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.

Bought:
  Anheuser Busch (US)

  ARA Asset Mgt
  Aspial (bonds)
  Boustead
  Capitacom Trust
  Capitaland
  CIMB Asiapac Div ETF
  Exxon Mobil (US)
  Global Logistic
  HongKong Land
  JMH
  Keppel
  Lyxor Europe10 ETF
  Lyxor Japan10 ETF
  M1
  OCBC
  Second Chance
  The Hour Glass
  Union Pacific
  YZG
  Zagro Asia

Rights Issues Subscribed:
  ARA Asset Mgt

Sold:
  nothing!

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!

When Lots Reduce from 1,000 to 100 - 19 Jan 2015

19 Jan 2015 is a date to watch for on the Singapore Stock Exchange. Lot sizes for shares will be relaxed from 1,000 shares down to 100 shares. Those very high valued shares that had been pretty much out of reach for many retail investors will start to look attractive.

A share that cost $10 per share at 1,000 shares used to require $10,000 to gain share ownership. But at 100 shares, it will only require an outlay of $1,000.

The bank stocks (OCBC, UOB, DBS), and the Jardine family (JMH, JSH, Dairy Farm, Hong Kong Land, etc) will be within reach for a lot more people. Will a mad rush on 19 Jan drive up their prices in the initial scramble? Any short term adrenaline rush will however likely taper off back to "value" over time.

For the retail value investor, 2015 will be the year where these 'costly' shares start to appear in their portfolio. I hope.

Previously:
2 Great News from Changes to the SGX Stock Market

2 Great News from Changes to the SGX Stock Market

I couldn't be happier with the latest announcements on the changes for SGX. There are several changes upcoming but I would single out two in particular: (a) the minimum value of a share will be 20 cents, and (b) the minimum lot size would be reduced to 100 (it's typically 1,000 today).

A Penny for Your Thoughts

With share prices requiring a floor of 20 cents, it means that many penny stocks would have to ante up to consolidate the shares to get above the minimum sum.

It's a real bugbear when you're trying to buy 50,000 shares at 10 cents a piece and somebody decides to sell you just 1,000 shares! On my gawd, that's only $100 in total and the sales charge alone add another $30 to it. Geez. [Palm slap face]

Wonder what's the impact for Qian Hu? Hmmm .....

100 is a Good Number

Then there's the minimum lot size. Some shares are trading at over $10 per share. Buying 1,000 shares today would require an outlay of $10,000. Worse are those Jardine family of shares, with many trading at several tens of dollars per shares. Takes a family fortune to buy anything.

Granted, I could try my luck buying from the "Unit Share" board on POEMS. But liquidity is just too low. Trying to get anything transacted is like balloting for a new flat in the good old days. Wait long long. But of course, not as bad as waiting to strike Toto.

With the latest changes announced, I look forward to getting my hands on Jardine Matheson Holdings (JMH) and Dairy Farm at some point in the near future. 100 shares of JMH at US$60 would still be a pretty hefty sum. But at least, it would be more within reach.

Would the greater accessibility cause these stocks to suffer increased volatility? It could work both ways.

Santa Claus is Coming to Town

The later change is actually detrimental to the earlier. 100 shares at 20 cents is $20. We really need to get to a minimum of $1 per share to make any sense. Alternatively, can sales charges drop even lower?

Looks like two of my X'mas wishes are coming true (Wish List for X'mas 2014). Three more to go. Got to believe there's a Santa Claus living in the North Pole.

5 Wishes for X'mas 2014

X'mas is coming. It's always coming what, right? At worst, it's 364 days away. Darned good excuse either way to make a wish list. So here's my greedy list ... (never know if it might come true!)

Chaos and order begin with the flutter of a butterfly.

1. Give me real ETFs!

Enough of those exotic synthetics already. Then we can have less problems about the average investor not being allowed to invest in ETFs. Let's have real index ETFs and give investor the real means to diversify across market regions with real stocks backing the ETFs. Generate the liquidity as well please. Please?

2. Can I buy just 15 shares of Jardine Matheson Holdings?

It's really a pain given that it's at a price of US$59.84/share in lots of 400 shares. That's quite a fortune at one go. Of course there is the means to buy small lots on the Unit Share board on POEMS. But it doesn't have the same liquidity wor. The spread is even worse.

3. Repeat my order if not transacted.

How hard is it to provide such a feature? Can I have the function on the basic POEMS application for a validity period for my buy/sell orders if it is not transacted within the day? It's a pain to submit a fresh order each day until it happens. That's a lot of mouse clicks you know?

4. To hell with the penny stocks! 

Can we get rid of them for gawd sake? I really hate people selling 1,000 shares at $0.10 when I'm trying to buy 50,000 shares of it. That's just $100. Come on! You're killing me with the sales charges. Enough already. Creep.

5. Bonds galore! 

Why can't those 5%, 6%, 7% coupon paying bonds be made available to retail investors? At $250,000 a pop, they're completely out of reach for most. Why the exclusivity when bonds could really lower the risk profile of an investor's portfolio? Imagine all those education and retirement portfolios aiming to get a reasonably safe yield or 4% extraction for retirement?