Reflections - What if I had started my investment journey earlier (Age 21/22)?

Yo folks, hope you have enjoyed the Lunar New Year!

At times, I look back at decisions I have made or things I have done and wondered how would things be different if I had done otherwise. I enjoy thinking about things that might have happened in a parallel universe. Reflections are wonderful sources of learning and on occasion, fun to think about. Among one of those things is investing.

I recall, back in 2009-2010 at the age of 21/22 (while I was still doing my Full-Time National Service), I was getting to know more about developing secondary sources of incomes, having thoughts such as opening up an e-store or doing surveys, and achieving financial freedom (having the commitment or knowledge to take my steps towards it was another story. Oops.). It was then when I came across and purchased Adam Khoo's Secrets of Self-Made Millionaires. I suppose that was the very first time I just started to know a little about investing in stocks (e.g. I learnt about blue chips). However, the idea was forgotten as spontaneously as it came. (Again, oops) :P.

At least I gained knowledge in other things that would deeply contribute to this day, such as the concept of expense management and other vehicles for developing secondary sources of income. It is also because of this book that I also managed to influence my friend, whose family was in the lower-income group and unfortunately, not financially educated, to kick-start his financial education so as to bring him and his family out of the hole.

Looking back, in some sense, I have actually indeed done investing back then - I invested in myself by purchasing that book, learning about secondary sources of income and expense management.

In terms of investing in stocks however, I wondered what would have happened if that was the path I had taken instead.

The Pros

• Global Financial Crisis had just occurred recently - I may had been able to take advantage of the drastic dip in stock prices to pick up.
• This might have motivated me to save up properly during my NS years to enter the market back then. I did not really have the discipline to save back then.

The Cons

• I would probably not have the maturity and diligence to properly educate myself in investing in stocks.
• I would probably also lack the financial muscle to pick up stocks either.
• I was not educated regarding the stock market so probably will still make big costly blunders that would cause me not to sleep soundly at night.

  If I could travel back in time, I would want to coach my past self on investing in the stock market and becoming more mature.

What would you have done if you could travel back in time where there was an opportunity for you to start learning about investing in the stock market earlier? How would it have changed your status today?

ShareInvestor presents: Investing Strategies for REITs and Business Trusts with Business Outlook 2018

Just thought I'll share this for those who may be interested: there is an upcoming event by ShareInvestor, you may find more details in the pdf by clicking here for full event details.

Date: 10 March 2018
Time: 9am - 12.30pm
Cost (early bird)* : $8 (ShareInvestor member) / $12 (non-member)
Cost: $15 (ShareInvestor member) / $18 (non-member)

There's some cool freebies thrown in as well, so could be worth the time.

* Early bird offers ends at 2nd March 2018.

I'll be going to this myself. :D

CPF-OA versus Inflation rate

Ever since I started my investment journey, I have emphasised a core rule both to myself and my friends that must not be broken no matter how risk-adverse one is:

"No matter how you achieve it (savings plan, bonds, stocks, bank accounts with high interest rate etc), hedging must be done against inflation, with the minimal eventual goal of having all your money and asset beat overall inflation rate of 3% p.a." This would include your CPF monies.

For the sake of this discussion, I would decouple CPF from non-CPF rate of returns and treating CPF-OA as a separate entity instead of considering it in conjunction with CPF-SA, which will become your CPF-RA when you hit 55.

(This discussion assumes CPF guaranteed risk-free interest rate is unchanged, you do not do and do not intend to do any investments with CPF including housing, and you are not anywhere near age of 55 yet.)

That brings me to the next bit. As we know, CPF-OA has a base guaranteed risk-free interest rate of 2.5% p.a, and up to 20k of your first 60k in CPF overall can earn extra 1% p.a. Your CPF-SA has a base rate of 4% p.a., and can earn an extra 1% p.a. as part of the first 60k in CPF, which means your CPF-SA is always ahead of the inflation rate.

If we look at the CPF-OA alone, this means the first 20k will beat inflation rate, at 3.5% interest rate. However, past a certain amount of savings in CPF-OA it will start to decrease, and then start to lose out to inflation.

Based on calculation, the tipping point in CPF-OA is 40k (3%). Having a more detailed breakdown into this, you can observe how the average rate of return decreases:

3.50%	2.50%	Avg ROR
20000	0	3.50%
20000	5000	3.30%
20000	10000	3.17%
20000	15000	3.07%
20000	20000	3.00%
20000	25000	2.94%
20000	30000	2.90%
20000	35000	2.86%
20000	40000	2.83%
20000	45000	2.81%
20000	50000	2.79%
20000	55000	2.77%
20000	60000	2.75%

 
What this translate to is if the savings in CPF-OA is to beat inflation, any amount accumulated in your CPF-OA after the first 40k needs to be diverted to instruments with returns of at least 3%. Next, you can start to consider the effect of the other factors specific to you surrounding your CPF-OA savings (e.g. housing loan, your retirement sum).

Just some food for thoughts.

Enjoyed the short read? Have your opinions and thoughts to share? Feel free to share it in the comments section!

Oh, and Happy Lunar New Year to all! Marksman, signing off.

Recent market correction and changes to portfolio

With the recent market correction due to the panic regarding increasing bond yield, it seems like a great shopping opportunity for any counter that has been oversold. I imagine this probably applies to both long term investments and trading opportunities. I made a small amount recently from trading with thanks to this. :)

There are some who has concluded we are ready for a rebound and continuation of the rebound, and there are others who thinks this is just the very start of a bear market. Myself? I think it could be either and one should have the game plan to adapt to and take advantage to both situations.

Being someone inclined towards building passive income more so, I lean towards buying sustainable high-yielding stocks and increasing defensive positions, but not fully digging into my available funds so that I may still take advantage of any market crashes.

To de-risk my existing position, I have decided to let go Asian Pay TV Trust and have the funds in kept in my warchest first. While I have only held onto to it for a quarter of dividend, at least I did not lose money over this. Short of a market crash bringing even better buying opportunities, it is going to be a challenge to figure out how to meet my target yield of 8%+. This brings my income portfolio down to 6.8% (SGD 1150) per annum. I should figure out how to bring this up to 7.2% - 7.5% per annum.

After some consideration between several stocks in my shortlist and this event as a catalyst, I also initiated a position in Singtel (3000 units) with my CPFIS-OA, as I anticipate it will allow this portion of my funds to beat CPF-OA returns from both capital gains and dividends. Given the purpose of the CPF and my current available savings in CPF-OA, I am not comfortable with putting money into the other stocks I have considered.

Have your own game plan to share regarding the recent market correction or your strategy? Please feel free to do so in the comment section! :)

Portfolio performance review (2018-02-03)

This is the first time I'm posting about my investments so I will go through more backgrounds for my portfolio.

Dividend Portfolio
Capitamall Trust (5000 units)
Cache Logistic Trust (7500 units)
Fraser Logistic and Industrial Trust (1000 units)
Asian Pay TV Trust (10000 units)
Cromwell European REIT (1000 units)

Yield based on purchased price plus commission: Around 7.8%. It should return me about 1800 this year. The goal is to achieve at least 8% and having some element of growth to increase yield further.

Overall I'm pleased to say all the stocks in this portfolio is seeing capital gains.

Capitamall Trust - My first stock that I bought into while it was undervalued slightly. When I first started out on my investment journey, I had set out with a goal of being able to make 6000 from dividends/distribution annually for every 120K. As I enrich myself further, my yield target has been set higher and higher. Capitamall Trust, as a Blue-Chip, anchors itself as a safer asset in my portfolio. I look forward to the day Funan starts contributing to the distributions again.

Cache Logistic Trust - Truth be told, I rushed into buying it overpriced for high yield (I thought it was 9%+) as an inexperienced guy without realising private placement has diluted the distribution hence limited my gain from this (this is why you should do research before buying in.) The good news? I had managed to average down enough to have paper gain. I had periodically added position into this, most recently from the recent rights issue. With the gearing ratio reduced to ~36% (now 39.3% after acquisition), its 51 Alps issue resolved amicably, and recent acquisition of more Australian properties, my outlook for Cache is pretty positive.

Fraser Logistic and Industrial Trust - Bought at IPO as a tikam and as a form of reinvesting dividend proceeds. I kind of regret not having add a larger position after IPO given my positive outlook, especially given the growth prospect and low gearing.

Asian Pay TV Trust - Bought it as a riskier play (given the not-so-good consensus based on analysis from several parties) to boost distribution. It will be interesting to see the effect of the reduction in Capex spending this year. I'm on the fence about letting it go.

Cromwell European REIT - Another IPO tikam also being treated as dividend reinvestment. Also treating it as hedging if EUR strengthens or SGD weakens. It won't start contributing to the income until its maiden payout in Sept 2018. May consider adding more position later on?

Growth Portfolio (well only 1 stock at the moment hahaha)
Alliance Mineral Assets (40000 units)

AMAL - Lithium play. I am bullish on this and the overall Lithium-related sector and confident it will be a multi-bagger in the future.

Little advices for preparation of job-hunting

Note: Some parts of this post may apply specifically to the context of Singapore.
Note 2: Noting that this post is particularly popular, I have updated this post as at 15 Feb 2018 ( changes in blue).

So recently, I had the opportunity to look to new employment. Having gone through the job application and interview process, I learnt how some companies practices having some interesting requirements to be prepared for job application and interview... and in the aftermath, my thought were, "People might wanna know these when they are job-hunting."

Here goes:

• Always prepare a few complete sets of your photocopied documents, even if you are not actively job-hunting, then stash it somewhere. Of course, take good care of and don't lose your originals either:
• Your identity card (front and back)
• Your education certificates and transcripts
• Other professional certifications
•  Your testimonials
• Here's the interesting part: some companies do actually request for your last drawn salary payslip and your bonus payslip. I have learnt my lesson with this. Keep your payslips! You never know when you will need it (I'm glad I did just that).
• Resumes should always be tailored to the job requirement as much as possible.
• As a fresh graduate, consider making it concise enough to fit on a single page, unless there are really some significant achievements you want to put in.
• Get yourself a LinkedIn! Not only because companies does job advertising there, but it is common for headhunting to be done there. Even if not, you should furnish your professional profile in there, do some networking, and you can enrich yourself with the wealth of knowledge shared by other professionals! Plenty to be gained there.
• Have an elevator speech prepared - this is how you will introduce yourself in 60 seconds.
• Rehearse and anticipate possible questions (I imagine this will be particularly challenging as a fresh graduate, as you may not be able to give targeted questions and answers throughout the interview)
• Networking is key to success as a professional. Get yourself acquainted with friends, schoolmates, colleagues. Not only does this expands your opportunity to make career moves or start a career, the knowledge sharing adds values as you enrich yourself and it builds up your interaction skills.
• Have confidence in yourself! Everyone has something they are good at!

Any other tips? Please do share here as well!

Self-Introduction

Hi All,

So... A little introduction about myself? I am turning 30 this year, and I work as an engineer for my profession. I am also getting married to my lovely fiancee this month. In my off-hours, I enjoy reading more about investing/trading. I started my journey in investing/trading not too long ago (about 2 years ago?), with the biggest catalyst to dive into it being witnessing a sudden market crash and then realising, "Hey, these guys are overreacting! Maybe there is something to be had here." I experienced some downs and ups since then. My aim? Financial independence; Retire Early (FIRE) by 45.

So why did I decide to start this blog? I guess there are a few reasons...
- Share my investing/trading journey
- Share my journey to financial independence or freedom
- Provide helpful reads for not only towards investing, but also other financially-related resources.
- Other little things, such as life advice.

For a start, I would like to give my thanks to these websites for inspiring me to start this up:

• https://my15hourworkweek.com
• https://dollarsandsense.sg