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Portfolio Update




It’s been 6 months since I last updated my portfolio.
I realize time flies so quick once working life started. I told my church friends about it and they said it will get even faster after I turn 30. On top of just updating my portfolio,
I also wrote about Stock Monthly Investment Plan (SMIP) for those who
wish to do dollar costs averaging in HK and also my goals
before hitting 31.

Before that, here’s my portfolio for Poems
Sharebuilders Plan. (commitment of $2,000/ mth)

I increased the monthly commitment from $1k to $2k a
month since Sept last year after getting more disposable income. I also found
that valuation for ST Eng and STI pretty attractive. 

Based on Motley Fool’s article on 16th Jan here,
PE ratio for Straits Times Index (STI) is 11.6. Compared to Hang Seng Index at
16 and Dow Jones Industrial Average at 26.57, STI still has long way to go. I
have thoughts of reducing the monthly commitment to $1,000 a month as I applied
for Kim Eng Monthly Investment Plan and SMIP with HSBC HK but will consider
scaling down when STI goes above pe ratio of 15. For ST Engineering I am still
sitting at a loss but I believe will do just fine for long term investment.

What I like most about Sharebuilder Plan is dividend
reinvestment. As I am in my stage of building my wealth, I would rather
maximize my return my reinvesting my dividends for a small fee.

POSB Invest Saver (commitment of $200 monthly)

I signed up this plan back in Apr 2014, when
I was a university student and working part time. It was the time when my parents officially handover all my Angpow proceeds to me and it has been sitting on
very little interest in that bank account. Since then the plan has been on GIRO. I last
checked in Oct 17 and the bank account has started to dry and I decided to
continue funding that account via my salary account. I could have merged it with Share Builder to
save costs and so but decided to keep it that way for sentimental reasons.

Maybank Kim Eng monthly investment Plan (commitment of
$500 monthly)

It’s the only investment plan in Singapore that allows me to do dollar cost averaging for overseas stocks. Hence, I signed up to invest in Tencent Holdings. The
stock price has been going upwards after a small dip at 300 HK$ levels. It’s
hard to do valuation and calculating it probably won’t make much sense too,
especially pe ratio is at its 57. To me, its safety margin is its ability to accelerate growth and I continue to believe in its growth story.

HSBC HK Stock Monthly Investment Plan (commitment of
6000 HK$ monthly i.e. $1,000 monthly)

I opened this account in Dec last year when I made a
trip to HK for Christmas. Back then, I was searching for an investment plan
which allows me to DCA for Hong Kong Index. Turns out that HSBC and a many HK
banks allow me to do so. The stock code for it is 2800, Tracker Fund of Hong
Kong. You can check out the Fund Factsheet here .It
tracks the index pretty well with only tracking error of  0.0514%. I invested a lump sum of 5,000 HK$ and monthly investment of 6000 HK$, i.e. 1,000 SGD/month . As a non-HK resident, the only downside is the inconvenience
to convert and transfer money to HK$. For those who are keen to invest through HK
banks, also do note that most Singapore banks charge a transfer fee and
foreign transaction fee hence the best way for me is to change HK$ in
local money changers and deposit into HK bank account. My relatives and I travel to HK often so won’t be much of an issue.

Here is the list of HK banks which offer monthly
investment plan, or 
月供股票 they
call it. Currently, HSBC is undergoing a promotion where handling fee and
brokerage fees etc, are waived and only charge a monthly Custodian Fee of
25 HK$ (note that dividend handling fees/ corporate action fees do apply). I
did up a comparison table on the plans offered by banks and brokerage
firm. On top of banks, I included Chief
Securities because they are the only firm which offers DCA for US ETF- Vanguard
S&P 500 ETF (3140). Another way to DCA US ETF is to open a Standard Chartered
Priority Banking account with brokerage fee of 0.2%, no min brokerage fee.

Comparison chart for banks/brokerage firms offering stock monthly investment plan.

Do note that the promotions , fees, and securities available for investment may change with time. If you are viewing this few years after this post was published, kindly refer to their respective website for more updated info.

After account opening, I added 80 Tencent Holdings
shares 0700:HK in 2 batches: 40 at 436.60 HK$ and 40 and 457.40 HK$. This is in
addition to the Maybank Kim Eng Monthly Investment Plan. For those new
to Tencent Holdings, its owns a popular messaging app, WeChat and it started listing at 3.7 HK$ in 2004 and current price of
460 HK$ has been adjusted for 1 to 5 shares split on 2015. It’s PE ratio of 57
seems very rich, but richly priced stocks can actually defy gravity and
continue to rise for a prolonged period of time. When a stock is hot and
everyone is clamouring to buy, the stock can continue to sustain lofty
valuation. After all valuation is a guide, and if there is any safety margin to
talk about, it would be its strong growth. 

SG Portfolio

As we all know, 2017 is one of the best years to invest and stay invested, with
STI returning 22.08%. My portfolio main drivers are OCBC and DBS shares bought during at
2014 and 2015 and I still remained committed to holding them. Back
in 2016, I sold most of my shares for property investment which didn’t
materialize and managed to buy back subsequently to ride on the bull run. Due
to much work and travel, I have not been actively managing my portfolio but I
am quite blessed with banks and property stocks boosting my overall portfolio

There are many different strategies to build wealth
and my investing approach is more of a buy and hold. I do my best to pick
stocks with good fundamentals and invest for the long haul i.e. companies which
have economic moats that I can hold for many years. In times when the stocks or
general market seemed overvalued, I may continue to hold them. Over the years,
I realized that I have made more money holding on to the winners that cashing
out on my early profits.

In my opinion, great companies are actually rare to
find, and if I were to sell away a stock and my expectations about future lower
valuation does not actually materialize, I might have missed one big boat. One
example would be Riverstone. I bought them at $0.485 and sold at $0.585, and
the feeling was great until it went to $1.10 after 1 for 1 bonus issues and many
rounds of dividends. Similarly, I am certain that there are times Coca
Cola shares are overvalued but if one continues to hold a share of Coca Cola
trading at $40 in 1919 is now worth $9.8mil. Check
it out here

Secondly, if I exit my long-term investments in
anticipation of a lower valuation to come, it equates to leaving a business
that I know well; or business with developments which I can interpret with some
levels of confidence. If the price continue its upward trajectory after selling
and I am unable to re-enter, I may have to find new companies and opportunities,
and that means spending additional time to do research and bring the
understanding of the companies to a similar level.

That would also mean that I will not invest in down
and out companies with poor fundamentals selling at dirt cheap price expecting
a turnaround situation. The time that I will sell my stocks is when the
company’s fundamentals starts to deteriorate, especially when free cashflow
becomes negative or a dividend cut.

I have always been net buyer of stocks and for 2017, my only sell transaction is Sanli Environmental after the release of half year results. It was a
stock which I got it during IPO. The prospectus showed growing revenue trends,
increased FCF, experienced management and overwhelming support from
institutions. However, the results reported lower revenue, decrease in net
profit and even negative FCF. The only saving grace is lesser debt. Though the
lack of price movement after earnings release suggested that the price must
have factored into the earnings prior to the report, I felt that I don’t really
understand the company well enough. So, I divested to lock in some small

By the way, don’t get me wrong. I am not against
anyone who trades or does short term investment. It’s just that buy and hold
suits me better especially when I have very limited time to monitor my portfolio.
Everyone should find their own investment strategy which suits them best.

Buy/Sell Transactions & dividends collected since
June 2017 
(CDP portfolio)

Buy/sell Transactions
Dividends Collected (page 1)
Dividends Collected (page 2)

Also, I divested all my US stocks and invested in 37 shares of Robotics and
Automation ETF at US$37.20.

Some stocks in the red


I am still holding on to 8,000 shares of
ComfortDelgro. Its recent tie up with Uber has drawn much mixed reactions but
whether it will yield positive results is anyone’s guess. For now, I will continue
to hold for its dividends and I am pretty sure they can sustain its dividend
with payout ratio of about 0.7. At the price of $2.08, its yield is close to 5%.

Raffles Medical

I continued to accumulate Raffles Medical on price
weakness for the long term. The reason for its underperformance was due to its
stagnant growth coupled with softening medical tourism. Its catalyst for
growth is in the opening of Chongqing and Shanghai Hospitals. In my view, till
they began operation, profit will continue to stay muted. Even when they began
operations, it will also take few years for its business to breakeven. Hence,
it is not a stock for short term. Its price of $1.12 translates to a pe ratio
of 28 which is attractively priced in my view considering that it is a
defensive sector and serves as a good hedge for rising healthcare costs.

Total Portfolio Value= $415k 

Poems Sharebuilder Plan = $18,795
POSB Invest Saver =$10,292
MayBank Kim Eng Monthly Investment Plan=$468
HSBC SMIP =$10,365
SGX Portfolio 1= $224,263
SGX Portfolio 2= $119,195
Standard Chartered Online Trading Acc=$2,220
Cash= $30,000

Goals before 31… a portfolio of $1mil 

If a ship leaving its harbour without destination, no
wind is favourable. At best, the crew can navigate to stop crashing into
things, but the ship could just be mindlessly floating in the middle of the

The same can be said of human mind. If we do not have
a goal in mind, or any targets to achieve, we will behave like a ship which
floats through life but goes nowhere in particular. 

There are two schools of thought (or more) for goal
setting. The first one is about setting S.M.A.R.T. goals: Specific, Measurable,
Achievable, Relevant and Timely. Then the goals can be broken down into small
steps which can be achievable daily so we can track our progress. Another
school of thought believes in setting goals which can be unachievable or unrealistic through visualizing your success daily that you have achieved your goal. This will trigger your creative subconscious
mind which will generate ideas and means to achieve your goal. It makes you more
motivated, energized and looking forward to every new day. This is not unproven
or merely daydreaming as Michael Jordan had always visualized himself taking the
last shot before he ever took one in real life and Muhammad Ali had also imagined himself victorious in life even before the fight began.

I am leaning more towards the latter way to set goals but that being said, there is no right or wrong ways and you can
also use a combination of both methods.

Since this a blog on investment, I will share my
financial goals. Currently, my stocks portfolio is about $400k and my goal
is to reach $1 million before hitting 31. Assuming dividend yield of 5%, that would generate about $4.2k/mth of passive income, which will
cover about 80% of my monthly expenses (see below). It’s also an easy number to
remember and a good 7 digit target to look forward to.

I will be turning 29 in Nov this year so I have about 34 more
months to go. I can work hard to earn a more income, do more research for
better stock picking skills, or be more disciplined with money but the rest
would be up to how the stock market performs. I can’t eliminate systematic
risks or predict the next financial crisis. 

Hence, other than hard work, my returns will also
depend on how STI performs or the indices of the countries I am investing in.

My average monthly spending:
Food/Transportation/Tithe/Parental allowance = $2,200 mth
Income Tax/ Medisave contribution= $1,100 mth
Insurance premiums (Protection and savings & investment plans)= $1,500/mth
Travel= $3,600/ year i.e. $300/mth

Total = $5,100/month.

Moving Forward

Buy more each transaction
When my stocks perform well, my total
profits aren’t substantial because I only bought 2000 or 3000 shares. Since I
spent much time to do research on a particular stock, I should be more confident about it. I bought 5,000 shares of MicroMechanics at $1.035 in April with 120% till date. However it only consisted only 2.75% of my overall portfolio and my hard work resulted in insignificant gains. I had a writeup on Micromechanics which you can check it out here.

On top of the returns, buying more also reduces my transaction costs as a
percentage of total value.

Investing more Aboard
To improve my returns further, I will be increasing my position in US and
Hong Kong shares to have more exposure to growth stocks, especially ETFs tech
companies.  Last year, Hang Seng Index achieved gains of 35.99%
compared to STI returns of 22.08%. Its stellar performance was partially due to
gains from Tencent, which constitutes 11.57% of index(before 1st Dec
2017), returning 124.91%  over a year. Subsequently, it had a quarter rebalancing and the stock weighing on Hang Seng
Index dipped to 10%.

It’s almost 10 years since our last financial crisis and US market has been on
a bull run since then, with Dow Jones Industrial Average (DJIA) exceeding its
previous high of 15,000 points by 70%. In comparison, local markets are still
having a hard time matching the performance. Hence, having exposure to foreign
markets helps to boost my portfolio when local markets are facing downward
pressure or any possible geopolitical risks.

There are definitely risks to investing overseas, such as currency volatility,
or even taxes on dividend gains, but my view is that the benefits in general
outweigh the risks.

If you would like to join me in my journey towards a
$1mil, you may follow/Like my Facebook page here. I will update my Facebook on
any new posts.

Smart Goals

Visualization Success

STI Returns



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About Kelvin

Join me on the journey to FIRE by 40! I share insights on investing, smart money habits, and achieving financial independence. Let's reach our goals together!

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