3rd Qtr 2019 : Dividend and Portfolio Update

image credit to Izquotes.com




US stocks went into a free-fall on last Wednesday after the bond market stoked fresh fears of a recession ( due to inverted yield curve for US 2 years bond vs 10 years bond ). The Dow Jones plunged 800 points -- a sharp departure for a market that had very recently been hitting record highs. Same for STI Index, as world stock markets are so intertwined with each other nowadays, although STI index is not so high in term of valuation, but when US market tumble, we can’t escape and sure have some repercussion and price reaction. Hence, STI also dropped by almost -9% in past two weeks from as high as 3381 to 3115.

But former Fed Chair -Janet Yellen says "This Time Is Different !"


Janet Yellen says yield curve inversion may be false recession signal this time <from CNBC.com>



STE’s portfolio still manage to out-perform the market by +11.02% with YTD return of +12.51% vs STI +1.51% ( as of closing 16th Aug 2019 at 3115)

The better performance mostly due to my 47% holding of REITs which have average returns of +11%, except ESR REIT which is still in negative territory as compared to the closing price last year.






REITs still holding well after world central bank announced more dovish interest rate policy which is positive news for REITs as this could ease their risk of increasing finance cost. As you can see from above, FTSE ST REIT index is still up by +15.7% vs closing in 2018.

Total Dividend & Interest rate in 3rd Qtr 2019 = $48,491 vs  $50,804 ( 3rd Qtr 2018)

YTD 2019 ( 3 Qtrs ) = $144,677 vs $144,911 ( 3 Qtr 2018 )

Overall dividend collected almost the same as last year even though I have increased my Bond/Cash % in my portfolio by almost 8% point vs 2018. Most of the REIT’s DPU is quite consistent with some up and down. Some of the blue chips like banks and ComfortDelgro have also increased their dividend pay-out.









Portfolio Update :






Total holding down by 3 counters to 40 stocks which I think is still too many and my target is to further reduce it to 30.

I have blogged about the disposal of Global Inv / Ascendas HT, Fraser L&I and SingPost in my previous blog post (here ). I have decided to get rid of a few more lemons in my portfolio where some have performed terribly. Some might be due to prolong challenging industries downturn ( Sarine / TTJ Holding) and some might be due to tax dispute (Duty Free Int ) or some accounting scandal ( Trek2000). I have to admit that I am not good at selecting good company especially the small-cap which is more volatile and having transparency issues, to some extent.




I hope with this re-balancing of my portfolio, it would become stronger and be able to sustain the current volatile market. I have added 3 REITs in my new purchase and 1 blue chip ( HKG Land ) which been affected by current Hong Kong political turmoil and unrest. While I do respect their courage/determination to pursue their country’s freedom but I also hope the situation may improve as continuous chaos may not be good for Hong Kong’s future in the long run, no matter which side is right or wrong. Let’s hope and pray that the demonstration may end in a calm and peaceful way.



Hong Kong Tycoon Warns Protesters and Beijing Against Violence < The Wall Street Journal”






I have also added 2 more small-cap counters ( HRnetGroup and ISEC) in recent portfolio re-balancing. I know small-cap may have better growth prospect and capital gain than blue chips, but at the same time, the volatility for such stocks increase as well.  In view of a bad experience with few small-cap companies ( Design Studio / Sarine / TTJ and Duty-Free Int), I have decided to cap my exposure to each counter to not more than 3% of my portfolio value. This may reduce the impact on any loss to these small-cap counter but of course, it will also limit the gain I will enjoy if it turns out to be a good selection. But, hey! we can’t have the best of both worlds, there will be a trade-off in most of the case.


Are You On Buying Spree?




Some may ask if I am on a buying spree since I have added 6 counters to my portfolio. Obviously not as I am also selling 9 counters and reducing my holding in Sing Tel ( from 6.8% to 2.8% ), Capital Comm REIT ( from 3.2% to 0.9% ) as well as Fraser Comm REIT ( from 3.5% to 0.7%). My Bond/cash ratio basically remain unchanged at 24% even though with all these buying and selling, where I have also increasing my stakes in banks / FuYu and some REITs.





Even with the recent market correction of around -9%, I am not deploying my war-chest at this moment as overall valuation is not that cheap” enough for me to start using my war-chest. What I am doing now is just kind of re-balancing my portfolio, taken out some weak or poor performance counters and increasing some I though is still under value and some might be because of “ special situation” like HKG Land.

Market will continue to be very volatile with more and more economic indicators showing poor or weak performance like GDP/PMI / Export data etc. We will need to get ready for any wild swing ( like the one recently with more than 800 points swings in Dow Jones Index).


While waiting for a better entry point, I am happy to continue collecting my dividend till opportunity arises. Investing is a waiting game – we wait for the dividend to be paid every quarter, we wait for the right price or opportunity to buy, we wait for the company to growth after buying and inevitably we wait for boom and bust !!


Guess what I found while searching for the best quote about “Investing  & Waiting“?

A gem and the best article from our friend “ Sillyinvestor “ in 2013.

So instead of giving you the usual “Quote of the day”, I will present you the……


Article Of The Day :

“Investing- A waiting game” < by Sillyinvestor.blogspot.com>


“Investing is very much a waiting game, perhaps one that required even more patience than fishing.
You wait for the right price to buy a counter, and the price might not come in weeks, months or even years.
You found an opportunity, a hidden Gem, you bought it. Again, you might need to wait for years for the market to realize its value”




Cheers !!





PS:











Comments

  1. Wow wow Thank you for the blog, advises

    ReplyDelete
    Replies
    1. Hi Your Ka-Ki,
      Thanks for the comments .. :D
      Cheers!

      Delete
  2. Well done STE! If I may ask, why 24% for bond/cash allocation? Are you planning to increase the bond/cash allocation?

    ReplyDelete
  3. Hi Yaruzi,
    Thanks for the comments , 24% is just a number which I am comfortable with at this moment , not any "magic number " or formula... :D
    Since STI is not really overvalue ( as compare to US market) , I will not increase my cash portion and just keep my dividend if nothing to buy. We know that if US market crash , markets all around the world will be affected , even STI with low valuation , is kind of market psychology.....so I just keep some war-chest in case anything happen, else I am just "keep calm and collect dividend"...
    Cheers !! :D


    ReplyDelete
  4. Absolutely agree that 40 stocks are too much to keep track. To reduce from 40 to 30 is 25% cut, not very easy to remove 10 (25%) from your list.

    Also you are very decisive to cut lemons. I hope I can be more decisive also, but always trying to find excuses like things will get better, better, better......

    All the best!

    ReplyDelete
    Replies
    1. Hi D,
      Thanks for the comments , yah , is hard to reduce the total holding as we don't want to sell the loser (lemons) because of " loss aversion" and always hope for the recovery.
      Cheers ! :D

      Delete

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