My first post in 2022 to welcome the New Year.
I had high hopes that year end window dressing would push my IBKR portfolio return over the 20% mark, because its nicer to say I made 20% than 19%. In fact, on 30 Dec, it was over 20%, but there was a small drop on 31 Dec so I ended up with 19.79%, barely beating the Vanguard Total World Stock Index 😅
Despite the fact that there were two crashes in 2016 and 2020 when STI went below 3,000, most investors made >2.5% return when you look at the 5 and 6 year cumulative returns.
For Oct 2019 to Sep 2020, despite the market crash, it is frankly impressive that 50% of investors are still positive. But 12-mth performance is meaningless. I could have bought STI ETF for $1.50 10 years ago and every year collect >2.5% dividend. But because 10/19 to 9/20, STI ETF dropped, I would be considered to have 'lost money'.
Usually around this time, I am taking leave, preparing for, or going for my overseas vacations. I usually ignore the markets during this period which is also a good thing as there is usually a lot of window dressing going on around this time. Its far better to buy in January than in December.
I guess last year was an exception in that there was a mega-rally in Nov/Dec that turned out to be a 'real rally'.
Quite a few new entries thanks to the buoyant market conditions. While my focus is on ETFs, two individual stocks entered the list. Aviva had a good rally and made it into the 'large' list, while the oil price rally helped Shell enter the 'medium' category. First State Bridge is a super reliable performer and it was only a matter of time that it pushed itself into the list.
These are my September investing activities
I signed up for OCBC Premier Banking recently. One of the push factors is that I needed to get a "free" Mastercard (preferably with no fees/permanent waiver) quickly because Amazon was threatening to impose a 0.5% surcharge on all Visa payments in September which was like a few weeks' time. As it turns out, Amazon has since postponed the 0.5% to November.
Like most other banks, there are no charges for signing up but conversely no real benefits. Not really enough to make me sign up earlier, but since I needed a Mastercard I guess it was time.
The Mastercard in question is the Premier World Elite Debit Card. Since its a debit card, why wouldn't it be free?
So far, if I were to rank the benefits, it would be Standard Chartered no.1 due to online trading have lower comms + no minimum commission and the USD account. Their Visa infinite is only 2 years fee waiver and after that you have to request the card department to waive the fee. My SCB RM says he is powerless to do anything regarding card waiver.
UOB privilege banking would be no.2 because their Privilege Banking Visa Signature has half decent rewards and is lifetime fee waiver.
In the meantime, I am looking out for a better Mastercard. My key criteria are:
Update: I received a letter from OCBC saying that I will also be receiving an OCBC Premier Visa Infinite with no annual fee and that I can contact OCBC if I don't want it. The RM didn't mention this to me. Anyway, since its lifetime fee waiver I'll just keep it and lock it up somewhere together with my OCBC Frank card which is also lifetime fee waiver.
I put in $10k+ to accept most but not all of my entitlement for the 3 for 2 Sembmarine rights issue. I got the shares 'free' from the Sembcorp demerger so hopefully I'm not throwing good money away, but oil prices and demand appears to be picking up.
Other than that, I'm spending a little bit of my free cash flow to buy ETFs.
For SRS, I put this years' contribution of $15,300 plus accumulated dividends into Great Eastern's 1.3% for 2 years. Application was done easily online with Singpass. I wouldn't waste time with any plan that can't be done online.
While 1.3% is not fantastic, it really is much better than letting it sit in my bank account. Furthermore, I have to look ahead and see that I might have various 2.5% 3-year plans maturing over the next few years plus my sizeable holding of Frasers 3.65% bonds matures next year as well. So there is a certain amount of liquidity that I need to roll over via these short term plans to avoid ending up with too much cash in a saving account that hardly earns anything.
Nearing the end of July, China's crackdown on various tech firms and the education centre was an opportunity to continue to accumulate more 2800.HK and 2801.HK. Also added more VWRD and VUKE.
I do not think that prices are 'cheap' at the moment, but I felt that the small dip was as good a time as any to put some spare cash to work. If market keeps on going up, I won't be buying as much in August.
I am avoiding Singapore stocks for the moment because I feel that there are financial risks in Malaysia that could well have a spillover effect in the region. Nobody wants another currency crisis but one should be aware of the risks.
Now that the first half of 2021 has passed, I did a review of my passive income and discovered that my 1H2021 dividend income is +18.5% vs 1H2020.
I have mentioned previously that my aim is for my dividend income to recover to pre-Covid levels by end 2021. Next year, I hope for further dividend growth and to achieve Financial Independence by end 2022.
Financial Independence occurs when passive income is sufficient to meet your current standard of living.
However, that doesn't mean early retirement for me. Unlikely many who seem to hate their jobs (or those who hate their jobs probably surf internet forums during office hours to complain about their job), I'm happy with my job. Getting a salary and being able to work from home a few days a week (all that savings in transport time), I count myself fortunate.
I guess it also helps that I live in a spacious enough condo that I have my own 'home office.' Those who are cooped up in a shoebox condo might well prefer to be in the office.
I don't think current prices are a bargain, however, I have built up a sufficient warchest so I am ok to slow down the rate of my warchest increase by doing regular purchases of ETFs. About 30% of my free cash flow is still going to warchest but the remainder of my monthly free cash flow (nett expenses) is a pretty healthy amount.
I am unable to stock pick in a rising or buoyant market so I will stick to ETFs for now.
I had a fairly large sum of HK$ from my Vanguard delisting so I have been converting that to HKSE tracker fund 2800.HK and iShares MSCI China 2801.HK. I also bought other ETFs such as VWRD, WQDV, VPDX.
Vanguard ETFs paid out at the end of the month (counted as June dividends even though SCB pays late in July). DBS, OCBC and UOB also paid dividends this month. I count the dividend value even though I took scrip for OCBC/UOB. DBS I didn't take scrip because I'm holding in SCB, don't want odd lot.
Dividends just touching $50k after 6 months. Hopefully this will double after 12 months. After adding CPF interest to this, my passive income for 2021 should be track to recover.
Aug Edit: Missed out US$725.30 Telefonica dividend as paid in Scrip (30/6).
Bought USD at 1.3257 and parked the cash in short-term bond funds. I feel that at this level, one can long US$, collect some interest/dividend, and expect some forex appreciation as a bonus. At least, the risk of further downside is not that much, thanks to Singapore's 'managed float' of the S$.
While UK US Bonds ETFs have no withholding tax, the liquidity/trading volume/expense ratio/spread of the US-listed ETFs are a lot higher and might still be preferable if the intention is to park cash.
I parked the US$ in the US-listed VCSH and the equivalent UK listed VDUC. Both are Vanguard short term US$ Corporate bond ETFs. Maybe the best way to find out which is the better option is to just hold both.
Just when I thought I would start transferring 10k a month into Singlife until I hit $100k (due to the 1.0% interest for $100k), Singlife has changed the interest rate to 0.5%. I guess I should close the Singlife account soon.
As I have finished refunding my CPF Housing, I am running out of good places to park my spare cash/warchest.
I think May is the first time in recent history that I had not bought anything in an entire month from IBKR. Usually I generate the monthly IBKR activity report, but this is the first time I've seen an error message from IBKR because there was no activity the whole month (had to generate the MTM report instead to see my portfolio movements).
However, I added 2801.HK RSP to my existing 2800.HK RSP. I've also been doing my own regular DCA of world ETFs via SCB. My main world ETF is WQDV but I've also been buying VHYD and also recently added VWRD.
I will be getting a fair bit of cash back from the delisting of Vanguard HK ETFs so I also need to figure out where to deploy the cash.
For April 2021, my only purchase was my monthly DCA of WQDV. I missed the funding for 2800.HK RSP (I funded it on the 8th, which is the RSP date itself but you need to fund the purchase on the 7th...)
May 2021 appears to be more promising as the sell in May effect is taking place with prices correcting.
I have too much warchest in my bank account earning minimal interest. That's when I remembered that I can fund my Singlife account up to $100k to get 1% p.a. So I've started to transfer some cash to Singlife.
First quarter 2021 dividends collected. About 10% lower than 1Q 2020
A lot of S$ dividends collected in Feb. STI ETF, CDL HT, Ascott RT, etc
Also, like other Astrea offerings, I also encouraged my relatives to apply and they were happy to do so as its much better than savings/FD for them.
Fraser's Property Rights Issue is a bit trickier as the offer price is the same as the current market price of $1.18.
But if you recall I accepted my entitlement for the Frasers Centrepoint Trust Rights Offering at $2.34 without subscribing for excess (except what was necessary to round up to the nearest thousand), price dropped to $2.25, then rebounded and is now $2.55. So maybe there's a chance for a rebound after the rights issue overhang for this. Anyway, I want to be cautious as this counter is not in my priority list of counters to accumulate, so I applied for my entitlement rounded up to the nearest 500.
https://buyaftercrash.blogspot.com/2020/10/strategy-oct-2020.html
Year to date STI is up 9.31% while my IBKR portfolio is up 11.81%. Looks like I am on track for 10% return this year. Since it is only March, it makes me wonder whether I need to upgrade my forecast. That would also mean that there is still more upside to go and I should buy more instead of only building up my warchest.
My reaction was to buy more in order to average down as this was definitely a sale worth waiting for. On a one-year basis, my return is back to positive thanks to the recent rally. More importantly, a largely flat portfolio performance meant that my 2018 and 2019 gains were protected.
My China holdings are with FSMOne, and in 2020, China performed pretty well.
So overall, I'm happy to see that I didn't suffer huge losses and that I can continue to grow my dividends in 2021.
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Westpac Dividend was cancelled this month. But compared to 2020, I am collecting a little bit more dividends. My target is for dividends collected this year to fully recover to 2019 levels.
Averaging Up- My Weakness
One of my investing 'weaknesses' was a reluctance to buy
more if the price is more than my average price, so during the last GFC, I
didn't continue buying as as the STI rose toward 3,000
STI
STI has dropped below 3,000 again. I decided to start topping up my holdings of Sembcorp and Comfort Delgro last year and the market promptly responded by going down. In a sense, thats better for me as I still prefer to average down, even while I am learning how to average up... Now that Sembcorp is more of a utilities company without the Sembmarine overhang, I am actually more confident about adding to my holdings. As for Comfort Delgro, I still believe that 'disruption' by Grab is overstated.
FTSE100
Last Friday, FTSE100 went below 6500. I believe that FTSE 6500 is a 'buy' but I helped a family member transfer money to SRS to buy Lionglobal AllSeasons fund instead. Today FTSE is up nearly 1% but still below 6,500 so I will be adding at this level
Businesstimes reported that:
SINGAPORE's benchmark Straits Times Index (STI) rose 0.76 per cent or 22.49 points to close exactly at 3,000 on Thursday, touching this level for the first time since March last year. Across the broader market, gainers outnumbered losers 276 to 203, after 2.52 billion securities worth S$1.27 billion changed hands.
As I've mentioned repeatedly, its a safe bet to buy STI ETF when STI drops below 3,000 as it will recover. This time round, it took less than a year to recover. There is no guarantee of a straight line recovery but by year end, STI should still be above 3,000.
One of the investing rules I follow is to buy STI ETF (ES3) whenever it is below $3 because it will always recover to $3.
In 2020, I bought 27,300 STI ETF and the price has recovered in about 10months. Today, STI ETF went above $3 while STI itself hit 2,993.
2020 my IBKR portfolio was down 1%, but thanks to the rally in the first week of Jan, on a 1-year basis, my IBKR portfolio has turned green and is up 2.3%.
I hope that there will be a rotation and that value investing will see some positive gains in 2021.
