Portfolio Review (December 2022)

Review of my Portfolio (31/12/2022)

• Total unrealised loss: -22.5%
• YTD portfolio down: -43.4%

Added in December

Growth portfolio: QQQM, GOOGL

Dividend portfolio: Allianz income & growth, BST

Portfolio Weightage

Dividend Received

YTD dividend received: SGD $7207.70

Opinons

Graph as 30 Dec 2022

• Past 1 month $SPY, had been consolidating at $380. Seem like market is unsure to move in which direction.
• $360 (as in Dec) is the strong support of $SPY, so before it drop below that, i am still optimistic of 2023.

• However, the long term chart of $QQQ, (Tech heavy) had reach a very strong support @$260~

• I think that Jan 2023, will have a strong rally, however we are not out of the bear market yet, maybe $SPY may drop to $370 before the rally, i'll buy something if it really fall to that price.

China Tech

• KWEB, it need to re-test the support. It is overextented. It need to drop to $28 before i buy, if drop to $26 i will buy more.
• Maybe Jan 2023, US may rally and china crash then i can buy some KWEB. Else i just buy more dividend Stocks.

Foundation for Wealth Building

• The amount of income is the foundation of wealth building. Increase our income should always be the priority. The truth is investing don’t make you rich.

Financial Freedom = (Income - Cost) x Invest returns

• Most people who working toward F.I. primary focuses on being frugal, reducing costs and where to put your money to improve the investment returns.
• However, there will always be a minimum amount for monthly expenses. The nearer you are to the minimal, the more miserable your F.I. journey will be.
• There is also a limit how much you can optimise you portfolio. Is unlikely you will be able to consistent outperform the market. Most of retail investors will most likely underperform the market even if they invest in the index, including me.

• Both of these factors are important but not the most critical.

• The least talk about is how to increase our income, which is the most important parameter in the equation.
• There is no sure-win method on how to increase your income that can be "copy & paste".
• In short, you must have the ability to continuously increase your income and dont let your job limit you.

• You just have to get started and only you are able to figure out what fits you. You going to get smack by reality several time and it wont be easy.

• While career expert often advocates that the best career strategy to increase your income is to be the best in what you do, do what you love, upgrade your skill and money will then come naturally.😇
• Is a widely advertised and accepted idea, because it sounds nice...... in fairy tales
• In reality, your future will always be in the hand of the person above you, you only have the choice to stay or leave.
• Impact of losing your job become more severe as you age.
• There will always be someone younger, cheaper and more skillful than you.
• But having said that, at least get a bachelor degree ASAP (unless your job is commission based), it will be good enough to earn a decent living in Singapore.
• Find a boss that appreciate you and reward you accordingly is more important, but it will be rare.

• Many of us are looking for a career, but instead ended up with a job. I am just being realistic.

• Personally, I have always been a strong believer of side hustles and diversification of income. 😈.
• Because i know i am not the best and never will be, i am just average.
• Thus with many sources of average income added up, it will be equivalent to the income for being the best 🤣.
• Also, in the event, if i lose my job i will still have other means to cover my daily expenses.

• Always have a backup, if shit happen, i will be fine.

• Currently, i have 5 sources of income, Full time job, food delivery, dividend, a small event buisness and property rental.

• In my opinon, Youtube will be the best hustle if you dont mind showing your face.

• I typically work 60 to 80 hours a week. Side hustle is not for everyone.
• Do i like it? No!..... Do i hate it? No!.... Do i love the money? Certainly 🤑!... Guess this what it mean by "Doing what you love." 🤣
• How i earn ~$500k+ (net cash) In 6 years just by income diversification.

• Do not work for free. If there is no OT pay, dont stay late. Go home and rest or find a second job, value your time.

• It is also important to use some leverage, to accelerate wealth building. Of course, i understand the risk of over-leverage, always make sure you can afford.
• Majority are usually under-leverage because of the fear of getting into debt, as most people focus on present cost rather than the future value.

• BTO is actually the first pot of gold the government given to every Singaporean, how to use it depends on individual and the outcome will be very different.

• Life is all about sacrifices. You want more money, work longer. You want enjoy life, then money not enough. You want work-life balance, then retire at 65.

• There is no magic, you just have to grind for it.

2023 Resolution

• Currently, majority of the income is still from my active income, there is still a limit, TIME ⏰.
• However, i will still continue to increase my active income by spending more hours in 2023.

• For the next 10 years, I would focus more aggressively on building up my dividend income, not only because it is passive but also tax free.

Target By End of 2023

• Dividend recieved= SGD $11k
• New capital injection to investment portfolio = SGD $66k

My Preferred way to reach Financial Independent

• My perferred way achieving financial independent is always through dividend investing because is easier to forecast.
• It is risky to assume S&P will continue to provide a 8 - 10% p.a. long term returns based on historical data.
• Investing 101, past performance dont guaranteed future results, nobody knows what is the real future long term returns of S&P.🤷 ♂️
• The popular 4% rules dont really work, if you retire at the wrong time of the market cycle.
• However, index investing is still great because it provide instant diversification & it will never go to zero.

• In order to be a true long term investor, we first need to have sufficient cashflow to fund our lifestyle, so we will have the holding power to ride through the market up & downs.

Portfolio Allocation

• In my opinon, a portfolio should contain both growth & dividend stocks, regardless of age. So that during bull market, we dont miss out the gain and during bear market we still get paid.
• Dividend investing is one of a more substainable, predictable and less risky method to generate cashflow from the market compared to using deriative like option, CFD, or even crypto....
• Dividend investing is slow, because it is relatively less risky.
• Many comment that a company pay a dividend because they cant find way to grow that money, which is a valid point. However, when they pay me the dividend, i can use that money to buy more assets or pay down debt. I will take the responsiblity to grow that money.

• When i looking at a company financial statment, what matter the most are net income and free cashflow. I just doing the same for my personal finance.

• Below is the portfolio value of my growth and dividend portfolio. Both which i had been constantly buying in every month.
• Even in bear market, the dividend portfolio value has continued to grow and consistently providing cashflow. While the growth portfolio had been decimated, no matter how much money i pump in. The volatility is just too big.
• However, if the growth portfolio can go down this much, it will also has the potential to go up with the same magnitude; with the caveat that the portfolio contain highly profitable companies.
• Then the next question will be "how long can you wait?"

• i am not trying to convince you to adopt dividend investing, but just something to think about when constructing a portfolio to protect the downside and not just focus on the upside.

• Even if there is really "a loss decade" our financial goal will still be on track, if we allocate properly.

Risk off approach?

• T-Bill & SSB / Fixed deposit are very popular recent months because it provide a risk-free 3% to 4% interest.
• However, we should remember current SG core inflation is at ~5%, so technically our money is still losing value when we parked in these instrument.

• While is perfectly fine to park the emergency fund in these instruments. To grow wealth, we have to deploy our money in Real Assets.

• Always have a longer term perspective, the rate of returns is always determined by the price we paid.
• If you have been buying continously in a bull market, had you also been buying continously in a bear market? If yes, congratulations.
• Missing the best few days of market will have big impact on your returns. The best day usually come right after the worst days, you will never know when that day will come.....just something to think about.

• I remain 100% invested.

Share Price = PE x (Earnings / Shares Outstanding)

• In general, the rise of interest rate (macroeconomic factor) causes PE contraction. Thus the stock price will definately drop. Due to higher discount rate used by analyst.
• However, if the company are able to continue to grow its earnings and continue to do shares buyback the stock price will still be able to rise in a high interest rate enviroment.
• So is always important to invest in a profitable company.

Social Media

• "Be greedy when others are fearful." is an advice often been throw around in 2021.
• However, in 2022 all narratives have changed. "Hold cash", "Dont fight the FED", "Recession is coming", "stop DCA-ing", "this time is difference", "be diversified" and everybody start to become economist and fortune teller 🤷 ♂️...🤣

• Dont get spook out by the macroeconomic and lost track to your long term investing strategy. The main focus should still be buying at a discount for individual stock or DCA for index.

• Lessons: Dont just follow others blindly, gather all information and formulate your own plan, alot of people online, including your favourite youtubers, are just retail investor like you and me.

• Most of the time, we dont know what we're talking about and we can be wrong, i can be wrong. 🤣

Conclusions

• Increasing our income is more important than saving and investing in building wealth.
• Investing is just to protect against inflation and multiply what we already have.
• Investing is never about earning money, is about growing money, there is a difference.

• Focusing my time on actually earning more money is more efficient to grow the investment portfolio than finding the next 10x stock to improve rate of returns.

• Proper portfolio allocation is key to stay on track of your financial goal.
• The best way to know your own risk tolerance, is simply put real money into the market.
• If you are able to sleep well at night means you have high tolerance, else dont be too aggressive.

• Investing is a self-discovery journey. I believe this bear market allow many investors to re-think if their investing strategy is substainable long term.

• Common advices will often lead to common results.
• On the other hand, unconventional advices will either lead you to prosperity or financial destruction. Thus think twice before you act.

Previous Review

https://seedly.sg/opinions/portfolio-review-november-2022-159489d7-d44d-4cd7-a0e3-0acb10628b3a/