DBS, OCBC and UOB. "Evening With AK 2025."

With DBS, OCBC and UOB doing so well in 3Q 2024, I had to take time off from gaming to produce a series of videos.

For those of you who do not follow me on YouTube, here are the videos:

----- ---------- ---------- ---------  

In that last video, I also talked about "Evening with AK and Friends 2025." 

Finally got around to getting it organised. 

Well, my friend, Kenji, is doing all the work, to be honest, as I am too lazy to do it. ;p

Anyway, if you have been waiting for the event, tickets are available now. 

The last I checked, only 50% of the tickets have been sold. 

So, no hurry. 

Make sure you are free in the evening of 15 January before buying a ticket. 

After this event, I will take another long break and maybe return after I turn 55 years old which I think of as another milestone in my life.

"EVENING WITH AK AND FRIENDS 2025."

TICKETS ARE AVAILABLE NOW: HERE.

https://fifthperson.com/external-events-ak-meet-the-readers/ 

P.S. If you are unable to make it, please don't feel like you are going to miss anything important because this is just an informal chit chat session with AK.

3Q 2024 passive income: Banks to the rescue!

Another quarter has gone by and it is time for another update.

For a change, I will reveal the numbers first.

3Q 2024 passive income:
$85.223.17

This is a slight reduction, year on year, as 3Q 2023 passive income was:
$85,307.78

Almost negligible difference but it is still a dip.

The reason for this is the much lower contribution from Sabana REIT which I drastically reduced exposure to.

The REIT was one of my largest investments but this is no longer so.

Losing one of my largest investments is bound to have a big impact on my passive income.

However, as the title of the blog suggests, thanks to higher dividends received from my investments in the banks, the impact is mitigated.

The money from the sale of Sabana REIT was used to strengthen my T-bill ladder which is, of course, my war chest.

I am in no hurry to deploy the money since I am already substantially invested in the stock market.

Looking at the investments which contributed the most to my passive income in 3Q 2024:

1. OCBC

2. DBS

3. UOB

No surprises here since OCBC is my largest investment at almost the same size as my investments in DBS and UOB combined.

DBS is going to generate more passive income for me because of the bonus issue which in effect gives a 10% uplift to dividends received.

UOB is, well, UOB. 

Conservative and plodding along but still more than decent enough return.

In a recent video, I said I would not be adding to my investments in the banks as their share prices hit all time highs.

I would wait for a pull back in prices before adding.

To be fair, at 1.2x or 1.3x book value or so, the common stock of OCBC and UOB do not look expensive.

So, if I were not invested in the local banks yet, those would be where I put money to work first.

4. IREIT Global

In a recent reply to a comment on the REIT, I said this:

"IREIT's Berlin property will be vacant for 12 to 18 months very soon. 

No income to be generated by that asset then. 

So, expect income to be impacted. 

There is also the point that you (the reader) raised and it is a point I have made many times with regards to REITs. 

They will be refinancing in a higher interest rate environment although as many as 6 or 7 rate cuts are coming by end of 2025. 

I made a video almost a year ago to talk about all these and said I would not be adding to my investment in IREIT unless unit price went down much lower. 

Still, there were readers who added at between 32c to 36c per unit. 

To be fair, it isn't just IREIT, I am not interested in putting more money in any REIT now. 

My recent video on banks and REITs made this very clear. 

My focus is on income and valuation, not so much the prices."

I recently did a podcast with The Fifth Person and there was a segment on whether banks or REITs are more attractive as investments for income.

In case you are interested, here is the video:

In the latest update, IREIT Global said that they are in the final stages of pre-letting the Berlin property to a hotel and another hospitality operator. 

They expect to double the asking rent which I believe is realistic as the Berlin property is very much under rented.

I feel that the Berlin property is currently undervalued and if the REIT's management does a good job, we should see value unlocked.

IREIT Global's gearing ratio is still very low but their borrowing cost would most likely increase in 2026 when they refinance.

This is although we are likely to see many rounds of cuts to interest rate before then as the interest rate would still be higher than what we saw in the years following the Global Financial Crisis.

However, the REIT's relatively low level of debt should help to reduce the blow higher interest rate brings.

I revealed not too long ago, my investment in IREIT Global is nursing a big paper loss.

I use the word "nursing" and not "suffering" because the REIT is still paying me a meaningful dividend even as Mr. Market feels pessimistic about it.

At the current unit price, the distribution yield is about 8% and as I feel it is undervalued, there is no reason to sell.

I am quite contented to be paid while waiting for things to improve.

However, if Mr. Market should go into a huge depression and offer me a 10% distribution yield, all else being equal, I would probably buy more.

This would be very similar to the earnings yields offered by our local banks then.

All investments are good investments at the right price.

The right price is not a static number.

It should change if circumstances affecting it should change.

5. AIMS APAC REIT

I cannot end this blog post without giving AIMS APAC REIT a mention.

Still one of my largest passive income generators after so many years.

To me, this is a risk free investment as I have recovered all my capital many years ago.

The unit price can go up or down and it wouldn't affect me at all.

For people who recently invested in the REIT, please be aware that the REIT has perpetual bonds which means that their effective gearing level is higher than the gearing level reported.

Invest in the REIT only if we are comfortable with this.

Having said this, the REIT is well run and enjoys a tail win as logistics real estate which the REIT is mostly about remains in high demand.

Remember, if AK can do it, so can you!

Expenses. T-bill. SSB. DBS, UOB and OCBC.

It has been more than a week since my last blog post.

Things have settled into a new normal for me.

In this new normal, my expenses have increased by 3x or 4x.

UOB should be very pleased with me as I exceed the $500 minimum spending required on the ONE Card by a large amount to get extra interest on my savings in the ONE Account.

The increase in expenses is going to be part of the new normal and not transitional, I suspect.

Fortunately, my passive income is buffered which means I am able to absorb the current higher expenses.

Crossing fingers that things do not worsen.

I am still not sleeping well but, fortunately, I am able to take refuge in virtual worlds.

This has saved me many years ago from going into a depression and it still works for me today.

Just spending time alone and being focused on things that have nothing to do with the real world.

Escapism?

Call it what you want but it works.

In a YouTube video I made not too long ago, I said that I could feel apathy setting in when it comes to money matters.

I can say that apathy has definitely set in.

It is next to me now, watching me as I pen this blog.

Apathy says, "What are you doing?"

AK says, "Listen to me, Apathy, you are just a guest. You should try not to get too comfortable."

Brave words.

Writing is therapeutic to me and I am just talking to myself which helps to calm my mind as I try to make sense of things.

Anyway, soldiering on.

1. T-bill yield dropping.

In the last auction, T-bill yield declined to 3.34% p.a.

It could have been worse, I suppose.

Anyway, I got my non-competitive bid filled.

Using cash, 3.34% is still better than what a regular savings account pays.

Of course, if we can get 4% p.a. like we get with the UOB ONE Account, we should maximize that first to $150,000.

With T-bill yields declining and this goes for interest rates in fixed deposits too, high yield savings accounts should have priority when parking our extra money.

There is, of course, the added benefit of liquidity.

I also use my CPF OA money to buy T-bills but I might stop doing this because the break even cut-off yield for 6 months T-bill is 3.33% p.a. in case we lose another 2 months of CPF OA interest.

I would just transfer the money from CPF IA to CPF OA when the T-bills mature.

One less thing for me to juggle.

So, it isn't a tragedy.

2. Singapore Savings Bonds.

10 year average yield on Singapore Savings Bonds is also declining. 

I bought some SSB offered last month.

That had a 10 years average yield of 3.22% p.a.

This month, the offer is for an average yield of 3.1% p.a.

It is still above the 3% average interest I would get for doing voluntary contribution to my CPF account, although not by much.

I think I will give it a miss.

Another less thing for me to juggle.

Yes, again, not a tragedy.

3. DBS, UOB and OCBC.

Things seem to have settled down for the stock prices of our local banks.

They have recaptured their supports.

DBS at $35.

OCBC at $14.

UOB at $30.

Mr. Market might have come to terms with the eventual weakening of net interest income as interest rates decline.

However, like I have said many times before, our local banks have other sources of income and they are likely to continue growing as they retain about half of their earnings.

This means that even for people who paid higher prices for stocks in DBS, OCBC and UOB, eventually, their investments will become much more valuable.

For me, being paid while I wait is not a bad thing.

Still, do not throw caution to the wind.

The world is not in a good place now.

So many things have gone wrong and could get worse.

We are fortunate to be in Singapore but we are not shock proof.

Mr. Market could go into a depression suddenly, without warning.

That is when we roll out our war chests.

Remember what I always say.

Don't be overly optimistic.

Don't be overly pessimistic.

Be pragmatic.

Be prudent.

Be patient.

If AK can do it, so can you!

T-bill? DBS, OCBC and UOB crashed? When to buy?

I produced a YouTube video yesterday after someone alerted me to buy some bank stocks.

I thought the stock market had crashed.

Did not look at stocks for 2 weeks prior to the alert with all that has been going on in my life.

Anyway, if you have not seen the video, here it is:

It isn't a crash.

A steep correction but not a crash.

This blog post is more a reminder to myself what to do next because I am aware that apathy towards financial matters has set in for me.

If I don't put this down in writing, I might just let inaction take over.

1. Bank stocks.

I have said that it is a good idea to invest in our local banks because they are well run and well capitalized.

They have the ability to pay good dividends.

More importantly, they are willing to do so.

Further decline in their stock prices would be an opportunity to add to my positions.

For DBS, I am looking at $32.50 and $30.00 to add.

For UOB, I am looking at $28.00 to add.

For OCBC, I am looking at $13.00 to add.

I am already substantially invested in all three banks.

So, I will add slowly in case the unthinkable happens and prices go farther south.

2. T-bill ladder.

I will continue to maintain the ladder although the cut off yield has declined to 3.4% p.a. in the last auction.

3.4% p.a. is only slightly higher than the 3.3% p.a. I can get from a 6 months FD.

However, T-bills are backed by our government.

I don't have to worry about exceeding $100K in value.

SDIC. Remember?

The adjustment I have to make is when it comes to using CPF OA money.

Instead of placing competitive bids at 3.5%, I will be lowering it to 3.4%.

If the cut-off yield comes in lower than 3.4%, I will simply leave the money in the CPF OA.

The break even yield, if I remember correctly is 3.33%, in case we lose 2 additional months of CPF OA interest.

Nothing else for now.

Largest investments updated (mid 2024): Never run out of money in retirement.

It has been quite a while since I last blogged about my largest investments.

The last time I published such a blog was in January 2023.

So, it has been a year and a half!

Apart from being lazy, I didn't do very much to my portfolio and, hence, I did not see the need to publish any updates.

However, I think it is about time I do this even if it is just to take into account changes in market prices.

Many things have changed in the past 18 months.

Before we start, I want to share a YouTube video I produced on how not to run out of money in retirement which I feel is an important topic:

Anyway, here is the update.

$500,000 or more

1. CPF

2. OCBC

My CPF savings is a constant.

Being risk free and volatility free, it provides peace of mind.

I have not done any voluntary contributions to my CPF account in the last 18 months.

Instead, I have used that money to buy Singapore Savings Bonds and I shared the reason why here and also in my YouTube channel, of course.

I have also used money in my CPF OA to buy T-bills which grows my CPF OA savings at a faster clip.

In dollar terms, it is quite meaningful as I have quite a large amount of money in my CPF OA.

So, my CPF savings has grown in size in the last 18 months despite lacking mandatory or voluntary contributions.

Next is OCBC which is my largest investment in equities.

Since the last update on my largest investments, I added to my position in OCBC at about $12.30 a share in the middle of 2023.

The market value of my investment in OCBC has gone up significantly as its share price has also appreciated quite a bit.

This is very nice but as an investor for income, I am more interested in the passive income generation.

OCBC has become and will continue to be the most important passive income generator for me.

$350,000 to $499,999

1. AIMS APAC REIT

2. DBS

3. UOB

4. SSBs and T-bills

Unlike the top bracket, there are some changes in the second highest bracket in my portfolio.

DBS and UOB have both moved upwards to join AIMS APAC REIT in this bracket.

The spectacular increase in the share prices of DBS and UOB resulted in their promotion in my portfolio.

There is also the fact that I added to my investment in UOB in the middle of 2023 at about $27.90 per share.

I also added to my investment in DBS in November of 2023 at about $31.80 per share.

Together, OCBC, UOB and DBS account for more than 45% of my portfolio's market value.

Then, there are SSBs and T-bills.

Together, they jumped two brackets upwards from 18 months ago.

Yes, together, they were in the lowest bracket 18 months ago.

I can save money relatively quickly since my passive income exceeds my expenses rather significantly.

I have been socking away money in SSBs and T-bills in the last 18 months.

Money which would have gone into my CPF account was instead used to buy SSBs.

Excess money was used to buy 6 months T-bills, strengthening my T-bill ladder.

This provides me with more passive income without any price risk.

The money in T-bills also come back every 2 weeks which is useful if there are investment opportunities presented by Mr. Market.

$200,000 to $349,999

1. IREIT Global

For readers who have a keen eye, they would have wondered what happened to IREIT Global which was in the higher bracket 18 months ago?

The large decline in unit price since the last update means IREIT Global has fallen in its position in my portfolio.

Having declined more than 40% in the last 18 months means IREIT Global is no longer my largest investment in the REIT universe.

It briefly replaced AIMS APAC REIT as the largest REIT investment in my portfolio 18 months ago.

I made a video about IREIT Global several months ago and the decline in unit price is not unexpected.

Here is the video for anyone who might be interested:

I am still holding on to the investment and will be adding if its unit price declines further.

I find it easier to value IREIT Global because it isn't holding something amorphous.

It is deeply undervalued and more so now that Mr. Market is feeling very pessimistic about it.

In fact, I am getting a bit of that Saizen REIT vibe.

Readers who have been following my blog for many years would know what I mean.

Still, same same but different.

So, do not throw caution to the wind.

I made a video about this recently too:

$100,000 to $199,999

1. Wilmar International

2. ComfortDelgro

3. Frasers Logistics Trust

Membership in this lowest bracket of my largest investments has changed.

Wilmar dropped one rank as its share price declined significantly.

I know Mr. Kuok and Mr. George Yeo added to their investments recently.

However, I am still waiting for $3.00 per share before adding.

Wilmar is very undervalued if we look at the sum of its parts.

However, conglomerates always suffer from conglomerate discount.

So, buying with a larger margin of safety for a person of limited means like myself is not a bad idea.

Wilmar is still profitable and pays a meaningful dividend which means I am being paid while I wait.

This is true for all my investments.

ComfortDelgro and Frasers Logistics Trust are both chugging along fine.

Nothing much to say there.

Sabana REIT and CapitaLand China Trust have dropped out from this bracket.

I reduced my investment in Sabana REIT substantially not too long ago and I blogged about it too.

Don't like how the internalization process seems to be fraught with speed bumps.

Like I said in the blog, it is very different from my experience with Croesus Retail Trust.

CapitaLand China Trust has seen its unit price plunged.

Unfortunately, its fate is tied to that of the Chinese economy which is not in a good place now.

Specifically, the Chinese property sector which accounts for 30% of the economy will be a dead weight for many years to come.

So, this is the update.

Although there are a couple of investments which are underperforming, overall, the portfolio is doing well.

That is what matters to me.

Performance on a portfolio level.

Of course, all of us have different beliefs and we should all do what we feel is right for us.

If AK can talk to himself, so can you.

Related posts:
1. Sabana REIT divestment.
2. Largest investments (4Q 2022.)

Demand more from REITs as investors.

The catalyst for this blog is a comment from a viewer of my YouTube channel.

The viewer said:

"... older video says you did not lose playing reit. need your help man. it is starting to feel a bit strange already."

In reply to that, I said:

"I made a lot of money investing in REITs but that was during the 15 years when interest rates were almost zero. Things different already."

We must realize that things have changed.

I blogged about how I made more than $2 million investing for income and that was from passive income received alone.

$2 million in passive income.

Sunday, January 8, 2023

https://singaporeanstocksinvestor.blogspot.com/2023/01/2-million-in-passive-income-if-ak-can.html

It did not include any capital gains made over the years.

I can safely say that more than half of that $2 million in passive income was from REITs.

If we take into account capital gains from voluntary and involuntary sale of REITs in those 15 years, I have made a lot more money from investing in REITs.

For an average Singaporean like me, that is a lot of money.

It has definitely helped me to achieve F.I.R.E. more comfortably.

However, like I said, things are different already.

In many blogs I published and videos I produced in the last year or so, I said as much.

Rapid and significant increases in interest rates have thrown a spanner in the works for REITs.

Indeed, they have had the same effect on all risk assets and not just REITs.

In an environment where risk free rate is 5% or more, Mr. Market is right to demand more from REITs.

This means yield has to expand, all else being equal.

I made videos on this and I am including them here for people who do not follow me on YouTube:

If a REIT was yielding 5% when risk free rate was almost zero, now, it should yield 10% or so in order to be attractive.

In Singapore, if we take the recent Singapore Savings Bond which offered 3.33% p.a. 10 year average yield, a REIT which offered 5% distribution yield in the past should offer 8.33% today to be attractive, all else being equal.

This is just something to bear in mind and might not be an ironclad rule to follow, for people who still believe in REITs as viable investments for income.

However, it is simply sensible to use this yardstick, I believe.

Anyway, I get the feeling that people are still not as demanding as they should logically be when investing in REITs today.

Many are investing with the idea that interest rates might be rapidly cut from 2H 2024.

Investors who only started investing during the years of very low interest rates might even think that interest rate cuts means a return to the post Global Financial Crisis low interest rate environment which lasted 15 years or so.

Investing in REITs today with such a belief could lead to disappointment.

Bearing this in mind, I also made a couple of videos on IREIT Global before:

Finally, AK is losing money investing in a REIT.

This might make some people cackle with glee.

To me, this is just another example that I am not always right.

It is only paper loss right now but who knows how things would pan out?

Of course, we must not forget that AK is also losing money in another REIT, CapitaLand China Trust.

Things are different now and this is why I have been saying that I am not adding to my investments in REITs in the current environment.

Why do DBS, OCBC and UOB together form more than 40% of my portfolio today?

If AK can talk to himself, so can you. 

Videos on DBS, OCBC and UOB.

I have been somewhat busy in real life lately.

So, I have not been producing much content.

However, I did manage to make a few videos recently.

For those who do not follow me on YouTube, here they are:

------ ------ ------ ------ Just AK talking to himself, of course. ;) 

To view all my videos and also to subscribe, visit: AK71SG 

DBS, OCBC and UOB stock prices hitting all time highs!

Stock prices of DBS, OCBC and UOB have been rocketing higher!

How do I feel?

I have mixed feelings, really.

I would like to add to my investments in all three banks but not as their stock prices make new highs.

What am I doing?

Just waiting.

I will simply do nothing and collect dividends.

Filling up my war chest and taking things easy.

Money in my war chest will go to buying more 6 months T-bills in the meantime.

I expect the T-bill cut-off yield tomorrow to be around 3.8% p.a.

This is a pretty decent return for something that is risk free and volatility free.

I don't see any need to take on price risk especially when stock prices are going higher.

Uncle Warren Buffett said before that we should avoid doing this:

"Buying a stock merely because you think it’s going to increase in price."

For my current investment in DBS, OCBC and UOB, my favorite holding period is forever.

Of course, if we are trading, then, we might sell some if we think prices are going back down.

More from dear Uncle Warren Buffett.

"Time is the friend of the wonderful company, the enemy of the mediocre."

"Only buy something you’d be perfectly happy to hold if the market shuts down for ten years."

This, perhaps, explains why I sold some of my investments in the past and increased my investment heavily in DBS, OCBC and UOB in recent years.

If AK can talk to himself, so can you!

Related post:
A simple strategy.

SRS portfolio in 2024. What did I do?

SRS was a topic I used to blog about pretty often.

I have not been blogging about it as much since I have not been making contributions in recent years.

Reason is because I no longer pay income tax.

See:
Income Tax payable?

If we are still paying income tax, contributing to our SRS account makes sense to enjoy some tax relief.

Of course, we want to put our SRS money to work or we would get a very miserable interest rate.

For many years, I used the SRS money to buy plain vanilla endowment policies.

They were savings plan with some insurance thrown in.

In fact, I still have one or two of those with NTUC Income using SRS money.

In recent months, I also used the money to buy T-bills with yields being so much higher than a couple of years ago.

Dividends paid by my investments in stocks using SRS money are used for this purpose.

Yes, I also use SRS money to buy stocks of businesses which I think make good investments for income.

I have blogged about this before and shared what kind of stocks I would buy with SRS money.

Basically, the businesses must be good income generators with strong balance sheets; nothing which is likely to do rights issues.

The very practical reason is because we must have the excess funds in our SRS account to take part in rights issues.

This can be difficult to ensure.

I shared my SRS portfolio of stocks before but that is outdated by now.

See:
Win and win again with SRS.

I had SATS in the portfolio.

Of course, regular readers would know that I sold it shortly after it announced the decision to buy WFS.

SATS just didn't have sufficient resources to do what they suggested.

They had to raise funds from shareholders.

It was something unexpected.

So, I took the opportunity to sell when there was a bounce in the stock price.

In place of SATS, there are ComfortDelgro and OCBC in my SRS investment portfolio now.

This is what the portfolio looks like now:

Based on the purchase prices, it is not difficult to guess that DBS and ST Engineering have been in the portfolio for some time now.

So, like what I did?

Paid less income tax and put the money to work to generate more tax free passive income?

We can certainly win and win again with SRS.

If AK can do it, so can you!

Reference:
How AK used his SRS money?

Huat with DBS in Year of the Dragon!

DBS reported stellar full year 2023 results.

Net profit rose 26% to S$10.3 billion.

Return on equity improved from 15% to 18%.

2023 saw a 22% increase in total income largely due to higher net interest margin, fee income and treasury customer sales.

A final dividend of 54c was proposed and this is 6c higher than before.

2023 full year dividend at $1.92.

DBS is also proposing a bonus share issue of 1 share for every 10 shares.

Bonus shares will qualify for dividends from 1Q 2024.

Assuming DPS stays the same, this will boost dividend received by 10% in 2024!

My decision to add to my investment in DBS in November last year was fortuitous.

This makes me happy.

Mr. Market seems to like the news as well as DBS share price has gone up by 2.6% so far today.

Gong Xi Fa Cai!

Wishing all readers a Happy Chinese New Year!

Reference:
Added to position in DBS.

DBS and CPF miracle! Happiness!

I don't usually blog at night but this is so exciting that I just have to talk to myself.

Yesterday, I talked about my 1 year T-bill which I purchased with CPF OA money maturing.

This was the available balance in my CPF IA then:

I also said that I transferred the funds from CPF IA back to CPF OA upon seeing the money credited at 5pm.

This was my CPF OA balance yesterday:

DBS online portal said it would take up to 3 business days for the transfer to be done.

That would mean losing another month of CPF OA interest if the money went back to the CPF OA in February.

It is what it is, I guess.

However, I decided to check my CPF account just now just to see if a miracle took place.

Well, a miracle did happen!

The money is back in my CPF OA which means I would not lose another month of CPF OA interest!

My faith in DBS bank is restored!

Yes, I know.

AK is so shallow.

Bad AK! Bad AK!

I am so happy now.

Losing an extra month of CPF OA interest is a big deal in this instance because the sum is so big.

We are looking at about $1,400 of interest income.

Huat ah!

If AK can be shallow, so can you!

Reference:
CPF account recovery: Thoughts and plan!

SSB, T-bills, DBS and UOB. Plan for December. Easy.

This is probably going to my final blog post for 2023.

Planning on taking it easy for the rest of the month when it comes to social media.

Have been a little too active in the last few months on YouTube.

Now, going to spend more quality time with myself.

Being able to play three games everyday on my new gaming laptop makes me very happy.

That is what retirement is about.

It is about being happy.

A few things to talk about.

1. T-bills and SSB.

The Singapore Savings Bond being offered this month is offering a stunning 3.07% p.a. 10 year average yield.

Stunning for the wrong reason since last month's offer gave an attractive 3.4% p.a. 10 year average yield.

I think I will give this one a miss.

Am I veering away from my plan to keep buying Singapore Savings Bond as long as the yield is above 3% p.a. or not?

Well, the plan was to replace CPF Voluntary Contributions with Singapore Savings Bonds.

I have already done it with money meant for the CPF in 2023 and 2024.

2025 is work in progress and there is really no hurry.

In the meantime,  I will continue to strengthen my T-bill ladder.

The last T-bill auction had a cut-off yield of 3.8% p.a.

Hopefully, it stays there for the auctions happening this month too.

2. DBS and UOB.

I still want to increase my investment in the local banks.

OCBC is already a very large position.

So, the idea now is to grow my positions in DBS and UOB.

For me, the stock prices to add would be between $30 to $30.50 for DBS and closer to $26 for UOB.

3. Taking it easy.

I have been thinking of taking it easy when it comes to investing for some time.

However, after a recent recording with The Fifth Person, I have been thinking about it even more.

The decision to retire early was a big step for me.

I was always a worrier and I still am a worrier.

Still, I convinced myself that I had sufficient financial resources to retire early.

Then, in retirement, I began to question if I really did have enough.

I continued to invest for income and increase my passive income in retirement.

In recent years, I have been telling myself to take it easy and that I have enough financial resources not to have to worry.

I have had some success but something Adam said during the recording hit home.

So, I could simply just buy more Singapore Savings Bonds and T-bills from now on and still be quite comfortable.

Risk free and volatility free.

Don't have to do anything else.

This would be another phase in my life, if I should do this.

To be honest, I rather like it.

Anyway, that's all the talking to myself for now.

If AK can talk to himself, so can you!

Merry Christmas and Happy New Year!

Added to position in DBS. T-bill 3.8% p.a. cut-off yield.

Just a quick update on what I have done in recent days to my investment portfolio.

For anyone who is following me on YouTube, it is no secret that I have been looking to add to my investment in DBS.

I identified the immediate support to be at $32.00, and if that should break, then, $31.80 would be next.

I added to my position at closer to $31.80 a share but it is just a nibble.

I see longer term support for DBS at between $30.00 to $30.50 a share.

So, that is where I would like to buy more.

DBS continues to impress me with its much higher ROE of 18% to 20% when compared to UOB and OCBC which have ROE of around 14%.

So, I feel that this justifies DBS trading at a higher price to book.

There is also the fact that DBS pays dividends quarterly and as a retiree who lives off his passive income, this is also attractive to me.

Next topic is T-bills.

The auction happened yesterday and the cut-off yield was 3.8% p.a.

I estimated it to be 3.88% p.a. but 3.8% p.a. is good enough to make me happy.

What also makes me happy is that non-competitive bids were fully allotted.

T-bill ladder is intact!

Next auction is happening on 7 December.

So, nothing earth shattering happened, really.

Just sticking to my plan.

Always have a plan, your own plan.

If AK can do it, so can you!

T-bill or DBS, OCBC and UOB? 3.7% or 6% p.a.?

I received an SMS from CPF that went:

"You have a CPFIS investment deduction from your Ordinary Account."

I suppose this means that my competitive bid (using CPF-OA money) for the last 6 months T-bill auction that took place on 14 September was successful.

A quick check revealed that the cut-off yield was 3.73% p.a. and this is still relatively attractive.

This is relatively attractive when our local banks are offering much lower interest rates for 6 months fixed deposits.

Definitely, it is more attractive than the 2.5% p.a. offered by CPF-OA even when accounting for a loss of 7 months worth of interest income which would have been paid by CPF.

Why 7 months?

This is due to how CPF calculates and pays interest on our CPF savings, taking only the month-end balance into consideration.

So, all three of my applications using cash on hand, SRS and CPF-OA money were successful.

I find it strange that there seems to be less interest in 6 months T-bill now. 

It seems to be weaker compared to a year ago, for example.

I remember non-competitive bids being so plentiful that my offer to buy was only partially filled at times.

Could it be that more people are buying the common stocks of DBS, OCBC and UOB instead, given the higher level of public awareness of how attractive their dividends are?

After all, a 6% dividend yield beats 3.73% p.a. return hands down.

Could AK be doing something wrong?

OMG!

I can feel an anxiety attack coming.

Time to go sink some enemy warships to calm myself down.

Related post:
Must buy T-bill? 
(How to transfer from CPF-IA to CPF-OA?)