Saturday 30 December 2023

My Investment Portfolio - SG (End Dec 2023)


Extracted from Stockcafe


- Added 150 units of Mapletree Log Trust via scrip dividends at $1.437

My portfolio no longer hover between red and green. It is now green due to the recent rally by stocks and mainly Reits. The market has, as usual, been very forward looking. Take a look at the CME Fedwatch Tool on the interest rates probabilities below.

The market has rose, especially Reits, pricing in expected interest rates cut in 2024. In fact, the market is pricing in interest rate cut of 0.25 on 20 March 2024 and an interest rate of 3.75 to 400 by end 2024. It is important to note that these are probabilities based on today's environment. The context can and will change with each passing days, whether the Fed achieve a soft landing is also another question. 

I cannot predict the future, I can only try to understand why the market has rose recently, as explained above. At the same time, understand what impacts the interest rate and the measure to take whether it is cut, remain the same or increase. As always, I do not time the market. I buy what I perceive as fundamentally sounded stocks and continue to build this portfolio bit by bit. There is no need for me to FOMO at this point since I have been buying Reits in the last 2 years, in anticipation of interest rate cuts.

Dividends received* during the month: $1,691.68 (Frasers Logistics & Commercial Trust, Singapore Telecommunications Ltd, Mapletree Pan Asia Commercial Trust, Singapore Technologies Engineering Ltd, Mapletree Ind)

Total dividends received in 2023: $18,777.94

Average dividends per month^: $1,564.83

Total Portfolio Market Value: $373,885.08

* Dividends are recognised after payment date. Average dividends per month is calculated by dividing the dividends received by 12 months regardless of the month. 
Portfolio excludes Singapore Savings Bonds, T-bills and Foreign Stocks
Divided by 12 months regardless of month of the year. 

Friday 22 December 2023

2023 My Review & Dividends - $1.5k dividends per month, 5.63% dividends yield

2023 was a year where investors track the inflation rate and speeches of the US Fed bank members closely. From inclusion to exclusion of certain words, it made a big difference.

My portfolio is in the green as Reits have recently increased due to expectations of rate cuts in 2024. As of time of writing, my portfolio value is $361,431.80 compared to my capital $349,768.24. If all goes well, when the rate cuts come in, my 2023 purchase of Reits will help pull my portfolio up. But history has shown that life is not so simple and things may not go as planned. 

Click image to enlarge. Some stats are from stockcafe

For the year of 2023, I have collected a total of $18.777.94 of cash dividends, a 39.4% increase compared to 2022. This means that I have crossed the $1,500 dividends per month milestone. To be exact, dividends collected for 2023 is at $1,564.83 per month and $51.45 per day. Also, my portfolio average dividends yield has hit 5.63%. This is the highest in my investment journey and it is above CPF's interest rate. The yield was pulled up by the local banks (i.e. DBS and OCBC) that I purchased during covid19 period.

The dividends amount and yield would have been higher if I had not chosen scrip dividends for  Mapletree Industrial Trust, Lendlease Reit and Mapletree Log Trust. I had chosen scrip dividends as these stocks were still fundamentally sound and I had taken a long term view to continue adding the stocks. 

In terms of total dividends collected since I started this journey, I have collected $78,049.25.

This year I made a total of 16 transactions. 14 were buy/add/scrip/preferential offering transactions and 2 sell transactions. The 14 transactions were mainly for reits/trust except for Keppel Corp and Seatrium. I have been buying Reits in anticipation of the interest rates cut which will happen. The question is when it will happen. The 2 sell transactions were for Seatrium and Suntec Reit. Seatrium was given due to the Sembcorp Marine acquisition of Keppel O&M. I decided to sell to realise the 'gain'. Whereas for Suntec, I have held it for 10 years and the dividends has not been increasing. 

While most people do not bother to track the number of transactions made, I make it a point to do so on a yearly basis. I do so because if there are too many transactions in a year, it could mean that I am too trigger happy and have not been buying or selling at an optimal quantity to minimise transaction fees. Also, if there more sell transactions, it would mean that I would need to review why. Have I been buying stocks that are not fundamentally sound or did I panic sell? As an investor, I should have more buy compare to sell transactions.

As always, this update excludes Singapore Savings Bonds, T-bills and Foreign Stocks.

Saturday 9 December 2023

My CPF Strategy - Reached Full Retirement Sum (FRS) of $198,800 in 2023

Everyone of working age would have definitely have heard of Central Provident Fund (CPF). At individual level, they either love it or do not like it. Those who do not like it may feel that it is a forced saving and fear policy changes impacting the scheme or even that it is a scam. In some cases, they may have been misinformed. Whereas those who love it understands the benefits and maxmises it. 

I used to belong to the camp that did not like it mainly because of the fear of policy changes and I felt that I could earn more through investment rather than have the money sitting in CPF earning up to 3.5% (for OA) or 5% for (MA and SA). 

I was too naive. Having embarked on the investing journey sine 2011, I realised that it is not easy getting a portfolio yield of 5%. From my records, I have not even reached 5% yet, even after 11 years.  But bearing unforeseen circumstances, I should get above 5% this year. Due to this experience, I decided to explore CPF and join the 1M65 telegram group. As I understood CPF more, I appreciated it more. I decided to explore ways to maxmise it without topping up with cash unnecessarily as there was still a policy risks such as changes to withdrawal age. 

I had two immediate priorities. The first was to transfer excess money from OA to SA to earn a higher interest while balancing the need that I still need OA for monthly deductions for housing. This was not an easy decision as this transfer is irreversible. If I am out of job, I could run into the risk of having to use cash for my monthly deductions when my OA runs out. Hence, proper planning is important and it is essential to ensure that you have at least 6 to 12 months of buffer for your monthly deductions.

Second, reach MA Basic Healthcare Sum (BHS), so that contributions meant for MA would flow to SA instead. I had actually reached BHS since 2022. When 2023 started, I did a top up of $2,500 to my MA using cash in January. Also, whenever I had deductions in MA for insurance, I topped up the shortfall in amount to reach BHS in the same month. This is because I wanted my contributions meant for MA to flow into SA. This is a win win situation for me as based on my income assessment projection, my cash top ups to MA will be eligible for tax relief.

Source: CPF
Now that I reached FRS in 2023, at the age of 39, the bonus is that my OA will increase at a faster rate. This is because MA contributions meant for SA will now flow into OA instead as my SA has reached FRS. 

I know that there are some flaws and risk with the scheme such as policy risk. Also, the effective interest rate is actually lower because 
a) CPF interest is calculated based on lowest balance of that month (vs interest being calculated based on average daily balance); and
b) CPF interest is paid out in the start of the next year (vs interest being paid out in the next month, allowing compounding).

These 2 points, are unlike the usual interest calculation in Financial Institutes. 

I do not know who thought of the CPF mechanism. But it is so well though through. What I type here covers just 2% of the CPF mechanism. Kudos to the CPF team. It is not easy coming up with the policy, refining it and operationalising it. 

With this, I have already decided several years back that CPF will be my safety net. We will all have different view regarding anything, and this certainly applies to CPF too. As I am fully into investing of equities and bond, should my investments fail, CPF monthly payouts will be my plan B. I have also decided that this strategy is for me, I am unlikely to purchase a 2nd property and use it for passive income or investment. My personal take is I will consider a 2nd property only if both my spouse and I:
- max out FRS;
- have cash on hand to top up to ERS when we reach 55 years old; and
- have cash on hand for a second property.

All three conditions must be fulfilled before I consider a second property. 

What is your CPF Strategy?

Sunday 3 December 2023

My Investment Portfolio - SG (End Nov 2023)


from stockcafe

- Given 1,240 Keppel Reit bonus share by Keppel Corp (1 Keppel Reit for every 5 Keppel Corp)

My portfolio is currently hovering between red and green (i.e. unrealised loss and unrealised gain), which I find quite exciting as it means there are more opportunities for me to consider adding stocks.  Reits have gone up in terms of price and I felt that the price of Raffles Medical is more compelling. But I have not added it yet. 

This month, I had also submitted my notice of election for Maple Logistics Trust to opt for partial scrip dividends instead of fully cash dividends. The opportunity to get the share at $1.437 is just too good to ignore. 

Will share about my full year dividends for 2023 soon as the dividends have been declared. 

As for Singapore Savings Bond (SSB), I am surprised to received full allocation. I had expected this SSB to be very popular. Hence, I have used both my wife and my own CDP accounts to apply for the SSB. Nevertheless, I am so happy to get full allocation across both accounts!

Dividends received* during the month: $1,708.94 (Suntec Reit, Astrea 7 Class A-1 Bonds, DBS, Keppel Corp)

Total dividends received in 2023: $17,086.26

Average dividends per month^: $1,423.86

Total Portfolio Market Value: $352,450.85

* Dividends are recognised after payment date. Average dividends per month is calculated by dividing the dividends received by 12 months regardless of the month. 
Portfolio excludes Singapore Savings Bonds, T-bills and Foreign Stocks
Divided by 12 months regardless of month of the year.