Largest investments updated (1Q 2022).

It has been a while since I last published a blog like this.

I have been lazy.

So, what's new, right?

In my defense, I did publish a couple of blogs on my largest REIT investments.

For example:

Largest REIT investments updated.

Anyway, readers who have been following my blogs regularly probably will not get much out of this blog. 

They would already have a rough idea how my investment portfolio has morphed in the last 2 years or so and also the reasons why.

For what it is worth, here is a quick update.

$500,000 or more:

CPF

Yes, I know that some will laugh at this.

It is OK because I am laughing too.

Laughter is good for our health.

So, laugh away, whatever the reason. ;p

See:
$1.1 million in CPF savings.

My CPF savings is the investment grade bond component of my portfolio.

It is my ultimate safety net.

From $350,000 to $499,999:

AIMS APAC REIT

IREIT Global

This bracket welcomes a new member, IREIT Global.

AIMS APAC REIT is my longest lasting top investment and has witnessed all the changes in my portfolio.

It sounds a bit spooky when I put it this way.

Absolutely free of cost for quite some time already, it is still generating good income for me.

I hope IREIT Global will be good to me in a similar fashion too.

Time will tell.

New readers might be interested in this blog:

AIMS APAC REIT or IREIT Global?

From $200,000 to $349,999:

ComfortDelgro 

Centurion Corporation

DBS

OCBC

UOB

Wilmar International

ComfortDelgro is the weakest position in this bracket no thanks to the pandemic but even with the huge decline in its share price, the market value of my investment is still above $200,000.

I do expect things to improve from here.

See:
ComfortDelgro: AK replies to comments.

Centurion Corporation is a much larger investment for me today and it is close to being promoted to the next bracket.

I blogged about Centurion Corporation recently and if you don't remember, see:
1Q 2022 passive income.

Like ComfortDelgro, I expect things to improve from here for Centurion Corporation.

UOB is a new member in this bracket as I only became invested in the bank during the last bear market.

My investments in DBS, OCBC and UOB are very close to being promoted to the next bracket as their market values have ballooned.

I have not added to my positions since the last bear market.

So, this is mostly due to the higher prices of their common stock.

To reduce my reliance on REITs for income, building long positions in all three local banks has proven to be rewarding thus far and I hope it continues to be so.

See:
Higher dividends from DBS, OCBC and UOB.

Wilmar International is another new member in this bracket.

More accurately, it is a returning member.

Wilmar moves into this higher bracket mostly for the same reason as the banks.

Its share price has appreciated meaningfully.

Still undervalued even though its share price is much higher now, it could possibly go higher.

Of course, it could also stay undervalued.

See:
Wilmar was $7.11 a share.

From $100,000 to $199,999:

Sabana REIT

Sabana REIT is my one and only investment in this bracket now.

The REIT returned as one of my largest investments in late 2020 after the low ball offer by ESR REIT was rejected.

Having activist investors on my side is very reassuring. 

I look forward to more value being unlocked.

See:
Sabana REIT to the rescue.

As promised, this is just a quick update.

OK, maybe, I will nag a little.

Remember, AK does not wear a coat.

So, no coattail to ride on.

Riding on coattails can be very dangerous especially if we do not have insurance. ;p

References:
1. Largest investments updated (4Q 2019).
2. Investing with some common sense.

Recently published:
Lying flat...

"Lying flat" is better than financial freedom?

I just watched a YT video on the "lying flat" movement that originated in China.

What is this?

"Tang ping (Chinese: 躺平; pinyin: tǎng píng; lit. 'lying flat') is a... movement in China beginning in April 2021. It is a rejection of societal pressures to overwork , such as in the 996 working hour system..." 

Source: Wikipedia.

996 means working from 9AM to 9PM for 6 days every week.

Apparently, the movement has even moved to the USA which is partly why it is harder for American businesses to find workers now which contributes to inflationary pressure as well.

"Lying flat" is different from achieving financial freedom.

It is about living a very low maintenance life to make our money last for as long as possible without having to work and then going back to work when we have run out of money.

Then, go back to "lying flat" until our money runs out and then going back to work for some money.

Many things boggle my mind these days but this idea of "lying flat" takes the cake.

Some readers might remember that someone said that financially free AK should be ashamed of himself.

See: 
Financially free AK should be ashamed...

I actually felt pretty good about myself after watching the said YT video.

One of the things I always say is that everyone's life can be and should be better.

Is "lying flat" a better life than working towards financial freedom?

Hmm.

Watch the YT video and decide for yourself:

Mind boggling.

While a low maintenance lifestyle sounds appealing to me, I don't think "lying flat" is the way to go.

I have always believed that we should work hard and plan for a good retirement.

People who are "lying flat" now will probably have a big problem in their old age and they could become a burden to society.

It is not just dangerous not to think ahead but it is also socially irresponsible.

Very short sighted.

Since people who are "lying flat" do work sometimes, is it a form of semi-retirement?

Well, maybe.

While I agree that a 996 work culture is bad, "lying flat" sounds like escapism to me.

People who are "lying flat" work whenever they need to while people who are "financially free" work whenever they want to.

I have also mentioned "wage slavery" in my blog many times before and how we can free ourselves.

"Lying flat" does not free us from "wage slavery" but instead shackles us forever as wage slaves.

Having pleasant dreams while lying in bed is quite nice but "lying flat" could lead to nightmares.

References:

1. Freedom from wage slavery!
2. Die faster if we work harder?

3. Plan early for retirement.

1Q 2022 passive income: Bad news galore.

Quite a few things happened in 1Q 2022.

As the world continues to grapple with variants of COVID-19 with the latest being the Deltacron or the offspring of the Delta and Omicron variants, Russia decided to start a war.

Inflation which was already gaining steam was pushed higher.

The Fed increased interest rate and there will be more to come.

In an inflationary environment, we will see rising prices in commodities and we could see companies like Wilmar doing better.

In an environment of rising interest rates, we could see banks doing better.

Even REITs could do better and for those who missed my latest blogs on REITs, see:

Why AK invests in REITs?

and 

How to invest in REITs?

For those who are well read, guess where this passage came from?

Anyway, regular readers know that I didn't do much in the stock market last year.

I feel that, overall, my investment portfolio is in pretty good shape.

None of my investments which matters to me is keeping me up at night.

(Only Genshin Impact keeps me up at night now.)

Last year, I added to my investment in Sabana REIT in early 2021 and then added to my investment in Wilmar as its stock price sank in 3Q 2021.

Nothing else.

So, I didn't do much last year but what about this year so far?

Well, I thought I wouldn't be doing anything in 1Q 2022 because I rather liked how my investment portfolio looked.

As I did not buy much of anything in the stock market in more than a year, my cash pile has been growing at a steady pace which really isn't a bad thing. 

However, towards the end of 1Q 2022, I decided to add to my investment in Centurion Corp.

My investment in Centurion Corp. was already very substantial and I really shouldn't be adding but I just couldn't resist it.

So, I guess AK doesn't have as much character as he thought he had. (TmT)

There is only a small handful of people who each has 1 million or more shares of Centurion Corp. and if I am not careful, I might join their ranks.

Prior to 1Q 2022, the last time I added to my investment in Centurion Corp. was in 2020.

I should say "the last few times" because looking at my records, there were multiple entries made at 32c a share in 2020.

Why couldn't I resist adding to my investment?

OK, I had a chat with my bowling ball and it had a few things to tell me.

Centurion Corp. has weathered the pandemic well and has stayed profitable despite the challenges.

This speaks volumes.

Well managed and resilient, Centurion Corp. is paying dividend again.

Although it is just 0.5 cent per share, my bowling ball told me that they could have easily paid 2 cents per share.

Really?

See:

If we look at the numbers, net operating cash not only recovered but exceeded pre-pandemic level.

Centurion Corp. was paying 2 cents dividend per share prior to the pandemic.

Then, why only 0.5 cent dividend per share now?

My bowling ball was silent on this.

If I were to make a guess, they are probably being cautious which isn't a bad thing, especially if they plan on paying down debt in the face of rising interest rates.

Looking at their financial statement, Centurion Corp. reduced borrowings last year when dividends were suspended.

Of course, if they have identified new businesses which would generate more income but would like to draw on internal resources instead of debt, it isn't a bad idea either.

Centurion Corp. should pay a larger dividend to shareholders if they have no better use for the money on hand.

Centurion Corp. has recovered well and seems to be as valuable a company today as it was pre-pandemic.

In fact, if we look at the NAV/share, it is much higher than it was pre-pandemic which suggests that Centurion Corp. is even more valuable today.

For the rest of the year, we could see Centurion Corp. doing better as Singapore eases border restrictions and more foreign workers return.

Source: Bloomberg.

We can expect the occupancy of their dormitories for students in the UK, Australia and USA to do better for the rest of the year too.

Their student accommodation assets in the UK have already seen a big improvement in occupancy.

Source: Presentation dated 24 Feb 22.

While the price of its stock languishes even as things improve, it seems like a good opportunity to increase my investment in Centurion Corp. and at a bigger discount to NAV too.

Centurion Corp. is undervalued but it could stay undervalued for a long time.

It might take a while but I like to think that patience will be rewarded.

"UOB Kay Hian analyst Adrian Loh has kept "buy" on Centurion with a higher target price of 45 cents from 43 cents previously."  Source: The EDGE.

Now, time for my passive income numbers.

In 1Q 2022, the three largest income generators for me were:

1. IREIT Global

2. AIMS APAC REIT

3. Sabana REIT

Total passive income received in 1Q 2022:

S$ 40,697.68

In 1Q 2021, my passive income was $36,551.14 and that was some 48% higher than it was in 1Q 2020 due to larger investments made in Sabana REIT and IREIT Global.

So, the fact that 1Q 2022 passive income was some 11% higher than it was in 1Q 2021 makes me very happy and the bigger number is thanks to IREIT Global's stellar performance.

I like investing in good income generating assets.

I like investing in them especially if they are undervalued.

IREIT Global not only generates good income for me, the REIT is also financially strong which gives me peace of mind:

From the numbers, to me, IREIT Global is clearly undervalued.

I have many blogs on IREIT Global and if you are interested, use the Search function at the top of the web version of my blog to find them.

There won't be any income distribution from IREIT Global and Sabana REIT in 2Q 2022 but DBS, OCBC and UOB should be paying dividends then.

It will be interesting to see if my passive income improves year on year in 2Q 2022 as the banks were still paying lower dividends in 2Q 2021.

1Q 2022 was filled with bad news and, for me, passive income was a bright spark amidst all the doom and gloom.

If we hold a relatively diversified investment portfolio of bona fide income producing assets, we should enjoy some peace of mind even as the world seems more than a bit messed up.

Hold some investment grade bonds too and regular readers know that the CPF does that for me.

See:
Unless we are very rich...

I remind myself that I can only do what I feel is right as I keep my feet firmly on the ground and not chase the latest get rich quick ideas.

If I am able to grow my wealth slowly as a retiree who depends solely on passive income to meet all my financial obligations, I am happy.

Invest more.

Speculate less.

For sure, I do not have all the answers and I can only hope for the best.

That's all for now.

Till the next blog, stay safe.

References:
1. Russia invades Ukraine...

2. 4Q 2021 passive income.

3. 1Q 2021 passive income.

How to invest in REITs?

This is a reply to a reader's comment on REITs and how I process them in my mind. 

If you are interested, see reader's comment: HERE. 

My reply: 

What we look out for will depend on our motivation. 

As an investor for income, I am more interested in whether my investments are able to pay me a meaningful and sustainable dividend.

This is especially important for a retiree like me with no earned income.

When it comes to REITs, I pay attention to whether money is being put in my pocket.

I would ask if what the management is doing would be beneficial or detrimental over time?

If beneficial, we want to make sure the benefits are bona fide for the longer term.

We want to make sure that the benefits are not illusionary or temporary.

Of course, there are other things to consider because we don't want to put money in an Eagle Hospitality Trust, for example.


It is hard to put everything down on paper because it could also just be personal experience at times. 

I could get bad vibes and just decide to stay away for peace of mind, for example.

So, for a start, understand what you want and you will know what to look out for.  

"I can never make it easy by saying ‘Here are three things’. You have to derive it yourself to ingrain it in your head for the rest of your life." 

- Charlie Munger 

Having said this, there was something I gave out during my talks (i.e. Evening with AK and friends) in the past and it might or might not be useful to you:

I also pulled some older blogs which I think might make for interesting reading: 

1. Ascendas Hospitality Trust: A nibble. 

2. Eagle Hospitality Trust: My philosophy. 

3. Saizen REIT is undervalued. 

4. Croesus Retail Trust and current thoughts. 

5. Sabana REIT and current thoughts. 

6. REITs and rights issue.

After more than 12 years of blogging, you could probably find more related posts in ASSI if you do a search.

You could also go to the web version of my blog and read the blogs linked in the right sidebar.

Unfortunately, the mobile version of my blog does not display the sidebars (and many other things.)

Gambatte! 

Recently published: 

Why AK invests in REITs?

Why AK invests in REITs?

Quite a few recent comments were about REITs.

So, a blog on why I invest in REITs is probably a good idea.

Some people are worried that impending rising interest rates will mean REITs doing poorly.

After all, REITs are all leveraged to some degree and higher interest rates will surely burden REITs.

However, compared to us directly investing in a property, REITs are probably more conservative when it comes to borrowing money with allowed gearing capped at 50%.

We are allowed a higher gearing level in the purchase of a property, in comparison, with 70% or 80% LTV being the norm.

Of course, property valuation has to be trustworthy but that is another topic.

If you are interested, maybe, read this blog:

Eagle Hospitality Trust: Financial engineering NAV.

So, if we are worried about rising interest rates and REITs doing poorly, we should also be worried about investing in real estate in general.

I very much prefer investing in REITs because:

1. I do not want to take on more debt.

2. I do not want concentration risk.

3. I do not want to deal with tenants.

Regular readers know I do not borrow money to invest in stocks.

I know some will argue that some debt is not a bad thing and I agree because a judicious amount of debt can make good decisions deliver better results.

Of course, the opposite is also true as debt will magnify the damage resulting from bad decisions.

There is no telling when a seemingly good decision could turn bad and I do not want to take the chance especially in retirement.

In fact, investing in REITs already exposes us to debt since REITs are leveraged.

I just don't want to take on more debt on a personal level and like I said, REITs are relatively conservative when it comes to leverage which helps to give me peace of mind.

See:

Gear up to get more passive income?

Unless we are very rich, it is unlikely that we can buy more than one or, maybe, two properties on our own steam.

This creates concentration risk and if we should end up buying a property which is hard to rent out or resell, we could be in trouble.

The truth is that most of us are not experts when it comes to real estate investment and we usually rely on "experts."

Concentration risk also includes counter party risk.

So, even if we should rent out our property, if the tenant stops paying rent for some reason, rental income goes to zero.

When we invest in REITs, we invest in a bigger number of buildings and we are collecting rent from a larger number of tenants.

See:
$500K stuck in bad property investment!

and

Condo investment has been a drag!

REITs are professionally managed.

I don't have to look for tenants.

I don't have to deal with their demands or complaints.

I don't have to deal with the upkeep of the properties.

The only thing I have to do is to check my bank account once every quarter to make sure these REITs pay me a share of the rental income.

I should also mention that it is rarely possible to buy properties at a discount to their valuation.

Properties are rarely mispriced like some were in the USA  during the early days of the Global Financial Crisis.

However, it is often possible to buy REITs at a discount to their NAV and a relatively big discount at times.

If we look at my largest investments in REITs today, most of my investment in AIMS APAC REIT was made when it was trading at a discount to NAV more than 10 years ago.

My investment in AIMS APAC REIT has been free of cost for some time and it is still generating income for me.

IREIT Global is a more recent investment in comparison and I increased my investment in the REIT substantially at a discount to its NAV and it is still trading at a discount to NAV today.

Sabana REIT grew from a small legacy position to a more substantial position after the low ball offer by ESR REIT was rejected and the purchases which resulted in the relatively substantial position I have now were made at a big discount to NAV.

I could go back a few years and it was the same with Saizen REIT, for example.

See my response to Felix Leong who said I was plainly lucky:
Saizen REIT: Right prices and luck.

Investing in bona fide income generating assets can hardly go wrong.

When there is mispricing, we could possibly make more money.

When compared to real estate, mispricing is not as rare when it comes to REITs.

In recent years, I increased my investments in non-REITs but it wasn't because I felt that REITs were no longer relevant to income investors.

Investing in income generating non-REITs is just a way to avoid concentration risk.

Yes, REITs reduce concentration risk but having 100% of our portfolio in REITs also creates concentration risk.

OK, before I confuse myself further, I better stop.

Remember, this is just AK talking to himself, as usual.

It is never my way or the highway.

References:

1. Dumping all my REITs.
2. Largest REIT investments.

3. 4Q 2021 passive income.

Recently published:
Lost on Alibaba and $200K left...

Lost more on Alibaba and $200K left for AIMS APAC REIT.

Another reader left me a comment but didn't want his identity known.

So, not publishing his comment which has a link to his page.

The comment:

Dear AK 

Thanks for selflessly sharing your knowledge, experience and wisdom...

I recently found your blog when i googled for news on Alibaba...

Bought some Alibaba when so many said it was cheap and bought more to average down...

Wish i didn't because now lost even more... really a lot...

Your investing style seems rock solid and i want to learn more from you...

I only have about $200,000 cash left which can be invested...

Thinking of putting it all in Aims Reit because with war in Europe it is safer than Ireit...

7.5% yield now will be $15,000 passive income a year... will help me recover...  

Correct me if i am wrong...  wish i knew...

BK 

No regrets investing for income.

Dear BK, 

Welcome to ASSI and I am glad you have found it useful. :) 

I don't give advice. 

Not allowed to and don't want to. 

Responsibility scares me. -.-" 

A few things though. 

Please remember that 

Putting money in a REIT is not putting money in a fixed deposit and we should not look at distribution yield only. 

Putting all our money in a single investment leads to concentration risk and if that investment should go bad, we are sunk. 

AIMS APAC REIT is a big investment in my portfolio but it isn't my only income generating investment. 

You might be interested in the following blogs:

1. AIMS APAC REIT or IREIT Global?

2. Largest REIT investments updated.

3. DBS, OCBC and UOB.

4. Survivability and opportunities.

5. Make recovering from losses easier.

Retirement drawdown strategy? Passive income and CPF?

This started out as a reply to a reader's comment and it got so long that I decided to publish it as a blog.

My reply:

I think I am a bit like that too. 

I am comforted by a high level of savings. 

See: Save 100% of your take home pay! 

Mentally scarred. (TmT) 

See: Life was difficult... 

However, I have been less tight fisted in recent years with money. 

There are more important things in life than money, after all. 

For example: My passive income from 2015 all gone! 

Bad AK! Bad AK! 

As for your question on retirement drawdown cases, this is something other readers have asked me before. 

There is no shortage of advice on the internet on this topic. 

However, this is a difficult topic for me to blog about because all of us have different circumstances, varying needs and wants. 

We are also wired differently and will find comfort in different approaches. 

I can only talk to myself about what works for me. 

In my retirement, I do not want to worry about outliving my savings. 

My focus is on passive income generation so that I would not have to draw down from savings. 

I do feel that this is a valid and even important idea to consider but like I said, we are all wired differently. 

If I keep my needs simple and wants few, I might never have to draw down from savings and I might even be able to grow my savings in my retirement. 

Of course, regular readers know it all started with a spark. 

See: To retire by 45, start with a plan. 

So, the focus for many years leading to my early retirement a few months before I turned 45 was to invest in bona fide income producing assets. 

Of course, we must always hold some cash and this, of course, includes our emergency fund and war chest or opportunity fund. 

See: How much should we have? 

It is good that you mentioned CPF because my CPF savings, apart from yearly voluntary contributions and top ups, is really on autopilot. 

Conventional wisdom tells us that investment grade bonds should be a significant proportion of our portfolio in retirement and the CPF works for me.

See: Unless we are very rich, CPF is all we need.

If I ever need to, I will be able to make withdrawals from my OA and SA in a few years from now when I turn 55 years of age. 

See: Withdrawing CPF savings. 

I do not see that happening unless my passive income is severely curtailed or if I suddenly need more spending money. 

Money in the RA will automatically be drawn upon once I turn 70 and, of course, that is CPF LIFE which is a lifelong annuity. 

See: Make CPF LIFE work for us! 

I know this is a tangential answer to your question. 

However, like I said, we are all different and there are just too many possible draw down cases. 

Know what we need and want in retirement. 

Look at what we have now.

Think of what we are able to do from now till our desired retirement age.

Devise a realistic plan which we are comfortable with. 

Be disciplined and march towards our goal. 

Of course, a good dose of luck helps. 

Once our goal is met, in our retirement, be cautious and stay mostly conservative when it comes to money and we should be fine.

The best retirement drawdown strategy is the one that gives us peace of mind.

Related post:

Retirement adequacy for late bloomers.

Recently published:
Cutting Alibaba and investing for income.

Cutting Alibaba and investing for income.

The reader who invested in Alibaba at $220 a share has thrown in the towel.

He now wants to invest for income to recoup his rather massive losses.

If you do not know what I am talking about, you might have missed this blog:

Invest in Alibaba? High risk, high reward?

AK says:

Investing for income is not about getting rich fast.

It is more about getting rich slow.

It definitely isn't sexy and it can even be boring.

I have a weak heart.

So, boring isn't a bad thing.

What is investing for income?

In a nutshell, look for bona fide income producing assets and pay a fair price for them.

Of course, if we can pay an unfair price for them by paying less than what they are worth, even better.

Remember, if it looks too good to be true, it could well be too good to be true.

See:

Is Eagle Hospitality Trust worth it?

and

$71,000 in alternative or bogus investment?

I know some people are losing more than money as stock prices plunge.

Some are losing their minds especially those who are speculating or investing with money they cannot afford to lose.

If we are investing for income, we should be less concerned with prices but more concerned with value. 

Buy income generating assets at prices which make sense to us. 

Do not chase rising prices.

Do not fear falling prices. 

Do it right and we will be rewarded over time.

If AK can do it, so can you!

Reference:
Investment philosophy is timeless and so is ASSI.