Interactive Brokers Yield Enhancement Program

 

I never enrolled in IBKR yield enhancement program (aka share lending scheme) because I thought it only applied to US stocks and most of my stocks are UK-listed. Then I received this e-mail showing that I can make some coffee money even with UK stocks. Nice. Of course I know the figure is 'theoretical' and there is no guarantee the shares will be lent out, but getting some free money once in a while looks good, can treat myself to Starbucks once in a while

🍹🧉

Jan strategy: Bought Singtel and ETFs

 

No soon had I mentioned reducing my stock-picking did I go out to buy Singtel. My excuse is that this is for my SRS account which cannot be used for foreign stocks (and I don't want to set up an Endowus account to access World Unit Trusts).

I was queueing to buy more Comfort Delgro at the daily low of $1.14 but my orders were never filled and it crept back up to $1.17.  Since my last update Singtel fell further from $2.50 to $2.45, so my order was filled.

However, I have also bought ETFs this week to balance out my stock-picking, namely IOZ, LSPU, VWRD and VHYD.

Fourth Milestone Reached

My portfolio value hit my 4th milestone this month, though I waited for 2 weeks to ensure that it was relatively stable and not a temporary blip. Together with record dividends collected in 2022, I feel I have a reasonable margin of safety when it comes to maintaining financial independence in the face of a possible recession in 2023 (or so the experts claim). However, one thing about recessions is that if too many experts forecast a recession, it usually doesn't occur.

What is interesting is that the last 2 gaps were quite consistent:

• Aug 2018 - Nov 2020 - 2 years 3 months
• Nov 2020 - Jan 2023 - 2 years 2 months

As explained in my portfolio page, the gap between the 1st and 2nd was large because I was repaying my housing loan.

I didn't make a New Years' Resolution for Investing this year, but plan to continue on with my earlier resolution to BUY MORE ETFs and do LESS STOCK-PICKING. 

As it is good to set a target and to measure progress, my 4th milestone is now replaced with a 5th milestone and I'm looking at achieving it in 2-3 years' time based on previous progress. 

A fair chunk of my cash balance will be wiped out as I really need to replace my car this year and I am hoping for a lower COE (as COE quotas are increasing later this year). If not for car replacement, I would have been more confident of reaching my 5th milestone in 2 years' instead of 3 years'. Car ownership comes with an opportunity cost, but as long as one properly budgets for it, it is manageable. 

 

  

<a href='https://pngtree.com/so/4g'>4g png from pngtree.com/</a>

The difference between different banks' Priority/Premier Banking

 

Before Chinese New Year, it is useful to get new red packets, especially ones that are of higher quality. Since people are giving out fewer and  fewer red packets (less children to give too), its good to have a small number of quality red packets rather than a large number of generic red packets (which are used up by school children for classroom decorations most of the time).

This year, OCBC Premier Banking sent me a letter telling me they are working as a Team. But if they are sending this during CNY season, where's the OCBC PB red packet? A bit disappointing to waste postage/paper/envelope just to tell me the rather obvious fact that there is a "team."

On the other hand, Standard Chartered seems to have gotten it right by sending me their PB red packets.

Finally, UOB, total radio silence.

This sort of comparison between banks should of course not be taken too seriously, but I just want to give a shout out to SCB for their effort and I do appreciate getting some spare red packets. The nicest ones I have are from my car dealer but of course one must be careful when giving red packets with a car brand that you do not want to be seen "showing off" what brand of car you drive....

Anyway, A happy Lunar New Year to everyone!

Jan strategy: Comfort Delgro Price crash: bought more

 Comfort Delgro price crashed and I bought more at $1.17.

There were no SGX announcements in 2023 and the only news I saw was a RHB analyst report issued on 13/1/22 that pointed out the sharp decline in public transport EBIT in 3Q22 and downgraded their price target to $1.65. The 3Q22 results were announced earlier so it was old news. As the market is forward looking, this decline may have something to do with 4Q22 results which have not been released and I hope nobody is trading on confidential inside information.

Anyway, I bought more Comfort Delgro at $1.17 and I plan to accumulate more next week. Just nice that I have funds from the sale of Sembmarine shares that I need to redeploy.

Another counter on my radar is Singtel which similarly crashed by a similar percentage over the course of this month.

Finally sold my Sembmarine Shares.

I finally sold my SCB holdings of 200k+ Sembmarine shares at $0.139. Those who read this blog know I'm terrible at pressing the sell button, so its good that I got some practice.

There was a bit of profit made as I got the shares "free" as a result of holding Sembcorp and was forced to subscribe to the rights issue at $0.08.

However, as I am optimistic that market is going up in 2023, its important to re-use cash from stock sales ASAP. So even though I haven't received the cash yet, I went ahead tonight to buy more VWRD and VDPX.

Reflections on $13k passive income

 

Despite the stock market downturn, it appears that fundamentals are still sound and the stocks I am holding are actually earning profits that can be used to pay dividends. Therefore, my passive income has risen to $13k. I would have to admit that my spending went up a little bit in 2022 due to inflation but at least the increase in my passive income is more than the inflation rate. 

The purpose of this post at the start of the New Year is for me to reflect on whether I would do anything differently with the increased passive income. At the moment, I do not plan any major changes. In 2022, I started spending a bit more money on healthier foods and will continue to do so. Apart from salads, I am replacing red meat with fish from reputable sources (fish prices have been hit by inflation). Diet alone is not enough of course, and I will continue my gym/swimming exercise routine during work from home days. Apart from better quality of life, I hope that good health will reduce healthcare expenses in the future 😄

An increased passive income might lead some to consider property upgrading because the passive income can help to service the loan. However, I do not plan to get into debt anytime soon via the property upgrading path. I am perfectly happy with my current condo which is a spacious 2000+ sqft.  I have friends that have "invested" in building their dream houses (buy and rebuild semi-D to 3-4 stories with lift, 4000 sqft+) and their houses are really beautiful. But I'm aware they invested a lot of their time into the project in order to achieve their vision. Apart from a lack of interest due to a general satisfaction with my current condo, I don't have the time at the moment to build a "dream" home. Home is where you hang your hat, as the saying goes.

In terms of investing strategy, I will continue to prioritise World ETFs (both FTSE all world, and FTSE all world high dividend ETFs). I plan to continue my regular small RSP of China ETFs with FSMOne as well. Finally, I plan to sell all those Sembmarine shares that I bought at $0.08 during the rights issue. Thanks to the oil price rally, they are currently nearly $0.14.

I end  with a chart comparing Vanguards All World ETF to its All World High Dividend yield ETF. The dividend strategy outperformed the All World counterpart by 10%. I would add that its not the "dividends" but the fact that most companies in a dividend index are "value" stocks with good cash flow and profitability. These stocks will do well in a rising interest rate and inflationary environment compared to a growth stock that finds its cost of borrowing increasing.

😺

2022 Edition

BuyafterCrash: Search results for reflections