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This is just a quick blog to remind myself what I am going to do this week.
Yes, more of AK talking to himself.
Eavesdrop at your own risk!
If you are not the risk taking type, stop reading now. ;p
Don't worry.
You are not going to miss out on anything, I feel.
This blog isn't going to be about anything earth shattering or mind numbingly ingenious.
It is just going to me sticking to my plan which is to generate more passive income.
It is about being pragmatic and putting money to work in bona fide income producing instruments.
No PONZI schemes please.
I want to continue my exposure to fixed income as their yields have become reasonably attractive in recent months.
So, I will be applying for Singapore Savings Bond with the remaining $14K originally set aside for CPF voluntary contribution in 2023 as planned.
I will also try my luck again with the upcoming 6 months T-bill.
I was lucky to get some 4.4% p.a. yield 6 months T-bill in the last auction.
Yes, it is luck, despite what some people might say.
It is an auction.
Who knows what is going to happen with any degree of certainty?
I know I don't.
Let's see what we will get in the T-bill chocolate box next.
I know many people want to know what the T-bill yield might be and some people will probably do some crystal ball gazing.
However, I am not going to bother anymore as when people thought that the yield would be higher, it came in lower and when they thought that the yield would be lower, it came in higher.
Alamak.
I blur liao lah.
How like that?
What does AK think about this?
Well, here is the brutal truth.
With a sum of $10,000 to $20,000 per auction, it won't move the needle much whether the yield is 3.9%, 4.2% or 4.4%.
Am I right to say that?
OK, I know.
Bad AK! Bad AK!
This applies only to AK!
Move on now.
Nothing to see here.
The next thing I want to do is still to increase exposure to the local banking sector.
I blogged about my intention to average up on my investments in OCBC and UOB in October.
However, I only managed to increase my investments in the banks by 11% and 19% respectively before their stock prices rose much higher.
There is a chance that OCBC might retrace to test support.
I see the longer term 200 days moving average at just under $12 while the shorter term 50 days moving average at just above $12.
So, that is probably the immediate band of support for OCBC.
That is probably where I would be buying again.
I remind myself that technical analysis shows where the supports are but it cannot tell if the supports will hold or break.
What if it breaks?
Looking at the weekly chart, the 200 weeks moving average is at $11.
I do not believe it would go that low as there is a trendline that is rising and should provide support at around $11.60 to $11.70 in the next couple of weeks.
Of course, Mr. Market does not care what I believe in and will do what he wants to do.
OK, this blog is probably longer than what I had in mind.
Stopping here.
In case I do not blog again until the new year, Merry Christmas and Happy New Year!
References:
1. Walk F.I.R.E. enter demon.
2. 4.4% yield T-bill: Sanity or...?
3. DBS, OCBC and UOB at...
Bloggy Award
12 comments:
Hi AK,
Blessed Happy New Year to you too.
While you were busy formulating your investment plans this week, I was busy banging my head against the wall watching the World Cup finals end in tikam tikam penalty shoot-outs. The worst kind of ending for a soccer match...
I have just tikam tikam this morning on the upcoming T-bill auction, and if I am not alloted, the funds will go into the CIMB FD ladder. Just nibbled abit on bank stocks. SSB - not decided yet.
Hi Yv,
I don't watch soccer and always crack the same joke about 20 silly men chasing after one ball whenever people ask if I watch soccer. ;p
I dread the World Cup season because of a neighbor who would stay up late with his kakis and cheered or jeered very loudly at crazy hours.
Fortunately, that neighbor has moved out a few months ago. :D
I am still waiting for a retracement to support which might or might not happen before I buy more OCBC.
The MACD shows that the positive momentum has weakened but at least OCBC isn't overbought anymore.
Have to wait and see.
Happy New Year! :D
Hi AK,
Here’s wishing u a Merry X’mas & Happy New Year in advance. “)
It’s been a rather fruitful year for me that I’ve managed to further grow my income generating assets/stocks at lower valuations prices.
Thanks for the heads up on your OCBC’s technical analysis, and yes I’m actually intending to further increased my investment in OCBC too. Unfortunately for UOB, which share price has gone up too fast since my last purchased at $26 in late October. Will wait for the next buying opportunity when there is one, hopefully.
From my observations, all three local banks financial results ended 9M22 Vs 9M21, their EPS have all increased. More so when their 4Q22 rising NIM & NII is taken into account when they announced their FU2022 results in Feb 2023. Thus I believe all three banks will likely be increasing their dividends payout to shareholders. 🤞🏼🍀
Cheers 🥂
i have been buying AA at $1.2 avg since October. Taking a pause now half-way thru my buying cycle.
Hi Eddy,
I am so glad to hear that 2022 has been fruitful for you.
Too much doom and gloom in too many quarters.
Having our feet firmly planted on the ground investing in bona fide income generating assets can hardly go wrong.
I also believe that the banks should increase their dividends and hope that they would.
Merry Christmas and Happy New Year. :D
Hi Siew Mun,
AA REIT is a solid choice as an investment for income, as both of us know. :D
A good price only makes it a better choice. ;)
Hi Ak
I have been buying sabana at 43c
Hi SgFire,
I like Sabana REIT too. :D
hi AK,thanks for the heads up. I was planning to park my funds with CIMB FD 6 mths at 3.95% but now thinking if I should just try my luck with T bills. If tikam not successful then go back to CIMB. Are you going for competitive or non competitive?
Hi EX,
Non-competitive bid for me.
I don't want to be accused of being a "sabo" king. ;p
I will either get all of my bid filled or some of it filled.
Although I said I was not going to predict what the yield might be, I don't think the cut-off yield will be lower than 3.95% p.a.
Crossing fingers. :)
Hi AK, I got in late, so far my average per share price for OCBC is around $12. Read all your posting regarding banks having tailwind while facing with potential downturn. Not sure whether to continue average up from here onwards. Hoping to have bank shares make up about half of my portfolio, but unsure now given my high entry prices..
HI C,
I find it easier to value businesses which are profitable and paying dividends.
This compared to businesses which are burning cash and promising growth.
The local banks are profitable and paying dividends.
They also retain approximately half of their earnings which means that they grow more valuable over time.
This is indeed the case with OCBC.
Looking at what Mr. Market thinks is a fair price to pay for OCBC, it was about $11 a share until not too long ago.
Now, it looks like $12 a share.
To be honest, I don't think that OCBC at $12 a share is a high entry price.
It is probably the fair price to pay now and it could actually look cheap in future.
We got our foot in the door already.
If Mr. Market goes into a depression, as long as the business is still good, we buy more.
Of course, we don't know when that is going to happen.
So, in the meantime, paying a fair price to increase our stake slowly as and when share price tests support is not a bad idea.
Paying a fair price for a good business is not a tragic event. ;p
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