Saturday, April 7, 2018

Q1 2018 Portfolio Update

With a blink of an eye, a quarter of 2018 is over. How has 2018 been for me? So far, 2018 has been kind to me in every aspect of my life.

Since this is an investment blog after all, I shall begin with a review of my holdings.

As I am primarily an income investor, the trend in dividends received is one indicator that I pay attention to. This does not mean that I conveniently overlook unrealized losses, stick my fingers into my ears and go "la la la, I can't hear you." I have observed new US income investors/bloggers engage in such mental gymnastics whenever an investment of theirs sours. I hope that I do not end up that way.

Over time, I realized that I have become more judicious in my entries, holding period, and exits. I have become more comfortable with the act of taking money off the table. Realizing capital gains and limiting losses are not as foreign to me as before. Concerning the latter, it is better to acknowledge my investment mistakes and protect whatever capital that is left rather than banking on hope that things will turn out fine. On a related note, my perspective has changed as well. Instead of focusing on individual counters, I try to view how each individual counter fits into my overall portfolio.

Q1 2018 Dividend Income (SGD)

Dividends received from my SGD-denominated portfolio in Q1 2018 fell, when compared to the same quarter last year. This is mainly due to profit-taking last year.

Q1 2018 Dividend Income (USD)

In contrast, dividends received from my USD-denominated portfolio in Q1 2018 rose, when compared to the same quarter last year. If you look at the y-axis, the dividends are still chump change. I am still cautious and will scale in only when a better opportunity presents itself.

In Q1 2018, I sold off my entire stake in Vicom and RHT Health Trust. After including dividends, I closed my position in Vicom with a small profit. I have been looking for opportunities to sell Vicom after my newbie mistake of buying it at an elevated valuation.

RHT Health Trust is another facepalm-able experience for me. To manage risk, I have many positions, with each position sized as a function of my knowledge of the company and the risk that the particular counter plays on my overall portfolio. I have been lulled into complacency, partly because RHT Health Trust is a small position in my portfolio and partly because I assumed it is just Business-as-Usual (BAU). I did not see the warning signs and WHAM, I got hit.

I have added precious metals on multiple occasions throughout the quarter.

Portfolio Overview
My SGD-denominated portfolio is overall green owing to my purchase of REITs early on in my investing journey. Non-REITs, on the other hand, shows pockets of mini unrealized gains and losses here and there.

My USD-denominated portfolio is overall green owing to Dairy Farm and Dairy Farm alone. The consumer staples sector is bleeding, with General Mills exhibiting the largest drop in my portfolio. The market punished it further when General Mills announced its intentions to acquire Blue Buffalo, a pet food company. I have come across Blue Buffalo before and its financials are good. As Blue Buffalo trades at a high valuation and does not distribute any dividends, I had to give it a miss. The US healthcare REIT sector is also facing multiple headwinds from rising interest rates, changes to American healthcare policy, and patient outflow due to the current flu epidemic.

Emergency Fund
I have accomplished what I have set out last August. Our emergency fund has hit the $20000 figure in January 2018. In light of the present economic outlook, I intend to top up our emergency fund further to give ourselves better peace of mind. This brings me to my next point on.....

I had a pleasant surprise the other day at work. I received my performance bonus and increment letter and the numbers within exceeded my expectations. As mentioned before, I have conditioned myself to have zero expectations. Hence, any upside is an upside. And upside is good to my net worth numbers since I did not "plan," "estimate," and "account" for it in the first place. I have seen my peers mentally traumatized when reality fails to meet their expectations. They expected more but was given way lesser.

However, my happiness was short-lived. On the same day, over at mum's side, she was identified by the CEO of her company to take on a thankless and stressful role that entails an increase in her working hours without any pay increase. Through Providence, she got off the hook.

The ridiculous thing is that some younglings who did not want to take up that role encouraged her to do so because it would "look good" on my mum's CV. My mum retorted that she is near retirement already and that she does not need to beef up her CV. LOL!

While recounting the situation to me, that was when my mum realized that she's grown old. The feeling that I had during the conversation was best conveyed with the latin phrase memento mori. It was a sudden, sinking feeling, the kind where you feel that your heart has just been dislodged from its original location.

I recovered quickly. Time waits for no one. I have spent enough quality time with her. This is a reminder to spend even more time with her, above and beyond what I previously did. As a gesture of appreciation, I randomly brought her to a jeweller and gifted her with a gold bracelet and voluntarily contributed a portion of my performance bonus into our shared emergency fund as a token of my love.

Cash Flow
In hindsight, one of the investment actions I took at the end of January 2018 looks incredibly idiotic. I transferred almost all of my cash into a fixed deposit. 2 or 3 days later, it was volatility week! Then the realization sank that it takes some time to convert my fixed deposit back into cash. Cash is different from cash equivalents. I'd rather lose out on some interest than to not have the cash to invest when I really need it.

I did something that is unlike me. I withdrew from my 3rd Specialist Diploma programme as I have been falling sick too much and have increased responsibilities at work. As I withdrew at the halfway mark, I'm entitled to a post-diploma certificate (e.g. half a Specialist Diploma).

In the interim, I'm just casually reading books (non-investment related) and taking up short courses/workshops at brick-and-mortar institutes. Once I've recovered from my burnout, I will be ramping up the intensity again and continue my achievement hunting spree. But that won't be anytime soon.

Net worth breakdown
Compared to the previous quarter, there has been some changes to my net worth breakdown. The cash portion has increased due to contributions from work from ~31% to ~36%. The precious metals portion has increased from ~23% to ~24%. This is strange considering how I have been accumulating precious metals throughout the quarter. The equities portion fell from ~44% to ~39% due to profit taking and the simple fact that cash contributions from work are left as cash. The pie chart below does not include my performance bonus as it has not been credited into my bank account yet. Before I forget, I will be taking a leaf out of Uncle CW's book: Bonuses are not to be spent in the year they are obtained.

Net Worth Breakdown (Q1 2018)

As per before, quoting my Q4 2017 update, "The pie chart depicts the breakdown in my net worth across the various asset classes in percentage (pie chart neither includes my CPF nor my emergency fund). To be conservative, I computed my precious metals allocation at spot price even though I am holding everything in physicals."

Random Announcements
I have signed up on InvestingNote in order to communicate with Turtle Investor and Jeremy Ow as both do not have blogs. The Turtle Investor on InvestingNote is different from the Turtle Investor blogger. Jeremy Ow occasionally comments at LP's blog.

I have also signed up on Stackoverflow in order to seek answers to my programming questions. Strangely, I am able to help answer some programming questions as well. Then I got too excited trying to attempt to answer other people's questions and almost got banned for it. Moderation is key, be it commenting on other people's blogs or on forums.

That's all for now. Thanks for reading!


  1. Good to see so many activities from a financial point of view. Spending more time w mum is good.

    Quite a lot of metals also! Good!

    1. Hey bro,

      Good to hear from you again. Still waiting for your next blog post for quite some time already.

      I still want to collect more metals. Hope it remains at this same level.

    2. Hehehe.. already drafted my next article, but it’s not very relevant to all the readers but only to some of the readers.

      Any reason why fix D compared to SSB.

      SSB is v flexible also.

    3. Good! Waiting to read it.

      SSB got application fee and early redemption fee, and takes more time (compared to FD) to terminate. At that time, I was on a 6-months FD. Can get back my cash faster in the event of a market crash.

  2. Emjoyed your update. Nice touch on the jeweller part!

    The hypocrisy from your Mum's colleagues is rather distasteful.

    1. Hi 15HWW,

      Thanks for your kind words.

      Life has taught me to treasure loved ones when they are still around.

  3. Great update UN ... and I hope you can spend more quality time with your mom.

    1. Hi Yaruzi,

      Thanks for your kind words. Mum is important. But what mum would say is God is more important.

  4. You have show that investing over market cycles is journey of continous learning process to reach our investment objectives.

  5. Unintelligent Nerd,

    Cash in your pocket is different from cash in someone's pockets ;)

    Time waits for no one.

    I felt it was only yesterday I was 30... Now in a flash, I'm 50!?


  6. Hi UN,

    Wow. Nice update. Similarly, I'm also trying to take more time out possibly, to accompany my family. As each year passes, I aged. So do they and everyone.

    1. Hi Sleepydevil,

      Thanks! You are on the right track, so keep up the good work!

      You must remember to spend time with your sister too! =P