2023 Portfolio & Dividend Update
A Rollercoaster Ride
I know, Uncle
was really late to have this 2023 performance review as we are already in
February 2024 😊. Pai-seh, I was busy with a family
trip to Korea followed by a Cruise Trip onboard RCL. Also, during the school
holidays, we went a few times short trips to Malaysia and back to my hometown. My
younger daughter got her O Level result followed by searching and applying
for JC. That’s why I have been delaying this update and dragging my feet to
write this blog post.
I think most
of us had the same feeling that 2023 was a challenging yet dynamic period for
investors, marked by a series of unpredictable events that significantly affected
our returns. I have seen my portfolio up by more than 10% in the early part of
the year and it dropped by more than -8 % at one time and recovered slightly
better at the end of the year with +2.3% (including dividend).
investor, navigating through such a volatile market requires adaptability,
patience, resilience, and long-term strategic thinking. Otherwise, with such a market,
we may end up with a “sell low buy high” kind of situation if we follow the
market sentiment/mood to trade in / out accordingly.
2023 was a
great year for investors who have invested in the US and other developed markets.
The S&P 500 was the star at +24.23% while Nasdaq100
went up by a whopping +43% because of the extraordinarily strong performance
from Magnificent 7. Not to be left behind, India's BSE Sensex was up by +20%, and Japan was also up by +19%. Back in our home country, STI ended up just flat at -0.34% and
FTSE S-REIT: at +0.27% while Hong Kong’s HS Index had the worst performance among the
major markets with -13.82%.
You can see
that my portfolio has returned almost flat since 2019 when I started to venture
into Hong Kong and other markets like UK LSE and MY KLSE. Hong Kong market
experienced almost -51.3%
since 2018 after the US started the so-called “trade war” with China followed
by crisis after crisis (HK Riots / Covid-19 / China Tech crackdown / Property
control & meltdown and now the economy slowed down plus capital outflow from
domestic and foreign investors. )
Below is the
comparison for 5 Years of CAGR + Average Dividend Yield of the major
markets since 2019:
Index = -4.83% (CAGR -7.99% + Averg Div
Yield 3.16% )
STI = +4.61% ( CAGR 1.09% + Averg Div Yield
FTSE S-REIT =
+5.53% ( CAGR 1.32% + Averg Div Yield 6.85% )
FTSE 100 =
+6.69% ( CAGR 2.82% + Averg Div Yield 3.87%)
+15.3% ( CAGR 13.73% + Averg Div Yield 1.57%)
DJ 30 =
+12.09% ( CAGR 10.07% + Averg Div Yield 2.02%)
= +2.52% ( XIRR, including dividend )
portfolio return since 2019 was terrible after I ventured into the overseas market (especially the HK market where I have more than 50% exposure.) and only outperformed the HK
The HK market
was down for 4 years consecutively and it was a record since Hang Seng Index was created in
1969 and now YTD 2024, it continues to drop by another -8.8%. It is really a
challenging year for investors investing in such a market. I think many have
lost faith and jumped ship or cut losses due to this prolonged downtrend and
severe negative market sentiment with huge capital outflow and overhang property
issues. The market sometimes may rebound with some positive news like PBoC
cutting rate or rumors of a USD 278 Billion rescue package to buy up the market,
but it continues to drop and test the lower low if those so-called rumors do
not happen eventually.
collected $896K of dividends for the past 5 years (2019-2023) but at
the same time also incurred capital lost (paper / realized) of around -$501K, so the net gain in the past 5 years was $394K
or XIRR of just 2.52%. The losses mainly came from the HK market as
by Market :
As you can
see, my gain from SGX/LSE/KLSE was almost wiped out by losses from the HK and US markets
(US also mainly on China Tech ADR). If I exclude the HK Tech stocks, my return in the HK market still be able to generate a +ve return of $37K (including dividends), although just a mere 0.6% XIRR, not bad actually under the current severe downtrend HK market, with the power of dividend.
really a challenging and good experience from a portfolio management
perspective when one is trying to venture out into new territory and market
with much uncertainty about the country and geopolitical risk involved.
valuation looks cheap from a “traditional” way of analysis e.g. PE/PB or Div
Yield, the factor affecting a market is not just by these valuation matrixes,
it involves much more complicated global capital flow/ geopolitical tension and
will not be selling at the current price level and at the same time not buying
much into this market with just selectively picking up some high FCF Yield
companies / ETFs from time to time. As the policymaker emphasizes companies with
good FCF could increase their dividend payout or do the share buyback (can
see the increasing trend about companies doing this), I will just keep calm and
collect dividends for the time being.
I am not sure
what will happen in the next 5 years time, will it be :
Let’s see …..
I don’t have a crystal ball and can’t predict what will happen in HKG/CHN Market
in the coming years.
4th Qtr 2023 Dividend Update:
Dividend collected in 4th Qtr 2023 = $31,270.92
Dividend collected in 2023 = $188,240.48
Portfolio-wise, I didn’t do much with just increased some S-REIT in 4Qtr 2023 and JMH /
Ping An Insurance, as well as the HK Dividend ETF 03070. Added 3 stocks and 1 s-REIT and
reduced (take profit) on small cap pharma Consun Pharma 01681.
stocks performance in 2023 :
There were some ups and downs, the worst performance among my top 10 holdings was PingAn Insurance with -31.6% and the best was CNOOC with +30.3%.
start of the year, the HK Hang Seng Index lost another -8.8%! Will the HKG/CHN
market face the same situation as JPN in the early 90s the economy and stock
market were stagnant for almost 30 years and just recovered to the previous peak recently.
I think is
still too early to predict what might happen as the comparison between China's
economy and Japan's "Lost Decades" in the early 1990s is complex, and
there are both similarities and differences. The trajectory of China's economy
will depend on its ability to manage challenges e.g property sector / local
government’s debt issue, implement effective policies to stimulus economy and
promote domestic consumption as well as adapt to the global economy and political
tension like “tech/chip war “from US lead alliance and increase exports to
non-US / EUR markets.
moment, I think the best option for me is just “do nothing”, adopt the “wait
and see” attitude, stay calm, and collect dividends.
onwards, I will not do the quarterly update as I feel no point in just publishing
the dividend figures without much info or update. Initially, I was thinking of
totally stopping blogging as most of the stuff I wanted to share (about investing
philosophy/investor's behaviors towards market/ market valuation and cycles/regression to mean, etc. ) had already been mentioned and highlighted in my previous
blog post. But I think to stay connected to fellow like-minded friends and
investment communities, I think it would be better for me to just do the yearly
review and update. Also, Uncle will spend more time traveling and
staycation this year with Mrs. as kids are growing up. We are planning to
travel to China ( 哈乐滨,
长白山, 雪乡, etc..) after CNY. 😊
Ah ok, I may
continue to post and share photos taken during our trips from time to time!
Chinese New Year is just around the corner, taking this opportunity, I would
like to wish you and your loved ones a year of prosperity, happiness, and
triumphant success in the Year of the Dragon! Wishing you the strength and courage of the Dragon as you pursue
your dreams in 2024 !!
龙年吉祥 , 龙腾虎跃、龙马精神, 龙年行大运 !
Cheers! Till next update …
PS : World
stock market regression Chart :
For the US market, it seems that the "party " may continue with trillions of excess capital sitting sideline in the money market to enter the stock market when the FED starts to cut the short-term FED Fund Rate. As I always emphasize, the stock market is 90% psychology and 10% economy/ valuation. Because of market sentiment/optimism, one of the greatest economists John M Keynes famously observed that the " market can stay irrational for longer than you can stay solvent !"
Stay safe with these so-called "Animal spirits " while enjoying the party!
In fact, even the more diversified index of the S&P500 as we think is quite concentrated with AI / Tech hypes with the "Magnificent 7 " outperforms the rest and contributes a big chunk of profit and growth of the S&P500 (with high PE now, of course, some may argue there is still pretty much of strong growth there, can't really measure it with standard PE valuation, no doubt). Anyway, as I said, the party may continue as long as capital/funds continue to pour into this market, just enjoy the ride! 👍
Ok, now they are talking about " Super 6 " without Tesla ... 😉
"The Magnificent 7 has now added a combined $3 TRILLION in market cap in 2024.