Saturday, February 28, 2015

Feb 2015 Portfolio

This month, we see oil price recovering and making new high in 2015. Above US$50. Ths stock also follow through with a rally. We see a little rally just before CNY but overall market was quite good after S&P 500 made repeated highs and Japan announced that they are just out of recession.

This month I added my first blue chip SIA Engineering into my portfolio.
SIA Engineering had been sold down recently together with alot of those S companies such as ST Eng, SPH, SATS, Sembcorp Ind, Sembcorp Marine. It forms part of the Straits Time Index (STI). I always wanted to get one of those. Due to its recent poor results, it has fallen from grace. Used to be around $5. This buy I am not so confident because being a blue chip the PE 18 and 3.71 PBR ratio is not so good but it has practically 0 debt and is a branded stock. Based on past dividends I shouuld be getting around 5%. Pretty good for a blue chip huh? :)

This month I also added SPH which is also a consistent long time dividend blue chip stock. SPH has fallen quite alot from its $4.40+ to current $4.10. Just found out that SPH also activated their share buy-back program buying around $4.09 on the same day that I bought mine. This is a show of confident from SPH mgmt that the price is quite low already. So am proud to add it into my portfolio.

Blue chip month for me as I collected my third blue chip dividend stock Sembcorp Ind. It is usually hovering around $5 but have fallen alot due to low oil prices. This is a very diversified business just like Keppel Corp where they deal with energy, water and marine industry with its presence felt almost worldwide. It is also the only blue chip beside Keppel Corp whose PE ratio is below 10. So just added it into my portfolio.

This month is also the month which I bought the most stocks. Just really want to take advantage of the sharp drop in prices to accumulate these quality stocks that have been in my watchlist for a long time. Really glad and proud to welcome them into my portfolio :)

STI vs my portfolio

This month, I lost to STI by just a bit. Maybe better luck next month :)

PeriodSTIMy Portfolio (Realised)Verdict
Jan 20152.71%3.21% I win
Feb 20152.41%2.16% I lose
Total 12 stocks in portfolio

This month I pocket a little dividend from Sabana Reit
Checkout my Dividend history

Wednesday, February 18, 2015

Friday, February 13, 2015

My Motivation - Fellow SG Financial Bloggers

The journey to financial freedom is a long and lonesome journey. It would be entertaining and enlightening to have some like-minded companions along the way. Just like the movie Lord of the Ring - the fellowship of ring, a party of human, elve, dwarf and hobbits was formed but along the way, Bolomir got lured by the magic ring and was killed by the Orcs. In our world, some people will throw the white flag and surrender or some just want to take a rest and recover before continuing the journey. Its important for us, fellow financial bloggers to interact, encourage and help each other out by sharing useful tips so that we can all complete our journey to financial freedom.

Just want to pay special tribute to some of the SG Financial bloggers that in one way or another motivate me to start my own investment plan and be financial free! It has now been a daily routine for me to read through the blogs with my ipad, lying on my soft bed to give me some investment ideas every night before I sleep. If anyone ask me to recommend a good investment book to start off with, I would encourage them to read your blogs *serious*. Its definitely worth more than anything else because they are written and shared based on real life investment experience and real monetary stock transactions.

These are the 2 blogs which get my engine started: - a full time investor who was a moderator of - a disciple of ghchua

Thanks to the following financial aggregators for adding me into their list and get me exposed to hundreds of readers. At least I know I will not be talking to myself and some real people are reading my blog posts.

These are some of most active and wise bloggers who never fail to entertain me and give me investment ideas :) - a investor living a frugal life - a young daddy with an impressive portfolio - a young man with a good start - a uncle who achieved financial freedom with his cheeky and sometimes very chim posts eg pillow concept, freehold stocks etc - a very detailed and thoughtful investor - a investor named Richard :) - a very detailed and REIT focused investor - a modern dividend farmer - a rich lady investor - our joker and outspoken Jared - a investor - a dog lover cum investor, describe stocks as dogs and puppies ... kidding
and many more others

Please do not be too disappointed if you did not appear in my list as it could be that I haven't stumble upon your website yet. Just drop me a comment and say Hi to get things going.

Just to let you know I am a big fan of Lord of the Ring (LOTR) and Hobbit movies so will use some of the annotation from the movie to describe how you guys motivated me

If I am Frodo Baggins

You are Sam who is ever so loyal to accompany me in my long and treacherous journey towards financial freedom (Mordor)

Please do not be Boromir and try to steal the magic ring from me :)

If I am Bilbo Baggins

You are Gandalf, the grey wizard who is always looking out for me by telling me which stocks have value

If I am Gollum

You are my preciooous magic ring that I can always use it to make me invisible so that I can be safe

If I am Gandalf

You are Galadriel, the beautiful elve queen who always appear in the nick of time, sending giant eagles to save me from danger

Friday, February 6, 2015

Mitigate Risk By Diversification

Putting our hard earned money in the stock market is a risky business. We may have put in our best research effort to ensure that all the financial, valuation and management factors are tip-top but there will be some hidden or external factors which investors do not know. We all do not want to see our portfolio lose money. It's risky to invest in stock market. We cannot eliminate risk but we can reduce our risk. So what do we do? We buy more individual stocks :) Study has shown that as we diverisified by buying into different stocks, our portfolio risk reduces. So when a particular sector or single stock is not doing well, it will not have a big impact on your portfolio as a whole. However, when there's a systematic risk of a global crisis eg the Great Financial Crisis in 2008, every stocks in the stock market will fall. That will affect your portfolio too.

The following will be what I will be doing.

Stock Diversification
Keep to the 5% rule. Try not to have more than 5% of the individual stocks in your portfolio. So that any bad things happening to your single stock is only 5% of your overall portfolio. It will not caused a dent in your portfolio. In order to get the magic 5% figure, you need to invest at least 20 different stocks so that they will make up 100% of your portfolio. Basically, I will be trying to build my own ETF with 30 to 40 stocks for a start.

Sector Diversification
Currently we have oil price dropping from US$100+ to below US$50, this has caused O&M related stocks such as Keppel Corp, Sembcorp, CH Offshore, etc tumbling down as much as 27%. Do be careful not to keep picking up these stocks from the same sector and over exposed yourself to the O&M sector. Keep to the 20% for each sector.

Geographic Diversification
We are lucky to be in Singapore while it strived to be a financial hub, there are lots of companies listed in SGX with foreign investments such as Saizen REIT (Japan), Mapletree Greater China REIT(China), Hutchison Port Trust(HK), Ausnet(Australia), etc. Many of our stocks in SGX have investments in different countries such as Hong Kong, China, Japan, Indonesia, US and Malaysia. These are the countries which most of the SGX stocks are vested. It's about 15% in each countries so pretty much diversified already. At this moment, I am concentrating on building my portfolio buying local stocks in SGX. In the future, I may want to buy stocks from US or Hong Kong to spread out my geographical risk. However, it seems quite expensive to buy foreign stocks as we need to pay extra handling fees for our overseas dividends which I do not find it worthwhile. I may be considering buying high dividend ETFs which consists of a list of 30 to 40 dividend stocks. Any good idea on buying foreign stocks please share :)

Asset Diversification
Just now we mentioned about global stock market crisis, so how do we reduce our risk when that happens? We diversify our assets namely stocks and bonds. I am treating my CPF savings as bonds currently earning 2.5% and 4%. If you have read my profile, you would have known that I have maximised my SA savings so I have a pretty build-up bond asset in my portfolio. In this blog, I will be focusing more on my stock asset.