Dividends

Seeing as how we've collected all the dividends for this year, it is a good time for an evaluation of how much dividends our portfolio generated for this year.

Dividends for the year: ~$1670, approximating $139 per month

This is taking into account that the dividends for DBS is not in yet, but we're intending to take scrip for that counter anyway. Also, we missed out on the round of dividends in May.

We will be channelling the dividends back into the investment account for compounding when we find opportunities.

SGX Outage

As many would be familiar by now, trading at SGX halted at 11.38am on last Thursday.

It is reported that the cause was due to a "hardware issue".

However, as a long term investor, the outage did not bother me one bit. While i kept abreast of the news, it mattered little to me whether there was active trading or not.

Of course, this does not diminish the pain of shorter-term traders who live by every tick of the market. I can see how the exchange shutdown will hurt them. However, this method of investing does not square with my current investing philosophy.

As Warren Buffett famously said:

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.

Are you confident with your purchases?

First CD!

KSH Holdings Limited made the announcement today that it will be distributing a final dividend of $0.015 per share and a special dividend of $0.005 per share. XD would be 11/8/16.

At an average buy price of about $0.55, this would make it about 3.6% dividend yield.

And happily, this is my first declared dividend! Another milestone achieved! :)

Step-by-step we progress...

June 2016 Report Card

Apologies for the lack of posts. I was struggling with an examination recently and that really sucked the life out of me.

Exams, you say? Yeah... such is life.

However, the exams are over!!!

Yaaaaay!

As we transit into the 2nd half of 2016 (how quickly time flies!), I would like to share a short report card on my current holdings, taken from the excellent site SGXcafe.com:

Currency	# Stocks	Day Change %	P&L %	P&L + Dividends %
SGD	4	0.53%	2.28%	2.28%

Name (Currency)	Port %	Current Yield	Div Strength	Avg Price	Close	P&L %	P&L + Div %
STI ETF (SGD)	60.84%	3.46%	N/A	2.835	2.89	1.95%	1.95%
CapitaCom Trust (SGD)	13.53%	5.75%	81.30%	1.412	1.5	6.20%	6.20%
KSH (SGD)	12.99%	5.65%	67.29%	0.55	0.54	-1.76%	-1.76%
OCBC Bank (SGD)	12.63%	4.11%	94.16%	8.394	8.75	4.24%	4.24%

And a pithy few hundred in cash.

Overall, I'm quite pleased with the results so far. This little start of a portfolio has endured its first (mini-)crisis and emerged reasonably unscathed. 

Regrettably, I was unable to average down some of my holdings during the Brexit sell-down. After the initial purchase-burst in May, there was minimal savings that could have been used to take advantage of the low prices. Again, this is (largely) due to renovation and household items. Admittedly, there was some lifestyle inflation this month as we spent more in restaurants and an expensive NTUC trip. As it is, my credit card bills for this month may cross $3k. Sigh...

Goals for second half of 2016:

1. After settling down, I hope to be able to start saving again, as per usual habit. It would be great not to have to look at 3-4 digit spendings every few days or so. Still debating whether we should purchase a TV hmmm...... 

2. I would also hope to start building some holding cash aside from my emergency funds (typically referred to as warchest). The recent market dip has taught me 2 things (i) Holding power is important, one should not be forced to have to sell your investments, especially during times of crisis (ii) Opportunities do not come knocking frequently. Take advantage of them when they come. 

3. Related to the above point, purchase appropriate insurance for the missus, and getting a better grasp on mine. We have been procrastinating this for almost half a year. It is time to figure out what we are covered and how much we are paying for this cover. Yes, I have been paying for insurance without knowing what I am covered for (at an expensive cost per month!) as many of the plans were passed to me from my parents when I started working. And for her, I believe she has been procrastinating as well (typical Singaporeans we are). I think it is time to sort this out.

4. I hope to blog more regularly as well. As mentioned before, this blog helps to record my thoughts and remind me of my own plans as I start to take charge of my own financial health. I hope to be able to look back some time down the road, and identify my strengths and learn from my mistakes during this journey, and be able to educate my daughter as she begin her own journey as well.

FLT IPO and Brexit

Frasers Logistics And Industrial Trust just closed its IPO on Thursday 12pm.

This is a pure-play Australian REIT which offers the following:

1. Majority (60%) free-hold
2. Relatively long WALE
3. Properties are mostly young

However, there are the following considerations that we made as well:

1. Exposure to forex risk - AUDSGD is relatively low currently
2. Pricing of 2.9% above book value
3. Australia's industry is currently at a peak level. Is this sustainable?

With the following considerations, we decided not to apply for this IPO as there are REITs in Singapore that offer good historical yields, good management, and at considerable discounts. It would seem wiser to invest in properties that can be seen and evaluated more accessibly, and at a discount, than something that is relatively more expensive, and harder to evaluate.

Moreover, as per my portfolio on SGXcafe, REITs currently form 13.12% of my portfolio, which is already comfortably within my planned allocation which can be found here. I have plans to diversify my REITs holding slightly in the near future, but I would think that adding a foreign REITs to my portfolio would complicate portfolio rebalancing.

The referendum for Brexit will be held next week on 23/6/16. With the numerous events recently, markets would likely be extremely volatile, and it would seem to be a good time for bargain hunting. It is unfortunate that I am already largely vested in with not much cash holdings to deploy, so I will likely be sitting this one out until the dust settle. 

Even though Brexit would probably cause turmoil in the market, I do believe that it is the best decision the UK can make for itself. 

It appears that EU is evolving gradually into a financial (mostly done?), political (partially done?) and military (early traces?) union. With such a system, UK with its numerous opt-outs would likely be playing a lesser role anyway. They would face the difficult choice of a closer union (and giving up of more sovereignty such as the pound), or to be tied to a union it has little to no influence over. 

The EU also appears to be inherently undemocratic. It is difficult to support a supranational institution that can determine the policies of a country without the ability to put it to the test with an election. Such an institution will grow corrupt and self-serving. As the adage goes, power corrupts, and absolute power corrupts absolutely. With no one to answer to, the bureaucrats would only answer to each other, and would most definitely be looking out to their own interests as top priority. Initially, the policies drafted may benefit the constituent countries, but when the rot of corruption sets in, as it will undoubtedly do so, there will be no escape.

Nevertheless, I do suspect that the Bremain camp would likely prevail in the end as the undecided voters would likely vote for status quo, if we consider previous experience. 

Of course, the above is only my personal opinion. Feel free to disagree!

Next week would be a very interesting week!

Green!

At long last, my portfolio is green!

It definitely took quite a while, but I guess learning to have patience is important on this journey.

I've also managed to catch OCBC at 8.38 this week too.

So... what are my plans for the coming months?

In view that prices might be on the upward trend, I might focus on saving more money for this period and only investing on/off for now.

After all, for this period in time, I expect most of the growth in my portfolio to be largely from savings, and minimally from the dividends/growth.

Patience is key!

Manulife US REIT IPO

Was watching with interest as this new REIT counter launch this week.

This is the first IPO for SGX mainboard this year.

I was deciding whether to subscribe to it for quite a bit. Did a brief research on them and did not find anything too unsettling.

However, I decided not to go in in the end due to the following considerations:

1. If I am planning to subscribe to this REIT, the intention would be to hold this for a long time, say few years at the minimum.
2. This would expose me to forex risk, which isn't too bad as the SGD is likely to depreciate against the USD in the near future with our new monetary policy.
3. However, looking at the risk of US election coming this November, there is a very real risk of a market shock should one of the contenders become the POTUS. 
4. I am not familiar enough with the US market to mitigate against this risk.

Hence, I decided to sit it out and focus on looking through local investment opportunities for the moment.

There is still so much to learn!

Being positive

I cannot say it is without a tinge of sadness that I see the STI is going down and down. This is especially so after you are vested.

Worse, the temptation to trade gnaws in the background, thinking that one can easily buy at current lows and sell. All this without doing proper homework.

I must consistently remind myself that I should not be treating this as a playground, and do the hard work of studying and understanding what I am investing in, and put money wisely into places which I believe in.

It is easy to lapse into thinking that I can outsmart the market.

That being said, it is Friday!

There's been some talk here that some have noticed more younger people are taking up investing, and have their theories on the phenomenon.

It may very well be true that the younger generation (getting hard to think of myself as young at this age though!) desire instant gratification.

Am I seeking a way out of traditional employment?

Being really honest with myself, there is no doubt that I have serious reservations about my current profession. As my friends and colleagues relate their experiences to me, it is easy to notice a strong undercurrent of dissatisfaction in many of these conversations.

Or perhaps, it is just another manifestation of the Singaporean penchant for complaining!

Unfortunately, it is difficult to share these reservations with most people outside the profession. Most would simply brush it off as "You've had it made already!" without seeking to understand more.

Nonetheless, I do see many positives in my current job. In fact, I can say that I generally like where I am like now.

Which is why I will probably stay where I am for now.

But I am under no illusion that investing will be a quick get-rich scheme. Thankfully.

In fact, thus far, I've only enjoyed paper loss. Have yet to see green in my portfolio.

But I understand the importance of investing. I understand that that will come with risk.

And I am prepared to size that risk, and take it.

And I look forward to the day, perhaps 3 decades from now, when I can look back at myself today and say "I am glad I began this journey".

And I am glad my wife agrees with me.

The thoughts of a new investor

So... I've taken the first steps and invested for the first time, and bought the STI ETF at the beginning of the month.

I decided not to do any DCA for the initial investment as I knew if I delayed or took my time putting in the money, I would naturally try to time the market and will never commit myself.

So I took the plunge...

And naturally, the market immediately turned against me.

Watching the STI drop recently reveals that I am not as detached from my emotions as I initially thought. It was with some dismay that I watch the lines drop lower and lower.

Therefore, I must remind myself that having the right psychology is most important.

1. I am not a trader.
2. I am in for the long haul.
3. I am not as detached from my emotions as I think I am, hence, I must keep myself in check.

There is the reassurance of having a small amount of cash still on hand, to be put in when appropriate.

Meanwhile, I'll be reading up on some investing books to understand myself and the market better.

Anyway, my portfolio can be seen at SGXcafe, for those that are interested. Of course, it is very simple for now.

Investing in... what?

So, I have yet to take my first step into investing.

At the moment, everything is more or less set up. I have a broker account, a CDP account, and the money ready.

Due to a simple oversight, I forgot to bring along my security token and as a result, I am unable to make my first step into investing today before the long weekend.

Therefore, I will make a theoretical timeline of how I am intending to invest. Hopefully, this will serve as a reminder and guide for my wife and myself as we progress along.

We currently have a sum of $80k to start off with. With this, I am intending to put $50k into the STI ETF to start off with.

Therefore, we intend to begin with this:

1. STI ETF: 100%
2. Warchest $30k

Thereafter, with our regular savings, I intend to purchase in batches till I achieve this:

1. STI ETF 40%-60%
2. REITS 0-20%
3. Bonds ETF 40%
4. Warchest $30k

I am still deciding how much to put into REITS, seeing as it is more defensive in nature. Should I take the allocation for REITS from the bonds portion instead of taking it from the STI ETF portion?