1st voluntary contribution to CPF account in 2018.

AK has become a bit more IT savvy and he now contributes to his CPF account using internet banking at home.

OK, you are right. 

I admit. 

AK has become even lazier in his retirement and will try not to leave home, if possible.





Bad AK! Bad AK!

How to do it? 

Er... You mean how to contribute to CPF account using internet banking or how to become even lazier?

Who threw a shoe at me?

Who? Who?

See related post #1 at the end of this blog.





Anyway, I just did my first online voluntary contribution to my CPF account in 2018!

This was to my CPF-MA which, of course, earns 4% interest a year.

For those of us who are still gainfully employed and paying income tax, contributions to our own CPF-MA will also enjoy income tax relief.

For people under 55 years of age who have already maxed out their CPF-SA (i.e. hit the Full Retirement Sum) and for people who are 55 or older, no top up to the CPF-SA is allowed.

However, we can still contribute to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS).







The BHS is $54,500.00 in 2018.

Contributing to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS) is a good way to earn 4% interest a year.

Of course, in the process, this helps us to enjoy "free" H&S insurance too.

See related post #2 at the end of this blog.





Last year, I said doing a contribution to our CPF-MA at the start of the year would get us an $88 "ang bao" from the government.


For those who still have mandatory contributions to their CPF accounts and hit the BHS in 2017, with the higher BHS in 2018, they can make a voluntary contribution of $2,500 to their CPF-MA now.

This means that they will get a $100 "ang bao" from the government!





What about AK?

See for yourself:

My CPF-MA is lower than the BHS for 2017 because there was a deduction made to pay for my H&S insurance plan last year.

Lacking mandatory contributions from being economically inactive means that I would be able to make a bigger voluntary contribution to my CPF-MA.

So, my ang bao from the government is going to be more than $100!

How much more?

You calculate yourself hor.

Happy New Year!




Related post:
1. Online contribution to CPF.
2. Free H&S insurance in Singapore.

FY2017 passive income from non-REITs (Part 4).

If you have not read the 3 earlier parts, read them HERE (PART 1), HERE (PART 2) and HERE (PART 3).

Although most of my investments have an emphasis on income, regular readers know that I also have some money in investments which would hopefully give me a mix of income and growth. 

Such investments, some bigger and some smaller, as a whole, form a smaller proportion of my portfolio compared to my investments for income.

This is consistent with the capital allocation pyramid which I have shared many times before.

Keeping this in mind, I added to my investment in Wilmar at under $3.10 a share as Mr. Market turned pessimistic in 4Q 2017.

Buying at a discount to NAV and at a price 10% lower than what Archer Daniels Midland Co paid to increase their stake more than a year ago seems like a good idea to me.

Wilmar is a growth story and I believe that value is still being created.

More valuable than it was in the past, undervalued now, we could see Wilmar's value being unlocked in 2019 if the plan to list in China succeeds.

See related post at the end of this blog for my simple analysis on Wilmar's value.

Wilmar definitely demands quite a bit of patience from investors and with a dividend yield of about 2%, it isn't anything to shout about but it is nice that I am getting some pocket money while I wait.






In the same vein as my investment thesis for Guocoland earlier in the year, I decided to put some money in Ho Bee Land towards the end of 4Q 2017.

After a run up in its share price, I waited for a retreat to a long term support which is the rising 200 days moving average (200d MA) before nibbling.

From a fundamental perspective, with a NAV per share of $4.55, my purchase was at a 47% discount to NAV which is pretty attractive to me.

Of course, there is no point in buying at a large discount to NAV if the investment just sits in our portfolio and looks pretty.






It is only a worthwhile investment if value is unlocked or if it generates an income for us.

Ho Bee Land's major shareholder owns more than 70% of the company but this, in itself, is no guarantee that value would be unlocked. So, it is important to be paid while I wait. 

Looking at the numbers, I feel that Ho Bee Land would be quite comfortable with a higher DPS but to avoid disappointment, I am going with an assumption of a rather undemanding 5c annual DPS.

Although I am quite comfortable with my entry price, I am not crazy about it and I would probably be accumulating only if Mr. Market decides to give me a better offer.







After all that has been said, I am expecting 2018 to be a year of reduced passive income as a result of having a greater proportion of investments with lower dividend yields in my portfolio.

That story to be told next year.

To conclude this final blog of 2017, FY 2017 distributions received from non-REITs:

S$ 481,902.09










So, it all works out to be approximately S$40,158.00 a month.

Without the huge distribution from Croesus Retail Trust, everything else being equal, off the top of my head, I estimate a big decline of more than 80% in my passive income from non-REITs in 2018.

Here is wishing everyone a happy, healthy and prosperous 2018!





Related post:
Accumulating Wilmar.

FY2017 passive income from non-REITs (Part 3).

If you have not read the 2 earlier parts, read them HERE (PART 1) and HERE (PART 2).

To continue from Part 2, in my blog on SingTel earlier in the year, I said that in my retirement, missing a regular earned income, I should be less adventurous and that I should seek greater stability when it comes to passive income generation.

In other words, I should be less speculative and should not leave too much to chance.






Consistent with this desire for a higher level of stability, I decided to reduce my investment in Accordia Golf Trust (AGT) in 4Q 2017 by more than half and to again increase my investment in SingTel.

I will say that this was not a very easy decision emotionally because, overall, with all the dividends received and with some capital gain to boot, AGT has been a pretty good investment for me.

Hesitating for a moment, I had to remind myself that to be consistent with my aim for greater stability in passive income generation, it was a sensible thing to do.






I know there are people who say to avoid AGT at all cost but regular readers know that I like to think that all investments are good at the right price.

This also brings to mind what Warren Buffett said before:

I don't always do a good job of this but with AGT, maybe, I did.

So, you see, ComfortDelgro was not the only stock which I found attractively priced in 4Q 2017 as I also built a larger investment in SingTel.

SingTel is a more valuable company than it was in 2015 and paying a price similar to or lower than what I paid back then to increase my investment in the business now seems like a good deal to me.

Compared to Starhub which I have a very much smaller investment in, SingTel has a much stronger balance sheet and also more resilient earnings.





While Starhub's DPS could suffer another cut after already reducing from 20c to 16c, SingTel is probably able to sustain their current payout as they have been paying out less than 75% of their earnings as dividends.

With this in mind, when SingTel's price plunged after going XD, I bought more and would probably add to my investment if there should be another significant decline in price.

Everything else being equal, the decision to buy more SingTel rather than Starhub on price weakness really isn't a very difficult one.

Coming up next is the last blog of the year and that would complete the update on my FY2017 passive income from non-REITs.

Read Part 4: HERE.







Related posts:
1. Reduced Accordia Golf Trust.
2. SingTel analysis.

FY2017 passive income from non-REITs (Part 2).

If you have not read Part 1, read it: HERE.

To continue, as things turned out, I grew my relatively small initial investment in ComfortDelgro rather significantly.

For weeks following the time I first invested in the business, ComfortDelgro's share price did a rather placid see-saw movement.

Whenever the share price retreated to around $2.00 per share, I nibbled, as I decided after doing more research that $2.00 was a fairly good price and I believe it still is.






Then, informed by the technical analysis which I did a few months ago, I increased my investment again when its stock declined closer to $1.90 a share prior to the proposed deal with Uber to purchase a 51% stake in LCR.

There was a rebound in its share price after the announcement but in the following sessions, it drifted lower to test support found at $1.90 a share.

What to do?

Panic and sell?

No, I pounced on the opportunity to add again to my investment.

See:
ComfortDelgro's 51% stake in LCR.

In a downtrend, supports are more likely to break but, together with the fundamental analysis I did, they gave me an idea of where I might want to add to my investment.






Could the stock decline even more in price? 

I don't know if it would but it could.

In the face of massive disruption by Grab, I decided that ComfortDelgro could continue with a 10c DPS comfortably (pun intended) even without its Singapore taxi business.

In my first blog on ComfortDelgro, if you remember, I assumed what I felt was a very realistic 7c DPS and, so, anything higher than that is a bonus to me.

As long as this remains true, all else remaining equal, I would very likely add to my investment on any future price weakness which coincides with the supports which I have identified.

See technical analysis: HERE.






From an investing for income angle, I am comfortable with ComfortDelgro. 

With rather strong cash flow, the investment risk is very low although its share price could continue to experience volatility.

For income investors, it should be about getting in at a price which makes sense to us and price volatility really should not bother us unless we are investing by using money which we really shouldn't be using.

It is worth being reminded that ComfortDelgro is not just about taxis in Singapore.






Having said this, the fear that ComfortDelgro could see its stock sinking in price is not unreasonable, of course.

Someone asked if ComfortDelgro's share price has bottomed?

I would be very wary of anyone who tells me he knows the answer, either way.

Although I did a bit of technical analysis on ComfortDelgro, I do not know if the stock price has bottomed but it looks like it has at least found a floor and the momentum oscillators are supportive of this.





Everybody fears the unknown.

Now, fear can be a good thing because it stops us from acting recklessly but irrational fear might hold us back from making sensible decisions.

I always tell myself that to fear is human but it is never a good excuse for inaction.

I also remind myself that I probably would not be able to buy at the lowest possible price.

If I did, I was lucky.






In summary, as an investor and not a trader, I decided that since a sustainable and meaningful dividend from a company like ComfortDelgro was attractive for me, the rational thing for me to do was to make it a bigger investment in my portfolio.

So, I did exactly that and it helps to reduce my investment portfolio's at one time heavy reliance on S-REITs for passive income.

At lower prices, all else being equal, dividend yield would expand and make investing in ComfortDelgro for income even more compelling.

Now, you know why I am ready to buy much more if there should be more blood letting in the market.

Roll out the war chests?

That could happen.

See related posts at the end of this blog on why I decided to invest in ComfortDelgro as its share price plunged.










Some might remember why I added substantially to my investment in SingTel earlier in the year.

I will talk about this in Part 3: HERE.

Related posts:
1. Massive short interest.

2. ComfortDelgro analysis.