Recession could hit Singapore. Do what Buffett and AK say?

Warren Buffett famously said to investors the following.

"Don't worry about economic predictions."

In his opinion, 

"... it really doesn't make any difference in what I do today in terms of buying stocks or buying businesses what those numbers tell me. 

"They're interesting, but they're not guides to me. 

"If we buy a business, we're going to hold it forever. 

"So we're going to have good years, bad years, in between years, maybe a disastrous year some year."

Now, this perspective is very interesting and also instructive.

It should be interesting to all investors.

However, it is only instructive to certain investors.

Who are these certain investors?

Investors whose circumstances are similar to Warren Buffett's, of course.

Not everyone has money gushing in regularly and, definitely, not everyone has more money than they would ever need.

We do not have the resources that Warren Buffett and Charlie Munger have.

When we read such opinions, therefore, we have to think of our own circumstances.

For most of us, paying attention to the early signs of where the economy might be headed is not a bad idea.

In a YouTube video I recently produced, I said that the Monetary Authority of Singapore is worried about the economy and if they are worried, we should be worried too.

Singapore's economy is slowing down fast and it is likely to get worse as many major economies seem to be heading for a recession.

So, the Monetary Authority of Singapore has decided to put fighting inflation on the back burner and not to tighten in a move that is expected to help support the economy.

Most people still need their earned income and they should worry about possible retrenchment.

Indeed, massive layoffs started in the tech sector and if a recession hits, other sectors would most likely also be impacted.

Only iron rice bowls will be safe.

What to do?

If we do not have an emergency fund, we should really start one.

If we have an emergency fund already, do a review and see if it is still adequate.

Even if we have passive income, we should have an emergency fund because passive income could dry up.

Whenever I recall how my interest income and dividends reduced during the COVID 19 pandemic, I get PTSD.

If we are fully invested in equities, we might want to start building a war chest.

If we already have a war chest but it is somewhat empty like mine, try to fill it up.

There are so many things that could go wrong in the next few months.

Geopolitics in many places could worsen.

The banking crisis really isn't over yet and, in a recent interview, Warren Buffett said so too.

Depositors will not lose money but investors will lose money because they made bad investments.

I am very "kiasu" but, given the uncertainties, I am more "kiasi."

I tell myself that I want to do a better job of preserving capital and having more cash really isn't a bad thing.

This is especially when the front end of the yield curve stays elevated.

A risk free return of 3.65% to 3.85% p.a. with zero volatility is very decent.

It isn't a bad idea to be more defensive, especially if it gives me peace of mind.

I said this to a reader in the comments section recently:

"Being substantially invested in equities already, I am more likely to regret not having resources in a bear market than not having invested more to benefit from a bull market, if it should happen."

At this point, it is important to remind anyone who is eavesdropping on me that all of us have different circumstances.

So, just like how we shouldn't accept what Warren Buffett says as being instructive for everybody, we should not accept what AK says unquestioningly as well.

We are also wired differently and will have our own beliefs.

Do the right things and the right things will happen for us.

If AK can do it, so can you!

Recently published:
T-bill ladder completing.
References:
1. Fixed income strategy.
2. Survivability and opportunity.

Final T-bill using fresh funds. Ladder completing soon.

3.75% p.a.

That's the cut-off yield for the latest 6 months T-bill auction.

I said in an earlier blog that a cut-off yield of between 3.65% to 3.85% p.a. would still be relatively attractive.

Plus the fact that the "interest" is paid at the beginning of the tenure, if we are able to hold till maturity, 6 months T-bills offer better returns than 6 months fixed deposits placed with DBS, OCBC or UOB now.

I will go ahead with the plan to apply for the next 6 months T-bill which will have its auction on 26 April when it is available.

That will be the final T-bill I will apply for using fresh funds.

Why?

My T-bill ladder would be completed by then.

This is because the first 6 months T-bill I applied for in October last year will be maturing on the 24th this month.

I will use the returning funds from that maturing T-bill to apply for the first T-bill in May.

Every two weeks from the 24th of this month, I would be recycling returning funds from maturing T-bills.

Therefore, no fresh funds would be required for T-bill applications from then on.

Well, at least that is the plan for now.

As long as the front end of the yield curve stays elevated, this should generate some pocket money for me.

Always nice to have more pocket money.

Since I would not be injecting fresh funds into T-bills, the passive income generated by my investments for the rest of the year will go into my war chest after deductions are made for expenses.

I am in no hurry to increase exposure to equities.

This is largely because I am already substantially invested.

I also don't want to be caught in a situation where Mr. Market goes into a depression and I lack the resources to buy stocks from him on the cheap.

So, do I feel like this because I can see a recession is on the horizon?

Alamak!

If you think like this, you need help.

OK, at least I am not the only one who is mental here.

No, I am simply doing what I have always done.

What might that be?

"Eat crusty bread with ink slowly."

Constructing a T-bill ladder helps to fulfill the "I" in "ink" which stands for "income."

Buying Singapore Savings Bond when the 10 year average yield is above 3% p.a. really helps to fulfill the "c" in "crusty" which stands for "CPF."

The "w" in "with" stands for "war chest" and I need to fill up mine.

If you are new to my blog and feel a little lost with my taste in food, I will hyperlink the relevant blog post below.

I think it is quite tasty.

If AK can do it, so can you!

Updated on 14 April 23 with a new video on the latest from MAS:

Recently published:
Lean F.I.R.E. since 2014!

Reference:
Eat crusty bread with ink slowly.

Related post:
Saving for income.

Lean F.I.R.E. 2014 till now! Still going strong! AK is wrong!

A regular reader, Henry, commented: 

"A good piece from you about Lean Fire. 

Like you, I have a crisis mentality and always worried about money not enough after FIRE in my 40s. 

To the extent that I would review my savings versus expenses every month. 

Then I figured out I should use a withdrawal rate of maximum 2% and factor in a 2.5% annual inflation into my calculation. 

This relieved the situation a lot and I only look at the number once a year. 

Then C19 induced high inflation struck. 

Haha, had to rework those numbers again every few months. 

Glad that I'm still alive and just returned from a Europe holiday. 

Your blog is so good. I learnt a lot since 2014, the year that I FIRE. Thanks again."


Then, in reply to my comment, Henry dropped a surprise on me. 

Henry said: 

"Alamak AK. Cannot compare my Lean FIRE with your Abundant FIRE lah. 🔥 

Even go holiday also must go when there's promo and low period to save costs. 

Now back to the reality of "poverty" living. Lol. 

Your blog had helped many over the years. 

Sifu and role model. Keep it up." 

I was replying to Henry's comment and something just kept me shifting my weight on the chair. 

I decided the problem was not my chair nor my buttocks. 

I was very curious. 

Very, very curious. 

So, I decided to publish my reply as a blog to see if there is a chance of satisfying my curiosity.

My response. 

"Hi Henry, 

Oh, you went for Lean F.I.R.E. 

Was that concept already around so many years ago? 

I wasn't aware of the different forms of F.I.R.E. when I decided to retire early at 45 so many years ago. 

I just did it my way. LOL. 

The fact that you did it and have been successful for so many years shows that I might be too conservative. 

My blogs on Lean F.I.R.E. might then give people the idea that I am talking down on the concept. 

It is not my intention to talk down, to be honest. 

I am just sharing a cautionary message. 

Now, having read your comment, I am interested to hear from people who are on Lean F.I.R.E. or who are thinking about Lean F.I.R.E. as something viable. 

How do they feel about the concept now? 

Are they still comfortable with possibly retiring early with little or no room for error? 

Or is my idea that there is little or no room for error an error? -.-" 

Oh, yes, I know what you mean by "poverty" living. 

Rich people laugh at me for saving small sums of money! 

They say I have a poverty mindset. (TmT)


Thanks for encouraging me to continue blogging.

If I were to retire fully from blogging, everyone who regularly eavesdrops on me has lots of alternatives available now. 

In recent years, while I was hiding in my gaming cave, to borrow a phrase from Keng, so many new personal finance/investment bloggers and also YouTubers in Singapore popped up. 

Really, the only constant in life is change and this is a good change.

In recent years, I have been cutting back on social engagements and even the number of ways people could get in touch with me became very limited.

I am one step away from being a hermit.

I enjoy spending quality time with myself a bit too much, maybe.

Well, although I have been a semi retired blogger in recent years, a full retirement isn't happening yet. 

Yet. ;p

I still enjoy blogging and, now, I even enjoy experimenting with YouTube video production. 

Old dog learning new trick. ;p 

So, I will stick around. 

I have decided to publish my response to your comment as a blog because I believe it should have a wider audience. 

I want to share an important point and a not so important point here. 

1. AK doesn't know everything and could be wrong about Lean F.I.R.E. 

2. AK is a semi-retired blogger and a new YouTuber who is just having fun. 

Agree or not?" 

Recently published: 

Avoid Lean F.I.R.E. and struggling with higher costs.

Avoid lean F.I.R.E. and struggling with higher costs.

A few months ago, I blogged about F.I.R.E.

More specifically, I blogged about lean F.I.R.E.

I said that some people would retire early once their passive income is able to cover their basic necessities in life, leaving very little or no room for error.

I cautioned against lean F.I.R.E. as I thought it was pretty shaky.

Of course, regular long time readers know that I like having buffers partly because I am mental but mostly because I think having a crisis mentality is not a bad thing.

I used an example of how I got pretty worried during the COVID-19 pandemic when both interest income and dividend income took a hit.

If I did not have sufficient buffers, I would probably have had to look for a job.

It would have been very difficult in a very challenging environment.

It would probably also have been very difficult because I was much older and have been out of the workforce for many years.

Why am I blogging about this now?

The catalyst for this blog was something I read this morning.

A F.I.R.E. movement pioneer who retired early 10 years ago at age 34 now says he must return to work.

Why?

He cannot afford his children's college education now.

I always say that kids are very expensive to bring up in Singapore. 

An estimate which I did almost 20 years ago showed me that it would cost some $250,000 per child from birth to graduation day at a local university. 

I am sure that the figure is much higher today.

It is so important to think ahead when we plan for F.I.R.E. or anything in life, really.

Think what could go wrong and what happens if we should have an accident or a few along the way.

Maybe, we planned to have two children but got lucky and were blessed with triplets or quadruplets.

It sounds a bit amusing when I say this and we might laugh at it, but it could throw a spanner in the works, especially if we are on lean F.I.R.E.

After being retired for 10 years, it would probably be a challenge to return to the workforce.

Our skills or knowledge might have become obsolete or our old position might no longer exist.

Structural unemployment is very real.

Even if we are not obsolete, we would probably have to compete with younger and probably more energetic people for the same job.

They would probably be able to settle for lower salaries too.

Costs are rising and people on lean F.I.R.E. might be able to cope if they rise slowly but if they should rise rapidly like what has happened in the last one year, it could become difficult or even impossible.

I would avoid the various forms of F.I.R.E. which are along the line of lean F.I.R.E.

I don't like to live life with little or no room for error.

This is why people who follow the Y.O.L.O movement, believing that they should live life to the fullest, can ill afford mistakes.

Things do go wrong like they sometimes do.

I always demand a greater margin of safety for peace of mind.

What about you?

Related post:
F.I.R.E. lean or shaky.

Comments section of the blog
on Mr. Lee Kuan Yew.

Recently published:
1. Mr. Lee Kuan Yew's wisdom.
2. Obsession with salaries.

Mr. Lee Kuan Yew on impressing people. Latest videos.

Mr. Lee Kuan Yew said this in 2011.

"I see no reason why I should impress people by having a big car or changing my suits every now and again to keep up with the latest styles.

"I've got many new suits that are absolutely in good condition because I seldom wear them.

"In fact, the older I get, the less willing I am to spend time putting on a suit and tie.

"I just have a blouson or a buttoned-up Chinese jacket, and it saves a lot of trouble.

"I have had them for many years and they are very comfortable."

Latest videos by AK production house:

Have a good weekend!

Recently published:
Why do we obssess with salaries? Why compare?

Related posts:
1. Mr. Lee Kuan Yew said China could become pushy.
2. Why I have been silent on Mr. Lee's passing?

Why do we obsess with salaries? Why compare?

This is the first time I am doing this.

It is the transcript of a YouTube video I made recently. 

People who prefer reading might like this.

----------

Regular long-time followers of my blog know that I have become very reclusive in my retirement.

There are many reasons why this is so. 

One reason is because I retired relatively early in a society where it is not the norm. 

This leads to some awkward moments for me even with members of the extended family. 

Like most Singaporeans I know, they like to ask the following question. 

"What do you do?" 

I would feel like telling them that I am a NEET. 

However, I am sure they wouldn't know what that is. 

So, I just tell them I am jobless. 

OMG! Someone only in his early fifties and jobless? 

Next question. 

"How long have you been jobless?" 

About 7 years. 

OMG! He has been jobless since his mid-forties! 

Oh, in case you don't know, NEET stands for Not in Employment, Education or Training. 

Basically, it just means I am a non-productive member of society. 

Of course, even if I should be gainfully employed, they are not shy to ask the next question. 

I am sure you know what it is. 

"How much do you make?" 

The Singaporean obsession with salaries. 

I still remember the time when a reader told me he found my blog through a forum which discussed salaries in Singapore. 

I was so stunned like vegetable! 

I have had to suffer comparisons with my cousins in my years growing up. 

"You know your cousin so and so?" 

"You know he got full marks for his tests?" 

Of course, I am talking about school days. 

These days, the only tests I take are blood tests. 

Anyway, one day, I got so fed up that I told my mother to stop comparing me with others! 

I am sure the comparing continues but if I don't hear about it, it doesn't affect me. 

Unfortunately, at family gatherings, it is hard not to hear such things. 

A friend told me recently that my passive income puts me on par with the top decile of household income in Singapore. 

I didn't know this. 

I worry about inflation, and I worry about whether I would have sufficient passive income. 

Of course, I have always been a worrier, and I don't think I would ever stop worrying. 

Anyway, I found out that the top 10% of households in Singapore had an average monthly income of $13,626 in 2021. 

So, my friend is right. 

OMG! Am I the one comparing now? 

You know what they say? 

Misery loves company. 

Miserable people are comforted knowing they are not alone. 

So, I should not be too reclusive. 

I should not shun company. 

I just have to be in the right company.

(While I am at it, do you know what is the 2022 average monthly income of the top 10% of households in Singapore? 

If you have the numbers, please let me know in the comment section.)

Related posts, maybe:
1. Chinese New Year secret.

2. AK should be ashamed!

Recently published:
1. Bankrupt before 30.

2. 1Q 2023 passive income.

Saving for income: SSB and T-bills in April 2023.

In my 1Q 2023 passive income update, I reminded myself that my portfolio was able to generate more income because I continued to put money to work.

Specifically, money was put to work in bona fide income generating assets.

I was also saving more money as it has become a more rewarding asset to hold.

Using 6 months T-bills to save money rewards me immediately as the "interest" is paid at the start of the tenure.

Although T-bills accounted for a very modest portion of passive income in 1Q 2023, this component was missing in 1Q 2022.

Having another source of meaningful passive income is not only pleasing, it makes for a more resilient portfolio.

There is also a very high degree of reliability as T-bills are not only risk free, they are volatility free if we hold them to maturity.

Indeed, we don't have to be investing for income all the time as saving for income is also a viable alternative.

Although it could not generate any income for me in 1Q 2023, I applied for Singapore Savings Bond (SSB) last month and my $16,000 application was fully allotted.

I did not apply for the latest T-bill as I had decided to prioritize the SSB towards the end of the month in March.

That T-bill had a cut-off yield of 3.85% p.a. which was higher than the cut-off yield of 3.65% p.a. in the preceding auction.

The plan is to continue applying for T-bills this month as a cut-off yield of 3.65% p.a. to 3.85% p.a. would still be relatively attractive.

The plan is also to apply for this month's SSB if it should offer a 10 year average yield of greater than 3% p.a.

I think the Monetary Authority of Singapore read my blog.

It seems like I will be applying for the SSB.

I should be able to set aside $10,000 for the SSB and also $5,000 per T-bill application this month.

Although some experts feel that interest rates have peaked, now, with OPEC cutting back on production to prop up the price of crude oil, the outlook could change.

I have been very consistent in saying that I cannot predict what might happen in the future but I know for sure I can prepare for the future.

As an investor for income, this means putting money to work in income producing assets while building a war chest for in case Mr. Market goes into a depression.

I am happy that cash is no longer trash and that there is another way for me to be paid while I wait.

Saving for income has become more rewarding and it certainly gives me peace of mind.

For a more a complete picture of how I have been generating passive income, please read the related post below, especially if you are a new reader.

Related post:
1Q 2023 passive income.

Bankrupt before 30. Is this a trend? Don't let it happen!

This blog is just some stuff for my pensieve.

I know that being on the verge of bankruptcy is not fun. 

I am talking from experience. 

Becoming bankrupt must be a lot worse. 

The combination of high inflation and very high interest rates is expected to send many economies into a tailspin. 

Bankruptcies are expected to increase. 

Allianz Trade estimates that bankruptcies will increase globally by 19% in 2023. 

Bankruptcies in Australia increased to 238 Companies in February 2023 from 175 Companies in January of 2023. 

The US is expected to experience a 40% rebound with 18,900 bankruptcies. 

If we think this is only happening in places like the USA and Australia, consider this. 

In Singapore, we already saw bankruptcies rose last year in 2022. 

Although the Covid-19 pandemic hurt Singapore's economy, the number of people who were made bankrupt in 2021 sank to the lowest in five years! 

Ministry of Law data shows that 3,648 people filed for bankruptcy last year in 2022. 

That was fifteen per cent higher than the 3,160 applications filed in 2021. 

This comes amid much higher cost of living, rapidly rising interest rates and the loss of pandemic support measures. 

The number of bankruptcies is expected to increase this year in 2023. 

Property auctions and mortgagee sales are, therefore, expected to rise in 2023 on the back of increasing number of bankruptcies. 

I always say that it is not a bad thing to have a crisis mentality. 

Always think of what might go wrong. 

Even though it might not look like it could happen, things do go wrong when we least expect them to. 

Take precautionary measures. 

Limit your exposure. 

If you run a business, evaluate credit limits and terms extended to customers. 

This is especially so for customers who are at risk for bankruptcy or already struggling to pay.

Businesses could be made bankrupt because too many debtors could not pay up.

Don't let other people's problem become our problem.

What I did when I was working as a business manager back in the day was to ask for larger upfront payments and allowing a smaller amount on credit. 

As an individual, although it is important to make sure to have an adequate emergency fund, to avoid bankruptcy, it is more important to make sure we are not over-leveraged. 

An emergency fund is unlikely to save us if we are excessively leveraged when things do go wrong. 

If we are using 60% or more of our earned income to service debt and if we do not have any meaningful passive income, then, we should seriously consider deleveraging.

If we must have leverage, how much is prudent?

Well, I don't know exactly how much leverage we should limit ourselves to in order to be considered prudent.

However, if 20% or less of our earned income is used to service debt, I feel that is relatively comfortable.

It will give us the option to put aside more money, and in an environment where money has a much higher cost, it is not a bad asset to hold.

Why not use all our money to pay down debt?

Well, for most of us, if we do that and if we become unemployed, we are in trouble.

With global recession a greater possibility now, be very careful.

Of course, having less leverage will also give us the option of investing more money when Mr. Market goes into a depression.

We must remember that it is pretty easy to sink into bankruptcy if we are careless. 

In Singapore, bankruptcy is a legal process involving an individual or firm that is unable to repay any outstanding debt of at least $15,000.

Only $15,000.

Don't Y.O.L.O. 

Don't be like an ostrich sticking its head in the ground. 

There is no automatic way to be released from bankruptcy in Singapore. 

The good news is that bankruptcy is avoidable. 

How? 

To me, it is simply being careful and not to do anything financially irresponsible. 

I saw in the news that the young in Singapore are increasingly relying on credit card debt. 

There is also a growing "buy now, pay later" culture. 

These generate sounds of ticking time bombs to me. 

This is the story of a young person who was declared bankrupt before turning 30 years old. 

He got his first credit card soon after graduating. 

He was excited when he got the card and took it as a sign that he had arrived. 

Soon, he found how easy it was to spend money or, more accurately, future money. 

Scratch that. 

It was simply money he didn't have. 

Then, came the interest free repayment offers. 

No interest for 12 months? Really? 

He maxed out that card and applied for a line of credit. 

Rinse and repeat. 

Before long, he had a mountain of debt. 

How does one who is making $2,500 a month get out of a $50,000 debt pile? 

Warren Buffett famously said the following to people, especially those with credit card debt. 

"I think people should avoid using credit cards as a piggy bank to be raided." 

We have to be financially prudent before we can work towards financial freedom.

Recently published:
1Q 2023 passive income.

Reference:
Survivability and opportunity.

1Q 2023 passive income: Plodding along.

This is my first passive income update for 2023.

I will talk a bit about what has happened in the fixed income space first.

As expected, the latest 6 months T-bill auction closed with a higher cut-off yield of 3.85% per annum compared to the previous issuance which had a "shockingly low" cut-off yield of 3.65%.

A couple of weeks ago, I produced a video which shared my thoughts on what a further interest rate hike by the Fed would mean for certain assets.

You can watch or listen to it here:

The latest Singapore Savings Bonds offer which closed on Wednesday was oversubscribed.

A higher 10 year average yield of 3.15% per annum attracted Mr. Market's attention, no doubt.

3% per annum 10 year average yield, I believe, is the threshold to watch.

The Singapore Savings Bonds which were undersubscribed earlier in the year offered lower 10 year average yields of 2.97% and 2.9%.

As long as the 10 year average yield is above 3% per annum, it makes more sense to me to put money in Singapore Savings Bond than to do voluntary contribution to my CPF account.

See:
CPF or Singapore Savings Bond?

A week ago, I shared my updated fixed income strategy and if you missed it, read it here: 

Fixed Income Strategy.

My application for the latest Singapore Savings Bond with $16,000 of money which would have been earmarked for CPF voluntary contribution in 2024 was fully allotted. 

After this, I would have another $22,000 from future dividends to deploy to either Singapore Savings Bond or CPF for the rest of the year.

Total amount of money to be deployed this way in 2023 is $38,000.

Not to rehash too much, I am providing links to two blogs about changes to my portfolio in the months of January and February here:

1. Changes to portfolio in January 2023.
2. Changes to portfolio in February 2023.

In March, I put more money to work in 6 months T-bills. 

I also added to my investment in OCBC as the price of its common stock sank below $12 at one point. 

So, how much did I receive in passive income in 1Q 2023?

$41,563.36

I am quite pleased with this although it increased year on year by only 2%.

In 1Q 2022, my passive income was $40,697.68.

Back in 1Q 2022, my investment in IREIT Global was a star performer.

Income received from IREIT Global in 1Q 2023 declined 11.5%, year on year.

A combination of higher operating expenses and the cessation of its sole tenant in its Darmstadt asset dealt a double whammy.

However, readers who have been following my blogs on IREIT Global would understand why I remain invested.

I like investing in bona fide income generating businesses with strong balance sheets.

I like them even more if I am able to get them at a discount to their true value.

To me, IREIT Global fits the bill.

See:
IREIT Global: Buying more?

Pertaining to this idea, if you do not follow my YouTube channel, you might want to watch or listen to this video which I released recently:

As IREIT Global contributed the lion's share of passive income a year ago, I was expecting passive income in 1Q 2023 to see a decline.

So, you can imagine why I am pleasantly surprised to see it increasing 2% year on year instead.

I must have done something right along the way.

What did I do differently?

I gave it some thought and decided that I have only done things which I would have usually done.

I have been putting more money to work in income producing assets.

My investments in Sabana REIT and IREIT Global are larger now than they were a year ago.

That mitigated the reductions in their DPU.

I received some income from T-bills in 1Q 2023.

I didn't have this a year ago.

So, I have been saving more money with the belief that cash is not trash and that it has become a relatively rewarding asset class to hold.

Then, all else being equal, income from some investments actually increased, year on year.

Higher income received from some of my larger investments in 1Q 2023, year on year, made an impact.

The following deserve mention:

1. Ascott Trust
2. AIMS APAC REIT
3. CapitaLand China Trust

You might want to watch or listen to a YouTube video I produced on AIMS APAC REIT here:

CapitaLand China Trust's much higher DPU was surprising because I remember reading somewhere that their DPU reduced.

I checked and apparently, there was a 2 cents per unit entitlement declared.

If not for this, DPU would have been much lower at 1.4 cents instead of 3.4 cents.

OK, they give, I take.

If things do not improve significantly from here and if I do not put more money to work, then, year on year, I could see a decline in passive income in 1Q 2024.

Of course, what I receive in passive income for the whole year is more important than what I receive in a single quarter.

If 1Q 2024 should turn in a lower amount of passive income, hopefully, 2Q and 3Q in 2024 could help make up for it.

In the same vein, I am looking forward to passive income in 2Q and 3Q this year as, for me, their numbers are usually much bigger compared to what 1Q and 4Q bring to the table.

Having said this, my portfolio's 1Q 2023's performance is not too bad. 

It is the result of putting more money to work and also the higher income generated by a few of my investments.

To be honest, it definitely benefitted from a splash of luck too.

It is important to remind myself that luck is unreliable and we should always be prepared for crises.

Pertaining to this point, you might be interested in this YouTube video I released recently:

Finally, an update on "Evening with AK and friends 2023."

I received a message from Kenji a few days ago that 80% of the tickets were sold.

At the time, there were about 60 tickets left.

So, if you were unsure if you could make it on 10 May, you might want to make a note on your calendar. 

Some tickets might still be available closer to the event date and you could get your ticket then.

Ticketing link: HERE.

Till the next blog, remember, financial freedom is not a dream.

Investing in bona fide income generating assets, especially if they are undervalued by Mr. Market, will help us along the way.

Watch or listen to this latest video on how AK is getting free money for life from Hock Lian Seng:

Hope you like most of my YouTube videos so far.

Literally, it is eavesdropping on AK talking to himself.

Remember to subscribe to my YouTube channel if you want timely notifications.

In closing, I should remind myself that what I have done as an investor is nothing amazing.

Just plodding along.

Unless severely disadvantaged, anyone can do it!

If AK can do it, so can you!

Related post:
1Q 2022 passive income.

Invest in property developers? My portfolio.

Oh, no! Another short blog?

Although I like undervalued investments, there is always the possibility of such investments staying undervalued for an extended period of time.

Some readers might have noticed that this is usually the case with property developers.

My preference is, therefore, to invest in property developers that are able and have shown a willingness to reward shareholders with meaningful dividends.

The wait can be a long one and being paid while we wait makes it more affordable for most people.

Although individually my investments in property developers are definitely not big enough to be in my list of largest investments, collectively, they could be.

In late 2019, I shared the list of property developers I was invested in.

They were the following:

1. Guocoland

2. Ho Bee Land

3. Hock Lian Seng

4. OUE

5. Perennial Holdings

6. Tuan Sing

7. Wing Tai

The list has shrunk as I let go of my positions in Tuan Sing, Perennial Holdings and OUE. 

Tuan Sing was sold a few years ago when its share price rose to what I felt was fair value. 

Perennial Holdings was delisted and I made a small gain in the process a few years ago. 

OUE was a very small investment in the list and it wasn't very impactful. 

So, I let go of that investment and used the money to increase my exposure to our local banks instead.

For a while now, I have been left with the following property developers in my portfolio:

1. Guocoland

2. Ho Bee Land

3. Hock Lian Seng

4. Wing Tai

With interest rates much higher today, property developers are unlikely to do much better than before.

However, these four companies are undervalued and they should still be able do well enough to pay meaningful dividends.

I like being paid while I wait.

For example, Wing Tai Holdings which is trading at close to 70% discount to NAV is offering a 4% dividend yield.

It is like Warren Buffett buying socks at a huge discount but it doesn't stop there because the socks, in this case, pay us for wearing them!

Having said this, I am not increasing exposure to property developers although I am more than comfortable to hold on to my existing investments.

Related posts:
1. Perennial Holdings stock spikes!
2. Invested in Tuan Sing Holdings.
3. Hock Lian Seng should be 69c.
Recently published:
Fixed income strategy. My plan.