Saturday, January 27, 2018

Rebalancing and The Crystal Ball

Most major index in US and Europe are at all time high from DJI, S&P, Nasdaq, FTSE, and DAX. In Asia itself, Nikkei, Hang Seng, KOSPI are no different. STI had not broken its all time high, but it managed to close slightly above 3600 a few days back.

Based on my pre-defined rebalancing rule, I need to reduce my equity allocation to between 30-40% when STI is trading between 3500-3750. Therefore I started selling some of my equity holding: VanEck Vectors Gold Miners UCITS ETF (+8.34%), Deutsche Bank (+41.61%), Hugo Boss (+68.05%),  Bayer Motoren WK (+37.62%), SIA (+10.70%), and Capitaland Commercial Trust (+55.3%). Their CAGR was between 6.92% and 48.7% with average holding period of about 1.5 years.

My equity allocation is now at 36.56%, with bonds/cash allocation at 63.44%. If STI goes further up closer towards 3750, I may have sell more. Of course, I don't know what future holds, but the most important thing is I have a plan and will stick with the plan when certain market level is reached or broken.

In the bible, Joseph received the favour from God and was given the revelation that there will be 7 years of plenty and 7 years of lack. He was also given the wisdom to manage Egypt's resources during the cycle. During the 7 years of lack, not only Joseph ensured King of Egypt didn't experience any lack, he also made him the richest person at that time. See, God is capable to preserve and bless even during the time of lack.

It is interesting that human always try to predict the future, though they know very well that they don't even know if they will still be alive the next day or not. I'm capturing all the crystal ball gazing in Jan 2018, so we can look back and learn how accurate some of these predictions were.

Friday, January 5, 2018

2017 Was A Better Year

I was comparing the total portfolio value according to my personal spreadsheets vs the total portfolio value in my POEMS statements and found a significant difference in amount reported. POEMS statements showed a higher total portfolio value compared to my own spreadsheets. I had to go through the numbers again to find where the difference came from.

Apparently I made a few mistakes when updating the portfolio since October 2017, as I forgot to update the increase in quantity of Fullterton Short Term Interest Rate Fund C. I also overstated total fresh fund added into portfolio, which was $88,000 instead of $90,000.

Correcting all the numbers since October, it turned out the portfolio performance in 2017 was better than 2016. Return YTD for 2017 was a respectable 8.29%, XIRR for 2017 was 8.89%, and XIRR since inception was 7.49%. Final portfolio value was $642,482.65 and the portfolio actually made $49,185.80 in total profit including dividends for 2017! Wow!

All past posts for October 2017, November 2017, and December  2017 were now corrected.

Thursday, January 4, 2018

December 2017 - Low Cost Portfolio Scorecard

The year 2017 finally came to a close and it's the time again to look back and review how the portfolio was doing. Total portfolio value was $505,296.85 at the beginning of the year and it ended at $642,482.65 in December. Total fresh fund injected was $88,000 and total profit for the year was $49,185.80 including the dividends received. YTD return was 8.29%, XIRR YTD was 8.89%, and XIRR since inception was 7.49%.

Nothing to shout about the portfolio return when a number of blogger investors were making double digit percentage return in 2017. However, I personally was satisfied with the portfolio performance as my goal was never to achieve the highest return in the shortest time frame. Instead, I was aiming for:
1. Capital preservation
2. Consistent return of 4% and above in the long run.
With equity allocation at 41.47% and bond/cash allocation at 58.53%, I can sleep well even if global stock markets were crashing by 50% when I wake up tomorrow. Indeed when I was on 2 week vacation in early December, I didn't even bother to look at the market fluctuation.

After selling off Venture Manufacturing in November, GLP proposed privatisation was finally decided too. It looks like my equity allocation will be reduced further with this "force" selling. I feel there is still a lot of potential in GLP, so it's with a mixed feeling I accepted the privatisation offer at $3.38 per share. I received $505.56 in dividends in December 2017, which brought total dividends in 2017 to $10,266.70.

DateSecurities NameFCYSGD
5-Dec-2017SIA40.00 40.00
18-Dec-2017Chow Tai Fook (HKD)662.59 113.77
21-Dec-2017Capitaland Retail China Trust226.78 226.78
22-Dec-2017Royal Dutch Shell PLC-B (GBP)30.92 55.42
26-Dec-2017BP PLC (GBP)38.85 69.59 

Link to Yaruzi's low cost portfolio as of December 2017