Sell into the rally and stay invested.

A reader left me a comment recently:

"Many AK shares like CDG and APTT have gone up. I hope AK didn't dispose them."

Why would I sell them before?

I like being paid while I wait.

This is something I have said many times before.

Therefore, regular readers would find this quite familiar.






We buy undervalued income producing assets, receive dividends while waiting for Mr. Market to turn realistic.

We could even buy good income producing assets at fairer values, receive dividends while waiting for Mr. Market to turn optimistic.

When Mr. Market is greedy, the wait is over.






Having said this, regular readers would also be familiar with the phrase "trading around a core position".

Although I will sometimes sell into a market rally to lock in some gains, I always stay invested for income, retaining a core position.

I am an income investor at heart and more so now as a retiree but there is also no accounting for Mr. Market's moods which means staying invested is probably sensible.






Despite the fact that there are negative divergences aplenty, the bull might have legs and market euphoria could last longer.

Some readers who attended "Evening with AK and friends" might remember the way I explained what a negative divergence was.

An example is as the share price goes higher, trading volume dwindles.

Volume is the fuel that drives rallies.

If volume dwindles, the rally could be ending.






There are potential double tops as well.

We see this when the share price, having retreated from a high, tries to go higher but fails.

As prices retest recent highs, we want to see higher highs forming on the momentum oscillators such as the MACD.

If we see lower highs in such instances, we have a negative divergence.





Mr. Market's euphoria could be sputtering.

I have trimmed my investment portfolio by some 25% to 30% since my last blog post.

So, as you can see, it is not an overly big reduction.

I have sold into the rally but I am staying invested.






The rally is also a good opportunity to sell stocks which are more speculative like APTT.

APTT was really too cheap to ignore and regular readers know I was gobbling as its unit price plunged.

At one stage, it went under 13c a unit and, of course, I bought more.

The market rally has allowed me to book a gain on my investment in APTT which, I won't deny, is a pretty speculative position, whichever way we cut it.






A couple of stocks which received greater attention were SingTel and Wilmar, which I bought more of as their share prices plunged in the last one year or more.

Like APTT, they have paid me dividends while I waited.

I decided to reduce my positions in SingTel and Wilmar heavily because, to me, their charts show obvious negative divergences.

Could we see $3.00 to $3.10 a share for SingTel and Wilmar again in the next few months?

It is a rhetorical question, of course.






Certainly, we cannot predict but we can prepare.

There is no better way to be prepared than to have a full war chest.

AK's war chest says:

"Burp. Pardon me."

So, what do I do now?

I go back to being paid while waiting (and playing Neverwinter).

I am just talking to myself, of course.




Related posts:
1. Wilmar.
2. SingTel and CDG.
3. 2018 passive income and APTT.
4. Make investing easy with 3 things.

Recently published:
Ascendas Hospitality Trust.

Ascendas Hospitality Trust's investors getting a bad deal?

As a backgrounder, if you have not done so, you might want to read this blog:

Ascott Residence Trust and Ascendas Hospitality Trust to become one.

It was published on Wednesday, July 3rd, 2019.

The blog here is in reply to a reader's comment that it is a bad deal for AHT investors.




AK says...

While not fantastic, really, it isn't that bad a deal for AHT investors.

For every AHT unit, we will get almost 0.8 unit in the combined entity.

Priced at $1.30 per unit, the deal values AHT at almost $1.04 a unit.

AHT was trading at way below its NAV (of about $1.01) for too long.

See:
AHT Stock Fundamentals.




Also, priced at about $1.04 a unit, the yield of AHT would be about 5.76%.

At $1.30 a unit, the combined entity will provide us with a distribution yield of about 5.5% which is pretty close to this 5.76%.

After taking into consideration the cash payment of 5+ cents per unit which AHT investors will get (and this is close to one year's worth of income distribution), I believe that this is a fair deal.




We should not compare AHT with the new combined entity by looking at yield numbers only.

We might see the tree but not the forest.

I am willing to accept a slightly lower distribution yield from what I think should be a stronger and more resilient business entity.

The new business entity will also have a much lower level of concentration risk which was a negative about AHT.




Of course, if we are pretty sure we are able to secure a much higher yield in a similar investment with a similar risk profile elsewhere, we should move our money to where it will be treated better.

Or if we wish to lock in the capital gains, there is nothing wrong with taking profit by selling our units to Mr. Market either.

As I do not have an alternative investment in mind, I am quite happy to stay put. :)




Recently published:
2Q 2019 passive income.

Is AK blogging about Neverwinter?

In response to a reader's comment: HERE.

Hi Samuel,

Unfortunately, Neverwinter doesn't have a big following here in Asia, it seems.

The guild I belong to is mostly made up of adventurers from North America and a handful are from Europe.

If you decide that you want to switch guilds anyway, you are welcome to apply to the guild I am in: 

Neverwinter SOLO Alliance.

We are a group of solo players that got together to form a guild so that we can enjoy the benefits a guild brings to adventurers.

There is a strict clean language rule and we avoid politics and religion in chat.

Otherwise, we are pretty easy going.

If you do join SOLO, please don't actively look for me in the guild chat.

I like to stay low profile in the virtual world too. ;)





As for making Astral Diamonds, we have to remember that we are only allowed to refine 100K Rough AD a day and if we want more AD, staying F2P, we have to think of getting them from other players.

To make AD from other players, we have to make use of the Auction House (AH) to sell things which other players need or want.

Warren Buffett said that the stock market is a place where money is transferred from the impatient to the patient.

Well, the Neverwinter AH is a place where AD is transferred from the impatient to the patient. ;p





For example, people are always in a rush to refine their gear and enchantments.

So, sell the unbound RP items (black pearls etc.) to them.

I always take my time and only use bound RP (bound to account or bound to character) for my refinement needs.

You can get bound RP from daily invocations and by having 

1. Dragon's Hoard Enchantment (from Tyranny of Dragons campaign), 

2. Fey Blessing Enchantment (from Sharandar Campaign) and 

3. Quartermaster's Enchantment (from the Siege of Neverwinter event which happens a couple of times a year) 

in the utility slots in your gear.





This is just one idea.

Go watch some Youtube videos on the topic.

There are so many videos but the older ones might have ideas which are no longer feasible.

Here is a recent video from a very established Neverwinter content creator, Kali Gold, on how to farm gold and how to convert that into AD, for example:









I think most of ASSI's readers are not interested in Neverwinter but I have decided to give your suggestion a go and publish this reply to you as a blog to see the response, if any. ;)

Recently published:
1. Ascott Residence Trust and Ascendas Hospitality Trust to become one.
2. 2Q 2019 passive income.

Ascott Residence Trust and Ascendas Hospitality Trust to become one.

In reply to a reader's comment: HERE.

Ascendas Hospitality Trust (AHT) has been a good investment for income over the years.

AHT has also been rather undervalued by Mr. Market for most of those years.

This deal shows the true value of AHT.

"ART will acquire all AHT stapled units at $1.0868 each, comprising $0.0543 in cash and 0.7942 ART-BT stapled units issued at a price of $1.30."

Source: 
Yahoo!Finance.




I first invested in AHT in 2014 and paid a price of 72c a unit.

See:
AHT: A nibble.

Over the years, I accumulated at prices lower than my initial purchase price, sometimes significantly lower, whenever Mr. Market felt depressed about AHT.

Of course, AHT became a relatively substantial part of my portfolio.

AHT has been generating meaningful passive income for me regularly.




In 2017, I said AHT should continue to deliver.

"Not too concerned with the fluctuation in unit price. As long as the trust continues to do well enough to pay me an income that makes sense, I am happy."

See:
AHT should do well.




I am glad to see that I will receive some cash payment and also receive units in the enlarged entity.

This means that I will continue to enjoy income distributions after the deal is done.

I like to think that patience will be rewarded.

In my experience, it has mostly been the case.

Congratulations, fellow AHT investors.




Recently published:
2Q 2019 passive income.
(With contribution from AHT)

2Q 2019 passive income.

It has been almost three months since my last blog and I hope everyone is doing well.

1. Update

So, what have I been doing?

OK, I will tell you and, maybe, there is a message for everyone in this somewhere too.

I have been having a blast in Neverwinter!

Many things have changed with the new expansion (Module 16: Undermountain) and I love the game even more now.

In fact, I enjoy Neverwinter so much that I created a third character just a few days ago.

This time, I created a wizard.





Neverwinter is a free to play (F2P) MMORPG and although we could use real money to buy game currency, we don't have to do it.

Everything in the game could bought by earning game currencies while playing the game.

There will always be adventurers who are impatient and want to get everything faster, of course.

I have met quite a few impatient adventurers in Neverwinter and they are the ones who have spent hundreds or even thousands of dollars on the game.

Thanks to them, AK has a free MMORPG to play.

As for me, after taking some time to understand Neverwinter's economy and how to make Astral Diamonds (i.e. the most important in-game currency), I have become quite wealthy in Neverwinter and, like in real life, having wealth in the virtual world makes life more comfortable.





I no longer have to run random dungeons with pick up groups (PUGs), which basically means groups of strangers, just to earn some Astral Diamonds.

I used to have to do it everyday as a newbie in the game, of course, and it is just like exchanging our time for money as an employee in real life except that it is more fun.

Just like in real life, being AK, I tried to get to a point where I didn't have to do that and, now, I don't have to.

I am a Neverwinter multi-millionaire.

I am enjoying Neverwinter without having to worry about not having enough Astral Diamonds.

It is like enjoying real life without having to worry about money.

Anyway, did I say there could be a message for everyone here?

I wonder what that message is?





2. Blogging

I have not been blogging and will probably not be blogging much in the future either.

I am tempted to say that I won't be blogging anymore and that this is my last blog, seeing how much time I am spending on gaming, but never say never.

Gaming is like how blogging was for me until recently.

I first discovered blogging 10 years ago and blogging took up more and more time until a point when it became a full time activity.

So, I apologise for my tardy replies to readers who have left comments here in my blog and I also apologise in advance to readers who might leave comments for me henceforth.

It is probably a good idea not to leave comments which require timely replies from me.




3. Facebook

I am unable to log in to Facebook anymore.

I don't know why and after they removed all the links to my blog from my page, to be honest, I don't really care about Facebook now.

After all, quite obviously, they don't care about me.

See:
Financially free and Facebook free.

It has been almost three months since I last logged into Facebook.

So, there are probably many messages from readers there which I won't be able to read or reply to now.

If you are one of the affected readers and would like to reach me, please leave a comment in this blog instead.

Apologies for my tardy reply in advance and, again, if it is something that requires a timely response, it might be better not to write as you would most likely be disappointed.





4. Passive income

Now, that we have addressed the important stuff, the numbers.

How much did AK receive in passive income in 2Q 2019?

S$ 60,906.39

Not a lot to the very rich but it is a meaningful sum of money to me.





Some investments that generated more than $2000 in passive income for me in 2Q 2019:

1. AA REIT
2. Accordia Golf Trust
3. Comfort Delgro
4. Wilmar
5. VICOM
6. Frasers Logistics Trust
7. AHT
8. OCBC
9. DBS
10. Ho Bee Land

Readers who have been following my blog will know that what I have achieved did not happen overnight, of course.

See:
How did AK create a 6 digits annual passive income?





5. Plan.

People might ask me what is my plan now with all the economic uncertainties.

I like to think that what I have now is strong enough to weather any financial shock.

I have a meaningful income generating investment portfolio.

So, I have been receiving passive income and that has been beefing up my war chest.

This will probably go on.

See:
Wait to pick durians.





I have a sizable emergency fund for if things should go terribly wrong.

I would like to remind everyone not to ever think that credit is always easy to obtain.

When things go terribly wrong like they sometimes do, credit could easily dry up as even existing lines of credit could get chopped.

Having money we can easily get our hands on when we need it fast with no strings attached means we are our own masters.

See:
Emergency fund.





I will continue to fully contribute to my CPF as I treat it as the risk free and volatility free investment grade bond component of my investment portfolio.

If I have to, I will be able to withdraw money from my CPF when I turn 55 which is only 7 years from now.

Otherwise, I will continue to use my CPF as a savings account.

I hope nothing so financially disastrous happens that I would have to tap on my CPF savings in future.

See:
$1.5 million in CPF savings.






6. Mantra

Always remember this.


If AK can do it, so can you!

I believe it and so should you!

Keep doing the right things and the right things will most likely happen for you.

Gambatte!


See:
Is AK a rags to riches story?






Related posts:
1. 1Q 2019 passive income.
2. Financial freedom and a break.
3. AK is a full time gamer.

1Q 2019 passive income.

Sometimes, I hear people say that time slows to a crawl once they are retired.

I find that strange because time flies faster than ever for me in my retirement.

Again, 3 months have gone past me in the blink of an eye.

Again, I am reminded that time is too precious for us to simply keep exchanging it for money.

See:
Why did I want an early retirement?

Yes, some people say that time is money.

For me, I say time is more precious than money.

Don't be a wage slave but also don't be in a situation where we have too much money and not enough time.

See:
Financial freedom and not enough time.





Now that the philosophical moment is over, how much did I receive in 1Q 2019?

S$ 71,052.90

Sounds like a lot of money, doesn't it?

It sounds like a lot to me, anyway.

It is this much because of RHT Health Trust's bumper income distribution which is not going to be repeated.

If we disregard RHT Health Trust, my largest passive income contributors in 1Q 2019 are:

1. SingTel

2. AA REIT

3. IREIT 

For most of us, investing for income will most likely make a meaningful difference to our financial health.

I believe that patience will be rewarded and it is often so for me.

If AK can do it, so can you!

Believe it.

Believe in yourself.

Related posts:
1. 2018 passive income.

2. Income tax payable 2019.

In conversation with AK 2019 (Part 1).

As I cannot post stuff in Facebook anymore, periodically, I will share some of the more interesting conversations I have from time to time with readers as blogs in ASSI instead.

If you don't know what I am talking about, you must have missed my last blog post.

See:
Financially free and Facebook free.

Seriously?

Reader #1 says...
I have a friend, she is reaching 55 this year, she is wondering if she should go for enhanced CPF life.
May you share your thoughts? Thank you


AK says...
If your friend is not a savvy investor, having a larger monthly payout from CPF LIFE is a good choice. 🙂


Related post:
FRS and ERS CPF LIFE payouts.

Reader #2 says...
I done some market study with frens in telco n IT biz as well.

I got a feeling singtel will recover sooner than we expected.

Pricing has stabilised at the moment for them in india n oz

I was told to avoid the starhub totally because this coy doesnt has any more drivers fwrd

Airtel ceo has also said that recovery in 2020.

The ambani case of being used by ericcson will see anil coy to be bot over by his brother mukesh jio reliance soon.

Therefore it will reduced another big player in india.

Ak can u write something abt ocbc?
After recent result?
My feel is coy is too giam siap w dividends

AK says...
I still like SingTel.
Nothing to say about OCBC really except that I agree they are giam siap... 😛

Related post:
FY 2018 passive income.






Reader #3 says...
Sell part of ComfortDelgro & buy Soilbuild lor.
R u still holding on to your Soilbuild?

AK says...
No Soilbuild liao.
I blogged about this before.

Related post:
Was Soilbuild REIT shabby?





Reader #4 says...
I had to saved, scrimp and also "avoid" big weddings haha

AK says...
Many people I know, including readers of ASSI, earn more money than I did (as a worker).

It is easier for them to achieve financial freedom (than for many average workers).

Just have to keep our needs simple and our wants few (for a start). 🙂

Related post:
More passive income than richer folks.

Financially free and Facebook free!

Reader says:
hi ak. did something happen to your Facebook page?
only can see posts from 2018 haha

AK says...
I also dunno why but FB removed all links to my blog 😞

Reader says...
shucks haha. I guess they getting alot of flak for various things
even the assi page ah. which is so odd

AK says...
I will just stop using FB to update readers, I guess.
No loss to me. 
I guess it will inconvenience readers though. 😞






A message from Facebook.

"This post goes against our Community Standards, so no one else can see it."

Facebook has removed ALL the links to my blog.

So, I won't be able to update readers using Facebook anymore.

Readers who have been following me using Facebook will just have to check my blog from time to time for updates.

There are, of course, also other means to follow my blog.

Check my blog's left side bar.

AK is financially free and now he is also Facebook free!

Income tax payable in 2019?

Readers know that I have been spending a lot of time in Neverwinter and it will continue to be so as Neverwinter is launching Mod 16 a few weeks from now.

Mod 16 is Neverwinter's largest Mod (or expansion) in its 5+ years history and it is going to bring big changes to the game.

I will be spending a lot more time farming and preparing for the new Mod.

So, a longer period of absence from my blog and FB page or wall could be expected in the near future.

After this blog post, it could be quite a while before there is another one.

Please don't be worried if you do not hear from me for several weeks in a row.







Anyway, regular readers know that one of the things I try to do is to inspire.

I do this because I believe that even for average working people, our financial health can be and should be better.

The catalyst for this blog post is this:

Yes, it is that time of the year again and I am being reminded again how I am not making any financial contribution towards nation building.

Really?

Bad AK! Bad AK!

I was looking through my past blogs on the topic of income tax and I think I did not blog about this last year.

The last blog I had on the topic of "income tax" was in 2017, it seems.








I remember when I was a young working adult, a senior told me that I should be happy if I was paying more income tax because that meant that I was earning more money.

Higher income meant paying more income tax.

It seemed to make sense. 

At the same time I asked why should it make sense?

I didn't ask the senior that, of course.

Even then, I talked to myself.

Yes, I was and still am mental.






Anyway, for some time now, being unemployed or, more accurately, economically inactive, I have no income and therefore I do not have to pay income tax, right?

Well, not totally.

I am economically inactive but that doesn't mean I don't have any income.

Without any income and not being born with a spoon made of some precious metal in my mouth, I wouldn't last very long being economically inactive.

See:
AK's 2018 income.






Spend our time working for money and pay income tax?

Make more money and pay more income tax?

OR

Spend our time not working for money and don't have to pay income tax?

Make more money and pay less income tax?

For me, it is a no brainer.








Remember, it is not impossible.

If we want it bad enough, we will make it happen.

Believe me. 

Believe in yourself.


Just don't do anything illegal or unethical to achieve our goals.







Want to pay less income tax or not pay any income tax at all while having income?

See the related post at the end of this blog and also follow the hyperlinks to more related posts.

If AK can do it, so can you!




Related post:
Income tax payable (2017).

Passive income made by passive income? Yes!

This blog material is taken from a reply I recently gave a young reader who is doubtful that a comfortable retirement is achievable in Singapore for the average worker.

The reader also wonders why AK seems to be pretty calm about losses in investments while he is likely to get rather depressed.

AK says...
If we are right more often than we are wrong, we should do well enough and I think I have been lucky that way.

After so many years as an investor, I am more forgiving towards myself and try not to dwell too much on losses because no matter how good an investor we are, it is bound to happen.

What helps to give me peace of mind is investing for income.

Investing for income, I am less bothered by daily price fluctuations.





You might be interested in the blog where I said we could save 100% of our take home pay if we do the right thing.

See:
Save 100% of your take home pay!

Invest for income and we will get "free money" (i.e. passive income).

Why spend the money we earn from working when we can spend "free money"?

I am even more forgiving towards myself these days because I am now in a situation where the "free money" I have is from the "free money" made by the money I earned years ago.

Now, give that a moment to sink in and, maybe, a light bulb would turn on above your head.





Yes, for some time now, my passive income is made by the passive income made by my earned income.

What is better than passive income?

Passive income made by our passive income!






If we do the right things, it is definitely possible to retire more comfortably in Singapore.

If AK can do it, so can you!

Related post:
To achieve financial freedom, most of us have to create Dividend Machines.