Volatility
The picture has changed so much for STI. Banks were hammered down. In addition to the Trade War the new concern is the virtual bank licensing. The Reits / Trusts generally do much better that even the weaker ones make the Banks look bad.
I did a bottom fishing on STI ETF to support the gap in performance between the ETF and me. However, it seems STI ETF still has some distance to go further down as the next tariffs of US$300 B is going to be major. Companies should be making preparation for this as this could hit China manufacturing with more substance whereas previously maybe just on finishing touch of products.
I think War Chest is more essential today than few days ago as the market trend seems getting a little nervous. While I hold the view that stable Reits are like "Fixed Deposits", this is based on the opinion that DPU remains stable and Investor ignore Capital Gain/Loss. So any significant market changes, if any, to hit this class of asset, this may even present good opportunity for the fund to expand. Question is how deep ?
Feeling bored and thinking.
Cory
2019-0523
Last previous blog here.
The key change after 3.5 months are my Net Property Asset. Definition is the value of my property minus outstanding loan. This is then added to my Net Worth. The way to obtain value of my property is to access URA website for recent transacted values in $psf. And then do a conservative estimate of what my property value be if I have to sell it today.
Other changes includes increase in Singapore Saving Bond holdings (SSB) and increase in equity valuation due to capital gains. Both % figures hold well but SSB still reduces slightly in % wise. More cash today in my investment account and the unrealised gains from stocks outweighs the net sales. Dividends are straight into cash.
Despite that, saving reduced in % wise. Mainly because I have just paid my tax. Proportionate decrease due to significant increase in property net value. Slightly higher spending due to new cost for nanny.
Cheers
Cory
2019-0519
Like in many countries, we have Income Tax, GST, Road Tax and Property Tax. Similarly for me even though I am based oversea, I can't escape them as well. The tax here (oversea) is the biggest item of my expenses. Usually I look forward to good bonus to help cover them. There are few deductions to be made before I can see my money in my bank account. There is Pension too but that is another topic.
Taxes
In the payroll, there are Income Withholding Tax, Labor Insurance Tax, Company deductions and Medical Tax. Company deductions, Labor and Medical Tax are deducted directly through payroll. To be clear they aren't part of Income Tax. They probably constitutes about 2% of Income. The company will pay separately about 8% to the government. This works to about similar to our MediSave size. However the key difference is the money is to a common pool and will not be returned unlike Medi-Save.
The much larger component will be Income Tax. To cope with the payment, the authority will withhold some money every month and one will pay the balance after an assessment during the tax period. Yes, this is deducted from payroll as well.
Assessments
The income tax here has three routes of assessing the needed unlike Singapore where is pretty straight forward for most of us. Usually, only 2 will be used as the 3rd option is only when you have very significant earning. One of the easiest way for me is to ask for tax office personal assistant (temp worker) to follow through the form on the required. And the system will compute what is needed and I will pay the lower of the two after withholding amount that has already been deducted monthly prior year. After doing a few verification with the tax officer, I will proceed to payment using ATM setup within the tax office that allow us to withdraw over the typical limits.
Tax Rate
From table above already translated into S$, most Singaporeans income would fall within the range of 20% cascading. That's pretty high. Do note this tax excludes Medical and Pension consideration which are considered separately. If you are a Senior Manager and above, 30% - 40% cascading tax of your income is the norm here (oversea).
This is one main reason why people who earns good income like to come to Singapore. The taxes in Singapore is relatively much lower.
Cheers
Cory
2019-0518
Relative Performance is like a bitch but I like it. Keeps me on my toes. There is also a deep secret which I have been studying for some time that is to use it to do re-balance between STI ETF against my portfolio. That way I could theoretically increase my odds to beat Strait Times Index.
Using Cory Barometer above, the gap is widening so maybe good time to plunge into STI ETF. However, Uncle scare scare. Almost try DBS but also scare scare. Okay okay. How about buying back Mapletree Ind Tr ? Also scare .... glad that I raised some cash.
In the end, Cory Gene Strategy : Freeze..... ( Think I am crazy ? Ignore me )
Cory
2019-0513
The market currently in upheaval due to recent Trade Issues. During this period I do some adjustment and manage to raise 6 figures warchest from recent sales in my trading account. The exercise is more of re-balance with more net cash. JD.com and SIA no longer in my portfolio. I have no plan to tap on bank cash which will be reserved.
Currently Xirr : 10.7% for my portfolio. Profits yield is slightly lower at 9.7% due to realised gains before year ended. STI came down to 6.5% quite furiously which is about 8.5% after dividends using STI ETF as a reference. Total dividend collected so far 17K.
Reits/Trusts - Still surprisingly resilient in the face of trade war. Applying same logic's of CMT onto Ascendas-Tr and Ascendas Reits taking some profits off the table, they are smaller today but still pack a punch. I am still looking for opportunity to boost my dividends which currently stand at potential 43K max now. I like to end up with 50k potential by year end.
For the current negotiation, I still believe in human minds prevail, an acceptable agreement will be reached. Since is initiated by USA, is definitely will favor them. The world trade is based on USD. The Consumption power house is in US. There is limited option for the Chinese. This could still end up favorable to Mexico and SE-Asian countries as we will be more involve in production export to America. Therefore good for our industrial assets.
Cory
2019-0509
This is the concept I have termed which trying to grasp. A number of us understand not to fall into the trap of price anchoring. What this mean is that there is a believe of specific price of a stock that one is familiar without consideration of fundamental or market changes.
This often happens when one buy a stock and will not sell even when fundamental has weakened and continues to assume the price will return to purchase price or higher.
Yield Anchoring is more for dividend investor. Say we use to buy CMT at 5.8% yield. Today the stock price is trading at 4.8% yield, one may view as too expensive. Should we sell CMT ? Can we buy CMT ?
If I am to go through logical thought process. Few things come into my mind.
1. Business Fundamental
Can DPU maintains? Can it grow?
2. Alternative investment
Alternative investment that gives better yield for similar risk ?
3. Risks
Is my personal situation or macro environment considerations.
If we are to think through carefully above, there maybe time I could refuse to buy CMT at 5.8% yield but later on could be all willing to purchase at 4.8% !
In current market condition, Interests rate are low. I could view CMT providing stable 4.8% yield for next couple of years with potential of DPU growth. The view that CMT Malls Business are vibrant and domineering leadership in the market. Relatively low gearing which could avoid loan liquidity issue if there are recession. And with property curbs .... investment limited.
This may explains why selected performing Reits and Trusts do well even under trying condition of the market. Will it change ? Sure does. So we need to monitor but usually is not a overnight thing except Trump tweets .....
Cory
2090509
Decided to do a "tweets".
Trade talk has just taken a surpise turn for the worst to my dismay. Is now more like two arrogant kids having a face off. It could get worst. One would think two sensible adults will come to a compromise but life is unpredictable.
This has hit my first level warning. Having 11% returns in 4 months period, is like swimming ahead by 10 laps. So for this phase I will do further profit taking.
Sold half of my Ascendas-h Tr as I have more than 2 years of dividends. The future dividend loss will be felt.
Sold only the amount increased of Mapletree Ind Tr which I have increased before ex-dividend. It was average up previously in anticipation of better market environment and net net after dividends still have slightly more profits. This is more like de-risk levelling move.
Sold SIA. Just few lots. While is gain ytd. Counter level is slight loss. Is non core so is a counter less to manage. I also decided to release one of my US stock at market price with similar story as SIA.
thanks
Cory
20190506
