Tuesday, January 6, 2015

2014 Year End Portfolio Review

Our performance must be measurable. We should have a plan, a target or goal and a strategy on how to achieve our target. If not, how do we know if we improve or not. Only then will we know if we are in the right track and continue doing what we are doing. If we are in the right track, then we can decide if we want to multiply or magnify the effect.

Its the end of 2014, let's just do a little checkpoint to see how much am I closer to my target :) I started building my portfolio in Oct 2014. So only 3 months of results.

STI vs my portfolio:
My portfolio is still not able to beat STI at this moment. But as time goes by, with the collection of dividends and some capital appreciation, it should be no problem :)

Portfolio by stocks:
I am currently in the process of diversifying my portfolio such that they should not exceed more than 5% of my total portfolio. I am still looking out for more high dividend stocks to buy so that I will be more diversified. For the case of Global Investment, I was too excited and bought too much in it. But its ok, it will be slowly diversified when more stocks are added in.

Portfolio by sector:
We should not be looking at just stock diversification, sector diversification is equally important. I hope to have a 20% allocation for REITs and a 80% allocation for the rest of the stocks. Probably not more than 20% for each sector of the other stocks. The reason why I was willing to allocate a slightly higher % for REITs is that REIT has a policy to pay out 90% of their distribution and will be what I want.

TargetTargetted Portfolio sizeTargetted Monthly dividendsPeriodYearly CONDividends Reinvested
1st target$85,000$495 2015$30,000$5,900
My 1st target is to invest up to $85,000 and receive monthly dividend up to $495 per month.

Total dividend is $450
Dividend per month is $450/3 (pro-rated) = $150

My worst performer is UMS Holdings (-5.3%). This stock pays consistently good dividend but its quite volatile as I noticed that their CEO disposed his shares quite frequently and Applied Materials which is their major customer and investor also disposed its share quite recently. This may be the reason of the volatility.

My best performer so far is Asian Pay TV trust (4.9%). Maybe its because I bought it at a good price during Oct 2014 when market was in a bear mode.

Overall, my portfolio still ends positive in 2014. Maybe that's the benefit of diversification. My risks are spread out throughout my list of stocks. However, diversification is also a double-edged sword. It will also not amplify your winning too. Your results will not be the best and not be the worst, somewhere in between. That's something you have to give and take too.

At end of 2014, I already invested close to $39,000 and receive monthly dividend of $150. Based on the projection of my expected annual dividend of this current portfolio, I should be getting around $3,600 which is about $300 per month. So I am almost half way there. If I continue to follow my strategy of allocating $5000 each month to buy high dividend stocks and assuming no hiccups or unforseen circumstances, I should be able to meet my 1st target with ease :)

No comments:

Post a Comment