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4Q 2022 passive income: More resilient portfolio.

Sunday, January 1, 2023

AK did not get to be lazy in 4Q 2022 as reallocation of resources continued in the quarter.

2022 has turned out to be quite a demanding year.

In equities, I reduced exposure to a plethora of stocks to raise funds to increase exposure to the local banking sector.

This is consistent with what I shared in a blog published in the middle of October.


DBS, OCBC and UOB at 40% of portfolio.

The banks are in a good place to enjoy a strong tailwind provided by rising interest rates.

Even in a recession, the banks should continue to bring home the bacon as they are well capitalized and should have no problem paying dividends.

Nothing was sacrosanct in the reallocation exercise and several very small positions in my portfolio were closed down while some larger positions were reduced in size.

Apart from OCBC and UOB, I could not resist increasing the size of my investment in IREIT Global as the fundamentals remain sound and the REIT's unit price hit what I felt to be distressed levels.

It would be impossible to buy any asset owned by IREIT Global at about 40% discount to valuation but we could if we bought some of IREIT Global from mid 3Q to 4Q 2022.

To be fair, that 40% discount to valuation could reduce somewhat as the REIT is going to take some time to backfill the space at Darmstadt vacated by Deutsche Telekom.

The valuation of that particular property could come under pressure, therefore.

However, if we are investing in properties for the longer term and we should be, it isn't a tragedy that it might take some time to see results as the space will be leased out eventually.

IREIT Global has the most defensive financials I can find amongst the REITs which I own while offering a distribution yield of around 8%.

With the accumulation of IREIT Global in 4Q 2022, it is my largest investment in the S-REIT universe today.

IREIT Global: Short term pain.

I also added to my investment in Wilmar International as the business became more profitable in spite of a challenging environment.

In the worst case scenario where we see stagflation, I have an inkling that Wilmar International could outperform as the world faces a food crisis.

I nibbled at LION-OCBC Hang Seng Tech ETF as it overshot the low formed on 15 March 2022 but like I said in an earlier blog, it would likely be the last time I added to my position in the ETF as I am not too keen on trading regularly in order to make money.

Too lazy.

I did subsequently reduce exposure when the unit price rebounded in November. 

I reduced exposure again in early December as the ETF's unit price rose to test resistance provided by the descending 200 days moving average which was approximately at 71c:

Hang Seng tech ETF: BUY or SELL?

Those couple of trades produced a capital gain of around 23% and reminded me of why I spent so much time trading the stock market many years ago.

Some readers might remember that I shared in my blog as well as during one or two "Evening with AK and friends" that I made around half a million dollars in my adventures as a stock trader many years ago.

Trading stocks could be financially more rewarding than investing for income but it requires more activity and some knowledge of technical analysis.

I have decided to become more laid back in recent years to spend time on other things in life.

Anyway, the average price for my remaining position in the ETF is probably low enough to make Chinese tech stocks look cheap even to value investors.

A simple reversion to mean would result in a capital gain for me.

I do not need to see euphoria and the ridiculously high valuations when the market was sloshing with almost free money in order to have a good result here.

However, it is a tiny position in my portfolio and it would not move the needle much.

In bonds, I have put money earmarked for contribution to my CPF account into Singapore Savings Bonds (SSBs) while money from maturing fixed deposits went into Singapore Treasury Bills as yields of these government bonds reached levels which I found to be more attractive.

Blogs on SSBs and Singapore Treasury Bills:
1. SSB 2.44x oversubscribed (27 Oct.)
2. 4.19% yield on T-bill!(28 Oct.)
3. 3.47% 10 yr average yield! (1 Nov.)
4. 3.47% p.a. fully allotted (28 Nov.)
5. 4.4% yield on T-bill!(9 Dec.)
6. 4.28% 6 mths T-bill. (21 Dec.)
7. SSB: Mission accomplished.

The changes made in 4Q 2022 to my investment portfolio is consistent with what I have said many times before and that is not to be overly optimistic nor overly pessimistic but to stay pragmatic.

Having a percentage of my portfolio in fixed income like SSBs and Treasury Bills now while staying invested in equities which I feel will likely outperform fixed income (including my CPF savings) in the longer term should result in a more resilient investment portfolio.

If I feel that equities would outperform in the longer term, why am I still putting money in fixed income?

It is about having peace of mind as an investor.

Fixed income instruments are important for investors who cannot afford or at least feel that they cannot afford to be too adventurous as fixed income helps in reducing the volatility in our portfolio.

Not everyone is able to stomach greater volatility, whether it is due to a lack of financial ability or  mental strength to do so.

Now that yields are reasonably attractive, they also help to reduce the cost of insurance that is the opportunity cost of not getting possibly higher returns.

There were times when I was very adventurous as an investor and I was fortunate to be well rewarded many times but I also suffered losses sometime.

The emotional roller coaster that came with being more adventurous wasn't a lot of fun either.

Anxiety and depression are only interesting topics to psychiatrists.

1. Peace of mind as an investor.

2. When to worry? What to do?

Having said this, I am also partial to fixed deposits which offer relatively high interest rates as I continue to maintain a meaningful cash position which is mostly my emergency fund and float.

This cash position has helped to keep me sane during bad times and it still does.

What about the opportunity cost of not being invested?


Do you believe in insurance?

I do.

I know that some people don't.

The cost of insurance is worth it, in my opinion.

4% p.a. 6 months fixed deposit.

What about my war chest?

There isn't much left in my war chest as the funds have been substantially deployed.

Well, regular readers would have an inkling that there wasn't much in my war chest to begin with as I lack an earned income and consume most of my passive income.

Inflation, passive income and budget.


Even the government takes pity on me and gives me money every year.

Anyway, enough of self pity.

So, how much passive income did my portfolio generate in 4Q 2022?

S$ 25,331.81

It is a relatively small sum compared to passive income in 3Q 2022.

However, to put things in perspective, 4Q 2021's passive income was:

S$ 21,283.82

So, year on year, 4Q 2022's passive income came in 19% higher.

Looks more impressive percentage wise but I get it that the dollar value increase is smaller compared to 3Q 2022 which saw a smaller percentage increase at less than 10% improvement, year on year.

4Q 2022 passive income includes income received from 6 months Treasury Bills which I started buying only in October.

This new passive income component is a relatively small trickle but every little bit helps.

My passive income for the whole of 2022 is:


This is almost 20% higher when compared with S$171,854.30 generated in 2021.

Average passive income per month in 2022 was about:

S$17,166 per month.

Can't really complain.

I am contented.

Now, I ask an important question.

What is 2023 going to be like?

It is more likely than not that recession is coming to many parts of the world even as we get used to the idea that higher inflation is going to stay with us for some time to come.

So, with inflation high and economic growth evaporating thanks in part to rapidly rising interest rates, we could also see stagflation.

Therefore, I would be quite happy if my passive income in 2023 is similar to 2022, give or take a few percentage points. 

Not going to raise the bar as I could be disappointed.

What else am I telling myself?

As an investor for income, I cannot dictate how much my companies should pay me but I can certainly tell myself how to spend my money.

What to do?

Will have to tighten my belt.

Buckle up for a bumpy ride.

Don't throw caution to the wind.

Hold on tight to our emergency funds for dear life!

50% do not have enough savings!

I continue to remind myself that fixed income investments are more attractive than before. 

Having a meaningful percentage of risk free and volatility free T-bills and SSBs in my portfolio is not a bad idea.

The CPF might not be as sexy a "fixed income" instrument but it isn't wrong to keep thinking of it as an investment grade bond with a significant annuity angle.

The CPF still works as a risk free and volatility free investment grade sovereign bond which helps to provide a greater degree of certainty when it comes to retirement funding.

These fixed income options help to form the large base of my investment pyramid.

Motivations and methods in investing.

I also remind myself the importance of staying invested in bona fide income generating businesses which generate meaningful and sustainable income for us.

Getting rich slowly isn't as sexy as getting rich quickly but like I said before, the journey to financial freedom is not a race: HERE.

In summary, for regular folks, don't be too adventurous as having strong and reliable cashflow is important. 

To be clear, it has always been important but with heightened rising costs in so many forms and much greater economic uncertainty, it is probably more important than ever.

Focusing on our portfolio's ability to generate income and not our portfolio's market value (now or in the future) might not be a bad idea.

Remember, I prefaced these highlighted paragraphs with the words "for regular folks."

If you are a very rich or "jin satki" person, it might not apply to you.

If you are not very rich or "jin satki" but act like you are, good luck to you.

Very rich people can take a few hard knocks and still survive.

For example, they could lose a few hundred thousand dollars or more in Tesla or Alibaba but still stay rich.

Those who are not very rich might find themselves in financial distress especially if they had borrowed money to do the same.

Peace of mind is priceless.

2023 is likely to be a relatively difficult year for most regular folks.

Stiff upper lip and stay the course.

As long as we are moving in the right direction, we should make incremental improvement and move towards financial freedom. 

Discipline and patience will be rewarded.

All in good time.

Happy New Year.


Growing passive income: Equities, CPF and bonds.

3Q 2022 passive income: Stunned!

4Q 2021 passive income: Don't lose hope!


Unknown said...

Happy New Year AK! As usual, always inspiring to read your mumblings to yourself about the past one year, what you have achieved, and your outlook in 2023! =)

Yv said...

A very Happy New Year to you AK.

Thanks for sharing generously with us your "peace of mind" advice and the fat fruits of your labour.

HappiSnoey said...

Gd am AK, have been a silent reader since 2014. The irony of it all is that I only started to be more active in building my financial literacy after I am diagnosed with incurable cancer in my early 40s (yes... even with today's medical advancement). Doc said that he can only do so much in prolonging my life and I could only pray and stay positive. Lo and behold, its been 9 years, so I think I should make an effort to write to you (before its too late, you never know) and thank you for your unselfish and funny "talking to yourself" posts. Like you, am a regular folk, and can't be too adventurous. I have stopped working since, so am thankful that I have insurance coverage for my cancer treatments. Sadly since last Oct it is no longer 100% due the insurer's change of policies. It is important not to underestimate the medical costs. FYI, my cancer drug costs about (eye popping) $450 per day. My take away is that no one can predict how long we can live (healthy or not), so it is safer to take a more prudent approach with our financials.
May your new year be filled with joy and peace! Blessed 2023 Ak and family!;)

Star and Skies said...

Thanks so much AK71 for always generously sharing your wise wisdom here. Just wanted to say I am truly grateful that you took the time to share here, the importance of eating bread with crusty ink is finally sinking in especially as I get older and financial literacy start to matter. I have topped up my CPF today instead of throwing the money away on shopping as previously, but I wouldn't have known how to do it if you hadn't shared how so thank you so much again. Happy New Year and may 2023 be a smooth and fun year for you!

AK71 said...

Hi Unknown,

Happy New Year! :D

If my blog has inspired readers to achieve financial freedom, I am happy.

Thanks for the affirmation. :)

AK71 said...

Hi Yv,

Happy New Year! :D

It is definitely possible to achieve financial freedom in Singapore.

My way is just one way to do it, of course. :)

AK71 said...

Hi HappiSnoey,

I want to say I am sorry about your illness but I think I shouldn't.

Instead, I will say thank you for sharing with us your situation and also your wisdom.

Indeed, we don't know what might happen in the future.

It is only prudent not to be too optimistic and throw caution to the wind.

If things should go terribly wrong like they sometimes do, knowing that we have a strong balance sheet will provide some solace.

I hope 2023 will be a good year in one way or another for you. :)

Unknown said...

Hi AK,

Your trading record has much allure. What stocks were you trading back then?
I guess Singapore stocks are so hot for trading?

Happy New Year,

AK71 said...

Hi Star and Skies,

Oh, thank you for reminding me about eating crusty bread with ink slowly.

I forgot to include a link to that blog.

Will do it at the end of this comment later.

Indeed, Warren Buffett was right that when the tide goes out, we would know who had been swimming naked.

With interest rates rising, the tide is receding and people who were thriving in a zero interest rate environment speculating in risky "growth" assets are facing the music now.

I am glad that talking to myself here in ASSI has inspired and even helped some readers.

Saving money is definitely an important component in our journey towards financial freedom.

If AK can do it, so can you!

Happy New Year! :D

1. Investors eat crusty bread with ink slowly for peace of mind.
2. Common piece of advice on saving money.
3. Save 100% of our take home pay.

AK71 said...

Hi KK,

That was a long time ago.

I only traded Singapore stocks and so many of them too.

Cannot remember all of them by now.

There are always trading opportunities in the stock market.

Trading just requires a lot more work compared to investing for income.

I will say that even investing for income, we might get to make some nice capital gains from time to time.

Those gains, I accounted for separately as those were never intended to be trades but investments.

Happy New Year! :)

SgFire said...

Happy new year to Ak and lots of prayer and thank HappiSnoey for sharing your inspiring story. Keep positive and smile always

C said...

Thank you AK. "Eating crusty bread with ink slowly" is showing results for us, especially with recent spike in interest rates, we can clearly see friends with outstanding loans behaving like the proverbial "standing naked when the tide goes out".

Speaking of this, trying to buy a bit more Wilmar around $4. Not sure if should start buying around $4.12. My average price is 3.76.

AK71 said...

Hi SgFire,

Happy New Year!

Yes, wishing HappiSnoey the very best in 2023 too. :)

AK71 said...

Hi C,

Unfortunately, the proverbial phrase "spare the cane, spoil the child" comes to mind.

Sometimes, pain is the best teacher and I am speaking from experience.

Ouch. (TmT)

If we believe that Wilmar is worth a lot more than what Mr. Market thinks, then, it isn't expensive. ;)

1. Wilmar was $7.11 a share...
2. Wilmar International: Free stuff with every purchase.

Sandra said...

Congratulations AK, on your outstanding 2022 annual results, may you continue sharing your thoughts with your faithful and new followers. Happy New Year ☺️

AK71 said...

Hi Sandra,

Thank you for the encouraging comment.

I will probably continue talking to myself in 2023 and people can continue eavesdropping. ;p

Happy New Year! :D

Rellangis said...

Hi Ak,

Reading your blog is like taking a useful financial literacy course which everyone should take in my opinion. I am thankful for the bits of wisdom you tried to impart to your readers. I should also strive to write my own financial report card too for 2022 but I always procrastinate...

Btw, I noticed there are google ads in your blog. Dun they count as meaningful income for you to include as well?

Anyway a Happy New Year to you and family! May 2023 be a better year for everybody!

AK71 said...

Hi Rellangis,

Oh, I can understand being lazy.

I do that very well. ;p

You can see the Google Ads?

Thank you for not using Ad Blockers. :)

The ads do generate some revenue but very little.

Usually, the amount is less than $300 per month.

If I blogged daily and if I were more active in social media, the ads would generate more revenue but I don't have the inclination to do so.

Still, ad revenue, however little, is a consistent financial compensation for my time spent blogging.

So, thanks again for not using Ad Blockers. :)

Happy New Year! :D

The Dreamzola Traveller said...

Sometime it takes awhile to see the results of what we had planted, maybe years before we could actually see its effect. Looking back at my time, if I had not started my journey 17 years ago, I could be now among the group feeling the pains of rising inflation and job insecurity.

Now that I am getting older, I don take much risk as before. Prefer to put some of it in fixed deposits. Peace of mind is good for a nice good sleep. lol.

AK71 said...


I share your sentiments.

I didn't want to retire at 65 years old and thought 45 years old would be a nicer age to retire from work.

It took years of planning and disciplined execution but it all started with a plan.

Really cannot imagine going back to work now.

Anyway, if I were a prospective employer, I wouldn't employ me today. ;p

These days, I see young people who want to retire by 40 or even 35 years old.

F.I.R.E. is burning bright. :D

Don't "walk F.I.R.E. and enter demon" can liao.

Safety first. ;)

Retiring by 40 is a fantasy for most.

Ok said...

AK, hello.

After reading your blog, it dawned on me that i squandered nearly three decades not investing and my savings have been eroded by inflation, wondering what would you invest in if you were nearly 50 years old now, appreciate your soliloquy, and wishing you a fruitful new year, thank you.

AK71 said...

Hi Ok,

I am 51 years old this year and I will tell people in my age group that we should not be too adventurous as investors.

I have a blog on this topic in reply to another reader who feels the same way you do.

Hyperlink to the blog here:
Retirement adequacy for late bloomers 101.

As per point number 4 in the blog, if we have some spare cash to invest with, go for bona fide income generating businesses with strong balance sheets.

Of course, they should also pay meaningful dividends which would help to fund our retirement.

We don't want to have to delay our retirement or come out of retirement because of an investing adventure gone wrong.

You might be starting later but it is still better than not starting at all. :)

Happy New Year! :D

EX said...

Hi AK,

Everyone has commented so I felt I had to say something too. Haha Just a simple word of Thank You is not enough for the advice you have given throughout the years. Appreciate your selfless sharing and prompt replies. May the New year bring you health, wealth and happiness!!

AK71 said...

Hi EX,

Thank you for the well wishes. :D

If talking to myself here has helped some readers over the years, I am glad. :)

Good health, more wealth and greater happiness for all of us in 2023, please. ;)

Hope not being too greedy. ;p

^_^ said...

why u so scared to show your face? did too many bad things in the past?

AK71 said...

Hi ML,

I shy. ;p

Winnie said...

Hi AK - I know it’s easier said than done, but pls ignore these keyboard warriors. I don’t understand why people need to be so mean (looking at MasterLeong). It’s an irony when himself is hiding behind a nickname. I have nothing but gratitude to you, for your yong xin liang ku sound bites to us on financial freedom. And it makes me sad to know that this had impacted your mental health somewhat, when you gain nothing out of it.
Just remember for every 1 of those trolls, there are many more who are thankful to you and your blog is making a positive impact to many lives. Gambate!

AK71 said...

Hi Winnie,

Thank you very much for the encouraging "Gambate!"

Nice to be on the receiving end once in a while. :D

To be honest, blogging has been rewarding too especially when I learn from readers how my blogs have helped them in one way or another.

It also helps that I have always enjoyed writing and it is quite natural that I enjoy blogging too.

So, I have gained from blogging. :)

Some people tell me that the anxiety is self inflicted and it is probably true when my psychiatrist told me that Earth would still revolve without me feeling responsible for it. LOL.

The truth hurts. ;p

Simply put, I just have to try to be more ZEN or, putting it negatively, apathetic.

Thanks so much for your kind words.

Gambatte, I will remember. :D

^_^ said...

why u so scared to show your face? no balls ah

^_^ said...

how u so scared to show your face? too many enemies? no balls?

AK71 said...

ML is trolling AK.

Very cham liddat.

Unknown said...

Hi AK,
Firstly, thank you for sharing your investment experience and journey.
A quick question and apologies if it had been asked and answered in the past.
When you share your passive income generated, does that include CPF interest earned or accrued ? Thanks.

AK71 said...

Hi Unknown,

Don't thank me because I am just talking to myself here in my blog. ;p

I blog about passive income from my investments and interest earned in my CPF account separately.

Separate accounting.

This makes sense since I cannot withdraw my CPF savings yet.

I blogged about CPF interest earned a few months ago:
More than $1.1 million in CPF savings.


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