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DBS Share Price To Stay Higher For Longer.

Tuesday, February 11, 2025

I have said for many months that interest rates are likely to stay higher for longer.

Higher for longer interest rates are good for not only savers but also investors in DBS, OCBC and UOB.

In their latest results, DBS said that they expect net interest income to come in slightly higher this year due to this.

This is a change from expectation for net interest income to stay flat or weaken, year on year, as the Fed cuts interest rates.

The Fed is now expected to keep interest rate on hold and might only cut towards the end of 2025.

The number of rate cuts this year expected by Mr. Market has gone from 5 to only 2 now.

This bodes well for DBS, OCBC and UOB.

Coupled with strong growth in their wealth management business and income from fees, we could see earnings surprising to the upside.




DBS has already announced a higher final dividend of 60c per share which is about 10% higher than the 54c per share a year ago.

They are also going to introduce a 15c per share per quarter payout over the next two years.

This is a return of capital to shareholders as the bank has plenty of excess capital.

This brings the payout per quarter to 75c per share.

Mr. Market really likes this and has sent the share price of the bank higher and it is quite possible that it is going to stay higher for longer, just like interest rates.

So, people ask me when am I selling my investment in DBS?

I have said before that 2x book value was something I was looking at.

However, with the recent development, this has to change.

With an additional payout of 15c per quarter per share which increases the dividend by 25%, I would be giving up a lot in terms of passive income by selling now.

As I expect the share price to stay higher for longer, all else being equal, it could be a long wait before I get to buy again at a lower price.




While waiting, the NAV of DBS would continue to climb higher.

Some might say that a gradual return of capital over the next two years means that DBS' NAV would be impacted.

However, I would highlight that it is only 15c per share per quarter which would be more than covered by retained earnings which means the NAV of DBS would still be growing.

Just some back of the envelope calculation.

60c DPS from a 50% payout.

60c per share retained earnings.

15c per share capital reduction.

The bank is still growing by 45c per share per quarter.

This means that using NAV as a guide to sell, the target price to sell would only move higher over time.

Given the current situation, the share price has more room to move higher.

JP Morgan is now trading at 2.3x book value.

Could we see DBS trading at 2.3x book value too?

I expect UOB and OCBC to surprise to the upside to, barring unforeseen circumstances.

Investing in DBS, OCBC and UOB, increasing the size of said investments and staying invested has been most rewarding.

If AK can talk to himself, so can you.

Recently published:
Dividend Machines Are Crucial As CPF SA Closes.

Dividend Machines Are Crucial As CPF SA Closes.

Monday, February 10, 2025

Been a while since my last blog post.

I have been busy with many things at home and I have not been looking at the stock market.

The last time I did anything in the stock market was in December last year when I bought some shares of Alibaba and Wilmar.

Fortunately, my investment portfolio is on "auto mode."

More or less.

It doesn't require constant attention from me.

It simply generates passive income for me regularly and all I have to do is to check my bank account on a monthly basis to see how much I have been paid.

This is still something I have to do since I don't want to overspend and I have to allocate excess capital.

In recent weeks, when it comes to excess capital, all I did was to maintain my T-bill ladder and this was something I have produced blogs and videos on.

T-bills are still a good place to park excess cash for now as I wait for better investment opportunities in the stock market.

Interest rates are likely to stay higher for longer as the Fed is no longer as interested in cutting rates as they were in the second half of last year.

This is of course good news for my relatively large position in DBS, OCBC and UOB.

All three banks are likely to continue paying meaningful dividends and they could pay more in 2025.

This is because they have plenty of excess capital.

Having said this, it is important to mention that I am not always flushed with excess capital.

There will be months when I don't receive any dividend or very little.

First and fourth quarters are usually drier.

January usually sees a drought!

I received zero dividend in January 2025!

However, my investment portfolio still generated 42% higher passive income in January, year on year.

This is all thanks to T-bills and Singapore Savings Bonds.

Fixed income.

I have been stashing more money in T-bills and SSBs.

To be sure, the passive income in dollar terms is not mind blowing.

January 2025: $1,491.93

January 2024: $1,046.20

It is an increase of some $450.

Enough to cover some of my routine expenses.

Of course, if I had mainly relied on something like this over the years, I would not have what I have today financially.

This is just part of my financial pyramid and it contributes to my portfolio's stability.

Of course, regular readers also know that I like the CPF system very much but with the CPF SA going away once we turn 55 years of age, we have to be less reliant on the CPF to fund our retirement.


Investing in the stock market is still something that every regular person should seriously consider in order to have a more comfortable retirement.

How to get it right most of the time?

I have shared my methods and philosophy here in my blog over the years and more recently in my YouTube channel.

Some have asked me if I could conduct investment courses but, of course, readers who have been following me for many years would know my answer to that.

However, it is that time of the year again and for anyone who is interested to learn how to invest for income, "Dividend Machines" is open for registration again.

"Dividend Machines" is the only course I have promoted yearly since its founding so many years ago.

It is not only well structured, it is also well priced and does not cost thousands of dollars.

It is run by my friends at The Fifth Person and some of you interacted with Victor who was the guest speaker during "Evening With AK And Friends 2025."

Anyway, if you are interested in growing streams of passive income and you should be, have a look:

Dividend Machines 2025.


If AK can do it, so can you!


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