Why am I writing a financial blog?

It's been quite abit of time since I wrote a new post.

I have been busy with a new job and added responsibilities, and at times questioned myself whether I should continue writing here . What if something I write causes someone to purchase a stock that loses them their hard earned money? I am also aware of how there are many more people who invest and are way more capable in their analysis , their interpretation and explanation of investing principles, who work with numbers and finance their whole lives.

I had for a time thought about shutting down this blog, to not bother with giving it a push to building it more properly.  Yet I realized something when I had a chat with a few colleagues just now. There are many educated people, many people from all walks of life that might go through life and not invest, may not know when to start or just find the whole thing a pain in the ass. There are people that do not realize the actual opportunity cost of leaving their money to do nothing , and there are so many in my age group that are still grappling with investment principles, or even just simple money matters.

I think that if my writing can convince someone to go down a make financially conscious decisions that better their lives and their families, then I may have done something that really sparks joy for myself.

Starting from today I am going to invest a little more time every other day to write more about my simplistic views on investing, money and just about financial decisions. I hope that this blog will become a depository of knowledge, and will help others to at least get an easier start in what admittedly might be a painful beginning to an ultimately rewarding investing experience.

For those who have read my blog, I humbly seek your suggestions on what content might appeal to you and assist you in your financial journey.

Do things that sparks joy.

Review of Retirement Plan

It's been about 9 months since I started working and things have been a whirlwind. 

My company had been bought over recently and I was re-assigned into another role in the new company. It's been a few days of getting to know the new systems, new people and basically getting myself into the new work environment.

As I looked and reviewed my financial situation, it's been the nearly two years since I bought one of my first stocks in the journey to financial freedom.

The returns for the stocks has been average at best; some stock purchases have perhaps been costly to my overall portfolio, dragging it down as I previously mentioned in my other post.

My benchmark for awhile now has been the S&P, which has risen approximately 13 percent since a year ago. Unfortunately, my portfolio is nowhere near that.  This has mainly been due to three purchases that have drastically fallen, one of which being Design Studio (The new CEO has made me regret purchasing the stock) and two others (Daimler and Bank of Zhengzhou) that has been heavily affected by the trade war shenanigans and would be laggards in my portfolio overall.

Another big issue is my expenditure; I found myself taking grab a lot due to the fact that my office location was quite far away; the new office location is nearer now but in town, so I will be able to save some money on that.

Overall, I believe I have been overly optimistic on a.) my returns and b.) my ability to save.  The one lucky thing is that my new job position will possibly get me a far higher pay and bonus than I expected. I have to revise my investment plan slightly and will take a more conservative calculation from now on; this is in addition to admitting to myself that I can't just not enjoy life while going through to early retirement.

A few considerations I am planning to alter in my life is to pick up a side gig of some sort - extra cash would be good and might be a good hobby.. That is also on top of moving towards a more passive and less active picking portfolio (maybe pushing up ETFs to 30% of the portfolio for a start) , as investing has been a great pasttime and I am not willing to move to a fully passive portfolio yet; and to start looking into my expenditure to see what makes sense and what doesn't.

While there has been some setbacks, I will continue down this journey and to fully embrace the hiccups that happen in this experience.

Cheers everyone, and wishing everyone a great week ahead.

March Update

It's been a few months since my last post...

Quite a few happenings has happened on a personal level and also the recent fall in stocks the past few months had shaken me admittedly. However, I stuck to my guns and didn't sell any of my stocks, and have seen great recoveries in most of my stocks.

Notable mentions:

My dogged decision to keep buying Alibaba has netted me a great profit in just a short while. With the possible relief in the trade war, I have managed to dollar average up and down with around 25% of my portfolio concentrated in alibaba. This has net me a good overall net gain of around 20+ percent in a short while. Good stuff.

There has been some struggling stocks such as Singtel and Design Studio, with the latter committing sepukku. It has been particularly disappointing to see a once great stock such as Design Studio be ruined by the current CEO with it making a significant loss for the year, what with the crazy increase in payments to contractors accounting for a huge loss. I will probably exit around 50% of my holdings there especially because the reasons I bought it has not been validated. It is a painful mistake with the stock falling over 50% since i bought it. 

Overall, my portfolio is in the green and there has been some strong stocks supporting it, while some mistakes has led to the size of my profits being shrunk significantly.

I have also added to a chinese stock called Haier. this is the biggest appliances company in China and the stock had been at a significant discount, and a quick calculation of the free cash flow has led me to realize the huge margin of safety I had if I purchased the stock. It was one of my fastest purchases (with due diligence of course) and I have enjoyed the ride up of 6 percent in 2 short weeks. Hoping to see it climb even more what with how undervalued the stock is.

As I push on with this portfolio, I have come to understand what type of companies my investment style is suited for, and hopefully I will make less mistakes going on ahead. I remain hopeful that my career path and investment strategy will allow me to reach my financial dreams.

Cheers everyone and to a great year investing ahead.

Autonomous Vehicles!!!

It's finally launching.

https://www.youtube.com/watch?v=Eq89YGbERzs

Waymo's autonomous vehicle is out and this is the beginning of something revolutionary.

Alphabet has been something I have been invested in for awhile now, and my only wish now is to purchase more of it.

The invention of the autonomous vehicles heralds interesting times for the world ahead; reductions in cost of deliveries, taxis and etc will seek a drop that will change many industries.

All in all, just so excited about this.

December Update (Portfolio Update)

Realized I haven't updated my portfolio page in awhile even though I have been giving monthly updates.

So here's the portfolio below! I have utilized a more accurate XIRR rate calculation for my returns.

Specific changes: additions of Altaba and Apple.

With these additions, I am going to pivot to more defensive stocks to add to the portfolio, as my current portfolio is one that is heavy on technology.

Future possible changes: still sticking to my point of view about Singtel, and will likely release the stock at a decent price point and if I want to free cash for other better alternatives.

Overall, am not too happy with the returns I have gotten this year, especially since I previously was investing with my savings and am now only able to increase my warchest since July this year (work work).

Lessons learned from investing this year : one too many.

I realized that investing has become a great hobby of mine, but acknowledge that active investing is taking up too much time for very little additional alpha. Nevertheless though, it is a source of enjoyment for me. Work my minions.

Cheers!

Updated Portfolio (4/12/2018)

November Update

As previously mentioned, I am adding to Alibaba stocks till the end of the year for it to become my largest holding.

However, instead of investing my money into Alibaba Stock (BABA), I am investing into Altaba (AABA) instead.  A colleague has highlighted the differences for me. For those who may not be aware, Altaba is the remnant of Yahoo that was not sold into Verizon. It is essentially a investment holding company that holds Alibaba stock (15% of total Alibaba stock), and a few patents that Verizon was not interested in purchasing from Yahoo when it was bought over.

In light of this, especially since it has then sold its Yahoo! Japan holdings, it is essentially an alternative (ALTaba geddit) to Alibaba. The key differences are that it is valued slightly under Alibaba stock, due to the company being considered an American company, and thus having to suffer withdrawal tax should they liquidate Alibaba at any time. However, in return, one can actually hold Alibaba equity, as compared to buying it in the form of an ADR.


The idea is that if there is ever a time that Altaba liquidates its Alibaba stocks, there is a high likelihood of there being tax reliefs that will in fact make Altaba a better purchase than Alibaba.

Intending to employ more cash into other US stocks such as Activision Blizzard. Will highlight reasons why going further ahead.

11.11 is coming and I am looking to get some great deals on Lazada (Go Alibaba!)

Cheers!

Has Singtel truly became Sinktel?

Singtel. The telecomm company you choose just because everything else sucks. Or so until circles came riding along.

I am still wondering why I bought Singtel awhile back at $3.38. The irony of the matter is I went against Peter Lynch's advice of BUYING WHAT YOU KNOW. I was a singtel user for quite a few years... and then I changed my plan to Circles. and bought singtel stocks.

Shame shame.

the circle here indicates the buffering circle that was my thought process in buying Singtel. 

What the heck was I thinking.

The main considerations here for Singtel is that it is facing cost competitors EVERYWHERE.
From the Philippines to Singapore, and its Indian investment facing fierce competition from a startup with a warchest that would make everything go to pieces.

In Australia, it faced falling profits, as can be seen from this link - https://www.afr.com/business/telecommunications/optus-sees-profits-plunge-on-nbn-rollout-halt-20181107-h17n80

In India, the new entrant is crushing prices and causing Airtel's margin to shrink.

Let's also not talk about the increased capital expenditure required to get 5G in, and the anti-monopoly laws in Singapore that will require Singtel to essentially "share" this tech with the other telecommunication companies.

Another possible long-term end to Singtel's dominance might be that of new technology in another country, and literally far far away - SpaceX, Elon Musk's plan of building Starlink, a global satellite based wifi, to put it crudely. While this is still a few years away, this just highlights how easily telecommunications can be just a commodity and there is no differentiating factor, and highlights also how easily a new entrant can disrupt everything.

(Link for this here)
https://www.teslarati.com/spacex-first-starlink-internet-satellites-go-live-in-orbit/

Those are the downsides, and also a potential end to a once large and deep moat.

I bought the stock on four premises - a good dividend yield (still there I guess) , first mover to 5G in an IOT environment (still the only hope for redemption, yet at great capex ), great market share (not anymore) and dominance in all its subsidiaries (bye) , and a good profit margin (sigh).

The truth of the matter is this is not a stock nor market I should have invested in. I think out of all my purchases, even for those which might have fallen more, this is probably the most senseless stock I bought. I don't see the point in holding this stock for anything more than dividend yield, and yet even that seems to be pointless if the stock price is falling.

The story I bought into was a company that would be able to defend its dominance, but it is obviously not the case. I fell for the irrationality that "Singtel has always been around/protected by gahmen!". So was Hyflux.

I have to admit I dropped the ball on this one. I am considering selling all my shares in Singtel tomorrow and to move the cash to a better company.

Sometimes you just have to admit you made a mistake.

Cheers!

"Poor Singaporeans can lead lives of quiet desperation and not really experience what living is"

A friend of mine posted this in response to a link being shared around facebook: https://www.malaymail.com/s/1689316/economic-outlook-2019-wages-increment-promotes-economic-growth?fbclid=IwAR0eg5OWLWc27x9_oXxhfrvXvRkHL4s7cBhjp-vcL0MK63ETgyB8maAyHJA#.W95h5bWyWTZ.facebook

tldr; the article is about supporting minimum wages and Singaporeans were sharing it around as a basis that we should actually enact minimum wage in Singapore.

I will admit that perhaps I am not equipped adequately to comment fully on the impact of a minimum wage, I can say that based on what I know that this seems to make sense in the argument for equity in Singaporeans.

On a more personal anecdote, I remember my younger days when my father was retrenched and we had to tighten our belts significantly. My father has always been a person that spent money carelessly; there were many quarrels in my family involving financial issues, what with my mother being the exact opposite.

Shortly after he was retrenched, he started working as a taxi driver. During the time when I was young, I remembered him as the taxi driver, not the engineer he was for a good part of his life.

I remembered my mother's constant reminder to save and to be frugal, and that we were not a well-to-do family, and that it was important not to compare. 

I kept this mindset throughout my childhood all the way to university. It was during university that I actually got curious about how much my family was earning in comparison to the Singaporean average. This was after my sister graduated from university and my brother was working as well, alongside my father finding another engineering related job after a hiatus of nearly 5 years.

We were now considered a middle-income family, to my surprise. I didn't feel like that. We rarely traveled; a tze char meal was considered a luxury that we rarely went. I was not jealous nor envious of my friends that drove cars and had the latest phones. I remembered being one of the last in my class to even get a working broadband internet. 

Only when in university did our family really start "living" and not just struggling to survive. I will admit I never was poor to the point of having to worry about food on the table. I am grateful for that. I would just want other families to be like that too. 

On a side note, that tough period in my life shaped my mindset on finance and investing. I realized that my father was not wise with his money, and that led to tough times when it was not necessary to be so.  He swiped the credit card for paying the house to giving me my allowance for school. It was a financial trap brought about by bad financial literacy. I am grateful for what he has done to bring me up, nevertheless.

I guess that's the point of my post. I cannot blame my father for not knowing enough about financial literacy; he did not have the luxury of a father to teach him that (my grandfather passed away when he was 17, and my grandmother was a gambler). Yet, being born in this time and age allowed me to have access to so many ways to educate myself on finance which my father did not, and I would want others to learn as well.

The whole point of wanting to retire young for me is to never be a slave to money, or the lack thereof. I would want to truly experience what life is, and in that same thought, I would want less well-to-do Singaporeans to have that opportunity too (Go minimum wage!) For many others stuck in between poverty and truly living, I would like to think that this blog helps a bit in educating my readers just a little bit more on the true essence of saving, investing and to never be indebted to consumerism, yet still being able to live a good life.

 

Musing over. Cheers!

1.5 Year Check-Point

It has been about 1.5 years since my decision to embark in early retirement (FIRE for anyone who knows about this).


Since the last time I posted about my portfolio, per the portfolio page, I have made some additional purchases to my investments.

I am currently behind both my investment and saving goals, so I will highlight a few reasons why and how I am going to adjust accordingly.


Firstly, I have made some entrances into Alibaba in the past few months, both at 172 USD and 143 USD, in addition to my original amount of 168.88. This has obviously not been great for my portfolio, especially since the current stock price is atrociously low for a company with such great returns.

Hence, I am buying more. As mentioned,  I will be investing in Alibaba till the end of the year, unless there are some significant and huge changes to their earnings growth.

The recent trade war has hit some of my stock quite badly. One particular one of note is Daimler, which has dropped by nearly 18% since my last two purchases. Some of this has been redeemed in terms of a decent dividend yield, so I will just maintain the level of the stock.

Design Studio was another stock that was hit pretty badly with their loss announcement. As much as I would want this to be a turnaround play, as per Peter Lynch's categorization, I got to admit that I went in at the wrong time for this one. The current price would be a better turnaround price than anything, though I would recommend people against going in with a large sum.

Barclay's is another long term dividend play that I foresee better returns with, what with the return of volatility in the market being ideal for investment banks overall. I am also holding long term on this one.

BUOU Fraser's is a consistent dividend play and will be something I might add on to in the coming months to tide through this volatile times. It's high occupancy rate is ideal for tiding through volatile changes in the market, providing a good and steady source of income.

Ah, Alphabet. Recent reductions in revenue GROWTH as compared to analysts' prediction has meant that the stock price has dropped a few basis points. Not concerned about this, as I am still seeing it as a good play. However, the current trade fears is evident in the stock price, and I will look into purchasing more of this after I am done with my Alibaba purchases of the year.


Savings

So far, I have been trying to save 10% of my salary as liquid cash, so as to provide a safety net for any extraordinary purchases and also as an umbrella in case of any unexpected unemployment (as unlikely as it may be).

My spending has been increasing due to a few responsibilities I have taken up at home and also due to just spending creep overall. I am looking to reduce this especially in terms of taking grab and eating food out. Since my insurance has been paid for the year, I am still looking forward to the bonuses and hopefully a pay raise next year that will be in line with my goal to retire young.

Possible adjustments

Currently, in spite of the temporary drop in my stocks, I am still okay with the overall returns since I started investing. I am taking this drop in the market as an opportunity to buy and hold stocks that I couldn't have gotten just a year ago, and will utilize it accordingly.

Cheers everyone.

A commentary on leveraging REITs with loans

I recently took a look at another blogger that utilized Maybank's 2.88 percent yield loan to leverage on REITs. The idea, in essence, was borrowing cash using the yield loan mentioned above to obtain dividend yields from REITs that will allow one to pay back this loan while accumulating the remainder as fine, hard cash. This blogger had loans in the hundreds of thousands (good lord) making use of this strategy.

Using Mapletree North Asia REIT as an example, one could get a dividend yield of 6.7%, pay off the 2.88%, and be left with a "free" 3.82% yield on your loan amount. That is in essence, making money work for you when you don't even have money.

In theory, that sounds like a fun and dandy idea, so I actually had a discussion with others about this.

Firstly, we have to find out the logic of why a bank like Maybank would be willing to loan out their money for you to leverage, instead of just buying these REITs themselves.

Most banks are regulated in ways such that they are unable to convert all the liquid cash they have into assets, due to certain financial regulations, that while differing in each countries, tend to set a certain percentage of debt to their equity in the form of a capital adequacy ratio. In essence, they are prevented from essentially throwing all their cash into REITs, so it would make sense for them to just loan it out to us poor souls, and just kill us with interest.

Benefit of leveraging in this context

Let's face it. That 3.82% yield is pretty good, considering that it is based off money that you don't own, and the leveraged amount could be 2 times larger than your initial capital ( had a call with maybank but honestly forgot what was the minimum margin ratio required).

If the REIT one purchases appreciates in capital gain, it can also be quickly sold off for extra cash on top of the "free "3.82%".

Now, what are the risks then?

Risk(s) of leveraging REITs

Firstly, 2.88% is pretty high. The potential upside may not necessarily be justified by the risk one takes when entering these positions.

Maybank, and other institutions that provide this service, retain the right to select what REITs they will allow you to purchase with the leveraged loan. This also means that at any time, if they find that the REIT no longer fulfills the criteria for their AAA rating ...
They will just remove it. What this means is that the financial institution now has the right to ask for their money back. In the event that you can't cough up the cash, it will either use the cash that you have to hold in the margin account (per the ratio) or if you are using other equities (other REITS as an example) to leverage off on, to pay for the outstanding balance. This will be on top of you holding a sub-AAA rating REIT, which would most likely be due to it suffering from some management issues.

Essentially, what this means is that one takes on the risks in two ways : the risk of the REIT's capital value dropping, and also being forced to sell/liquidate equities and cash to maintain the margin call.

Not a fun thing to happen.

Which brings us back to the other blogger. I noticed that he hasn't been posting for awhile now, and got curious about some of his/her holdings. Some of the REITs he has bought has depreciated nearly 50% or more in value. The margin calls triggered were probably not fun.

Conclusion
The main essence of this is that in investing, unless one goes for the Singapore savings bond, there is no risk-free option.  It is more about taking risk proportionate to one's expected returns.

If one wishes to utilize this, it would be prudent to look at the safest REITs, instead of just the ones that have the highest yield. Also, the amount leveraged should never be a large sum.

On the topic of failing

More a personal thought than any.

I recently have been going through some difficulties at work and also in my personal life. It was not fun to check on my stocks and see a huge drop either. Sometimes it feels like my goals are not being achieved as much as I want them to be.

Such is life though. Last year, I had a cute little nephew joining the family. Today, my brother in law sent a video of him trying to stand up and walk. He would take a few steps and proceed to fall flat on his face. With my brother-in-law's encouragement, my nephew smiled, picked himself up and continued trying again, taking a few more steps every single time, and finally walked to his dad.

What happened to failing and trying again. Isn't that how we learn?

I need to remind myself of that, both in my life's journey and my financial goals, to learn from my mistakes and to be better.

Reminder to buy the boring ones

Stocks can be exciting. Who would not want to buy Amazon and watch it climb with its stellar growth? Autonomous vehicles, so exciting (yes I am shooting my own foot here.) Netflix and chill anyone?

In all seriousness though, I have to remember one of Peter Lynch's adage here. One must remember that many a time, the most boring companies are the ones that can earn the most. I am looking into my portfolio again to see if there are better and more boring stocks to buy. Excitement into stocks tend to drive up prices, whereas the sheer boredom of what a company sell can often times be perfect; Boring companies are honestly what earns money a lot of the time, and still keep on the down low while doing so. One then can swoop in and hopefully get a ten bagger.

I have to remind myself of that too.

October Updates

The past few days has been a terror in terms of the swift downslide of stock value. My portfolio was hit pretty hard, especially with the foreign exposure from Alibaba, one of my favorite stocks.

Alibaba had dropped from a high of $210 to an astonishing low of $143 yesterday, causing the overall portfolio of my stocks to drop significantly. I wouldn't deny that it stopped me in my tracks for awhile.

However, I remembered the old adage to buy when others are fearful, and looked into Alibaba again. While there have been some changes that might affect its rockstar growth, the stock value at such a low gives a great opportunity to enter into it again. I have increased my shareholdings there by 33%, and will buy perhaps even more once I have more holdings. Should there be an even bigger downturn, I will take the opportunity to load up on Alibaba for the rest of this year, as previously mentioned.

Other consideration for purchases are adding into Fraser's, and into Design Studios. I still believe that Design Studio is a great play going forward, but I would rather add more into Alibaba at the moment.

Cheers.

September Update

September marks the 1.5 years I committed to this journey to retire young.

So far, the returns have been sub-par for the year, what with the recent fall in Alibaba and Daimler shares that has affected my portfolio significantly. The bear market in Hongkong now is something I am looking to see if I can enter at some cheap valuations, what with the volatility now coming in from the Tariff War.

However, I had also entered more into Alibaba, nearly doubling the amount I had put in last year. I intend to continue adding to Alibaba at least up till the end of the year. While this addition has cost me some short term-growth, I foresee this as a 10 year play, and will continue adding into this share as time goes on.

My other considerations is to start looking at S-reits that I can enter into going forward, to provide some steady dividends in the meantime.

In this case, I am moving my portfolio to certain non-dividend shares overseas and dividing yielding shares locally. I will make an update on the portfolio page soon.

I am also contemplating purchasing some Singapore Savings Bonds with the rainy-day portion of my savings, utilizing the DBS Vickers account I am planning to set up soon. This will be with the intention of triggering the higher returns from DBS Multiplier.

I have overspent slightly for the past 2 months and have been looking to see where I can make adjustments on my expenditure as well.

Cheers and good luck in your retirement journey.

5 good reasons to invest in stocks outside of Singapore

I noticed across many Singapore investing blogs are that they tend to only purchase SGX stocks. I tend to agree with some of the points put across, such as the lack of taxes, and also the need to account for foreign exchange rates when purchasing stocks overseas.

I do not, however, think that this should be an impediment towards purchasing great stocks that can be bought everywhere. It is already very easy to purchase foreign stocks, as I have mentioned in my post.

Let's take a good look at some reasons why it is great to purchase stocks overseas.

#1: Exposure to GREAT companies

Lets look at the current state of SGX now. While SGX does hold a respectable number of companies, even many overseas (Australia and China comes to mind), the sheer number of companies available may often mean that there is lower chances of finding a great quality stock. While we may have some companies such as Comfort Delgro in the past that was able to provide consistent and great returns in the past, the current state of Singapore's economy as a mature country has led to lower rates of returns going on further. It is not to say that Singaporean companies, or companies in SGX are doing badly; it is just that sometimes, the grass is legitimately greener on the other side. Why give up one tree for the whole forest, when you could possibly buy the whole damn thing. 

#2: The IPhones, the Mcdonalds', and good ol' Uncle Google

The honest truth about living in Singapore is that we are the epitome of Globalisation. So many of the things we utilize, from the phone that we use to the food that we eat, all come from multiple countries all over the world. Starbucks are plentiful, and Uniqlo is where we go to buy great and affordable clothes. 

It is a simple truth that the SGX just does not have the level of exposure to possible great stocks that we would want, because as investors it would make good sense to buy what we know, and Singaporeans end up knowing more about some foreign products than even local ones. Why not invest in those stocks?

#3: Not putting your eggs all in one basket

I would not be putting the case on here about diversification by buying other countries' stocks exactly, as many people who have taken basic finance lessons will know; diversification is more about buying shares in such a way that industry/company specific risks are reduced. Systematic risks, such as ones that shock a country, may be difficult/impossible to diversify away. Singapore's economy is heavily tied to the current state of trade all around the world. Our economy is heavily affected whenever there is a recession in some of the bigger countries (US, China, etc), due to our heavy trade links and our exposure as a financial and export-based economy. Just buying a US stock, a Chinese stock alone, will not constitute as proper diversification.

My logic for buying shares in other countries, is a simple one. As personal investors, many of us work in Singaporean companies that have our salaries, bonuses and etc tied to the success of this country. We would not want a possible fall in our earned income to go down together with our passive income. It is at this simple junction that we might end up depending on our passive income more, and it would be better if this income came from somewhere other than the Singaporean economy, and also countries that we are not exactly fully dependent on.

#4: Liquidity

The Singaporean market is a great example of great discipline. Purchasing stocks in Singapore can oftentimes take longer, just due to the fact that waiting for a good price for your stocks may take a long while. The upside of this is low volatility. The downside is the sheer difficulty at times in having to wait for a good time to enter the market. Many markets overseas do not have this issue. While still a reason, I must substantiate that as a value investor that this might actually justify buying more Sg stocks, because low volatility might just be a factor for sound business.

#5: Where are the news?

Oftentimes, one would find difficulty in finding news about Singaporean stocks. This might inhibit research and oftentimes leave one unable to make a particular decision about a stock. The great thing about overseas stocks, especially those in the US (just google it) and China (just baidu it) are that there are a lot of news, and sometimes I will read through other anaylsts' or business news that will give me insight that I might have missed otherwise. 

Cheers everyone, and have a great weekend.

P.s. Leave some comments on what you might be curious about, or what I could put up a blog on. Also if my posts can be made more entertaining,insightful or even about the length. 

One decent reason to get Singapore Savings Bond

Now, as many travelling on the mrt has seen, there is the presence of Singapore Savings Bonds advertisements being tossed out around. This got me interested on the topic of whether it was worth it to bid on them. The interests rates are as shown below.

Source: http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx

At first glance, of course, the returns are barely enough to cover the average inflation rate of Singapore. Nevertheless, this is a risk-free investment, and can be ideal to use your rainy day funds/savings and invest it in the manner I will explain below.

DBS multiplier comes straight to mind as a great way to combine the returns from both sides (DBS and SSB) . What am i talking about here?

As some may know, DBS Multiplier gets higher interest rates the more categories of transactions one does , namely your salary entering through the account, house loans from DBS/POSB, insurance payments from DBS/POSB, credit card usage ($1 is sufficient to trigger the category) and most importantly, if you INVEST through DBS/POSB.

Let's assume you want the most bang for your buck. Naturally, I would say sticking to SC (refer to previous posts) for investing might still be a good choice to a certain extent, as I believe the transaction costs are still the lowest there.

However, if you wish for a double-pronged method for investing, one can actually "trigger" another category for DBS multiplier by actually obtaining the SSB from the CDP account if one has one with DBS/POSB. In essence, you will be obtaining the interest for buying the SSB bond, while still triggering a higher return for your DBS multiplier. I think that is a win win, especially considering how relatively liquid retrieving this money from SSB/DBS multiplier can be. Meanwhile, I can still be obtaining the sweet low cost investing from Standard Chartered too.

Cheers people, and onwards to investing towards a brighte future.

Disclaimer: I am not associated with any of the banks, nor am I associated with the Singapore Government in anyway (other than paying them taxes. Boo.)

Tech Trends and Stock Plans

Here's a view that I like to look at when I invest into my companies.

Fundamentally, I find myself believing it hard for many of the companies today to exist 10 years into the future. IF they are to exist 10 years later, per my time horizon for investing in stocks, they will have to have certain identifying factors to compel me to make a long term purchase into them.

Here are some of my reasoning when looking at stocks right now. For this, I am excluding my purely value plays into some of the smaller stocks in my portfolio, and will be talking about my stock purchases which I will plan to add into going further.

1.) Possible growths with technology

Some of my key purchases now are into companies that are quite large but yet still remain nimble in their willingness to invest into R&D. Alibaba, for example, is a company that I love, coming from a logistics background. Their foray into technologies that encompass the newer generations' forms of consumerism, including buying online, deliveries, e-payments, and also the underlying technology (cloud as a good example) is one key reason why I am buying into them. The company itself has a sound and great business model, but they aren't afraid to dig into their coffers to invest into newer industries.

Another great example of this is my two purchases into Daimler and Alphabet. Alphabet is currently one of the companies most ahead with their autonomous vehicle technology, and so is Daimler. These two companies, along with Alibaba, are all companies that are doing great right now but have invested heavily in not just being relevant, but keeping ahead. Daimler has also collaborated with Baidu on their autonomous technologies, and I am looking forward to the fruit this bears, while their current business models still bring in tons of money.


Human MIA

2.) Value and Growth at the same time
Some people might argue that a company like Alphabet may be overvalued and not in line with the traditional value mindset. My reasoning against this is that the current business world does not allow for competition amongst companies as much anymore. We are seeing consolidations and huge purchases by technology companies, and they are no longer just going into tech ideas. While the stock market may at times be overheated due to people buying tech stocks, the reasoning is quite simple to me why I should buy into them, and keep them for the long run. Companies like Alphabet, Alibaba have huge moats that protect them from any temporary setbacks, and their technological advantage allows them to hold near monopolistic grips on their industries ( who uses yahoo anymore?) In my opinion, this goes fairly well in hand with the idea of wonderful companies at fair prices. I don't care if the stock market is going to price them high today and price them low tomorrow. These companies have huge moats, will be around for years to come, and most importantly, hire some of the smartest people in the world. These assets more than justify the slightly overvalued prices,  and if one looks at a 10 year window, more than covers the margin of safety. As these companies continue to grow and their free cash flows increase, eventually the companies will start providing dividends. I see them less as growth stocks as much as facing the reality they are going to be around for a long, long time.

3.) Old time players stepping on potential goldmines

Some of the other companies I buy may be much more simpler and familiar to the Singaporean audience. I made two stock purchases into Daimler and Singtel. While Daimler is not a SG company, the mercedes brand is one known by all. So is Singtel. These two companies are companies that have established their roots for a long while, and have been in a mature industry. However, I like the two companies' ventures into future tech, while still providing a steady dividend.

Daimler's foray into autonomous vehicles and electric vehicles, especially their trucks, are what I love about this company, in spite of their stock prices tanking recently. They are not afraid to invest heavily while being an old timer (what with mercedes being the first automobile created and all).

So is Singtel, and their foray into 5G. 5G is what will connect the autonomous vehicles to the Siris and Cortanas, and will be the start of what connects the big data collection possible to run AI with. Singapore's smart nation will be what allows Singapore to stay ahead, and Singtel and 5G will be the support base.

Of course, the above are not just what I look into when investing in a stock, but they do factor heavily into me making a decision, post-financial statements.

Cheers everyone.

Random Thoughts

It has been a year and a half since I fully committed to my investing journey. I have experimented with a few investing styles and have perhaps made some losses due to my forays into some slightly riskier stocks, reducing my earnings since I began. As the tariff war in the US goes on, I see quite a few of my stocks suffering, which had been bought with the assumption of world trade, you know, not deciding to take a nosedive.


The birds flew away, just like the cash I placed into the market recently.


It's hard not to doubt myself and wonder why I didn't just enter the S&P ETF and gotten maybe up to 6-7% just by buying an ETF (since the start of 2018), and save myself the trouble of active investing. I advise my friends who are barely interested in investing to do so; why shouldn't I heed this advice?

I guess it is my own belief that I am able to achieve better returns than the market. I think that the 2 or 3% alpha that I could possibly get would justify my purchasing of value stocks that others won't, to not ride the greed train and go after the Facebooks, the Netflixs', Iqiyi, Teslas of the market. (I still maintain my reasoning for purchasing Alibaba and Alphabet, in spite of them not being conventional value stocks)

As this journey draws on past the halfway mark for my second year, I remind myself that I am giving myself at least one and a half more year to see if I can be more consistently beating the market.

The thing about me is that I truly do understand what the average investor would think whenever they see their stock prices drop. Sincerely, is it not all our hard-earned money going down the drain, if our stocks and investments don't do well? I feel the irrationality, the doubt, the fears coursing through my veins, telling me to just sell all my stocks now, just get away and invest only in safe bonds.

Yet sometimes, it takes some writing, some pondering, to realize that there are ups and downs in the market. And just like in other aspects of life, its what happens when things are down that truly matters. For this slight drop in the bucket for my investments, I will learn to do the right thing; and that is to do nothing. The stocks I have purchased are still bought with logical decisions and as little emotions as I could, and many are still dividend providing stocks that will justify being there in spite of their slight under-performance now.

I shall wait and see. For the market giveth and the market taketh away

The Layman's Guide to Start Investing in Singapore

This will be my multi-part series on starting on an investing journey in Singapore. I will go through a few common concepts on how to start investing in Singapore,  and is meant to help those who have 0 experience in investing take their first step.

Purpose of the Post

On talking to many of my friends, colleagues, and relatives, I have realized a common statement mentioned. "I want to invest, but I do not know where to start." 

Many are scared off by the prospects of risks, and heard the tales of people who invested in stocks and lost hundreds of thousands of dollars (many, by using leveraging and contra trading, which I am strongly against), or honestly are just plain overwhelmed by the barrage of information thrown at them, from various acronyms like TA or FA or CDP, limit buy market buy etc etc. They end up stuck in their confusion and think to start another day.  For this post, and a few going further on, I would want to simplify things and highlight the summary of how I started my first investment, from a uniquely Singaporean perspective. I will highlight the step by step of actually MAKING a trade, before I talk further about actually choosing the right stock in a future guide.

Step 1: Starting a Stock Account

Let's start with the basics. You can easily set up a stock account with most of the banks in Singapore. For myself, I started with an OCBC Securities account because it allowed me to invest before I was 21 (It required me to have $5000 in the bank as deposit, before I could invest any money thereafter) . After I reached 21, I changed to a Standard Chartered Online Trading Account, which has one of the lowest commissions in Singapore, and yet still has access to many different stock markets across the world. Take note that SC trading account is a NON-CDP account, and will meant that you might miss the AGMs of the companies that you bought, and other terms. Still worth it in my opinion.

In order to start an account, all you need to do is go to the nearest bank near your house and ask to set it up. They will usually require you to have a savings account (in the case of SC, a minimum $1000 in their eSavers account), and then you can open your account with the brokerage. They will also ask you what exchanges you will be interested in opening your account to. I started with just HK and SG, but moved on to include the US, UK and etc so as to increase exposure to the foreign companies I found interesting.

The SC account is pretty good for Singaporean stocks, with relatively cheap commission rates (S$10 per transaction as compared to $25 for most other local banks), but I have been looking at Interactive Brokers as an alternative, due to their better foreign exchange rates (heard there was no SG stocks there though). IB, however, requires a minimum deposit of USD 10000 (or SGD 14000) to start a bank account, and requires regular transactions, which might not be what I am looking at now, but definitely in the next few years.

Step 2: Making Your First Trade

In order to make your trade, all you need to do is wait till all the documentations have been sent to your house/email. I believe it took me around 2-3 weeks before everything was ready for me to invest.

In the case of SC (considering it's the one I use the most), you will have to transfer the appropriate amount of money into the currency trading account that is the same as the market you are buying into. 

Clicking on online trading will bring you to another platform, where you can just enter the counter code (make sure to include the search for all the stock exchanges!) and select the purchase amount, order price, order quantity and etc. Selecting the order quantity will then show the buy order price of the stock. Here, you can choose between a MARKET or LIMIT order type, where market is essentially choosing to buy the stock at ANY price it is at right now, while limit allows you to set the price, but could means you could fail to have your stock purchased by the same day (limit orders expire at the end of the day).

ETFs

ETFs can also be bought from the SC account, including the NIKKO AM ETF (following SGX) or the Vanguard S&P 500 ETF. Those who believe ( and rightly so) in just purchasing ETFs can look into these, with a fair warning on the S&P 500 ETF subject to US withholding tax (tax on dividends).

Your returns may not be as good as an US citizen. I will update more about this, as I seek to convert maybe 20% of my investments into an ETF.

Step 3: Choosing your investments

There are a hundred and one ways to invest the money you have and making them work for you. For myself, I choose to split my investments/savings into 4 different aspects : liquid savings, insurance, stock and other adhoc investments.

For my liquid savings, I chose to start a DBS Multiplier account to throw my money into on a day to day basis. The interest rate on a DBS Multiplier account seems to be the best I have seen around so far, especially considering that in orde to get the best rate, that I would not need to actually spend much on a credit card. I compared that to OCBC 360, which required a slightly higher amount of spending on credit card ($500 per month), which seemed to be counter-intuitive regarding having to spend more to *save* more.

For my insurance, I personally do not believe in financial products from any of the insurance companies, because I do feel that many of them are not worthwhile to put ANY money into. However, I do appreciate the need to cover my downside, in the scenario that I encounter any sickness or illnesses. I utilize a basic hospitalization insurance and a Prudential multiplier flex to cover critical illnesses and death. I would argue the latter insurance is more useful when you have a family going, which at my current age, is not necessary yet, but I would want to have some coverage in the case I am bedridden for a few years due to any medical problems.

For equities, I divide my portfolio into an array of stocks, some dividend stocks, some REITs, and some undervalued but non-dividend giving stocks. I will talk more about these in the coming posts.

My other ad-hoc investments include a small amount in crytocurrency, and other of my side projects :) The truth is that since I have just begun my journey not too long ago is that I would want to purchase property, but am unable to with the war chest I have now.

I know that there are other investment instruments, including options, bonds, and even loans through MoolahSense, but I personally feel my favorite instrument so far is that of stocks. I would argue that bonds currently are not worth it, especially at my age. I may switch to some more bonds, as per Benjamin Graham's advice, going further into my investment journey.

Step 4: Study, Study, Study

I placed this at Step 4 because I know that having the first three steps done will make all the administrative issues to be cleared and done. The non-stop studying on investments, the way to choose a proper stock and etc, starts here. As per advice given by Benjamin Graham, and Warren Buffett, I would recommend that anyone who does not wish to put in a larger amount of time into investing just set aside an amount of money and put it into the ETFs mentioned in Step 3. One can still get a reasonable return for your money and have an earlier retirement, just by putting your money in sensibly.

Many people would recommend saving at least 10% of your salary into savings, but I would recommend a much larger number than that in Singapore. I personally am looking into 10% into savings and 30% into investments. I believe it is necessary to consider CPF outside of your savings, as CPF can often be wiped out by purchasing a HDB flat. Do not just depend on CPF. It is the bare minimum. 

I am also building towards recommended emergency money of at least 6 months worth of salary.

Last but not least, I would want to convert readers to thinking more of the power of saving and investment, through this simple but succinct video explaining why we should do it. 

https://www.youtube.com/watch?v=Oi9cq7tXkmg

"Wealth is created through self sacrifice, and taking risks."

Take care, everyone!

(The author of the blog is not affliated to any institutions or companies named above.)

No Magic like Alibaba's

Purchased more of Alibaba.

101 reasons why I think its a good choice, but more importantly, why not.

Uncle Jack Ma's got my back.

'Nuff said.