1st HF 2017 – Net Worth and Portfolio Review

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Had seen many bloggers busy updating their portfolio recently right after the last day of June , allow me to come and join the party.

Thank GOD , there was no market crash in 1st HF of 2017 and in fact STI has outperformed many regional peers with returned of close to 13% YTD ( excluding Dividend Yield of around 3-3.5 % which is also one of the highest among Asian bourses ) .


My New Worth ( Including Dividend & Interest received ) increased by 16.7 % which I think is quite in line with market ( STI + Dividend return ) but If I have added in the CPF outstanding , my net worth will drop to only +14% as CPF’s average interest was around 3.3 % ( combine of 3 accounts ).


I am really happy to see such 1st HF result which is in line with market and we should not expect this double digit growth of performance to continue as nobody really know where the market will be heading in 2nd HF of the year. We may end up with negative return if there is any major market correction happen in 2nd half  of 2017 , but allow me to enjoy and be happy with this so called “ wealth effect “ for time being …. J




Definition : “Wealth Effect “ by Investopedia


What is 'The Wealth Effect'

The wealth effect is the premise that when the value of stock portfolios rises due to escalating stock prices, investors feel more comfortable and secure about their wealth, causing them to spend more. For example, economists in 1968 were baffled when a 10% tax hike failed to slow down consumer spending. Later this continued spending was attributed to the wealth effect; while disposable income fell as a result of increased taxes, wealth rose sharply as the stock market moved up. Undaunted, consumers continued their spending spree.

BREAKING DOWN 'The Wealth Effect'

The wealth effect helps to power economies during bull markets. Big gains in people's portfolios can make them feel more secure about their wealth and their spending. However, the relationship between spending and stock market performance is a double-edged sword as poor stock prices in bear markets hurt economic confidence.

The wealth effect refers to the psychological effect of asset value increases, such as those experienced during a bull market, on spending patterns. The concept focuses on how the feelings of security, referred to as consumer confidence, bolstered by the rising value of assets, such as investment portfolios and real estate, lead to higher levels of spending, correlating with lower levels of saving. These changes are said to be seen regardless of changes in discretionary income, in either a positive or negative direction.

The theory can be applied to both business and personal spending. Suggested increases in hiring and capital expenses increase as businesses become more secure in a similar fashion to that observed on the consumer side.

---- End of Definition -----



Well , I will not be spending more than usual even with this “wealth effect “  and increasing net worth due to favorable market conditions.

How about you ? will you be spending more ( in luxury items ) in seeing your portfolio’s value increased during this bull market ? 


Cheers !!





 "It’s not your salary that makes you rich, It’s your spending habits.”  By Charles A. Jaffe


" Beware of Lifestyle Inflation "


---- Appendix -----


My Portfolio Detail :





Equity Portfolio by Sectors :


Equity Portfolio by counters :






One stock OUT from my portfolio was HPH Trust and I have blog about my trade review  ( here ) as such , I will not repeat again. As for the IN stock , I have added 3 more stocks in my portfolio after my last purchased of ComfortDelGro in May.

These ( SPH, ComfortDelGro , SIN Post ( use to be in STI) ) are the 3 blue chips which among the favorite of investors and likely to be in your portfolio in view of “investment moat “ they have ,aka of monopolistic business to some extend . All are now facing their respective challenges due to “digital disruption “ for ( SPH and ComfortDelGro)  or business re-engineering like case of SIN Post .

 I am not so sure if these “ fallen angels “ would survive at the end of the day or instead ,I am catching the “falling knife “ and hurt myself eventually. Only time will tell…

At this point of time , many arguments on the +ve or –ve point of view among analyst , investors or speculators on these stocks ….and again , I will not justify my purchase here as I always mentioned and quoted :


"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." - William Feather.



Disclaimer :  This is NOT a call to buy or sell of any stocks mentioned above , it is just for illustration purpose , please DYODD ( Do You Own Due Diligence ) prior using or acting on any information given.

Comments

  1. 16.7% is astronomical on Net worth. You truly earn more than you spend idling.

    ReplyDelete
    Replies
    1. Hi Cory,
      Net worth increased mostly due to better equity return in thd 1st hf , especially REIT n Finance sector. .also ..partly contributed from my high saving rate of my dividend income received. ..no Lifestyle inflation " of course. ..using public transport. ..staying in HDB and eatting at hawker center ...the key words is " live within your mean"...
      :-) Cheers !!

      Delete

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