Prior to the Bank run up recently, I was a little over allocated in Bank segment. This is in consideration of STI Index as well as some of the shares that are in trading. So it was traded off when the bank did the initial run up. This increase a little bit of cash which I have some allocated elsewhere. As we know now, banks continue to run up.
Unsurprisingly, the performance between Portfolio against index narrowed a little but just a little to about 14.5% gap. The bank weight-age if I could remember is about 26% of STI Index whereas Cory Portfolio after consideration of Index shares will be lesser than 15%. Fortunately the broad classification on Services, and Reits segment also register some good run up.
One thing I did in Year 2020 is to ensure I have enough representation in Banks which unfortunately met Covid-19. With the yield that high and looks more sustainable, it makes sense to hold it over others. It gets tough to increase the allocation now despite relative good yield.
Cory
2020-0609
Market Recovery
We just have the steepest decline in STI in March. And when Circuit Breaker (CB) kicks in and enormous Covid-19 packages to support the economy, is already on purpose that we will not have V-Shape recovery simply because it was once extended and now follow by gradual openings. So the Index is also more like an "L-shaped" with a bias elevation for gradual recovery as below STI Index chart. With Index at -14.5% and judge by recent just one week 6% recovery, is not impossible that at the ending part to be a "Slanted U-Shaped" though chances are the probability is lesser.
This week Banks make major recovery, though the banks segment in my portfolio is smaller is still a large part of the portfolio, and it just flows with it though slightly slower. As today, Cory Performance YTD is back to positive by a hairline of 0.02% to be exact and 14.5% above Index (excluding index 1st half div). Theoretical max annual div $59k. Key stocks that I can remember off-hand are Ascendas, CMT, DBS, OCBC. STI Index, Netlink, CRCT .... which totaled about 20 stocks.
Market Relapse
The market may face a situation as we are opening up that we could see spikes in Covid-19 community cases but will we have to return to "CB" again ? Personally I think is unlikely we will face a spike similar to dormitories infection scale in the country. As previously mentioned, we have learned how to manage it through social distancing and mask. Neither will it be tenable for the country to go through CB again and another round of same Covid support packages. It will also be a little embarrassing for the ruling party to face coming election with confidence.
What this mean is the economy has to continue to open. And if there is major cluster infections, we will have to ride through it. How to work around this with other countries will be tricky. So the economy will churn on. Many of us who can will probably continue to Work-from-Home ( WFH ) to void major cluster happening in Offices. However, most of the businesses such as Show Gallery, Malls and Restaurants are likely to stay open.
A historical day for Cory of finally breaking even in Investment for 2020. Great day for Dividend Investing and staying vested. Hopefully it will last ! I am sure many others do too. As I type, DJIA staged near 1K point recovery above 27K in trading hour due to better job figures. Looks like Trump may have what he wanted.
Cory
2020-0606
SSB - Singapore Saving Bond
With the market crash due to Covid-19, many people is tempted to maximize the rebound by investing in the stock market at lows. And is at this very moment, cash is running low. Cash is basically King in March and still today in June.
One of the way to raise cash is to sell bonds or unwind your fixed deposit positions. So there will be great temptation to release SSB back to the government. I was exploring this idea too which I have max out my SSB between 2 to 2.5% quite long time ago to a trader mind.
I put this into deeper thoughts and decided Not !
1. SSB is a place where I secure my fund to support my home loan repayment and as a emergency fund too. I have yet reach a stage where i can sleep soundly putting this money to work in stock market. Logically I should but I feel my life will be shorten by 5 years from worries if I did even I could gain some monetary rewards.
2. At 2 to 2.5% this is way better than current new issues or fixed deposits in the market.
3. $200k is quite a lot of money to stuck in there. But I would caution and ask people in similar situation as me to think further in another way.
If one has $500k asset, $200k is 40% of net worth. That's a big chunk but necessary because it is a defensive line. If one is to grow his wealth to $1,000K, that's only 20%. So as one wealth grows, the amount in SSB by ratio get smaller. That's the essence. Fill the bottom safety nets. Whatever overflowed, we can put wherever we want. Over time, we will spring !
But it may takes a long time for many. Yeah, this mean you aren't ready yet.
" Maybe I can explore my fixed deposits. Oh no. Better leave it for 2nd Waves just in case.... ... "
Cory
2020-0602
