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Portfolio Cost: S$457, 975
Portfolio Market Value: S$593, 943 (+39.2% year-on-year)
Portfolio Overall Unrealized Profit: S$135, 968 (+29.7%)
Portfolio YTD Unrealized Profit: S$68, 660 (+11.5%)
Portfolio XIRR (including dividends): 14.63%
Portfolio XIRR (2019): 48.71%
Dividends Collected (1H2019): S$13, 410 (+11.6% year-on-year)
Current Warchest: S$7, 800

Portfolio Actions in 2Q2019:

  • Initiated positions in APAC Realty, Propnex Group, HRnet Group, F&N and UOB
  • Took SCRIP dividends for OCBC
  • Took SCRIP dividends for Raffles Medical
  • Applied & allocated 1000 units for Frasers Centrepoint Trust's preferential offering

Singapore Market Becoming A Top Hub For REITs
Global markets had quite a roller-coaster ride from May to June, right? It had been a hectic quarter as I opened my warchest and deployed funds according to my preset investment plan. The escalating trade tensions between the US and China turned out to be a blessing in disguise, especially for my portfolio. A synchronized global slowdown would prompt the US Federal Reserve to be more dovish in the second half of 2019. And we all know REITs generally thrive in a dovish environment. First, prolonged low interest rates would reduce the burden of debt refinancing for REITs. Although the REITs I am currently holding have healthy gearing ratios (below 38%), I don't mind a 'helping hand' from a dovish Fed. Second, an extended period of low interest rates would lead to a world that is hungry for yield, thus boosting the demand for yield instruments such as REITs. Those glorious days of high fixed deposit interest rates are not coming back, ever. This is the new norm now. We have to face reality and make the best of it. 


Singapore's economy has become a capitalistic utopia/dystopia, depending on your perspective. It is a system of rental income extraction by entrenched giant landlords (REITs). Many developed countries with matured real estate markets do show similar signs. For example, collectively, the local retail market is dominated by CMT, FCT, MCT, Suntec REIT and Starhill Global. If one is invested in all these retail REITs, he/she would essentially gain exposure to almost all major shopping malls in Singapore. The Pioneer Generation did not have the opportunity to participate in this rental extraction bonanza. As the third generation Singaporeans, we should thank our lucky stars and try our best to extract as much financial benefits as possible out of this 'rental economy'. In my opinion, real estate is one of the very few business sectors left that is still resilient to disruption. For example, even a disruptive and fast-growing tech company like Grab has to lease office space for its employees. Grab will be leasing its new, state-of-the-art headquarters from Ascendas REIT at One-North business park. This new building will house Grab's largest R&D centre as well as around 3000 employees. Being a unitholder of AREIT, I stand to capture some of Grab's future growth indirectly.


Less Obsessed On Beating The Market
The grim reality is that most retail investors fail to beat the market over the long-term. Even professional active investment fund mangers struggled to outperform the market consistently over many years. All the fees and commissions erode long-term returns. The more actively you trade, the more harm you do to your portfolio. Our worst enemies in investing are often ourselves. So, how do we, as individual investors, beat the market? Well, we don't. Ignore the 'beat the market' hype that pervades the investing scene. 

We are not highly-paid fund managers who need to answer to demanding clients every quarter. No one to pressure me to take profits when the market appears 'frothy'. No need to chain ourselves rigidly to the STI performance benchmark. We are not competing against rival managers to attract more clients. We are in competition only with ourselves. I am alright that my portfolio performance does not beat the STI every year, as long as my dividend growth rate does. Don't get me wrong, I am not saying it is fine for my portfolio to be decimated more than 50% in a year. Nobody wants that! I'm just saying that I am no longer obsessed with a few percent gyrations in my overall portfolio. In any given year, under-performing the STI by 2%-5% is no big deal to me.  I stick to my dividend growth strategy.


Be Informed Consumers Of Media
News can be a good source of information if you are able to interpret and use it properly to your advantage. Avoid knee-jerk reactions to every headline. Most media outlets are profit-driven businesses. They want to turn a profit. They must turn a profit, or else they will go out of business. Their bread and butter is always selling advertising. To garner higher advertising revenues, they must attract eyeballs. The new views they get, the more the advertisers are willing to pay. As the saying goes 'If it bleeds, it leads'. News programmers know, if they lead the evening prime-time news with a heart-warming story of students performing a concert at a nursing home, no one will watch. They know they must lead with fire, mayhem, murder, robbery, riots, scandals and controversies. Bad news sells, especially Trump's tariff tweets. This is the media industry's way of maximizing profits. 


The more your money works for you, the less you have to work for money
Dividend Warrior
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Many investors believe that timing the market gives better returns and reduces risk. I am afraid that's not the case.
If you are in your thirties, you can expect to live through roughly 10 more bear markets, big and small, at least. Are you really going to freak out, panic and go fully into cash every time? It makes no sense. Market timing doesn't work over the long run. It just... doesn't! Financial advisors and investment managers would try to convince you they don't do market-timing, but they actually do. They 'packaged' their sales pitch in a different way, using fanciful investing jargon such as 'downside protection', 'asset-class rotation', 'tactical allocation', 'style-rotation' and 'sector-rotation'. All these strategies imply that they are able to predict when to move from one part of the market to another, which honestly they don't. Nobody does!

Lots of investors miscalculate/underestimate the risk of bad market timing. They assume that they possess great 'predictive powers' that allow them to sell at the top now and re-enter the market at even lower valuations in the future. Sell high, buy low, right? Safety first, right? Unfortunately, the risk of being out of the market is far greater than the risk of being in.

Alice and Jane received their annual bonuses of $10k each. Alice decided to invest all at once. Jane decided to wait in cash. 3 possible scenarios will always play out.


In the end, over the long run, being on the sidelines often results in permanently missing the upside. For example, REITs have rallied ferociously from their Nov/Dec 2018 lows over the first half of 2019. Yes, their prices might go back down, but will it go back to their previous lows? Maybe not. If prices don't go back down to that level, investors who avoided REITs will never be able to capture that returns again. A potential 10% capital appreciation and a 6% DPU yield in a year is a rather huge opportunity cost. 

The masses get it wrong, the media gets it wrong, the economists get it wrong, investment managers get it wrong and so does just about everyone else. Corrections are going to happen. Bear markets are going to happen. Bad things happen all the time around the world. You will do more harm to your portfolio than good by trying to 'predict' your way through them.

"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves....." 
~ Peter Lynch
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Dividend Warrior by Dividend Warrior - 1M ago
"By three methods may we learn wisdom. First, by reflection, which is noblest; Second, by imitation, which is easiest; and third, by experience, which is the most bitter" 
~ Confucius

All investors are hard-wired with human emotions. When we experience failure in our investments, usually it's self-inflicted, which makes dealing with it objectively a daunting task. One of the best ways of speeding up our learning process is to examine and understand the blunders committed by others. This way, we increase our probability of avoiding similar setbacks. Fro example, one of my golden rules is to avoid S-Chips. After witnessing countless scandals/frauds associated with S-Chips over the past decade, they simply not worth the risks in my opinion. The latest corporate drama surrounding Best World reinforced this golden rule. There are two ways you can learn from others' experiences.

  1. Strive to replicate success. Kobe Bryant studied Michael Jordan. Paul Tudor Jones studied Jesse Livermore. Warren Buffett learned from Benjamin Graham.
  2. A different approach is to analyse stories of failures. Try to avoid whatever it it that tripped that person or company up. As Charlie Munger once said "Tell me where I'm going to die so I never go there."
These are my 6 Golden Rules after learning from the mistakes of others over the last decade.
  1. No airlines
  2. No S-Chips
  3. No penny stocks
  4. No O&G stocks
  5. No shipping stocks
  6. No utilities/infrastructure

Ego Getting In The Way
Our inability to process information that challenges our ego is one of the biggest reasons why many investors fail to capture good returns. There is a name for this natural mental malfunction. It's called cognitive dissonance. This type of behaviour is not limited to the Average Joe investor. In fact, the more experienced you are, the more confident you are, and the less likely you are to accept you're wrong, even when evidence goes against your belief. For example, some people have been bearish on S-REITs since 2017, citing the Fed rate hikes as a potential reason for a crash. Now, in 2019, the 'crash' did not materialize, even amidst a raging trade war. Despite 3 years of DPU and NAV growth while maintaining healthy gearing levels and WALE, this minority group of naysayers are still adamant of a 'REIT crash'. Admitting that they are wrong would be too painful, maybe even embarrassing, because it means they missed out on the substantial cash distributions as well as capital gains over the years.

"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." ~ Mark Twain

One of Warren Buffett's strengths is his willingness in acknowledging his mistakes. We need to recognize that mistakes are part of the investing journey. My way of guarding against overconfidence is to list down all potential risks/threats that a company might face before investing in it. I take constructive criticisms of my portfolio seriously. Criticism is information that will help improve my investing strategy.

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Yesterday, I attended an appointment at Toa Payoh HDB Hub and settled the downpayment for my HDB BTO flat using my CPF OA savings. I also paid the 'Buyer's Stamp Duty' as well as conveyancing fees. This is another step closer to owning my first residential property on this lovely tropical island. My second pot of gold! 



  • The entire process took roughly 15 to 20 minutes. Not much verification of documents involved. The important thing is to remember your HDB Portal and CPF log-in passwords and bring along your smartphone/OneKey token. You are required to log into the HDB Portal on-the-spot to complete the transaction. 
  • The HDB staff informed me that the key collection date should be in March/April 2023 tentatively. Could be earlier depending on the construction progress of the main contractor.
  • The HDB staff also provided guidance on the home financing matters. She advised me to pay for my flat in full when I collect the keys 4 years later. Right now, after settling the downpayment, there is around $126k left in my CPF OA. Over the next 4 years, my CPF OA savings would continue to earn 2.5% interest annually and I would keep contributing to my CPF OA through my full-time job. All these add up. By 2023, my CPF OA savings should exceed $150k, so I do not need a housing loan. Buying a new flat, but staying debt-free. How awesome is that! To all my foreign readers out there, the public housing system in Singapore is pretty sweet right?  (>_<)
  • The $500 option fee which I paid during my flat-booking appointment back in April would be reimbursed to my bank account. 
  • After settling the downpayment, I was told to visit the SP Group counter/booth to find out more about the 'Centralised Cooling System'. This is a pilot project. The SP Group representative explained that chiller units would be built on the roof-tops of each HDB block, and the chilled air would then be piped into our flats. There is no need to do maintenance on individual condenser units because there aren't any. This is the main selling point for me. My parents had to change the faulty condenser unit in their old flat numerous times over the last 20 years. That was rather costly and troublesome. In terms of pricing, the representative candidly stated that it should be cheaper than conventional air-con, 'otherwise nobody will sign up' (his own words).

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The period of relative calm in the markets was rattled by an endless stream of provocative tweets from US president Trump as the US government ratcheted up the trade war and tech war against China. Oh boy! Did the global media have a field day on this latest development. Some of the headlines were more fear-inducing than horror movies. Droves of analysts, experts, economists, fund managers, talk-show hosts are talking about an impending recession in 2020. Or was it 2021? Sorry, these people keep changing their minds. Everything seemed rosy and bright between January and April, remember?

Look, don't get me wrong. I'm not saying that the trade tech war is a non-event. You should be concerned if you have huge positions in shipping and tech/semi-con stocks. However, there are lots of other industries not even remotely affected by this. It's business as usual for these sectors. Life goes on. You won't hear Marvel fans saying "Hey honey, let's not watch Avengers: Endgame at the cinema because some intelligent people said a recession might be coming."

Many investors still do not understand that stock prices fluctuate all the time. Sometimes, they fluctuate more. This is not the first trade war the world has experienced. The US waged  a trade war against Japan and a Cold War against the USSR back in the 1980s. Strong, capable management will adjust and work out solutions over time. They always do. Kerry Logistics, a Hong Kong firm, has said that trade tensions are actually boosting activities in Southeast Asia. Which S-REIT has lots of warehouses in the SEA region? Yup, you've guessed it! Mapletree Logistics Trust. It's unit price has been rather stable ever since the trade war erupted, closing at $1.48 on 10 May before the avalanche of Trump tweets and closed at $1.49 today.
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Dividend Warrior by Dividend Warrior - 2M ago
Time horizon is a critical factor in retirement planning. It is the duration you need your assets to work for you, usually spanning 20 to 30 years. Over that few decades of retirement, a person's purchasing power can be seriously eroded by the inflation monster. Nobody wants to get to 80 and discover the money has run out. That's not fun. Aged poverty is cruel, especially in Singapore where the costs of living is high and the medical fees even higher.

One of the potential big mistakes early FIRE wannabes make is underestimating the effect of inflation. Sure, the numbers look rosy right now. Mr. X is able to enjoy his carefree life, playing computer games at home, playing Magic The Gathering with his friends and cultivating bonsai at his balcony. However, his lack of a stable monthly salary affects his ability to grow his portfolio, not to mention the lack of contributions to his CPF account. Most of the dividends he received would be spent on living expenses, leaving little for re-investment. If he delays his retirement by just another decade, things would be so much better. 45 is still a pretty early retirement age. All the salaries & bonuses he received in that extra decade of full-time work would enable him to grow his portfolio to a point where the returns can compensate for inflation. Furthermore, all the contributions to his CPF savings in that decade would allow him to enjoy a larger CPF Life payout at 65 years old.

Achieving Sustainable Financial Freedom
My advice to all those early FIRE otakus is to take inflation into consideration. If you are relying on your portfolio providing the cash flow to cover all your living expenses, you likely need some growth, just to increase the odds of your portfolio cashflow keeping pace with inflation. With this in mind, I would suggest:

  1. Delay your retirement, even if the figures show that you can retire comfortably right now in your 30s or 40s. Take my situation for example. I have a $550k portfolio generating annual dividends of $28k. I still intend to keep working.
  2. Keep your mind active and your body mobile by engaging in part-time work that you enjoy. That extra income can help you keep pace with inflation.
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Investing is really all about laying out cash now to get more back later. The earlier you start investing and the more you invest, the greater your money will compound over time. I do enjoy allocating my dividend cashflow. In fact, I have been rather active in deploying my funds in the current volatile market. It's no secret that global wealth is concentrated in the hands of the elites, the top 1%. It's time we claw some of that wealth back.

Are the Rich Getting Too Much of the Economic Pie? - YouTube

When I first started dividend investing, my main objective was to achieve financial independence by building a steady passive income stream. Another motivating factor was my desire to benefit as much as possible from economic growth. In our capitalistic system where wealth is distributed ever more unevenly, how do I get my fair share of the 'economic pie'? One of the best ways is to invest, to own wonderful businesses, especially those with low capex requirements, asset-light and highly cash-generative. Find companies that gush cash and require little capital re-investment. Buy a 'cash machine' and hold it forever.


Do what works and keep doing it
Dividend Warrior
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Last month, I wrote an article on the 'Middleman Economy'. Thanks to Trump's tariff tweet, Mr Market gave me a chance to pick up some well-run 'middleman' businesses such as HRnet Group, APAC Realty & Propnex. I also initiated a small position in F&N. It has a 20% stake in Vinamilk, which has been growing well 2017-2018. Be greedy when others are fearful. Do your research, draw up a plan and follow the plan. No opportunity to add any quality REITs as all of them remained resilient this week despite an escalation in the US-China trade war. My theory is is that if the trade war crimps global growth this year, the Fed is more likely to maintain rates or even cut rates. Guess which asset class will benefit from a rate cut? (。•̀ᴗ-)✧
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*Portfolio market value as of 3 May 2019



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*An increase of 26% compared to 2Q2018 passive income

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