My Portfolio Performance - October 2019 Update

Hi Everyone,

This is my Portfolio update in the month of October 2019.

Not much changes for my Portfolio in the month of September but there were various or rather exciting moments for S-Reits. IPO for Lendlease Reit also happen in the month of October.

As of now, Reits prices have rallied up to their peaks thanks to the low interest rate environment. US-China trade war and uncertain Brexit deal coupled with the looming of economy recession contributed to the volatility of shares prices on a daily basis.

However this have not affected the confidence of investors in quality Reits with a number of them announcing further acquisition with Private and Preferential Offering to fund their purchases. CRCT starts in the month of August followed by Keppel DC Reit and Manulife Reit in the month of end September to early October.

Even MAS is considering to raise gearing limits for S-Reits to 45% and if that happens, it definitely will boost S-Reits even further with more acquisitions.

We are now seeing a trend of quality Reits purchasing properties from their Sponsors. CRCT is one of them where they are purchasing 3 Shopping Malls from Capitaland. We are also expecting results announcement from majority of Listed Companies and Reits in the month of October.

Below is an extract of my top 10 Counters at the moment.

As of 16/10/2019:
Total Cost: SGD 188,529.28
Current Value: SGD 196,772.73
Current P&L: SGD 8,242.75

Portfolio Current Yield: 4.99%
Dividend per Annum: SGD 9,396.25

For those who is interested to see my whole Portfolio, please follow me at:
https://stocks.cafe/user/profile?username=sgcashflowinvestor

For the month of September and October, I have done the following:

1) Initiated positions on Manulife Reit
2) Applied for Preferential Shares on Keppel DC Reit
3) Applied for Preferential Shares on Manulife Reit

Lastly, I am waiting for Mapletree Commercial Trust preferential offering which to me will be one of the most exciting deal in Year 2019. MCT has proposed an equity fundraising comprising of 406.5 million new units via in a private placement and preferential offering to raise at least $902.30. The funds will be used to acquire Mapletree Business City (Phrase 2) for $1.55 billion.

MCT is one of my favourite top holdings and I have been holding them since IPO time. I first bought it at $0.88 and divested it when it reaches $1.55 around 3/4 years later. Subsequently I bought it back at $1.585 and have been holding since and added another 2 lots at $1.99 few months back.

Through this, I have personally experienced the Time-Weighted returns of holding quality Reits on a long term basis. I feel there is a lot to gain with share price appreciation and increasing DPU year on year and a lot to lose if you sell too early. 

Sometimes, you will never be able to buy back the shares at the same price that you have sold as the next low would be higher than the previous low. However this only applies to quality stocks and Reits which you have hand-picked and I'm not saying you should be doing the same for every counter.

As such, this increases my confidence and faith of my strategy being a long-term investor with majority of my money invested into the market. I am focused on long term returns instead of short term gain. Of course, it's never wrong to take profit when you feel the price has reach its ceiling with the risk of global economy recession lurking round the corner.

Financial Horse has given their comments to sell MCT early this year January when their share price has driven up to $1.74 but no one would expect MCT to be elevated to be part of STI few months later with share price richly valued at $2.30 now. https://financialhorse.com/sell-mct-reits-2019/

Sometimes the price will get higher even though the price seems unreasonably high over their NAV and P/B ratio. So when is the right time to sell your shares or Reits? No know can give you a definite answer except yourself.

I am waiting for the Preferential Offering to open on 30 October and will be bidding in excess of my allocated shares for MCT.

Disclaimer: This is not a Recommendation to buy or sell any Stocks and please do your own due diligence and research before making any decision.

Regards,
SG Cashflow Investor

Financial Matters & Tips #Ep 2 - How to think about Money

I was reading this book titled "How to think about Money" by Jonathan Clements which I bought recently.

This book highlighted a few interesting points and offers different perspective about Money and Investing which I find particularly true. It is very refreshing and allow readers to make smarter financial choices and squeeze more happiness out of your cash.

Here are the final thoughts from the Author:

There are all kinds of explanations for why we are so poor at handling our finances. We can blame our hardwired instincts, conventional wisdom, relentless corporate marketing and the financial industry's greed. But while I can understand why people go astray, my sympathy is in shorter supply. In the end, nobody stick a gun to our head and forces us to spend too much or buy overpriced investment products.

We all still have a choice - and we should be especially careful with our financial decisions, because the stakes are so high. Make the wrong choices, and our lives could be dogged by financial worries. Make the right choices, and we could have the financial freedom to lead the life we want.

These are the 12 suggestions for getting the most out of your money:

1) We favour possessions for their lasting value, but often we get greater happiness when we spend our money on experiences. Forget the new car. Instead, travel across Europe and other Continents.

2) We should use our pounds, Euros or dollars to create special time with family and friends. Take the kids to a sports event and your spouse to a theatre. Have dinner with friends. Book a trip to see the grandchildren.

3) We should design a life for ourselves where we can spend our days doing what we love. To that end, we should save every penny and dollar we can early in our adult life, so we quickly buy ourselves some financial freedom. In our 40s to 50s, we might use that freedom to switch into a career that's perhaps less lucrative, but which we may find more fulfilling.

4) We should worry less about dying early in retirement, and more about living longer than we ever imagined. Faced with that risk, most of us should delay our pension or CPF to get a larger monthly cheque, and also consider buying immediate annuities that pay lifetime income (we have CPF Life).

5) Our investment time horizon is measured not in months and years, but in decades and decades. We should strive to look beyond market's short-term turmoil and instead aim to collect the staggering gains that can accrue to those who globally diversified stock portfolios for 30 or even 50 years. Indeed, while a long bear market can impoverish retirees who don't have enough in bonds and cash investments, it can be a great gift to young adults who are good savers, because it offers the chance to buy stocks at bargain prices.

6) We should hold down our fixed monthly costs, such as the sum we devote to mortgage or rent, cars, utilities, groceries and insurance premiums. Those low fixed costs will give us more financial breathing room, which can ease our sense of financial stress, leave us with more money for discretionary 'fun' spending - and allow us to save voraciously.

7) Good savings habits don't come naturally, so we need to make socking away money as painless as possible. That means signing up for payroll contribution to our employer's retirement plan and setting up automatic investment plans, where money is pulled from our bank account each month and invested directly into the funds we choose. It also means adopting easy-to-follow financial rules, such as always adding $100 to the monthly mortgage payment and always saving financial windfalls, including tax refunds or bonus and income from a second job.

8) The harder we try to beat the market, the more likely we are to fail, thanks to the hefty investment costs we incur. To avoid that fate, we should stop trying to outsmart other investors and instead embrace humility - in the guise of a globally diversified portfolio of low-cost index funds.

9) We should never forget that stocks have fundamental value. For a diversified stock portfolio, that fundamental value will change much more slowly than market prices. To keep ourselves grounded, we should focus on the dividends and earnings we buy with every dollar invested, we should have a handle on the market's likely long-run return, and we should think like shoppers, viewing market declines with the same enthusiasm that we view a sale at the local department store.

10) Chronologically, retirement might be our life's final financial goal, but we should put it first. Retirement is the most expensive of our goals, and hence we need to save and collect investment gains for many decades to amass enough money. Retirement is also distinctly different from other goals, like buying a home or paying our children's education. What's different? Retirement won't be optional for most of us and we can't expect to pay for it out of our pay cheque, because at the point we won't have one.

11) We should take a broad view of our finances - and the unifying notion should be the income from our human capital, or the lack thereof. The pay cheques that we collect over our lifetime are like a bond that generates 40 years of fairly steady income (assuming not being retrenched). The income stream can diversify a portfolio that's heavily invested in stocks, provide the savings we need to set aside for retirement, and allow us to take on debt early in our adult life and then repay it by the time we retire. We also need to protect our human capital, be ensuring we have adequate health coverage, and sufficient disability and life insurance.

12) The goal isn't to get rich. Rather, the goal is to have enough money to lead the life we want. We shouldn't put that at risk by incurring excessive investment costs, straying too far from a global index strategy and failing to buy insurance against major financial risks.

None of this is especially complicated or clever. But putting these ideas into practice takes thought and effort. We need to ignore our instincts, rein in our emotions, take a deep breath and focus relentlessly on what's best for us - for our happiness and our financial freedom over a lifetime that might span nine decades.

Sounds like a lot of work? It's nothing compared to the potential reward. With a sense of mission and the simple steps outlined above, it is amazing how much wealth we can amass - and how much happier our financial life can be.

Regards,

SG Cashflow Investor