Investing should be more like watching paint dry or watching grass grow. If you want excitement, take your money and go to Las Vegas. - Paul Samuelson
I don't really have an update. Given the sideways nature of the Singapore market that swings between 2800-3000, there is really nothing to do but regular dollar cost averaging and making sure your portfolio is balanced. I have added STI ETF and CCT, that's about it.
SRS
I opened my SRS account this year as I thought that it would be good to get some tax savings. I haven't topped up my SRS yet but will have to do so by December. Most likely to will top up to the max and buy STI ETF unless STI suddenly rallies to 3,000, in which case I would buy a retail bond like Fraser's Centrepoint.
Post-US Election portfolio performance
My IBKR portfolio performance 9 Nov (election results) - 25 Nov is a mixed bag but overall positive (just made it into the green zone) thanks to performance of all the financial sector companies I hold as my IBKR portfolio has quite a lot of financials.
The big drops were telecomms (BT/VOD), and Emerging Markets (EIMI). However, these are fundamentally sound and I should be doing regular top-ups soon... except that I also need to put a lot of money into SRS in December which can't be used for foreign shares.
Year to date, I am quite happy with the portfolio performance. I am not looking for super high returns since I am holding a large diversified portfolio. Will report at the end of the year.
I don't actually have the portfolio performance of my SG shares and its a bit difficult to track with all my constant small purchases using SCB. Maybe when I have the time I will slowly enter in all the data into the google finance spreadsheet.But since I buy STI index components with good dividends or REITs, I would guess that performance follows the STI, which is sideways but at least the dividends are ok and tax-free.
No catchy title for this event?
In last month's Mid-October Strategy report, I mentioned continuing to DCA STI ETF ES3 @ $2.85. In the last 10 years, I had one rule for ES3: If under $3, continue DCA, if above $3, use money for other things (just nice that I had housing loan to pay off - no lock-in / no partial prepayment penalty).
With STI going below 2,800 again, I continued my monthly DCA with ES3 @ $2.83. Like I've mentioned many times, I got lots of practice averaging down. But ES3 at $2.85 or $2.83, I have no problems doing DCA at those levels. If it went below $2.80 I would consider using some of my CPF.
After SG markets closed, I was wondering whether we would get BREXIT-type discounts when the Atlantic markets opened but it was not to be so I didn't buy anything. While the futures looked impressively scary, the actual markets were not really down much and eventually reversed.
More fundamentally, rate hike and inflation expectations may have changed. I wonder if this was part of the reason for the rally in the 2 out of 3 of the insurers I am vested in. AV and PUK have a lot more international focus than LGEN:
- AV +4.36%
- PUK +5.72%
- LGEN -0.45%
There is no reason to believe that the volatility is over as there are many opportunities for mis-steps and mistakes. For example, the nomination of the correct people to his economic team is probably crucial. For foreign policy, I guess that whoever he nominates will have to work with Boris Johnson across the Atlantic....
Standard Chartered Priority Banking allows you to enjoy 0.18% trading commission for SGX-listed shares and no minimum commission. It also allows you to qualify for PB status based on the value of the shares in your online trading account, which must total $200k.
This makes it the "easiest" PB to get and because of the trading commissions, the only one that matters to a DIY investor.
At the same time, if the deal is so good, I wonder if it will last. I have no idea, so I'll just enjoy the no minimum commissions until they decide to revise the terms and conditions.
Focus back on Singapore: GLP
In the past few months, I have been focusing on adding foreign stocks and ETFs to my portfolio for diversification and also because I was worried about a weakening S$ and STI underperformance.
However, as I mentioned a few posts ago, STI ETF at $2.85 is a reasonable entry point, and if STI is hovering around 2,800, there could be individual stocks worth adding. If the stock derived a lot of its revenue from overseas, that would be even better. GLP is one such stock.
On 31 Oct, GLP dropped under $1.80. Those who HWZ posts will know that some call GLP a FIFO stock. Meaning you should buy on the dips. My entire holding of GLP was bought under $1.80. After it crossed $1.80, I didn't buy anymore but prepared to sell some if it hit $2. However, since it went under $1.80 again, I bought some more at $1.78 and got ready to average down.
My overall strategy is to buy a low price so that I can hold for a long time and collect dividends. In contrast, there were some people that didn't buy GLP when it was under $1.80 but instead waited for it to shoot up and followed the trend. Following the trend is fine if you are able to sell when there is a reversal, but not many people can do that.
I experimented with some FIFO of GLP but 0.18%/0.20% comms does eat into the profits. Maybe stick with FIFO of US stocks where the comm is 0.08% or less.
Hardly any S$ dividends this month.
My quarterly Vanguard Dividends are reported this month (I use Jan/Apr/Jul/Oct as the reporting months - in IBKR they are paid end Sep but reported as Oct payments)
Average dividends per month: Jan-Oct2016:
S$3,334.63 -
US$221.281 +
£171.67 +
Average dividend = Total dividend collected ÷ number of months in the year so far
Different from DK style of total dividend ÷ 12 months
Previous monthly average:
S$3,655.54 -
US$169.21 -
£146.99 -
IA considers lower yield target for UK equity income funds
By Sean Butters 20 Oct, 2016
.... The industry body is understood to be consulting members after a number of funds were ejected from the sector in recent years for failing to meet yield requirements.
... A total of 21 funds have dropped from the current IA UK Equity Income basket into the IA All Companies sector in recent years, including Hugh Yarrow’s (pictured) Evenlode Income and Henry Dixon’s Man GLG UK Income funds.
http://citywire.co.uk/wealth-manager/sector/uk-equity-income-funds/i600/?periodMonths=12&page=1
Chasing yield is harder and harder to do. I am a dividend investor but also a contrarian investor. If investors are hard up about high "current" yield (current yield actually means past yield), then I shall look for counters that give modest yield but have the potential to grow.
Wonder if those income funds that could not deliver income were the ones that bought too much BHP, which is a classic example of not to be too hard up about dividends, which is almost as important as buying after a crash.
Of course, the funds probably gave some excuse like they are changing from income strategy to growth strategy or that they were never an income fund in the first place, which is similar to buying a share for short term gain, but when the price drop, you then say that you are a long term buy and hold investor... (cross reference to "sunk cost fallacy").
Fraser's Hospitality Trust Preferential Share offering results are out. Fewer excess shares received compared to the Mapletree CT offering. My preference at this stage is for REITs with significant overseas revenue to hedge against any SG downturn.
Quarterly DCA of STI ETF at $2.85. I used to buy STI ETF more regularly using SCB. Then I stopped after August because of the $10 min commission. Decided that $2.85 is a decent enough price to buy $5k worth (to optimise the $10 min comm). Hope to restart regular small STI ETF purchases once I get SCB PB.
Sold Lyxor Commodities ETF. I still had some of this ETF left so I finally decided to close my position and take advantage of the small uptick in commodity prices. As commodities do not give dividends, my preference in the future is to look for markets that have a correlation with commodities prices (Australia, Norway). Initiated position in NORW.
Various small topups as part of DCA: Westpac Bank, Prudential, BT
