Cory Diary : 2018 Equity Performance

Year 2018

2018 has been tough for local equity investor. The STI ETF registered -6.48% after dividends. For people who is new to this, STI ETF is traded in SGX like shares in stock market. The last traded price is 3.117. (Stock Quote is ES3). It is often use as a benchmark to measure against investor portfolio performance as the ETF closely follows Straits Times Index which tracks the performance of the top 30 companies listed on the Singapore Exchange.

There are few methods to measure STI ETF Performance. I use XIRR after considering dividends distributed over the year. ( Typically twice annually ). XIRR is a function in Excel to calculate annualized returns. So we can do apple to apple comparison to my Investment performance. On the right table computed is how I obtain STI XIRR -6.48% including dividends.

My XIRR for 2018 Performance is -3.28% which is closely match to -3% portfolio losses. If I am to exclude US stocks, it will be XIRR -2.12%. So 2018 is the year where I am in the negative after dividends. My test drive in US Stock is quite bad in timing and the only consolidation is only a few % of my portfolio. So as mentioned in my earlier article, every % counts. The other lesson learned is on SME stocks that are more towards capital gain to size them up correctly smaller as they are more volatile in bad market condition and to realize them. 

What I did well is to contain and manage my losses and therefore outperform STI by 3.2% if I am to include US Stocks or 4.6% for local equity alone. This is especially important to me because over the years my portfolio has grown quite significantly. Every 1% move is quite a delta in $ number today than 5 or 10 years ago. Another thing I did well is work :). I got good bonus and this basically covered all my losses.

Cumulative Performance Comparison

Comparison is more meaningful if we do cumulative to minimize the luck component. This differentiate the men from the boys. However comparison to STI is tricky reason being you cannot decide when you are born therefore cumulative 30 years STI returns can be vastly different from cumulative 10 years STI returns from now. So is very misleading in my opinion if one advocate index investing purely without taking timing into consideration. Since I start actively with sizable portfolio 12 years ago, that will be the benchmark I will use. There are others assumptions made but let's ignore for simplicity.

I check multiple times on STI from 2007 onward. Excluding dividends if you have been doing index investing, is actually -0.2% annualized returns for STI. Which means about 3% returns after dividends.

For myself, 5.4% annualized 12 years compounded. The figure is expected to go on a down trend due to recent years of market weakness similar to STI however I have added disadvantage on aging and need to allocate to lower yield bonds, and much larger allocation of cash injection in later years. I would see the returns going down to 5% to match my portfolio dividend yield if the broad market continues to be flat or negative. Nevertheless is still better than leaving them in the banks.

My New Year Wish is to be able to help my wife manage her portfolio. She has been pretty damn lucky that I won't wish to touch. I have 2 more other wishes for 2019. 

Happy New Year !

Cory

2019-0101

Cory Diary : Sector Map Distribution 2018-1230

Just drawn up a map on my current equity investment portfolio. Do note SSB/Treasury, Pension and Fixed Deposits are not included.

Everything in percentage. There are mainly two areas which I will focus on here.


Dividend Play

About 50% in dividend focus equity (Trust/Reit). This will probably move to higher allocation in 2019. Net-link Trust will need to be watched closer as currently is a little over-allocated. Need to pay attention on how 5G plays out. One way is to increase my other dividend holdings. There are also good amount in Frasers and Maple families which are quite popular with investment community and I think is rightly so. Will it continues to do well in 2019 ?


Index and Bank

With rising rates, Banks will naturally benefits from it unless recession hits us. There are lots of noise in the market current whether 2019 is bull or bear. If I compute correctly, STI ETF yield is about 3.65% in 2018. What this mean is historically, STI price is relatively low using yield as benchmark. However we know that low can go lower just that the probability is smaller. Chart wise I think is unlikely to break support too. See link. Since STI Index is heavy on financials, higher exposure in the ETF is preferred. Unfortunately there is Telco element in it which I am not so sure. Therefore, I will still need to allocate some directly to bank counters.

I will be summarizing the final counters using radar and bubble after year 2018 truly ends.


Cory

2018-1230

Cory Diary : STI Index - Crucial Juncture

Most people who is well verse with STI Index would probably know that timing matters in STI Index investment. And going in lower will do us well in the future to come. So you may like to know that we are on the cross road for this period and the index is on one of it's low point of the wave fluctuation.

We have Tariffs, Brexit, Rate increase, US Shutdown, Syria pullout and SG Property Curbs and Poor Telco performance. There are so many negatives. Well, without them Index wouldn't be low, right ?

The above chart has a lot of approximations from a novice. So I won't be bothered to try to catch the ultimate bottom but appears 3000 range is strong. Question is do we dare to execute our buy ? I can't imagine if this range is broken. Maybe Trump is right ?



Cory
2018-1225