My Report Card (Portfolio Performance ) 2019
December was a busy month for me as we went to “Kukup-Malaysia”
for our family gathering after returning from Hokkaido, also another staycation
at JB right after the Kukup trip. Since
next week will be another busy week for me with Christmas gathering and
preparing my younger daughter’s entering secondary school, I would like to
give a brief and quick update of my portfolio performance for 2019.
As compared to 2018 where we have seen market (STI) down by
almost -10%, I guess 2019 will be a good one for most of us, especially for
those with more REITs in their portfolio. REITs have a good run in 2019 after FED
decided to have 180% change in their interest rate direction with 3 rates cut compared to rate increased in 2018, this has resulted in FTSE S-REIT gone up by +23.4% YTD.
2019 was an eventful year other than seeing FED’s stance
change, we have seen the market was very volatile with up and down whenever we
have positive or negative “tweet” from President Trump.
Although with much uncertainty due to trade war, BREXIT and other geopolitical risks, market continue to hit record highs in 2019,
especially last week when we have good news about “phase one” trade deal from
US and China.
Also, 2019 will be another disappointing year for those who
have predicted “market crash “ in 2019. As I have repeatedly mentioned that
nobody will have “crystal ball “ to predict the market movement, of course, there will be a possibility that the market may collapse in 2020 …who knows.
Just need to get ourselves prepare with some war-chest in hand
and having a diversified portfolio.
Ok, back to my portfolio returns.
I am very happy with +19.8% on equity in 2019 and I am really
lucky to have more REITs ( and banks to some extent) in my portfolio that does
exceptionally well in 2019. Also with some of the blue chips and electronic/semi
con stocks that doing well this year ( Thai Beverage / UMS/ Valuetronics ).
The market always moves in a cycle, not every year one will have such a good return. You may notice that last year (2018) was a bad year for me (REITs), with
-12.2% and underperformed STI by -6.1%. Overall for the past 12 years, I was
able to outperformed STI by +139.9% but XIRR since 2008 continue to decrease and in "diminishing
trend" in the long run as I was lucky to invest more during GFC in 2008/09.
You may find from my previous blog post that I have also
bought more during 2011 ( Europe Debt Crisis ) and 2015 ( EM and Oil crisis ). Investing
during the crisis period will definitely assist to boost up your total returns. If
you are in the wealth accumulation stage, a crisis is your friend and you should not afraid of crisis.
Although the market is currently moving below the long term mean level but is
not cheap enough for me to deploy my war-chest. As you may know from my
previous update that I am actually moving part of my fund to HKG/CHN market.
My stocks in SGX had decreased from 47 ( end of 2018) to 36
as of today as I try to consolidate my holding in Singapore market and cut lost on
some of the “lemons” in my portfolio. Not all stocks we invested will turn out
to be good, sometimes we do catch some “lemons”, but as long as you are
having more apples than lemons, it should be fine in the long run. I still believe
in diversification and at least it works out well for me.
The Power Of Dividend <link>
As I blogged before, the dividend attributed around 67% of my total return and
dividend will still continue to be my main “thesis “ of investing, as income
investor. All my holding will at least have some dividend paid out, more or
less, depending on sectors. That is the reason why I will not have “multi-bagger”
stocks from tech sectors like FANGs.
Investing is for the long term and like “marathon”, it required
patience, disciplined, resilient and focused in order to complete the race.
Not like “sprinting”, which is fast and short-term focused like “trading”, a different kind of sports and not my cup of tea.
Market Will Crash in 2020 !!
Kidding, nobody knows what will happen in 2020 and most of
the prediction in 2019 turned out to be wrong. As I mentioned earlier, in fact, you will be very happy to face the crisis if you are in the phase of “wealth
accumulation” stage and ready with some war-chest to be deployed.
In my
previous blog “
What Would Negative Interest Rate
Mean For Investors”
“The key is investing in an asset that producing “ sustainable & predictable “ cash flow….. of
course, REITs are not as qualified as good quality bonds, but an asset class
which is in between bond and equity, I think it deserves a substantial position
in our portfolio.”
With so many “negative yield” bond all over the world, REITs
and Banks will still be the key component in my portfolio to provide me with quarterly
dividends and continuous income stream.
Although REIT’s valuation is not as cheap as 2018 ( refer to
above chart on FTSE S-REITs), but with so much liquidity chasing for yield, I think
the valuation may stand if not improve in the coming years.
I may continue to shift a few % points from SGX market to
HKG/CHN to increase it to around 20%. as I deem this market to be interesting and undervalue. I know China still has much more
problems in terms of domestic debts (especially from the real estate sector), economic
slowdown/GDP due to trade war, the smaller bank starts to collapse and possible
huge CAPEX for Telco in rolling out the 5G etc….
I do believe that the China Central Bank and government have
a very strong political will and power to improve the situation, of course, the “bullet
“ to stimulus and restructure the economy towards domestic consumption rather than
export dominant. Hopefully the strong and resilient tech/e-commerce sectors on AI /IoT
/ Robotic or Blockchain technology would infuse some vibrancy into their domestic
economy.
I might be wrong on this “ HKG/CHN” move, but anyway, wish
me good luck. :D
Cheers !!
STE
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