A way towards retirement adequacy before the year ends.

A reader sent this message to me in FB and agreed to have me share it in my blog:

Hi AK,


Many thanks for your blog post "How to grow my wealth as I approach 40 years of age" and the other cpf related posts.


After poking around our cpf site, finally decided to move my entire 2013 OA contributions into SA. While it is nowhere near the MS, i feel it's a step in the right direction despite the fact that i am closer 40 than 20!


Thank you for always sharing your thoughts, journey AND nagging at us


P


P.S.
CPF website has an "Ordinary Account-Special Account Savings Transfer Calculator". It estimates how much MORE interest we earn by moving $x amt from OA to SA account. Unfortunately, it only calculates up to age 55 and not the 65 you mentioned. However, it is still a great gauge. Perhaps this may be useful for your readers to convince themselves of how wonderful this 4/5% interest is!

Here's the link:
https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/oa2sa/oa2sa_cal.asp

if you feel it will help others, please (share)

the exchange between you, Endrene and a few others were very helpful to me.

If you like what you read here, there are still a couple of weeks left before the year ends.

Related posts:
1. How to grow my wealth as I approach 40 years of age?
2. How to upsize $100K to $225K in 20 years?

Investing for income and position sizing for peace of mind: Inspired by an exchange of words in Kallang Wave Mall.

Some time back, a reader said it must be a good feeling to be out and about and overhearing people talking about AK71 without them knowing that AK71 was listening in. I replied saying that it had never happened before and AK71 was not as popular as he thought.

Well, you know what they say about never saying never.

I was out one evening, visiting the new Kallang Wave Mall to take advantage of the opening promotional deals when it actually happened. I don't know about having any good feeling. In fact, the experience was rather spooky.

Before I go on, in case you are wondering what lobang (Singlish for "a good deal") I had in Kallang Wave mall, it was this:

I spent $200 in NTUC Fairprice using the Citibank SMRT Card and got a 7% rebate. At the information counter, I showed them the receipt and the Citibank SMRT Card and I was given a $10 Kallang Wave voucher, an Olaf plush toy (Olaf as in the Olaf from the Disney animation "Frozen") worth $19.90, a chance to spin the wheel to win more "Frozen" products and to take part in the grand lucky draw to win a trip for 4 to Hong Kong.

OK, now, you know why I went to such an ulu (Singlish for "in the middle of nowhere") mall.

Now, back to the spooky experience I had.

I was in an aisle in the supermarket looking for some biscuits when I overheard 2 ladies talking about me behind my back! I mean, literally, they were behind my back!

A: "This AK recently like very bad luck. Bought SembCorp and price dropped so much."

B: "Ya. I followed him and bought too. Now, lost about 20%."

A: "OMG! Did you buy a lot?"

B: "Not cheap. Buy a few lots also a lot of money. Now stuck. (Sigh)"

A: "Don't worry. AK says strong company. He buy for the dividends..."

Then, they walked away. I was wondering if I should follow them discreetly to see what else they had to say. I know, terrible! I was eavesdropping! Anyway, I decided not to. Imagine them calling security because an old, fat and ugly man was stalking them. Yikes!

Anyway, if you know me, I didn't write to simply share a spooky tale. There is enough stuff in that short exchange between the two ladies which disturbed me enough to blog about my thoughts.

It is true that I started buying SembCorp Industries at $5.04 per share not too long ago and I blogged about my motivations for doing so, admitting that it was not a cheap purchase at the time. It ticked all my boxes but because it was not undervalued, I nibbled. I initiated a small position.

As its share price fell, I nibbled again at various points. Some might be interested to know that I actually nibbled a bit more at $4.14 a share just yesterday. I will probably continue to take small bites because although I feel that the stock is now undervalued, I am reminded of the saying that Mr. Market can stay irrational for a long time.

Although my initial entry price of $5.04 has lost almost 20% in market value, it might be useful to know that the nibble formed less than 1% of my entire portfolio. So, it means that my portfolio has lost 0.2% in value because of that purchase. If we add my other recent nibbles and their paper losses along the way, the total paper loss due to these is probably between 1% to 2% of my portfolio's value.

So, although the absolute dollar value might look substantial to some, we must remember that it is about percentages. We should always look at our own circumstances and decide how to size our positions in the stock market accordingly. Don't bite off more than we can chew.

Finally, because I am more interested in investing for a regular income, most of my portfolio ensures that I always have funds coming in on a regular basis. Yes, even my badly timed investment in SembCorp Industries will, in all likelihood, generate income for me in 2015 and beyond. This is an important reason why I am able to stay level headed, well, most of the time.

I thought for a while whether to blog about this because the two ladies I mentioned will probably read this blog and I don't know how they would feel but I guess I should just do it for everyone's benefit, including mine.

Related posts:
1. How to make recovery easier?
2. Motivations and methods in investing.
3. Do not love unless it is worth the loving.
4. Managing exposure in investment.
5. What should I do when I am down 25%?
"... the important thing to know is "What should I do?" given a certain set of circumstances." AK

Hock Lian Seng: Robust order book at a 3 year high.

I have been a shareholder of Hock Lian Seng's since 2010. 

I accumulated a core position in the stock and also did a bit of trading for extra pocket money. 

In the last couple of years, however, I have mostly been accumulating the stock because I thought Mr. Market was too pessimistic.





The last time I bought more of the stock was in February 2014 at 25.5c a share. 

Before that, I bought more in May 2013, at 26c a share. 

As some readers might have guessed, I developed an interest in Hock Lian Seng because of its attractive dividend payouts. 

Hock Lian Seng pays out about 40% of its earnings as dividends to shareholders every year and the yield is upwards of 5%.

I was waiting for more weakness in its share price to accumulate and since the stock was hardly covered by analysts, I thought the chances were quite good. 

Well, I think I can stop waiting.

Why?



There could be much more interest in the stock now that The EDGE published an article on it and after UOB Kay Hian published a report that highlighted a few points regarding Hock Lian Seng:





1. Company has a net cash position of $88 million or about 58% of its market cap.

2. Its two industrial properties, Ark@Gambas and Ark@KB, in Sembawang and Kaki Bukit are 80% and 99% sold. They are expected to obtain TOP in end 2014 and early 2015, respectively. So, Hock Lian Seng's cash position will improve as it recognises net proceeds of $60 million to $70 million from the projects.


3. Consistent and attractive dividend payout of a third or more of its earnings. Special dividends possible. See point 2.

4. Order book with contracts worth $345 million as at September. This is a 3 year high.






If Hock Lian Seng should attract coverage from more analysts and if they are mostly positive about the stock like I am, I think opportunities to accumulate the stock on weakness could be harder to come by in future.

Click to enlarge.

Looking at the chart, Hock Lian Seng's share price could retrace to 27c, the support provided by the trend line. 

If it should happen, it could be an opportunity for me to buy more although I would have liked to buy at prices lower than that.




Related post:
Hock Lian Seng (My last done analysis in April 2014.).

Home made waffle with a twist for Sunday lunch.

What did I have for lunch today?

I had some leftover waffle made by my sister but instead of having them with maple syrup and butter, a style more in keeping with breakfast, I decided to prepare a savory version instead for lunch:

Heat up both sides of the waffle on a frying pan.

Layer on cheese, cucumber slices and cherry tomatoes.

Voila! A warm and savory waffle sandwich is served!

Bon appetit!

Now, what should I do for dinner? Hmmm... I wonder.

Related post:
Save money and have a good dinner.