Jul 18, 2022

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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Jul 14, 2022

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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Jul 10, 2022

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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Jul 9, 2022

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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Jul 5, 2022

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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Jun 28, 2022

Cory Diary : 1H'22 Dividend

Quick update on the 1H'22 Dividend Report for Equity Portfolio. A brief on the portfolio changes. The portfolio no longer has bond since FCL matures. All elements of bonds are now supported through CPF and SSB. In addition, the yield of the portfolio is not perfect due to growth stocks within pulling down the overall score since they do not have dividends or minimal.

Last year the dividend reduced a little due to portfolio focus on capital gains and then switch out to dividend stocks that have just ex-dividend due to portfolio re-balancing. This year we do not have such situation. The strategy of the portfolio is to use Dividend for cash flow which also act as backstop in market downturn while buying lows.




This year as expected, the equity dividend is backup on rising trend due to larger portfolio size from larger total gain last year. Year-to-Date dividend $32,407. With this trend, potential dividend cumulation towards $500,000 by year end will be a nice milestone. Obviously with dividend play is a matter of time this will arrive provided we ever started. Feeling cheeky.



Cory

2022-0628

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Jun 26, 2022

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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Jun 19, 2022

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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Jun 11, 2022

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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Jun 5, 2022

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.





Cory
2022-0605

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Jun 3, 2022

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

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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May 28, 2022

Cory Diary : Pricing Power

One area I notice is that many of my stock selections revolve around Pricing Power. Let's mentioned a number of them.



SHENG SIONG - Basic necessity, different market segment from main competitors, growing stores. This are good inflation hedges.

FCT - Basic necessity, Connectivity, Property and Strong Sponsor with pipelines. Another good inflation hedges.

DBS - Basic Services, Integration of Services, Regional Expansion, Sustainable Strong Dividend, Strong Cash Flow, Benefits from Rising Rate, Largest Bank of the main three banks.

TESLA - Strong Cash Flow, Demand > Supply for at least 3 months, Strong Margins, Growing EV Market Shipments, Car Pricing keeps going up.

MICROSOFT - Strong Cash Flow, OS Monopoly, Strong Margins, Pricing Power, Software Businesses ( Scaling ).


Bracing Inflation Head On !


Cory

2022-0528

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May 25, 2022

Cory Diary : Funding to buy during this market downturn


The Stock Market has been under correction mode for some period. For STI Index, it has came down to early Jan level. The NADAQ (-27% YTD - updated) seen more severe down level to last year 2021 Feb period similar to Dow Jones. Unfortunately, investment cash account has been depleting as stock gets cheaper.

If we look at Tesla -41% YTD. Apple down almost -21% YTD. If we looks into other growth stocks that is still in -VE EPS phase, -70% loss from All Time High, is not uncommon. This was my concern in the article on Cory Diary : Market Draw Down Logic in late April just a month ago.

Currently at this juncture, there is a feel that market may get worst before it can recover due to high inflation level which forces the Fed to raise rate. It looks like they won't stop unless recession is around the corner. Of-course this is calculated guessing but it may not be what we expect so please dyodd. However if opportunity arise, and if we run out of cash, one is tempted to tap on emergency fund which is a Play of Russian Roulette. This is high risk.

In a down market, Bond can get hit especially in interest rate hikes. So if we park all our money there, there is a good possibility we will also be in deep losses and may not work. Fortunately, the only company bond in the portfolio matures this month and we have a sudden cash boost ( Plain Lucky). This cash can be use in broader market choices. The stock if we are to buy now is much cheaper than most people who invest in recent times. However low can get lower as there is no way to determine when the correction will ends. My personal plan will likely as previous article ( Cory Diary : Market Fear )

Another good alternative is Singapore Saving Bonds that one can withdraw as needed without impact to capital other than the $2 withdrawal fee. And this what I did partially. This few batches planned to withdraw anyway as the new issue of SSB has much higher interests. SSB provides reserve funding for the housing loans for years in my financial strategy. If we are to use it for stock market instead, personally I can only stomach partial funding and mainly into dividend stocks which helps provide cash flow.

Dividend Strategy by itself has passive cash generation ability. The longer the dull period, the more cash receive to buy lows. So in the long run will automatically help investor to buy at good price in cash crunch period.

Finally, have a job helps to provide the needed saving cash to invest during this period.

Should I go into growth stock ? As I was concern with the huge volatility and reduced Tesla allocation ( see link ) which is still quite large, it may not makes sense for me to increase now. To close it off, this is excellent period for dividend investor to collect shares as the price can get cheaper but no ones know how long. 

Cash is King feeling in the air.


Cory

2022-0525

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May 13, 2022

Cory Diary : Market Fear

Market Opportunity Timing

Nasdaq has crashed about 25% from ATH. STI has corrected about 8.5% roughly from recent high. Many growth stocks already hit Pre-Covid level bursting the bubbles created from WFH atmosphere. No doubt Market is in Fear. As usual when market is in blood bath there is opportunity to be made. The problem is will it go lower. If we are to measure against Mar 2020 crash, we still have 1000 point to go for STI Index ! Something to think about with current high inflation. No model answer here.


Funding

The recent crash comes at a time after my fear of volatility with growth stocks, my path into multiplier and SSB hitting 2.5% for new issue. In a way, incidentally build up a reserve to tap.

Coincidentally with high SSB rate, refunded back some issues for higher rate plan and a Bond matured this month. However, I still prefer to retain most of SSB for housing loan emergency at higher rates. And I plan to reserve some fund for CPF top from the bond matured.

At max in Net, the reserve can still provide a sizeable amount if we are to deploy them into warchest other than those investment cash account which already quite depleted from recent DCAs during the sell down.


Deployment

Firstly, where should we deploy. 

We can go for Strong Reit which are coming near to 6% yield as Option 1

How about be a little greedy and go for High Yield Reit hitting 7% if we take into buffer consideration of exchange rate risk. Possibility mix with some other stocks. This will be Option 2.

Option 3 into S&P500 which corrected roughly 18%. Required exchanging for USD at expensive rate that tend to fall in good times as my assumption. 

Option 4 into Growth stocks with strong balance sheet and again required USD and larger volatility/Risk which blogged in earlier article.


Secondly, how much each time to deploy, the pace and amount. So far I can hardly smell any course change with current high inflation medicine. Maybe will try bits investment each time during this market sell down each day spread across a period. Once Fed makes a deliberate control to slow down the rate hike, or some major market change, we can adjust after for the next batch. So maybe 30% before and 30% after. And remaining 40% for buffer. This plan likely varies as time progress.



What a time to have Covid Buffet at Home !

Cory

2022-0513

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Apr 30, 2022

Cory Diary : Market Drawdown Logic

Dividend Investing always have the idea that as the stock get cheaper we can buy more shares cheaper. At the same time we get more and more dividends. Capital loss is not meaningful as there is confidence the price likely returns if is not short term even long term we can wait. This is logical when the business fundamental is not significantly impacted and we are still seeing the cashflow coming in to provide dividend. Collecting dividend while we wait is a very happy exercise mentally.

Bottomless Pit


What-if is growth stock that hardly has any dividend ? This becomes tricky in market drawdown. In growth stock, PE can move from low to high gear and back. What this mean is money created out of thin air or vaporize with sentiment as money is not in the pocket literally. Strong companies will not escape punishment even with almost perfect score as people will still focus on the imperfect and blow it off with broad market. People who continues to average down in a down trend market will be suffering for a long time mentally. There is no base support. It can be a bottomless pit as valuation is just a paper exercise till something change the course.

The market is well known to be 6 months ahead. So if rates impact till year end means Early June is the time we re-evaluate our thoughts again. So much on Growth Stocks. Needless to say is not the same logic as dividend investing. Our brain needs to switch a bit on this and timing maybe critical even when we cannot do well on it. As usual exception always applies just in case someone like to shoot my thought.


Cory
2022-0430


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Apr 22, 2022

Cory Diary : Trading log 2022-0422

Quick updates on recent changes to Equity portfolio. Attained Potential $66k annual dividend with current equity setup after some re-balancing across the portfolio.




Tesla

Further reduced Tsla allocation to 11% on each upside swing in stages. The volatility is slightly too high for my comfort so is best to do it when the US currency in still in my favor. The latest sale is right after result which registered another fantastic quarter for Tesla. No doubt I am still learning on growth stock dynamics. Yesterday Netflix significant sell down is another reminder after Facebook (Meta Platform ).

Still bullish on Tesla however slowly realised that there is always drawdown which I can collect patiently when comes to Growth Stocks. Is 11% allocation just right ?  Frankly I don't know. Maybe it needs to grow in lock step with the portfolio size. Each time Tesla go on upticks, it becomes top allocation in the portfolio and I will shave a little which even after still has sizeable allocation. So it depends on many moving wheels I guess. And achieving a balance that I can sleep well..


DBS

The allocation has increased to 7.4% but decided to clear off all OCBC shares that recently collected. At this size, chances are will further increase the investment when opportunity arises primarily due to more than 4% dividend yield which is quite attractive for a bank stock else we can stay put and focus on dividend stocks through reits.

There are thoughts that P/B ratio historically is expensive which I agree but it makes sense to hold DBS for the dividend level it helps compensate at current price level. 



Sabana Reit, Aims Apac Reit and Daiwa House Log Reit

Make the mistake of selling too much ( roughly 60% ) through profit taking and the fear of major correction for high yield reit. Decided to buy back some at higher price to maintain the needed dividend while keeping the allocation in mind.

The latest report again show robust Sabana performance so the current 2.5% allocation will give me peace of mind. In peace time, Sabana allocation will go higher but we know Fed is in lock steps to increase rates. Likewise, there is some minor adjustment to increase Aims Apac Reit while reduced slightly on Daiwa Reit. This three Reits have been risk adjusted on allocation which provide strong dividend yield to the portfolio.


FCT

Further increase my allocation to this Mall Reit as I am still quite bullish on the defensiveness of suburb malls. The only weak link is the the Fixed Rate debt is relatively small compared to other reits. The other Reit which has sizeable reit allocation in the portfolio is MCT which just reported robust result.

At 12.9% allocation, this is probably the max I will go for this stock at portfolio level while malls on recovery path. The current yield is slightly below 5% based on my personal metric. 


Sheng Siong

The last stock is increment allocation to Sheng Siong. This is a defensive stock which has good growth potential and strong business fundamental. This help to compensate a bit when the portfolio sold down some Netlink BNB Tr last quarter. This provide some diversification from Reits while providing sufficient dividend the same time which is something nice.



Cory
2022-0422

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Apr 10, 2022

Cory Diary : DBS Multiplier Experience Sharing

Often we need to have some working cash, immediate cash or emergency needs. So able to optimize this amount of idle money will provide some returns. Fixed Deposit rate is bad in current environment and not as flexible. Even if rates continue to increase, is still low.

Conditions required for DBS Multiplier as follow currently. This could change. Currently to enjoy the max benefit we need to park $100k as below table. This cash can move out to other saving accounts as needed for use.



Under the My Account tab, DBS will track it monthly on your earning from Multiplier.


Following 4/5 criteria is met. So we hit 2% for the $50k and 3% for the next $50k as long eligible transactions meet $30k. This can come from salary, dividends, share transactions, credit card etc. Obviously I will not increase my credit card spending to meet the condition.



There are two types of returns below given on different day. If we are to add them all up, totaled $212.35 for  the month. Which mean a potential income of $2548.20 for the year.



We have formed a basic layer of income stream. Nice way for money to grow money.


Cory
2022-0410

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Apr 2, 2022

Cory Diary : Alignment of Net Worth Tracker

Have been thinking lately on how to simplify Net Worth tracker while trying to optimize asset such that they work harder "Passively" the same time. One of the way is to segregate the tracker lines to reflect efficient use of asset. Regroup similar attributes one to same group. See New Chart below.




Non-Productive Assets

Fixed deposits (FD) and Cash Saving should be in a group that formed the lowest base on the tracker. Their interests are small versus some other actively managed assets. This segment is not productive and is for daily working needs, emergency cash, regular bill payment buffers and even money market funds (MMF)  of investment accounts. Having them classify together gives a better view on non-productive assets.


Investment Streams  ( Red )

The recent setup of Multiplier ( DBS High Saving Returns ) with the goal to hit 3% max ( 2.5% on average ) take some planning and significant cash to invest ( 100k fund for $2.5k annual interests ) but  provides a much better returns than FD/Cash. This will be called Investment Streams as new term coined to align with the desire to have multiple streams of income which will have it's own group that includes Equity, Bonds, CDA & Property for productive assets.


Stacks

Within the Investment Streams, Equity ( Orange ) and Property ( Blue ) stacks single out to have a better view on their allocations. As see from the chart, the property segment takes a much smaller proportion to Equity which is a key engine for the dividend income. However the potential income from Rental is not small. More than 50% of current dividends. This is important to mention. In-addition to provide diversification. However, large funds are tided to SSB for emergency buffers due to loan. With 2.3% in SSB ( Low risk ), this means possible loss of 5k annual dividual income has it been use in Reits ( Higher risk ). Net is still worth it as property income from rental is much higher due to inherent leverage.

There is one time change due to underlying definition change from previous chart due to redefine of MMF as Non-Productive Asset. SSB, CDA and Multiplier as Productive ones. 


So how do you like this new methodology ?


Cory
2022-0402

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Apr 1, 2022

Cory Diary : Performance Q1'2022

Performance Q1 2022 ( +1.9% YTD )

In Q1 2022 we see significant run up in STI index due to Banking sector which is similar to what happen in Q2 2021. However Year 2021 performance manages to catch up significantly which ended the year in good positive notes. ( see link ).  As we move near to end of Q1'2022, the portfolio managed to end in positive territory with a smaller gap against STI Index. And end up with Positive 1.9% YTD.

Cory XIRR 1.9% vs STI 9.1% YTD


Dividends ( Equity )

Dividends for Q1'2022, $ 16,282 which implied monthly average of $ 5427. The current annual target is $64k. There is no surprise so far and is per expectation. Continuously looking for way to further increase the dividends by making idle cash more efficient from other pockets of the net worth.


Tesla

If we do comparison below between STI (Pink), Tesla (Blue), DJIA(Green) and Nasdaq (Red) on YTD, Tesla has a good run up in the last 2 weeks after falling behind for months. This shown again ability to hold through volatility is critical to profit in US market for stock that we have conviction in and shown to show strong business fundamental.




Tesla currently has 13% allocation in the equity portfolio after reducing the position 3 times and because the volatility still too high. Tesla still occupies top position in stock allocation despite that.


Reits

Have a nice recovery across a number of Reits in the portfolio. Even MCT registered a small loss after averaging down and hitting 5 digits negative when they first announced the merger. At 5% plus yield across many of the branded Reits they are still quite attractive for long term planning. FCT also stage a strong rebound with reducing Covid measures.


Wilmar

Just initiated a small stake in this commodity company. Hopefully not a painful lesson fee.




Cory
2022-0401

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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.