June 2019 mid-year review: Lessons in my journey so far

I started this investment journey with $1467.37 almost 1 Year, 3 Months and 21 days counting. As they always say, expect the unexpected.

Learn to Count Your Blessings
Recently, I have learnt to count my blessings and try to be more thankful despite my circumstances. Readers who have been following my blog would probably know that I recently have been informed of my retrenchment back in April.

Initially I was feeling under the weather but as I calmed down in my search for new employment,  I realised that this "disaster" could turn out to be a blessing in disguise. How so?

Firstly, I was getting complacent at my current role. It is a 8-5 role where I can get to leave on the dot. And it pays a rather decent and stable salary. But, there was no opening for opportunities for promotion not any pay raise.

With this retrenchment exercise, I not only had a legitimate reason to go for job hunting (for a pay increase, hurray!) and I also will be entitled to receive a small tidy sum of severance payment from my current employment. I am currently waiting 2 offers which I am told I will receive by 3rd week of June. I will explore my options and the career pathways it leads before making my choice.

If all goes well, retrenchment might have been the BEST thing that happened to me this year. I am so looking forward to securing a better job with career advancement prospects and also a better pay package.

I guess as they say, good or bad, hard to say. After all, it gave me a big kick in the butt for being complacent and got me off my comfort zone to be more intentional in my career path planning and also to being actively upgrading skills and updating resumes.

Portfolio Projection Review

As listed on my Portfolio Update page, my yearly target for this year is to hit $24,600 in portfolio value. I have not added much positions and purely relied on savings and so far I have hit $23,130.92. It seems that my goal setting is a little too easy to achieve and I will need to review my target amount at the end of the year.

I'm still on schedule to hit my goals for this year. Given the severance, I will be well over my target but this would likely be a one-off and unrepeatable.

Based on projections:
- Assuming I manage to save only $1,000 per month, (I should save more per month!)
- With no salary growth whatsoever
- Portfolio has to gain overall 6% per year
- Dividends reinvested
- Retiring for $2k/month (expected to reach by age 60)
(I will likely need to re-adjust this as seasoned readers and investors have told me this is likely too low a target to live/survive on)

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Projections (as of 9/6/2019):

Road to Financial Independence
PROJECTION					ACTUAL FIGURES
Year	Age	Portfolio Projected 2%/yr	Current capital injection Rate/yr	Estimated Dividend 3%	Actual Portfolio at end of yr	Actual Capital Injection/yr	Actual Dividends
2018	31	$12,000.00	$12,000.00	$360.00	$15,941.59	$16,928.40	513.25
2019	32	$24,600.00	$12,000.00	$738.00	$23,130.92 (till date)	$5388.4 (till date)	$325.45 (till date)
2020	33	$37,830.00	$12,000.00	$1,134.90
2021	34	$51,721.50	$12,000.00	$1,551.65
2022	35	$66,307.58	$12,000.00	$1,989.23

(cut short, for full projection, see the portfolio update)

2046	59	$747,872.54	$12,000.00	$22,436.18
2047	60	$797,266.17	$12,000.00	$23,917.99
2048	61	$849,129.48	$12,000.00	$25,473.88
Total		$849,129.48	$372,000.00	$311,751.57

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Portfolio Holdings so far: 

	Stock name	Code	Entry price	Shares	Price	% Allocation	Type
1	FCOT	ND8U	1.4674	1000	1467.37	6.54	Base
2	FLT	BUOU	1.0712	2500	2677.88	11.93	Base
3	Singtel	Z74	3.3182	1000	3318.16	14.78	Base
4	APTT	S7OU	0.1631	10000	1631.4	7.27	Speculative
5	Vicom	V01	6.0340	500	3016.99	13.44	Base
6	SSB	Just for reference	1.0000	2000	2002	8.92	Base
7
8	Cash				$8,330.92	37.12	Cash
				Total Amount	$22,444.72	100.00

Again according to Stocks Cafe,
Time-weighted returns = -3.16%, (all time)
Xirr = 0.62% (all time)

Time-weighted returns = 10.62%, (2019 till date)
Xirr = 24.33% (2019 till date)

I have not added any more positions due to the fact that I am being retrenched at the moment and the invested capital stays around $14k in securities. The portfolio just recently broke even. I lost money mainly on short term speculative positions and my dividend generating positions have so far covered my back. I am now ever more convinced that I should be doing what works (adding long term positions) and cutting down on what doesn't.  (short term speculation with more commission fees paid and lost as a result a double whammy if I made a loss)

Personal Growth
(in terms of investment knowledge)
I absolutely love the Kindle App (can be used on mobile, ipad and computer) and I am trying to read more widely and so far I have read a simple book titled: "The richest man in Babylon". Kindle books are really great because they allow me to carry many books on the go, and they are especially useful during the morning journey to work. 

This book is a collection of parables and stories of how the richest man in Babylon came to be and what are some of the principles to draw from these relatable and easy to understand short stories such as "paying yourself first" (but 10% is too low. For people who starting out it ought to be more than 50% but it is a good principle) and "making the money work for you" to which I can identify with when I blogged previously https://30yearoldinvestor.blogspot.com/2018/07/if-you-spend-what-you-earn-you-need-to.html where one needs to keep a portion of what we earn first. Without spoiling the book too much, here is a summary video of one of the short stories:

I am also starting to read a classic in The Intelligent Investor (which is a recommended read by many forumers on Investing Note) and also one other book that intrigues me alot which is the book titled :"Stock Market Investing for Beginners" If you are just starting out, these two books would no doubt anchor you well in terms of sound knowledge.

I didn't always have the luxury of access to information when I first started with $1467.37. But one always have to start somewhere. The good news is that we can always accumulate knowledge over time. I will be looking forward to share my thoughts and also if possible try to adapt some of the shared illustrations these books have to some Singapore examples. So, do watch this space!

Market Outlook
I am still adopting a defensive strategy towards my holdings. I will still only go for dividend generating REITs or dividend generating stocks on the Singapore market. With the current trade war ongoing, and the hype over whether interest rates will be cut by the FED has sent the market into a whirl. REITs have gone up probably due to the hype that rates will be cut. Fundamentally, things have not changed at all and I believe that I should not be buying on speculation of the rate cuts because they have sent the REITs higher. Many stocks on the other hand are being punished at the moment due to the trade war manifesting itself since that fateful Trump tweet in May about adding more tariffs on China.

Dow Jones index looks to be on the rebound and STI index seems to be following suit.

STI Index have fallen and the mantra "Sell in May and go away" seems to be in motion.

I might be waiting for a market crash that isn't coming given that June is seeing a bit of rebound but that is fine by me for now as I look to keep more cash on hand given my situation and to see if Mr. Market presents good opportunities that I think I cannot pass up.

I have also since come to learn that P/B ratio isn't a very good gauge for whether a REIT is undervalued or overvalued. As challenged by a fellow blogger to dig deeper into the numbers, a better gauge is DPU consistency and growth. Some good REITs might have a high P/B leading us to believe that they are always overvalued. But they never present a chance to buy because they will always be going up (if you just rely on P/B). A good REIT will have such a good track record of their management team being able to deliver growth.

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In all, I would like to wish everyone success in your own journey and thank you for reaching out to me and sharing with me your nuggets of wisdom especially in this transition period of my life. I am grateful to have you guys journeying with me so far in my fledgling investing journey.


Until Next Time,

K.C.

If you like this post, you might like our facebook page as well. I'm also on Investing Note.

Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first
4. Interview process cycle: How to increase your interview rates
5. My 2018 Year end review
6. I'm retrenched: 3 things to think about

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