My SRS Portfolio Dec 2022

My SRS Portfolio and Thoughts [Dec 2022]

Congratulations for clearing 2022! 2023 just started. I’ve a good feeling that this year will good to my SRS portfolio. If you need a quick recap, check out my top article for Dec 2022: what happen to the stock market from 2019 to 2022.

Again, if you are new to SRS, please start here.

Disclaimer: This article is not and should not be taken as a buy/sell/hold recommendation.

My SRS Portfolio Dec 2022
My SRS Portfolio Dec 2022

My Thoughts and Consideration

SRS Portfolio Tracker Dec 2022
SRS Portfolio Tracker Dec 2022

SGX:HST looks like it is finally recovering. I believe this is because China is reopening on 8 Jan 2023. They are more relax when it comes to COVID-19 testing and seems like lockdowns will be unlikely. China will be living with COVID-19. While I expect there will be short-term COVID-19 spikes and some disruptions, productivity will pick up soon after. Currently, there is no intention to add more position into SGX:HST.

SGX: BTOU is the most disappointing position in the portfolio. While Manulife  have pivoted and shifted into hotelised buildings and provide flex office solutions, there are several concerns to that SGX: BTOU have to address.

I believe there will be some divesting to reduce aggregate leverage in the next few quarters. Overall, these are all bad news to SGX: BTOU. Therefore, there will be no second entry into SGX: BTOU.

SGX: ME8U is a new entry into the SRS portfolio. I have receive first dividend payout from it and looking forward to the further dividends to come.

I have also embarked into dollar cost averaging into the S&P500. More to be added into this space in the articles to come.

Final Thoughts

It isn’t all sunshine for sure. Take care and hope you are well.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

What happened in the stock market 2019 to 2022

What happened in the stock market 2019 to 2022?

What happened in the stock market 2019 to 2022
What happened in the stock market 2019 to 2022?

If you are reading this, you might be deeply hurt by the stock market from 2019 to 2022. I feel you. The last 4 years could have been the most profound shift in the financial market ever. In this article, I will explain what happened to the stock market from 2019 to 2022. In the conclusion, I will attempt to forecast what may happen beyond 2023.

Disclaimer: This is by no means a buy/sell/hold recommendation. Personally, I will write what make sense to me at this moment of time. Read with caution. This is a highly simplistic article and I will explain using demand and supply which are the basic market forces that move prices.

The “Beginning”

COVID-19 was first identified in Wuhan, China in Dec 2019. The World Health Organization (WHO) declared public health concern in 30 Jan 2020 and later a pandemic on 11 March 2020. Province lockdowns soon became a global lockdown in the coming month.

In the last 50 years, the world has become a “smaller” world due to globalisation. It is now much easier to obtain goods, services and even labour across continents. As a result, some countries who have more resources (food, raw materials, land) can sell those countries that have less. In an utopian world, resources are used more efficiently.

In a way, the fate of every country in the world are now intertwined with each other.

The closure of China, being the 2nd biggest economy has impacted the world by reducing the  global supply. The illustration below show the top exports that China sells and the potential impacts on the destination countries.

What happened in the stock market 2019 to 2022 China Importance
What happened in the stock market 2019 to 2022 China Importance
What happened in the stock market 2019 to 2022 China Exports Destination
What happened in the stock market 2019 to 2022 China Exports Destination

The “Flawed” Gameplan?

As the world started to shut their doors, the FED in an attempt to save the economy blew the dust off their previous gameplan during the financial crisis of 2007 to 2009. Though it felt like a decade ago, on 15 March 2020 the Federal Reserve announced it is dropping its benchmark interest rate to zero and launching a new round of quantitative easing (QE).

What happened in the stock market 2019 to 2022 Fed Rates
What happened in the stock market 2019 to 2022 Fed Rates

For QE to happen, the central banks buy bonds (typically government) and other assets. Thus, it injects money supply into the economy. This adverted the previous credit crunch in 2007 to 2009.

I believe that COVID-19 was however not a credit crisis. However, as there are now more liquidity in the market. More money are now chasing the same (probably lesser) amount of goods. This increased the demand for goods and services.

The WFH Trend

What happened in the stock market 2019 to 2022 Work From Home
What happened in the stock market 2019 to 2022 Work From Home

COVID-19 brought many changes in our lives and one of them was working from home (WFH). While retail and restaurants were badly affected, the technology sector thrived as we are more reliant on technology to conduct our meetings.

Share prices of companies such as Zoom, Microsoft, Salesforce, Netflix roared upwards. As their business boomed, the demand for labour in this sector increased. As a result, wages increase. This increases the disposable income to buy even more goods and services.

Inflation Woes

This trinity of events in my view, created inflation. With China lockdown (lower supply), increase in money supply and wages (higher demand), this pushed the prices of goods and services upwards.

To add fuel into fire, the Russia-Ukraine crisis put even more pressure the global economy.

What was believed to be a transitionary inflation became a persistent one. While we are seeing some slow down in inflation today, it is way higher than Pre COVID-19 inflation rate of 2%.


source: tradingeconomics.com

The Pivot

To tame inflation, the FED began their series of aggressive interest rates hikes from March 17, 2022. This is done to create some price stability in the market. While I believe the COVID-19 crisis was more of a supply issue, the FED could only influence the market through demand side solutions.

When interest rates increase, this makes borrowing more difficult. As a result, business may spend lesser and this may cool the market. We are starting to the effects of this as news of hiring freeze began to surface.

This spooked the stock market sending share prices of many technology companies tumbling to their 52 weeks low.

What happened in the stock market 2019 to 2022 Taming Inflation

What happened in the stock market 2019 to 2022 Taming Inflation

What’s coming in 2023?

So, what’s next? The following section will be my prediction of the market. Please read with caution.

I believe things will become better in 2023. This is because supply chain will be easing. I believe the lockdown impacted supply chain as China is the “manufacturing factory of the world”. The world will be “reunited” again after 8 Jan 2023 as China finally open their doors to the world. At the same time, Chinese tourist will once again roam the world with pent up spending. I believe this inflation will be transitionary while supply chain eases up.

While manpower in the technology sector are still on freeze, I’m seeing more demand for manpower in the retail and restaurant space. As this sector struggles to find workers, this will push wages up. In a way, we might see improvements in income inequality. I believe this wage increase is healthy.

Hence, I believe Inflation will stay for a while. This will in turn mean that interest rates will be hovering around current levels. This will then depress stock valuation of companies.

What happened in the stock market 2019 to 2022 Moving Forward
What happened in the stock market 2019 to 2022 Moving Forward

Howard Marks from Oaktrees communicate this best in his recent memo. While we were blessed with low interest for the last 40 years, we should look forward to a more “normal” interest environment in the years ahead.

In today context, we are preparing more for a slowdown or soft landing. As the credit window is more constricted now, it is important to build up capital fast for any opportunity.

 

Final Thoughts

Congratulations for making it thus far. I don’t think it was easy to invest in this environment. It was certainly a 180 degrees pivot from 2020 to 2021. Nevertheless, it is more important to be educated in investment. I believe the window of opportunity is opening.

Like what Howard Mark says, a sea change is coming. Are you prepared?

I wish you all the best. Take care!

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

 

My SRS Portfolio Sept 2022

My SRS Portfolio and Thoughts [Sept 2022]

If you are in cash this year, you would have beaten the market. Congratulations! However, this does not mean you should keep your money as cash as inflation will erode the value of your money.

2022 is a rough year for the investment market. If you have invested in the STI for the past 1 year, you would have achieve no movement at all.

STI ETF Since March 2022
STI ETF Since March 2022

If you have invested in other markets, then you are most likely seeing a red in your portfolio.

If you are new to Supplementary Retirement Sum (SRS), please start here.

Disclaimer: This article is not and should not be taken as a buy/sell/hold recommendation.

My SRS Portfolio Sept 2022
My SRS Portfolio Sept 2022

My Thoughts and Consideration

My SRS Portfolio Sept 2022
My SRS Portfolio Sept 2022

SGX:HST continues to face downward pressure as Beijing’s zero-Covid pursuit, regulatory crackdowns and tensions with the West have led to a US$5 trillion rout in Chinese stocks since early 2021. I have averaged down (why DCA is not working on China’s stocks?) once in March 2022 and will be having a hold approach for this counter for now.

SGX: BTOU slides even further in the last quarter. I believe the main reason is because the FED has raise interest rates to combat inflation. This has made borrowing more expensive and may be a cause of concern for investors. However, it is worth noting the Fixed Rates Loans makes up 85.7% of their debt profile as of 30 June 2022 and isn’t a great cause of concern. BTOU is in a midst of transformation as explained in June 2022. I will be reading closely to this in the quarters ahead.

Manulife US REIT BTOU Debt Profile June 2022
Manulife US REIT BTOU Debt Profile June 2022

SGX: ME8U is a new entry into the SRS portfolio. I was eyeing Mapletree Industrial Trust for a long time. It was a stock that I was interested in even before COVID-19. MIT’s property portfolio comprises of 143 properties ranging from light industrial buildings, stack-up buildings, flatted factories, business park buildings, Hi-Tech building and recently data centers.

Mapletree Industrial Trust portfolio growth in IPO has been amazing with a new position into Data Centre. Looking forward to its’ performance in the years to come.

Mapletree Industrial Trust Portfolio May 2022
Mapletree Industrial Trust Portfolio May 2022

I have also invested a small amount into a 3 year endowment with a guaranteed of 3%. As this is a very straightforward proposition, I will not be updating this particular segment.

Final Thoughts

Quarter 4 is the best time of the year to think about SRS contribution. The main reason for SRS contribution is to reduce your tax payable for your FY2022. You then need to consider the investment portion thereafter. I will be running a webinar on SRS tax reduction in the months ahead.

Do comment below and I will individually send you an invite for the event.

Meanwhile, take care and hope you are well.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Retirement Calculator Singapore

Retirement Calculator Singapore: How Much You Need To Plan For

In 2022, I having more conversations with my clients whether they should increase their retirement sums due to inflation. I begin to realize that it is not easy for them to project their future needs when they don’t know the perimeters needed.

Hence, I have build up a quick calculator for them to calculate in less than 1 minute how much they need and how much they have to invest NOW to achieve their retirement goals.

Retirement Calculator Singapore
Retirement Calculator Singapore

The Assumptions

Behind every model requires a few assumption. I will go through the ones that require more thought process.

  • Replacement Ratio

This is the percentage of income to maintain lifestyle. Most studies suggest aiming for a target of between 70 and 85 percent of pre-retirement income. Typically, most of us spends a certain portion of our income to maintain our lifestyle. Some of us will spend more, some of us will spend less. To most of us, our spending habits will stay with us for a long period of time.

For Example: Peter earns $6K monthly and spends $4K every month on household needs etc. This means his replacement ratio is roughly 67%.

  • Inflation Rate

Though this is well defined, it is not easy to determine a meaningful figure especially when inflation has been going up in the last few months. From the graph below, you can see that we have spikes in inflation previously. However, it has been maintained at a certain level for prolong periods of time.

While, MAS does not have an explicit inflation target. The MAS has concluded that, on average, a core inflation rate of just under 2%, which is close to its historical mean.

I would think to err on the side of planning, we can use a inflation rate of 3%.


source: tradingeconomics.com

  • Expected Investment Rate

This is the rate that you want your investment to grow yearly to reach your goals. For this to be effective, it would be easier to attribute it to your risk profile which will then lead you to the appropriate investment instrument you will find suitable.

If you are someone who is risk adverse, you might consider fixed deposits which typically gives around 1% per annum. For Singapore bonds investment, the yield typically is around 2% to 3% depending on the tenure of the bond.

For those that are more adventurous, the SPDR Gold Trust (SGX: O87) annualized 10 Years Performance is 1.29%. Straits Times Index (SGX: ES3) annualized 10 Years Performance is 4.4%. SPDR S&P 500 (SGX: S27) annualized 10 Years Performance is 12.96%. Average yields are a reference point and can be used as a pinch of salt.

Taking a pause here, all forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. With an additional disclaimer, the above doesn’t represent a buy/sell/hold recommendation.

The Retirement Calculator

 

Final Thoughts

I think planning beyond 2022 will be an interesting discussion as we are in midst of existing developments (Russian-Ukraine, China-Taiwan, Monkeypox, COVID19). However, we should let it stop us to plan consistently for the future.

If realised you have a retirement shortfall, congratulations! It is time to do something about it. There are various instruments available and I will be glad to have an open conversation with you on how to do that with you.

If you feel like something needs to be done, the next place you need to go to is here (to read more) or simply contact me using the information below.

I wish you all the best! Take care.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

My SRS Portfolio June 2022

My SRS Portfolio and Thoughts [June 2022]

My SRS Portfolio June 2022
My SRS Portfolio June 2022

I’m writing this in the middle of June as I’ll be busy preparing for reservist during month end. In addition to the perfect long storm, inflation has been coming up in all areas. We are also officially in the bear market [Read More: Bear Market Survival Guide]. I have also finally added my position using dollar cost averaging which I will be covering more below.

If you are new to Supplementary Retirement Sum (SRS), please start here.

Disclaimer: This article is not and should not be taken as a buy/sell/hold recommendation.

My Thoughts and Consideration

My SRS Portfolio and Thoughts June 2022
My SRS Portfolio and Thoughts June 2022

Other than the new pie chart, I have added more into SGX: HST. The new addition is a very simple dollar cost averaging move. In China, Chinese banks cut a key interest rate for long-term loans. This can be seen as a bullish move as this will boost loan demand. However, China still struggles with lock-down from time to time if COVID cases were to arise. Let’s see how it turns out.

Meanwhile in SGX: BTOU, William David Gantt is appointed as the new CEO. Gantt wants to build a higher proportion of growth tenants, and this will be done through capital recycling, not acquisitions, for now. Their new focus will be on building quality income instead of growth. We probably will be looking at a new tenant mix in the quarters to come. I believe that the US office space is having an identity crisis now as working from home is a choice for employees now. If every company start to behave like Tesla (remote work privilege to end), we will see a higher occupational rates in the quarters to come.

I probably will be looking at a few Singapore companies in the quartiers to come.

Final Thoughts

I reemphasize again that this is not and should not be taken as a buy/sell recommendation. Wishing you all the best!

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.