$300K invested in REITs? Why did I buy? How was I sure?

I spend a lot of time thinking.

Some say I am a thoughtful person.

However, some say I think too much.

We are all wired differently, right?

During "Evening With AK And Friends 2025," something that kept popping up could be explained as such.

I said having money to invest with was not enough.

We must have the right mindset and the right framework for what we want to achieve financially.

Our methods and our motivation must match.

So, I shared the pyramid which I use to help ensure portfolio stability, and at the very least make sure it does not sink to the bottom of the ocean and is lost forever.

Having the right mindset is also very important.

Being prudent with money is the first and most important step as we need capital to invest with.

Being patient and pragmatic is useless if we don't have the capital to begin with.

Patiently waiting for opportunities.

Being pragmatic to know how much we should be investing in something.

Someone asked what gave me the courage and conviction to buy into REITs big time during the GFC.

I remember in reply to another question, I said we must know what we are buying.

If we didn't know what we were buying, then, we wouldn't know if we should buy more or if we should sell.

We could panic and sell when the price plunged instead of buying more, for example.

I used the example of Saizen REIT and said I was sure their portfolio of assets was worth more and that there was a strong demand for them.

When they sold some of the buildings to pay down debt as required by their lenders then, they were able to sell them at a big premium to book value.

Mr. Market was feeling very pessimistic about the REIT and turned a blind eye to that.

The GFC was really a credit crisis.

Some REITs like AA REIT could not get their hands on loans.

In the case of AA REIT, a white knight came along to recapitalize the REIT. 

It was controversial and very ugly but it was the only practical way for the REIT to survive.

The white knight was not altruistic, for sure.

It was all about making money and with so much money involved, they would try to make sure the REIT delivered.

So, what did I do?

I got on the boat with them.

Be pragmatic.

I also mentioned Lippo REIT during the event and how I was able to get a 25% distribution yield back then.

Indonesia was one of the very few countries that did not go into a recession during the GFC and the Rupiah was relatively strong then.

Indonesia didn't rely on external trade much.

Their domestic economy was 60% of their economy if I remember correctly.

The country's urban population still went to malls and they didn't have as many big malls back then.

The malls weren't going to shut down with demand that high.

With a 25% yield, I would have gotten back my money in 4 years.

Of course, some older readers might remember I sold more than half of my investment later for a 200% capital gain when Mr Market recovered from its depression.

That was the one year I blogged about massive capital gains from investments on top of passive income.

Be pragmatic.

I also said that I had the benefit of advice from a senior investor in real estate who said to be brave.

He said the market was behaving as if the buildings were being abandoned.

Still, we must do our own research to verify which I did.

Be brave but don't be foolish.

Don't borrow money to invest with.

Silly to risk what we need for what we don't need.

Don't follow "gurus" blindly.

Don't ask barbers if we need a haircut.

Educate ourselves and trust ourselves more.

We cannot get it right all the time, for sure.

However, if we are right most of the time, we should do well enough.

In the 15 years after the GFC, people got used to low interest rates.

REITs got used to that too and many borrowed too much and were way too optimistic.

We want to avoid being too optimistic and being too pessimistic.

Be pragmatic.

When some were saying buy Suntec REIT, I produced a video on Suntec REIT on how much it has changed from the time I invested in it donkey years ago.

Therefore, contrary to what those influencers said, I said I wouldn't buy Suntec REIT.

A few years back, so many influencers were saying buy Eagle Hospitality Trust and I produced a series of blog posts on why I wouldn't touch it.

Do our own research.

Someone in the audience said my blog was hard to read and he preferred my videos.

I think the truth is more and more people don't like to read.

Maybe, this is why in a recent international study, Singaporeans scored so badly in composition and comprehension in the years after leaving formal education.

Outsourcing isn't always a good idea especially when it affects our personal development.

We can listen to what YouTubers have to say but don't start relying on them for directions.

Alamak.

Nagging again.

Primary objective of this blog is to better answer a question posed during the event.

As I grow older, my brain dulls.

It takes more time for me to recall all things I want to recall in reply to some questions.

It is quite sad when I think of how I was sharper and more articulate before.

The nagging just happened unintentionally.

If AK can do it, so can you. 💯

AK is buying Alibaba shares!

I didn't think there would be another blog post until the new year but I did something just now which would have surprised myself a few months ago.

I bought some Alibaba shares.

If you are rubbing your eyes to read that again, I know how you feel.

However, if you have been following my YouTube channel, you would have heard me talking to myself about how Alibaba at HK$80 a share looked attractive even to value investors.

I just didn't like the policy risks in China and I also didn't like that they paid so little in dividends.

Well, better than no dividends, I guess.

Alibaba is fully capable of paying higher dividends given their healthy cash flow and balance sheet.

They have instead decided to buy back shares which, of course, increased the value of the outstanding shares.

Alibaba isn't dreadfully overvalued like Tesla.

Some readers might remember I made a video comparing the two.

I said that if I had to choose, I would invest in Alibaba and not Tesla.

Well, Mr. Market has gone on a Tesla buying spree and ended its brief fling with Alibaba.

Anyway, what made me change my mind?

More accurately, who made me changed my mind.

I had a chat with a friend who is invested in Alibaba.

He knows my stand on Alibaba and he agrees that there are policy risks.

China is not a free market economy.

The many ways we use to value stocks conventionally are not able to put a numerical or monetary value to these risks.

Yet, he is willing to take the risk because Alibaba just looks relatively cheap, a point which I am in agreement with.

When he saw me smiling, he asked,

"Do you think I am kum gong?"

I laughed at that because he obviously watched the video I produced on how a fellow YouTuber called me that for buying shares of DBS at higher prices.

He went on to say that if I was willing to buy Bitcoin after being convinced that the digital currency had value, why not buy some shares of Alibaba?

The important thing is to invest an amount of money that's similar to what I used to buy Bitcoin.

Or do not invest more than what I feel I am OK to lose if Alibaba gets shut down by the CCP.

I came home and I gave it some thought. 

Alibaba isn't something I must buy but I do like the idea of investing in a fundamentally strong company which Mr. Market dislikes.

Like what Warren Buffett said before,

"Be greedy when others are fearful."

Well, I am not going to be greedy here but I don't mind having a sampler.

So, thanks to my friend, I am a newly minted Alibaba shareholder now that Alibaba is back at HK$80 a share.

It helps that we can buy Alibaba shares in the form of SDRs or Singapore Depository Receipts in SGX now.

I like to keep things simple.

I think this will be the last video for the year but, of course, never say never. 

If AK can do it, so can you!

Plans for 2025. Hoarding cash for a crash?

It has been almost a month since my last blog post.

I am serious about becoming more laid back and being less active in social media.

The garden which I used to enjoy taking strolls in has become a minefield.

What to say?

What not to say?

How to say what I want to say?

Talking to myself has never been more stressful.

I have enough stress to deal with in my life.

Don't want to have to deal with more stress especially when I am not being paid to do so.

Yeah, at least we are paid to deal with stress at work, right?

I believe that many local financial influencers will have to be licensed and regulated because they are being paid for promoting financial products and services constantly.

From an interview conducted by CNA, I believe that it was one of the tests set out by MAS.

In case you are you interested, here is the video by CNA:  

Not the best interviewer nor interviewee but just focus on the substance, I guess.

I think the blogger they interviewed is probably one of those who would have to be licensed and regulated as her content is heavily monetized.

Well, since she and other financial influencers like her make money constantly from doing what they do in social media, they shouldn't mind being licensed and regulated.

As for me, I rather not have to deal with the hassle.

So, I will restrict the frequency of sharing and also the things which I do share in my blog and YouTube channel.

For example, in this blog, I am also going to talk to myself about why I am hoarding cash.

2024, just like 2023, has been kind to me when it comes to my investment portfolio.

Well, there are still a couple of weeks left to 2024 but I guess I can close my books for the year early.

Unlike 2023, I have not put any money to work in equities in 2024.

Most of the passive income I received in 2024 has been put to work in SSBs and T-bills.

I also made a smallish voluntary contribution of $8,000 to my CPF account.

CPF money for me will become cash in another 2 years from now.

Well, the money in the CPF OA, anyway.

Being paid an average of 3.0% p.a. risk free and volatility free is not bad.

So, my cash position has grown in 2024 and looks set to grow in 2025 too.

It will grow even more in 2026 when I have access to my CPF OA money.

In the meantime, I get paid reasonably well for holding more cash.

The UOB ONE Account has been good to me.

Fixed deposits in CIMB have been decent in generating some interest income too.

Just to be sure, these are not investments and I do not include them in my quarterly passive income updates which are about passive income generated by my investment portfolio.

6 months T-bills are still paying 3.0% p.a. or so.

Singapore Savings Bonds I bought in the middle of this year had 10 years average yields of 3.2 to 3.3% p.a. or so.

I am already substantially invested in the stock market and do not feel any urgency to put more money to work there.

Does this mean that I feel that the stock market is going to crash soon?

I know that some financial influencers like to make predictions as to where stock prices are going but like I always say, we cannot predict but we can most certainly prepare.

So, people can think of what I am doing as preparing for a stock market crash.

I just don't know when it is going to happen.

Of course, I also say never to be overly optimistic nor overly pessimistic.

It is important to stay invested in bona fide income generating assets and be paid while we wait.

Someone who kept saying that the common stocks of Singapore banks were very overvalued in the last 12 to 18 months and said he would wait for a crash before buying might want to do a rethink.

The fact that I have been hoarding cash does not mean that I think the stocks were very overvalued.

In fact, I have been quite consistent in saying that if we were not invested yet, we could buy some.

However, it is certainly harder to say that now.

When we look at PE ratios, it is mind boggling how the multiples have expanded for so many companies.

Earnings really have to come in much stronger in 2025 to justify these multiples.

For DBS, OCBC and UOB, their PE ratios have also risen pretty significantly.

They are now around 11x to 12x which is slightly higher than the 5 year average.

If we had a working crystal ball and if we could tell for sure if the earnings would grow enough to ensure these numbers are justifiable, then, we could buy more now.

Since I only have a bowling ball that thinks it is a crystal ball, I would rather err on the side of caution.

This is why I said earlier that my cash position is likely to grow in 2025 as well, all else being equal.

Well, it would probably grow more slowly as I am going to have higher expenses in 2025 with more money set aside for parental support.

That is another topic for maybe another day.

This is probably the last blog post before the year ends and maybe even before "Evening with AK and friends 2025" takes place on 15 January 2025.

If you are interested in the event, there are a few tickets still available and I blogged about it last month: HERE.https://singaporeanstocksinvestor.blogspot.com/2024/11/dbs-ocbc-and-uob-evening-with-ak-2025.html?m=1

Merry Christmas and Happy New Year!

Not an investment but it pays $3,400 monthly for LIFE.

In recent times, I have found it much easier to talk to myself on YouTube.

It is faster than blogging.

This explains the greater number of videos produced compared to the number of blogs I have published.

Although it is expeditious, YouTube is only good for sharing what would require less mental processing on my part

It is good for sharing content which I have at my finger tips which means I could simply ramble while still making sense.

For anything that requires me to think more deeply and to organize my ideas, I find writing to be more effective.

This blog is going to be about something which has required more thinking on my part.

This is really inspired by 2 comments in my most recent YouTube video.

If you have not seen the video yet, here it is:

One reader told me that I am growing older and I should spend more of my money before my health deteriorates.

I know the reader means well but I have very little interest in spending more money than I do now.

In case you are new to my blog and think that I live like a pauper, I don't.

I own a condominium apartment and I have a car, for examples.

Very big ticket items in Singapore.

Still, I must accept that I am growing old, not just older.

Another reader provided the numbers by saying I would be 55 years old in 2 years from now.

Then, he asked what would I do with my CPF money and if I would choose the FRS or the ERS?

Both these readers' comments got me thinking.

That's a problem I have always had.

I think a lot and some would say I think too much.

You know what people say about young people.

They think that they are invincible and have plenty of time.

Well, I am not a young person anymore.

Although I am still relatively sharp mentally, I can tell that my memory is declining.

According to the doctors, this is normal but I am more worried about dementia now.

So, although I have said before that if we are savvy investors, we would choose the FRS and invest the rest of our CPF money ourselves, I could change my mind.

This is really consistent with having a crisis mentality.

Always asks what could go wrong?

Although it is still true that if we are savvy investors, we could possibly do better investing our CPF savings in excess of the FRS, there is this question of age related issues.

What if we become mentally infirm in our old age or, worse, middle age?

For most of us, the answer to this would be to have a bigger stream of passive income which does not fluctuate with market conditions.

CPF LIFE would fill this role admirably and by choosing ERS, we would allow it to do better.

ERS is not just for those who are not savvy investors but for anyone who wants to have a greater level of certainty in retirement funding.

I am aware that the interest accumulated in the FRS or ERS in order for CPF LIFE to provide us with an income for the rest of our lives goes into a pool and would not go to our beneficiaries in case we should bid farewell to this world earlier than desired.

However, CPF LIFE is an annuity and it is an insurance product.

It is an insurance against longevity risk.

As with all insurance products, it is about pooling resources from many to protect against shared risks.

We might not like the idea of having interest accumulated on our savings going into a pool instead of our beneficiaries but if we should be blessed with a long life, we would be dipping into other people's money in the pool as our own would have been exhausted.

We must remember that CPF LIFE is a retirement funding tool and not a legacy planning tool.

Take the good with the bad.

With this in mind, I checked my latest CPF OA and SA balances.

CPF OA

$768,628

CPF SA

$350,678

I also checked what the FRS would be like in 2026 which is when I turn 55.

55th birthday in the year of 2026? 

The FRS would be $220,400.

ERS would be twice that sum or $440,800.

My CPF SA should grow to about $380,000 by 2026 just from interest earned, assuming no further contribution on my part.

If I were to go for the ERS, it would mean having the entire sum migrate to the newly created CPF RA plus $60,000 from my CPF OA.

This would give me a monthly income of about $3,400 from CPF LIFE Standard Plan from age 65.

This is quite possibly going to be more than enough to cover the basics in my life.

Of course, I am hazarding a guess here since who knows what the world would look like 10 years from now?

As I grow older, I find myself less inclined to tinker with things.

I value simplicity more and more.

In the last podcast I did with The Fifth Person, I said that I had little or no inclination to look at new stuff when it comes to investments.

I am just looking at what I already have and waiting to add to what I think are strong businesses which would pay me through good and bad times.

Having said this, true to the spirit of this blog post, there could come a time when I might not be mentally well enough to make such decisions.

Making full use of CPF LIFE would help to mitigate this risk.

Of course, all of us are different and what gives me peace of mind might be a source of discomfort for others.

If AK can talk to himself, so can you.

Relevant link: CPF LIFE.

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.)

Retire worry free in Singapore soon.

I have been thinking about really retiring in a couple of years.

Confused?

Didn't AK retire 8 years ago a few months before he turned 45 years of age?

Yes, I retired from active employment 8 years ago and I have been enjoying retirement so far.

However, I am not really retired because to me that would mean not having to look at growing my wealth anymore.

In the past 8 years, I was still pretty active in managing my investment portfolio.

Most notably, I made the move to increase exposure to DBS, OCBC and UOB.

I look forward to the day when I can be absolutely laid back.

Yes, I want to be more laid back than laid back.

Terrible, I know.

However, if I can achieve that, to me, I would be truly retired.

So, can I do it?

I think I can in another 2 years.

1. CPF money

Like I said in a recent blog, I would be 55 in a couple of years and that would be when my CPF account becomes a savings account.

Assuming that I stay with the FRS in the CPF RA, maintaining the prevailing BHS in the MA, I should have $800K or more in my OA.

Simply leaving it in the OA, that would generate an interest income of $20K per year.

I do not expect the low interest rate environment which lasted 15 years from the Global Financial Crisis to return anytime soon.

So, I could possibly get more than $20K per year from the CPF OA savings if I were to continue to buy T-bills with the funds.

Conservatively, if I could get 3% yield from T-bills, that would mean another $4K per year for a total of $24K per year in interest income.

2. Emergency fund money

In my recent blog post on how much cash I was holding, if I were to continue maintaining a $250K emergency fund held in fixed deposits, assuming a conservative 2% interest rate, I would get $5K a year in interest income.

This assumes that the UOB ONE account would have stopped offering a higher interest rate by then.

Seeing how UOB has already reduced the interest rate from 5% to 4%, this is a reasonable assumption.

3. T-bill ladder money

Now, I have about $200K in T-bills, if cut-off yields were to be 3% and this is not unlikely in an environment of higher for longer interest rates, that would generate some $6K in interest income.

However, if I continue to grow this since passive income generated by my investment portfolio exceeds my expenses by about $100K a year, with $400K in T-bill in 2 years from now, I could get $12K a year from T-bills then.

4. Fixed income

Fixed income was not attractive in a low interest rate environment and I had to look for more reasonable returns elsewhere.

Obviously, this has changed in the last 2 years.

From all the numbers I have crunched so far, 2 years from now, if I were to simply continue to buy more T-bills, I could receive passive income of $24K (CPF) + $5K (Emergency Fund) + $12K (T-bills) per year.

That is $41K in total.

5. Investment portfolio

If my investment portfolio continues to bring home the bacon and I am inclined to think that it would, I would be very comfortable.

My investment portfolio generated some $230K in 2023 and this included passive income from T-bills.

If I were to exclude this component, the portfolio would still have generated more than $220K in passive income.

Assuming income generation takes a 10% hit because REITs continue to underperform, I would still see $200K from my investment portfolio.

If we should see disease X striking, resulting in another pandemic, income generation could take a hit like what we saw during the lockdown.

Banks paid less dividend.

So, knocking 40% off passive income generated by 40% of my portfolio would still see $170K generated by my investment portfolio.

This includes the assumption that REITs would perform poorly too as said earlier, if you crunch the numbers yourself.

Assuming that I am still comfortable with living on $48,000 a year and setting aside another $48,000 for parental support, even in such a scenario, I shouldn't have to worry about money.

6. Total passive income

Looking at the above points, with the aid of fixed income in an environment of higher interest rates, in 2 years from now, I would have a truly worry free retirement.

Well, worry free when it comes to money at least.

There will be other worries, I am sure.

7. Conclusion

Having come to this realization, I have decided that I don't have to look at the stock market as much as before in the meantime.

Unless there is another stock market crash, simply hold my stock positions and continue to buy more T-bills.

This is naturally going to translate to fewer blogs and videos on related topics.

This is something I have been thinking of on and off.

It is the first time I have sat down and really looked at the numbers more carefully, projecting into the future.

To be fair, it is the near future I am looking at.

I will have to talk to myself again when I turn 55.

To anyone who is eavesdropping, this isn't a miracle and it isn't a dream either.

I have talked to myself extensively since 2009 here in my blog on the things I have done to make this possible.

Stay prudent.

Have patience.

Be pragmatic.

If AK can do it, so can you!

Some stocks do nothing for us!

I shared a photo of one my favorite ships in World of Warships in a video yesterday. 

Bismark is a ship I enjoy a lot and I have had many hours of fun playing it. 

There are some ships I have which are really beautiful to look at. 

Unfortunately, that is the only thing I find them good for. 

They are not fun to play, for various reasons. :( 

It is just like investing in stocks. 

Some stocks, we might think they are undervalued and good to invest in. 

However, they do nothing for us in terms of dividends. 

They don't even give us peace of mind. 

One starting with the letter "T" comes to mind. 

Bad AK! Bad AK! ;p 

The names of the "only nice to look at" ships below, for those who are wondering: 

Cherbourg, a French cruiser.

Gneisenau, a German battleship.

Loyang, a Chinese destroyer.

Try World of Warships on the Asian server. 

I am having a lot of fun and have not spent a single cent. Use my referral link and both of us will get some freebies in game. https://wows.asia/steam/Uther_Kaze 

We can both F.I.R.E. at some enemy warships!

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?

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!

How to transfer from CPF-IA to CPF-OA? Must buy T-bill?

In my last blog post, I made a passing mention about a 6 month T-bill which I bought using money in my CPF-OA maturing in the same week.

I made a request to transfer the money back to my CPF-OA when I saw the funds sitting in my CPF-IA a day later.

It was all rather easy with DBS online banking.

I simply logged in and went to the "Invest" tab and selected "More investment services."

Then, I chose "Refund to CPF Board."

Clicked on "Refund Full Amount", and it was basically done after clicking "Next" and "Submit."

Today, I checked my CPF account and found that the funds are back in my CPF-OA.

Now, I am wondering whether I should buy another 6 months T-bill with the money.

To be quite honest, I am not as enthusiastic as before because the cut-off yield has reduced so much since the start of the year for 6 months T-bills.

In January, it was as high as 4.2% p.a.

The T-bill that matured last week had a cut-off yield of 3.93% p.a.

I am hazarding a guess that the cut-off yield for this week's auction is probably going to be around 3.7% p.a. or similar to what we got in the last auction.

For a sum of $50,000, we are looking at an additional interest income of less than $200 compared to what the CPF-OA would pay for a 7 months period.

Nothing to write home about.

Anyway, with CPF-OA money, I will not go the path of non-competitive bids just in case the unthinkable happens.

I will put in a competitive bid of 3.5% p.a. because I don't think I am interested in anything lower than that.

If the cut-off yield should come in at 3.5% p.a., the difference in interest income is going to be less than $120.

The cut-off yields for 6 months T-bills are declining but the CPF-OA still pays 2.5% p.a.

So, the difference is shrinking and it is really not a big deal.

There is quite a bit of talk in social media that we should all use our CPF-OA money to buy T-bills.

To be honest, unless the sum of money is relatively large, it isn't anything to worry about.

If we do not have a large amount of money sitting in our CPF-OA, we really are not missing out on any meaningful passive income.

I think some people would say don't sweat the small stuff.

Of course, I am just talking to myself.

If AK can talk to himself, so can you!