salary Freeze, Covid Vaccinations, Covid Variants, Ukraine War, Fuel price sky rocketed, High Inflation, Rate Hikes, Property Curbs, ... ... ....

TIME WILL PASS

While is hard to predict the future, we have already progress so far as we take it one bad news at a time. For every damage done, it will Pass. Therefore is important that we Preserve and go through it.

What I do the past week is tallying up my available War chest. Have been buying in bits into dividend stocks so far. Trying to measure up how much each purchase drives the dividend coffer. The buying period is long because I want to see is there major dip or else put some amount Instead into SSB at higher interest rate later. 

Yesterday US side announced 8.6% Inflation number and luxury home sales dropped 18%. Obviously the Market reflected it. Currently I have Telsa and Msft in US position. Probably less than 10% of the Equity allocation. Even though it was managed down as I take advantage of the strong USD position to sell into SG Cash, the exposure is still quite high. Have a good night sleep last night so aren't going to DCA or increase US Positions.

SGX side, Potential Annual Dividends will hit $67k to-date. Received about $32k+ dividend YTD so far which is way more than previous years even before the month June ended. Seriously, I am not hoping for US market to crash but it works perfect if SG Market does for dividend counters so that I can stretch my dollar for the dividend significantly. 

BITS and PIECES

Meantime I will keep buying in bits and pieces as it looks like the market is on slow rewind.

Cory

2022-06011

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Cory Diary : Interest Rate v Reit Prices

Yield

Reit yield has been going down for past decade or more with lowering interest rates. What this mean is higher Stock Price. This seems a yield spiral which result in yield compression against SSB or Bonds. There needs for a reversal.

The bad way to do this is to have relative lower stock price with higher yield as we can see in past one and half year. Basically Covid impact weakening business fundamental. The ideal way to have much better earning in DPU. How can this happen ?

Currently I can think of 3 and item 1 condition is happening today. There could be more but for interest of time ...

1. Inflation - Yes. This result in higher rental prices provided strengthening economy.

2. Leverage - Higher Leverage will helps including Perpetual.

3. Property - Yes. Increasing Property Price means lower Gearing.

Rental

In short, Reits need to adjust their rental which takes time to happen therefore we could see weakening or flat market due to lagging factor however longer term this will provide better DPU thus stronger Reit prices theoretically.

The problem with this strategy based on past reference is that the lagging factor can last for years and who knows what will happen during this period. We could have recession, major war or another pandemic. touch wood ! Enough of negativity ! There can also be positive news too just that I lack the knowledge to think of immediately that has 100% confidence it can speed up.

What I could is to buy in slowly in small bites investing in strong fundamental businesses meantime.

Why Reits ?

See below - Specifically Singapore. Simply no withholding tax and local knowledge.

Source link

Cory

2022-0605

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Cory Diary : 20-year annualized returns by Asset class

Interesting finding this week is which are the best investment over a long term period of 20 years. And Reits came on top based on below chart.

Since this is US focus, SG Reit likely performs better after Forex based on historical exchange rate below.

US Dollar - Singapore Exchange Rate - Historical Chart

The other context to consider is that Homes may not be that bad for Singapore due to lower tax rate and Asian Market in general favors properties.

Even Gold and Oil have better returns. So why do we still need to invest in S&P 500 for long term ? You tell me ? Maybe we need 100 years track record however past performance is still never implied future returns will be.

Please DYODD. Cory is also trying to decipher ...

Cory

2022-0603

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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.