Wednesday, December 31, 2014

Dec 2014 Portfolio

Dec is always not a good month for stock. The big boys are closing their books and going for long Christmas and New Year holidays. They will be selling the market. This month we saw oil prices dipping by alot from US$100+ to US$60+ and some analysts were saying it will affect the stock market or some companies. This I find it strange because few years back oil was trading at US$60+ which is the norm and when it shot up to US$100+ everyone was saying its bad for the economy as profi margin were sliced and back then I remembered we have the oil crisis. But now that oil is getting cheaper, isn't it better for everyone? Oh no its not for everyone, good for SIA but not for Keppel Corp and Semb Corp as they are oil and gas related industries. The price is dropping on them. Will I be buying on them? Well, yes I would provided it fall within my targetted dividend yield. At current price, I still find them expensive and looks like oil prices will continue to go lower next year too or looks like I already missed the boat :(

Another big see-saw this month, with market getting jerky with the falling oil prices with Dow falling and STI falling as much as -80. Then when Fed say they are not going to raise the interest rate so soon, Dow recovered by +400. Market is so unpredictable and the whip-saw is definitely going to wipe out the short term holders.

This month I added Lippo Mall Tr, Second Chance into my portfolio.
Lippo Mall Tr has high dividend yield, not too low PE 11, below NAV and also a rather high debt, quite typical of a REIT :(
I would say I jumped into this is because of their announcement of placement issue @ $0.34 to aquire Lippo Mall Kemang which is a good thing. This suddenly present as a opportunity for me to become a proud shareholder of Lippo Mall Tr :)

Second Chance has high dividend yield but has a high PE 20 (wow), so far my highest PE stock. It has its own special retail niche in Geylang selling gold jewelry and rental property, quite divesified in Singapore and Malaysia. Have been monitoring this stock for quite some time as it is quite stable hovering around $0.445 and $0.45. Let's just take the first step and own some stocks first, we will see how ...

STI vs my portfolio
This month, STI still win because of the Santa Claus Rally. My portfolio also doing not bad by turning positive. Well, have to work harder and in time I am sure I can beat the STI with the collection of dividend and some capital appreciation.
PeriodSTIMy portfolioVerdict
Oct 2014-0.3%-1.32%STI wins
Nov 20142.11%1.95%STI wins
Dec 20142.41%0.27%STI wins

Total 7 stocks in portfolio

Friday, December 19, 2014

2014 Dividends

Oct 2014my first dividend from:
UMS :)
Nov 2014Creative$175
Dec 2014Lee Metal, UMS, Asian Pay TV Tr$255
Total Div per year$450
Total Div per month$450/3(prorated) = $150

Monday, December 8, 2014

My Motivation

I think most of us started off our journey by getting our first job, earning our first pay check, etc. I understand as a young working adult its very tough to save and invest because you want to start a family and will be spending on big ticket items such as a wedding package, car, home, renovation, baby and kids stuff such as milk powder, education, enrichment, tuition, etc. All these will easily set you back to zero. My advise is quickly get over this phase and build up your savings asap.

Although we are working and saving our hard earned money, I think its still our personal responsibility to do our own investment. Yes, you may say that we have our own CPF savings which provide only the basics. So let's say if you max out your ceiling which I believe is now $162k (CPF keep raising this ceiling to keep up with inflation), you should be able to get $1500 monthly via CPF Life eternally ie till death do you part. So if you are really prudent, you should be able to get by real fine. But not enough to achieve financial freedom if you have a family to support :( Not enough to retire early because for our age group CPF Life only kick in when you are 65 years old :( So we need to do something for ourselves in order to achieve much more. Let's take a look at what's my motivation for doing this:

Pull factors
1. To achieve financial freedom.
I think this is in the mind of everyone. So no need to explain too much. Everyone want to have enough passive income to cover their expenses so that they can do what they love and not worry about money.

2. To retire early.
With our current income, saving and investment returns, one of us should be able to retire or my wife can be home maker. My wife and I wants to retire early and spend time with our kids but sometimes we talk about retiring now when we are just 40+ which is abit early. What are we to do now? Travel around the world (my wife loves to travel). Be a volunteer. Stay at home and watch TV when our kids are in school? haha We choose to continue working and earning and saving up and investing. Maybe 50+ is a better age group to consider this option.

3. To lead a comfortable retirement life
The keyword is 'comfortable'. My targetted monthly passive income is $3000+ at current lifestyle would be more than enough when we retire. It is because as we get older, our kids will be working and have less financial burden for us (hopefully, nowadays parents are helping their children to pay for their housing down payment). Our expenses would be lower. Better still, if they provide us with a small sum every month. It will be an additional passive income for us :)

4. Your investment rewards = your effort
You invest how much, you get back how much. Of course, sometimes we will have some setback or global crisis. Make good use of these opportunities and beef up your investment portfolio. They will stay with you eternally. You reap what you sow.

5. Help ourselves first so that we can help others
This point was suggested by Richard Ng. I think its a good point. Remember when you were on an airplane before takeoff they will play a safety video when the oxygen mask drop down? You should help yourself first before helping your accompany kid. Quite logical and applicable here. First get yourself financially free then you will be in the capacity to help others in need of help or money. Be it charity or doing something great or honorable. It will be good for you and the receiver :)

Push factors
1. Working is not so enjoyable
If working is enjoyable, I would not call it a job or work. I would say its a hobby or past time. Not to be too negative but we do have our downs as a working adult. Sometimes we do get frustrated and angry with our work, bosses, customers that we want to end all this misery. But we are stuck in this vicious cycle as we have bills to pay and cannot quit just like that. We still need to eat and provide a roof over our heads. Leaving with not much choice we have to bite the bullet and carry on working.

2. Work performance not = rewards
Having worked for almost 20 years, I have seen enough. Things are not so straight forward in a working life. Things are not what it seems. Our effort is not rewarded by the amount of hard work we put in. There's a lot of other factors. Whether your boss or boss's boss 'liked' you, whether you are high profile enough, whether there's quota available for promotion, office politics, hypocrite, etc. Haha, enough of negativity here. You know what I mean :) Unlike school days when you put in effort to study hard you would most probably get a good grade. You reap what you sow.

3. Your job is not secured
There's no such thing as job security. Its only as secured as what your boss thinks so. So one day, your boss may just decide to give you the retrenchment letter and ask you to get lost. Another thing, there's no such thing as a compulsory retrenchment package. Go check with MOM, its only at the discretion of the company you are working for. They don't own you a living as you are paid every month. So do not get angry, frustrated when you received your white letter and realised that you haven't done any investment at all. Ask CPF for help? what if you are only 40+? You cannot withdraw any CPF funds at all :(

4. Our CPF Life is not enough for us to retire comfortably
Probably $1500 per month its enough if you lead a really really simple life with no extravagent. And you have to wait till you are 65 years old. What if government decided to raise it to 67 years old? Wow, cannot imagine I have to work till this age. If you are 55 years old and you meet the minimum sum (assuming $162k), your property (if you have 1) is auto pledged, you can still take out half of your minimium sum ($81k) for your expenditure. But why take it out when you can leave it with CPF and get paid 4% interest annually. You can still withdraw later on if there is an emergency. My parents only got $300 ea per month from CPF Life which is no better off so have to depend on their children's contribution. We want to be independent.

I would say my motivations are typical of a working adult supporting a small family with 2 kids. I am pretty sure it would apply for some individuals. Most importantly, this list serves as a gentle reminder for me to execute my long term plan. Do yourself a favour. Start investing and get out of the rat race asap. Work because you chose to, not because you need to and lead a happy carefree life :)