31 December 2015

A Review of Investments for 2015

2015 has actually turned out to be a horrendous year, or a wonderful year, depending on how you look at it as an investor. Checking against the STI, I realised it has actually suffered a -14.3% dropped compared to this time last year. Taking into account 3% of dividends which the STI index would not have accounted for, that would actually be -11.3% net in terms of total returns.

So if you're sitting on a 11.3% loss, you're pretty much doing market normal. You're normal. On the other hand, if you've been buying throughout the year when the market dropped, it's probably going to turn out great in the longer run. That is, provided you didn't buy a bunch of junk! You had a lot of guts and I wish you success! You're probably abnormal.

My stock investment has returned an IRR of -1.2% for 2015 inclusive dividends reinvested into the portfolio. So I guess I should take some satisfaction that I have outperformed the market for the 6th year running. Can I gloat somewhat?

However, my long term IRR has continued to slide: from ~20% (2012-13, 4-5 years), to 17.3% (2014, 6 years), and now ~12% (2015, 7 years). A case of reversion to mean? Still, 12% over 7 years is not a bad long term performance. I'm consoling myself.

The shares portfolio is taking on a more global outlook as I've started investing into other regional ETFs (esp. Europe, Asia-Pac and Japan) on top of my current holdings of Singapore and US shares. If this was a fund management company, I should probably use some other global benchmarks. But I'm not, so I will continue to reference STI as my benchmark, because that's what my opportunity cost is. I'm only accountable to myself.

  Anheuser Busch (US)
  ARA Asset Mgt
  Aspial (bonds)
  Capitacom Trust
  CIMB Asiapac Div ETF
  Exxon Mobil (US)
  Global Logistic
  HongKong Land
  Lyxor Europe10 ETF
  Lyxor Japan10 ETF
  Second Chance
  The Hour Glass
  Union Pacific
  Zagro Asia

Rights Issues Subscribed:
  ARA Asset Mgt


Lots of buying, not much selling. To be precise, I've sold nothing throughout the year. I've been a stooge. Gave nothing away.

Dividend income grew marginally to $11,168 for 2015. This would have been higher of course, except that I chose to accept all options offered in the form of scrip dividends (i.e. additional shares in lieu of cash) as per previous year. I'm too lazy to figure out what the exact dividend amount would have been. But I estimate it would likely be in the region of $14,000 for the shares portfolio. That's not enough to live off my lifestyle on, yet.

But from an overall perspective, the total portfolio of shares, unit trust, investment-linked and cash/bonds has finally breached the 7-figure zone. The journey is progressing well. The point of "inflexion" (a.k.a. financial independence) is coming.

Despite a tumultuous 2015, here's wishing you a wonderful 2016 next. Happy New Year!

30 December 2015

A Tale from Taiwan Trip

It's the year end and so it was time for my usual sojourn to some overseas destination. Fascinatingly, it seems many friends and colleagues also went to the same country - Taiwan! I wonder why? Did the exchange rate dropped and I didn't realise it?

Anyway, we were on the lake cruise at Sun Moon Lake on a bright sunny December day. The cruise (or ferry rather?) made two stopovers, first at a temple where the famous "cha ye tan" (tea-boiled egg) store is, then at a second stop where there are some streets with roadside food stalls and souvenir shops, before looping back to the start point.

The temple was no biggy, though it was a decent walk around and uphill somewhat. Good exercise with all the food binge in Taiwan. The egg was good! So it was worth that exercise.

On the way back for the final leg, we queued up to board the boat as the incoming passengers alighted.  The Captain was loitering along the queue line cracking jokes. As he past our group, he said, "Singapore!" Spot on. Guess our slang and twang was quite inescapable.

Then he passed by one of our party and said, "You're the most beautiful mother I've seen today!" Guess it was quite a compliment. Except, she's a young lady, barely 20 years old. We had a good laugh. He's blind or what? Either that, or it was the most crafty insult?

When the Captain found out his mistake though, he mumbled something to the effect that in that case, he shouldn't miss the chance. He went over to scribble something on a piece of paper and passed the slip to this lady. It was his Line contact. Line is popular in Taiwan.

That's the fastest pick up attempt I've seen. Girl wasn't interested, so I guess he lucked out. No can do.

But the thing is, this guy wasn't shy to test water and then plunge in quickly. Perhaps none too subtle. But he certainly seized his chance when he saw an opportunity.

Is that what entrepreneurial spirit is about?

Is that how we should invest? Test to assess, and if the condition seems good, plunge in?

16 December 2015

Hits and Misses - Did I make the right financial choices?

Thinking back to the financial decisions that I had made over a span of 20 years, I wonder if I had made the right financial choices?

My very first home was a 5-room flat bought off the resale market. House hunting was quite an effort of visiting house after house. It's a pretty exhausting exercise. And by the seventh attempt, we pretty much reached a point of fatigue. It was at what would be deemed a ulu (out of the way) area known at Yishun. Whenever I mentioned that I lived in Yishun, the look from friends was one of "kampong" in a far far away land. There were actually goats along the roadside then! And to add to the kick, you get lots of helicopters flying around for novelty. The novelty wore off soon enough, and gets rejuvenated each year before National Day when the chopper with the National flag flew past. It wasn't much of a financial burden as the monthly installment payment was well within the means of a pair of newly weds. I was barely three years into the working market and didn't have much of an income for anything more anyway. So I guess this wasn't a bad decision as I did not overly burdened myself with a high level of debt.

I rate this a "hit" (right choice).

It was more than 12 years later that I decided to "upgrade" to a condominium. When I upgraded to an e-condo, it was another "ulu" out of the way kind of place - Yew Tee. "Where's that?" friends would say with an extreme look of puzzlement. It wasn't an expensive place given it's "ulu"-ness. In addition, I took whatever cash and CPF we had to pay down the principal. Now here's where I have some doubts today. While it certainly reduced the loan capital rapidly to below $100K within a year, I wonder if I should have just lived with the higher level of loan, and use that cash to invest into the market instead? Returns of 6-8% annualised would certainly have outstripped the loan interest of 3%. Plus, I could have refinanced the loan after a few years. But because I had paid down the principal to below $100K, it seems the banks weren't keen to offer refinancing.

I think this was a "miss" (bad choice).

I started investing innocently being a noob in investment. And the very first means was via insurance related means. Compared to not having any form of investment at all, it was a good start. I could rate this a "hit" compared to having no investment whatsoever. But being a bit more tuned in to options today, I would certainly say this has been a "miss". It wasn't the best of returns, though it has given positive returns. Could have done better!

Overall, a "miss".

We stayed off owning a car for several years and relied on public transportation to get around. Thank you LTA! Considering that the car is a depreciating expense, this was probably wise.

I rate this a "hit".

When my second kid was born, my wife and I decided that it was time to get a car. With a maid in tow, five person just wasn't going to fit into a taxi. Our very first car was a second hand Suzuki Swift. It was quite low cost. But you get what you pay for! The car gave us quite of bit of angst when the aircon started to behave like a heater. And one fine day, we started getting steam coming out of the bonnet. Looked like we had bought ourselves a train. Stung by this experience, we went on to buy a brand new Nissan Sunny. On hindsight, I really cannot explain why, but we changed from one Nissan Sunny to another once every three years for the next ten years. Were we crazy or what!? I guess we should plead insanity.

Definitely a "miss".

Our latest car is a Toyota Wish. A family car for a growing family. It has lasted more than six years this time. And with the price of COE in stratospheric levels, it looks like we will continue to operate it for more years to come. It has been a substantively more fuel efficient car than the Nissan Sunnys we owned previously. It has been reliable, with a few incidents of deflated tyres to spice things up. It didn't take too kindly to running over nails I guess? Notwithstanding that it is a depreciating asset, I think overall it has contributed to a certain quality of life.

So I would rate this a "hit".

Housing and cars, two VERY big cost items for Singaporeans. At $12,000 per year for car ownership, that's $184,000 that has gone to Neverland. Seems like a few hits and a few misses for me. How's yours?

11 December 2015

Stock Take for 2015 on To-Do's - The Force Awakens!

It's almost the end of the year. Time to do a bit of stock take.

Fully contributed SRS. Checked.

Made donations to charity. Checked, checked, checked.

Contributed $7,000 to wife's CPF-SA. Checked.

Watched Star Wars.  Oops, not yet.  Time to feel the Force yet again.  The last time I did that, I was sitting in the first row of the cinema after having spent a whole afternoon of footdrill training for National Day Parade (marching contingent). Wasn't a good feeling when the screen goes scrolling with the intro.

As a stop gap, probably should go buy a Subway sandwich and get the freebie Star Wars keychain?