26 February 2013

Nest Eggs for Education Funds

Years ago, my wife set up a savings account for each of our child.  Contributing $50 a month for several (many!) years, these eventually reach a few thousand dollars.  But with the rapidly depleting interest rates at the banks, we finally decided that it wasn't the most optimal approach.

Reviewing the longer term plans, we decided to build these towards their respective tertiary education funds, should they succeed academically.  We then revised the monthly contributing to $500 a month by investing in a basket for unit trust funds (aggressive portfolio diversified across several regional funds - US, Europe, GEM, Asia ex-Pac).  With the increased earning power, this was viable and sustainable in recent years.  Through this, the respective funds have rapidly built up to $50,000 each through a combination of monthly contributions and growth in valuation.

Looking forward, I have shifted towards $600 a month contribution towards a portfolio of conservative money market and short duration bond funds.  Coupled with additional top-ups following each Chinese New Year and other miscellenous, it should lead to a nett contribution of about $8,000 a year.  In 4 years, when they would be of age for university, the respective nest eggs would have reached $80,000, an average of $20,000 for each of the 4 years at the university.  A sum that wouldn't be enough for an overseas education, though it would be a big leg up regardless.  More importantly, it should be adequate for local studies.

Looks like they are set.

04 February 2013

Pattern of Behavior - A Review for 2013

I was reviewing a past musing I made in 2011 (Pattern of Behaviour) of several interesting companies that I was invested in and monitoring. 

Since then, Adampak, CerebosHsu Fu Chi, Kian Ann all went through one form of general offer or another, and have since delisted from SGX.  Guess my bets were on the righthorses.  The original buys centered around these stocks that paid good and steady dividends.  In some cases, they had low Price-to-Earnings (PE < 15) and/or low Price-to-Book (P/B < 1.0) ratios.

More recently, I divested Innotek.  Seems like a dead horse.  But I may well have divested at its trough (pun).

Of the rest, most are still struggling at the fringe, especially M1, CSE Global, SingPost and Sing Inv & FinSingPost in particular faces the challenge of diversifying itself from being overly dependent on a gradually declining domestic market.  Consequently, it has been taking on an aggressive M&A track.  However, these have yet to pan out.  It's all about execution.  For the rest, I remain optimistic for the longer term.

Of the balance, Teckwah and Zagro Asia have been doing well.

In nett therefore, out of 12 stocks, 4 exited profitably, 1 exited at a loss, holding 4 that are performing neutral, and holding 2 that are doing well - i.e. 6 wins, 4 draws, 1 loss.  Not too bad.