Investing Beanstock’s Portfolio Update (Q2 2021)

A blink of an eye, half a year has already past. It was 6 months of ups and downs, especially for the stock and crypto markets. The world has not seen such a drastic and confusing macro environment, where unlimited money printing, coupled with high inflation across different asset classes like commodities, real estate, equities and more, all while the pandemic continues to ravage the economy and countries like India or Japan still facing their uphill battle against the virus.

Some Updates

Aside from me enjoying my first summer break before a new semester begins, I do have some good news to share!

Got my BTO Ballot! No. 90/105

My girlfriend and I applied for the May 2021 BTO ballot (Our first time applying for BTO) for the Telok Blangah Beacon 3-Room Unit, and we’re pleased to say we were successful in our ballot! The unit were also highly competitive given that there are only a total of 175 units for this BTO (and the last time Bukit Merah area had a BTO was 8 years ago)

We totally did not expect that and we are feeling extremely blessed and grateful to have secured a home in the near future.

That would be approximately $410K-$500K in future liability that I must now bear in mind due to the prime location near the Greater Southern Waterfront, and that is not counting in miscellaneous fees/interior design fees and even more fees.

Another potential bugger is that the house will only be complete by at least 2027..

Why 3-room? Well, the point of this BTO was more of an investment standpoint, as I am confident that the prime location near GSW and the asset inflation going on right now, will indicate a massive appreciation in terms of resale prices next time.

Even if I am not planning to sell it, I can rent it out for a decent 2.1K/month or more which essentially covers my future mortgages. (The house will be paying off itself!)

I also managed to onboard as a Binance intern for their NFT platform, and I am extremely excited to get started as it is fully remote and the team is full of talent from all over the world with some serious accolades.

Aside from that, most readers probably knew that I have been buying the dips as I mentioned them on my Telegram Group, and the market correction that happened this quarter has not spared anyone at all.

Fear was erupting from every corner of the market for various reasons

On the stock market side, growth stocks were rapidly sold off in favour for value stocks among Wall Street, as they were concerned about the macro outlook surrounding Federal Reserve’s stance on inflation and potential rate hikes at an earlier date.

In simple terms, Wall Street deemed the future rate hikes as unfavourable for growth stocks who have yet to turn a profit and rely on borrowed money (financing) until operating profit turns positive. Higher rates = lower incentive for borrowers.

On the crypto side, manipulative behaviours by certain billionaires, authoritarian governments and a slew of mainstream media spreading fear, as well as the liquidation of greedy, leveraged traders, led to the eventual correction for the entire market and we saw Bitcoin drop from a high of $65K to a low of $30K.

Despite the depressing price actions seen in the crypto market, fundamentally speaking, there are more and more individuals adopting Bitcoin, more and more companies and smaller countries like El Salvador and Paraguay adopting Bitcoin. On-chain data also shows that more and more Bitcoin are being accumulated by long-term holders and flowing from the panic sellers to the smart money.

This is further exacerbated by the ever-growing awareness and understanding of what Bitcoin actually does and how it solves the issue of money printing, central bank control and giving back the power of decentralisation to the bankless population and kicking off a movement for freedom.

The faster people understand Bitcoin, the faster mass adoption takes place.

Current Positions

Currently, I have a total of 17 positions spread among my US stocks and crypto portfolio.

The current allocation looks like this (Bold ones are crypto and unbold ones are stocks):

I use StocksCafe to keep track of all my investments + research on stocks. You can also view my portfolio as well as many others so you can compare your own performance with other investors. If you are interested in signing up, you can use my referral link** to sign up and access premium features for 1 extra month for new users. (3 months)**

So what have I done and what portfolio changes have I made following the changing macro trends and developments around the world?

Bought More Stocks and Even More Crypto On The Dips

I think this one is obvious. I mentioned many times that I will be adding more crypto as the market continues to be beaten up, both by panic selling behaviours and short-sellers pushing prices down and the ever growing fear, uncertainty and doubt with the current headline news of China banning Bitcoin surfacing yet again. (This is old news since 2017.)

In particular, I have been adding Fantom aggressively because the price is simply not justified to be this undervalued based on the current stage of development, real world adoption and their technological superiority against other Layer-1 blockchains.

With the potential and real world use cases of Fantom, there is no reason the market cap of Fantom should be less than 1 billion, in fact, the ball park figure should at least match Polygon, which is a similar, yet less superior blockchain based on technology.

I will be writing an analysis on Fantom soon, so stay tuned for that.

Aside from that, here is a summary of my crypto transactions this quarter:

1. BUY: Fantom

2. BUY: Ethereum

3. BUY: Bitcoin

4. SELL: Filecoin

5. SELL: Binance Coin (Reduced Position Size)

In the previous post too, I mentioned that I am rotating some of my stocks and below are what I did this quarter.

Here is a summary of my stocks transaction this quarter:

1. BUY: Roku Inc

2. BUY: Etsy Inc

3. BUY: Coinbase Global

4. BUY: Fiverr Ltd

5. SELL: Unity Software

6. SELL: Zillow Group

7. SELL: Alibaba

8. SELL: Altimeter Growth Corp (Grab)

On the stocks side, I wanted to concentrate fire and stick to a depth of analysis instead of breadth which might end up with me losing focus on a few key winners.

With school work and internship workload, it might also be harder to manage a big portfolio of stocks and hence I decided to concentrate on 7 positions and call it a day. At certain point, I had 20 different stock positions, but that was during NS days where I had a lot of free time nearing ORD.

Below are the breakdowns of how my portfolio looks like right now and how it fared:

Portfolio Allocation (As of 26 June 2021)

34% Crypto 66% US Stocks (As of 26 June 2021)

Yield Farming as an alternative source of passive income (A lucrative one)

Aside from HODL-ing my crypto, I am also putting them to work through Yield-Farming and the returns are incredible (I’m talking up to 500% APY or more). Only do this if you are comfortable with DeFi and understand the underlying risk.

The above allocation is not taking into account the daily yields I am accruing from my crypto because it would be too time-consuming to do that manually.

Hopefully one day someone can come up with a yield farming yield tracker that can track across many blockchain and even become integrated into StocksCafe. That would be a dream come true.

CeFi Crypto Solutions

For the centralised crypto solution side, I am currently earning passive income on the following:

1. Hodlnaut (Earning interest on Ethereum/Bitcoin/USDT)

2. Matrixport (Earning interest on USDC)

3. Celsius (Earning interest on Polkadot)

The centralised crypto platforms are very impressive in my opinion, and so far I have been getting consistent returns from the 3 platforms I am currently utilising right now.

I am getting consistent returns every week and it is also compounding, which is a good thing as compound interest is the most powerful way to build wealth while I am literally doing nothing.

This path is more for passive investors who do not want to take on huge DeFi risks and if you are even more risk-tolerant, the paragraph below might appeal to you more.

DeFi Yield Farming

For those curious about where I am yield farming in DeFi, I am currently yield farming on the following blockchains and their respective Dapps:

1. Binance Smart Chain (Autofarm) – Needs BNB as gas fees

2. Polygon Chain (Autofarm + Curve Finance) – Needs MATIC as gas fees

3. Fantom Opera Chain (Frankenstein.Finance + Fantom DeFi Wallet Liquid Staking) – Needs FTM as gas fees

Majority of my volatile assets like Bitcoin/Ethereum/Binance Coin for example, are yield farming in Autofarm single asset pools on Binance Smart Chain because I want to avoid impermanent loss, which in simple terms are additional risks you take on for being a liquidity provider when you provide 2 different asset to yield farm (eg. BTC-ETH or BTC-USDT)

Why Autofarm? Because they do the auto-compounding for me, has one of the lowest fees in DeFi and having one of the best farms with liquidity depth which is important if you want to be in battle-tested and “safer” farms.

As for stablecoins, I am using Polygon chain due to their low gas fees and taking advantage of some of the liquidity mining incentives offered on Polygon right now. Polygon will just be a temporary solution though, because it is also facing congestion despite the lower fees, which proves that it is also unable to handle large scale transactions.

On Fantom, there is something magical whereby stakers will not only get to earn staking rewards for staking your tokens onto the blockchain (current reward is around 14% APY), you can unlock your staked tokens by minting synthetic Fantom tokens which can be used for yield farming to earn even more profits.

This is essentially like leveraging but the good thing is that there are no borrowing fees at all for minting synthetic Fantom (sFTM).

So in essence, by doing DeFi through Fantom, you get the benefit of 14% APY from staking + cheap gas fees + fast transactions + additional yield farming, which in essence, is a real life money printer hack. (Legal!)

That is the TLDR on what I have been doing on DeFi thus far, and so far, I have been able to consistently earn 4 digit passive income per month from yield farming alone over the past few months while studying, which is way better than dividend stocks, which are mediocre at best and passive income requires an enormous capital (eg. 800K) to start making sense.

My Q2 Performance Year-To-Date

As of 26 June 2021, my Stocks + Crypto portfolio is still crushing the benchmark indexes on both a Time-Weighted and Annualised basis. This is also not counting all the passive income gains from yield farming both from centralised crypto apps and DeFi.

For my portfolio’s returns outperformance though, my portfolio also had significantly higher volatility and potential drawdown which you can see above, so while it may look like the returns are worth it, please take note of the potential price fluctuations and downside risk I took to achieve my returns.

This is not for everyone and there are massive risk to take note of, especially the crypto side. (If you didn’t understand half of what I said above for yield farming or DeFi, then you are probably not suitable for whatever I am saying, so please do your own due diligence before dipping your legs in!)

As a comparison to Q1 2021 though, my portfolio return % has reduced as a result of the growth stocks correction and crypto crash between May and June.

Right now, since the Stocks Vs Crypto Hypothetical Portfolios challenge are mixed in with my own portfolio and there is no way for me to display just my portfolio on StocksCafe just yet as well.

Crypto allocation still needs more finesse

That aside, I am still thinking of ways I can better consolidate my current crypto portfolio as having too many alt-coins might result in huge fluctuations even though I am constantly generating extra yield from it.

The price movements for alt-coins are many times more volatile than even Bitcoin or Ethereum, and not all alt-coins in my portfolio might make it in the long term, so that is just a point to note.

Those smaller crypto bets are money I am willing to lose and serves more as speculative plays especially for the smaller allocations like Band Protocol or Zilliqa where risk are imminent but likewise I am staking them via Atomic/Moonlet wallets for additional yield. (12%-17% APY)

Points to Take Note

Investing in crypto is not all rainbows and butterflies. There are massive amounts of risk but in return the rewards are way higher than you can expect on the stock market.

There is always a give or take in investing, as nothing that offers high returns is without the risk as well.

Before you decide to jump into crypto due to FOMO and greed, here are some things to take note of.

1. Lack of Due Diligence (Not understanding the crypto asset and blindly entering based on price and other’s opinions)

2. Exchange Hack Risk (There are many scammers and hackers out there in the crypto space)

3. Volatility-induced irrationality (Many new investors panic when they see huge price fluctuations resulting in panic selling behaviours)

4. Hot Wallet/Cold Wallet (Need to understand the difference between the two as that is how you will store your crypto assets)

5. Smart Contract Risk (This applies to those who are already in the crypto space, there may be smart contract bugs or loopholes that can drain liquidity so do take note of the project before putting your money in)

Some of these points apply to Stock market as well, and to new investors, if you are unsure whether you can stomach the volatility, you should start from the stock market first.

If you are uncomfortable seeing your net worth drop 50% or more, you should not be in crypto.

Crypto is not for everyone

At the end of the day, your investment portfolio should reflect your own personality, that is why everyone’s portfolio is different and it is futile to copy another person’s portfolio if you don’t understand what you are doing.

Crypto can be a great place for investors who knows the risk of the asset class but appreciates the innovation and technology driving the space and understands the risk-reward ratio over the long term.

If you are an individual who simply cannot take more than a 5% paper loss or cannot trust anything that is not MAS regulated, then please stay out of crypto at all cost.

Risk and Return goes hand in hand. If you are not willing to take 50% or more potential drawdowns, don’t expect to see 200%, 300% or 600% upside returns on your portfolio over the long run.

Every portfolio follows the Efficient Frontier with some being on the lower end and some being on the higher end, the trick to get market-beating returns is to be on the higher end of the spectrum consistently and effectively and understanding that asset allocation drives returns.

When it comes to investing in anything, I always go back to the same mantra.

This applies to both new, intermediate and advanced investors:

Know what you own, and why you own it

-Peter Lynch

This quote by the greatest investor of all time says it all. Always do your own research before investing into anything. Don’t blindly invest because of someone else’s opinion or because someone made 100 times their money from it. Investing is all about calculated risk and if you can’t calculate your risk, you are simply speculating.

Do research on your investments just like you would before buying a new phone, a new bag, a new shoe or going to a new company or new school.

You spent months or years to accumulate those savings. Don’t lose it because of laziness or greed. Do proper research and be curious! And then returns and profits will follow.

Going Forward (Q3 and beyond)

Moving forward, I am still consolidating my alt-coin positions to limit my downside risk further and the current dip has been a warning to me to not over-allocate to the more risky plays and stick to the blue-chip crypto coins to limit my downside.

I am currently suffering from a significant paper loss on my crypto portfolio but my stocks side managed to back it up and thus my overall returns this year remains positive.

My stocks portfolio is more or less fixed as my positions are growth oriented and the companies I am invested in are mostly younger companies with lots of room for further growth.

For those who are already into Crypto

Want to learn how you can earn high yielding interest rates on your idle crypto assets in a secure, safe and easy manner?

Earn Yields on Those Crypto With These Platforms

You can read up more on my post here to learn more about Celsius and Nexo which give you interest on your crypto assets

Or read up more on Hodlnaut here which is a Singapore-based crypto lending platform with market beating interest rates

What is Bitcoin? Answers here

Or do your due diligence on Bitcoin in my post here where I debunk some of the myths regarding Bitcoin.

Gemini Exchange (My Favourite Crypto Exchange)

Also my crypto exchange of choice Gemini here if you are looking to buy your first crypto!

Too Many Crypto Platforms? Here’s a Crypto One-Stop Solution

If you think there are too many crypto platforms out there, here is a simple solution for you. An all-in-one app for you to earn yield, trade, invest or borrow crypto with high security and assurance. Check out my Matrixport review

What is Decentralised Finance (DeFi)?

Or do you want to learn more about DeFi in a simple to understand manner? Click here to learn more

How to Value Crypto Assets?

Learn more about how you can put a “fair value” on crypto such as Bitcoin, Ethereum and more here

Crypto Referral Links (Click and Sign Up)

Gemini Exchange: Deposits and buy US$100 or more crypto on Gemini and you will earn US$10 in BTC.

Coinhako Exchange: You can create an account by clicking the link and then enter promo code: COINGECKO when doing a buy/sell and enjoy 20% trading fees discount!

Binance Exchange: Create a Binance.com account here and trade the widest range of crypto pairings!

Hodlnaut: Earn US$20 in BTC/ETH/USDT/USDC/DAI for free with your first transfer of US$1000 or more in the corresponding crypto asset of your choice!

Celsius Network: Earn US$40 in BTC for free with your first transfer of US$400 or more in any crypto asset and wait for 1 month!

Matrixport: Get a $1288 free coupon trial to try their product and earn $20 in USDC when you sign up successfully and become a qualified client!

Nexo: No referral events at the moment 😦 Just sign up and enjoy this great product!

Join My Tele Channel Here For Updates!

The Power of Low Fees (My US Broker!)

One huge advantage I have as an investor is paying very minute fees which can really eat into returns in the long run because I am using Firstrade to buy US Stocks which has absolutely $0 fees and extremely fast wire transfers for deposits and lightning fast trade executions.

Ever since I switch to Firstrade last year as my main investment vehicle, I saved up on a ton of fees and hence able to achieve way better returns than before. I saved up more than 5 times the fee paid in 2018, 2019 and 2020 this year due to the switch and I am really happy thus far.

Of my entire investments in 2020, fees only take up 0.1% of my entire portfolio! (2018+2019+2020 combined across all brokers and Robo)

Alright that’s it! For now, think long term, tune out the noise and avoid the temptation of gambling meme stocks, think of the companies that will do well in the long run simply find bargains/dollar cost into your positions. If you need some inspiration for companies to research, you can check out my post on 5 stocks to buy if the market crashes here.

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.