Sunday, 17 January 2016

Last year in 2015, another 20k saved, good or not?

Well, another year has come and gone. The previous year, which included the early part of 2015, I had managed to hoard $20k in 9 months.

For the year of 2015, after adding my sums, I have only managed to eke out $20k over the 12 months.


Only $20k? And its over 12 months, a good 3 months longer than the duration I managed to save the same amount last year!

While this year performance has been poorer than the last, there are certain reasons for the decline in performance.

Reduction in Disposable Income

A large part in the reduction of income saved is due to the enrolment in the Employee Stock Purchase Plan (ESPP), which kicked in at the beginning of this year. Since it is a good 10% of my income, my savings will suffer a rough reduction of $320 every month, assuming the graduate average pay of $3,200. That is a $3,840 reduction to my annual savings. Including the CPF contribution (20%) and parents' allowance ($500/month), the maximum I can save would be the region of $20k. Well, I think I deserve a pat on the back for saving almost the maximum a graduate in my shoes would save, assuming he does not spend on miscellaneous stuff like shopping, food, entertainment etc. So some readers might ask, wow, so Dividend Simpleton was like an introvert the whole year, as he didn't spend a cent on this stuff! Well, for my calculations, I did not include bonuses, which might be substantial to some, but for my company, my bonus was paltry at only one month. Well, better than nothing I guess, so I can assume for the whole year, I have spent around one month pay on such stuff. That is surprisingly a lot, but given that I have went for an overseas trip middle of this year, it makes a bit more sense.

Realised Losses

I have also included losses in my portfolio to my savings goal, much like impairment does to the accounting books. This directly affects the amount I have saved, as purchases are directly paid out from my savings account, and a loss would mean that technically, I have saved less. I like to take a conservative view on my finances, hence the inclusion. However, unrealised losses have not been included for the obvious reason that it has not been realised yet.


I have also included this into my calculations. The good thing about income tax in Singapore is that it is pretty on the low side. Even with the reduction via taxes, I would have saved around $20k, which is actually not bad a feat, I would say.


Despite the heavy losses ('impairments') to my savings, I am proud to have managed to save in the region of $20k, which is critical to buffing up my warchest, even more so when cash is beginning to be king in this bearish market.

The habits I have mentioned in the previous post on how much I have saved continue to be practised, such as saving money on food expenses by bring food from home and the like. However, such food and travel expenses are rather small for me, as I don't work in the city and the company provided transport to and from work. However, savings from such expenses may be handy for say people who work in the city, plus just simply queueing for food would have taken a large chunk of their lunch breaks. 

As for travel expenses, with the MRT and the buses making travel so convenient, I don't see why people would resort to taking expensive taxis and private transport to work. Look at the above picture of workers getting to work in Cambodia and we see how fortunate we are. We complain about so many things that many in Singapore have taken for granted. 

We need discipline to make this work, and if we keep succumbing to temptations, then eventually, it affects our attitudes to even our own course of work! We have a goal to work towards, and lets go GET IT!

Tuesday, 5 January 2016

Portfolio Update - December 2015

*As of 31 December 2015

Counter Average Price Yield on cost(%) Weightage
Croesus Retail Trust
UOB Bank
Fraser Centrepoint
Cache Logistics
Soilbuild Business REIT
First REIT
Croesus Retail Trust
Keppel DC REIT
Saizen REIT
Ho Bee Land
Fraser Commercial
Mapletree Logistics
Sheng Siong
Lippo Mall REIT



Total Invested Capital = $21,230.17

Total Expected Dividends/month = $120

Average Dividend Yield = 6.78%

First of all, it has been a busy month for me towards year end, and I apologise for the late post, if anyone is wondering what happened to Dividend Simpleton. As my responsibilities pile up at work, there goes my free time to blog about all things finance, and I expect this to likely happen in future. So if any of my readers wonder what happened to me, do not panic haha :)

The biggest change in my portfolio was the liquidation of Accordia Golf Trust (AGT). The trust performed very poorly in its recent results and that was pinned to the poor weather conditions in Japan, despite the expectation that the JPY has strengthened against the SGD, supposedly positive for the trust. Furthermore, the decision to reduce payout to 90% did not help either, which depressed distribution to a mere 2.32 cents per unit. Assuming this is the worst case scenario, I had estimated that the price would most likely go around the low 50 cents per unit to maintain market's expectation of a 9% yield to factor in the risk this trust is exposed to. As the market price was around $0.60 when the news was just released, I sold off the trust as I believed the trust would soon lose around 16% of its value. Eventually, it did, partly because of its poor results maybe, but also due to the much poorer market sentiments generally hitting the markets in November and December. The question is, since the price was reached my target price, is it still worth a buy? Well, I definitely won't be buying the same amount as I did before, given that with the risk-off sentiments hitting the markets now, many other quality stocks are trading at attractive valuations. Given the current uncertain market conditions, it is much wiser to keep the cash in the warchest for strategic and staggered deployment in future. Perhaps I might use SCB platform to buy a few hundred shares in AGT, if the prices show clear consolidation.

With the reduction AGT, my warchest has now increased by about close to $10k, allowing me to use the proceeds to make smallish bets using the SCB platform, taking advantage of market volatility. The months of November and December had seen several changes in my portfolio, as capital was recycled, buying shares on weakness and selling them on strength. Much noticeable was the cut loss on Asian Pay TV trust as the price was falling continuously, along with the threat of the distribution likely to fall to the low 6-7% yield, I would rather use the proceeds to invest into many other quality REITs offering the same yield. Some of my favourite counters for trading plays include Capitaland Mall Trust, Capitaland Commercial Trust, Noble Group and many others. Some counters are not in the current portfolio as they could have been liquidated entirely while quite possibly waiting for the next opportunity to enter again. The big players prefer to move the big names, so using them to trade would be preferred as they tend to be more sensitive to market movements.

There are many other changes to my portfolio and I can list them all here, and I will touch a bit on each of them why I chose to take action.

Ascendas Hospitality

This counter has made a impressive return since I bought it back in August. Yield is a whooping 9-10% and the capital gains were immense. I had attempted to buy in when the prices corrected to $0.60 in November, but it failed to hit my buy price before trending higher quickly, up till the news on the offer to buy all existing shares of AHT. I was a little impatient and sold the remaining shares at $0.73.

Fraser Centrepoint Trust

A defensive retail reit with a good long track record, low gearing and currently dividends are still growing, albeit much more flattish growth than before. Likely to hold this stock for a longer time frame.

First Reit

Added some on weakness due to speculation of privatisation, which I believe is likely to not happen. Yield is the most decent amongst the medical reits listed in SGX, with a much lower premium to valuation, which is coincidentally caused by the recent speculative news of shifting of the listing of property trusts to Indonesia, due to changes in tax policy.

Cache Logistics Trust

Added more on weakness. The overall investment theme remains the same, although expect some weakness in the short term. The DHL BTS facility should be operating finally this year and the next results or the following one would determine if the BTS could mitigate higher expenses and lower rental from its other assets.

Keppel DC Reit

Added more on weakness. The theme of investing in this is the same, strong REIT fundamentals and likely more defensive in the face of rising interest rates.

Soilbuild Biz Reit

Added more on weakness. I like its exposure to the business space sector. Although it is named as such, majority of its properties are the industrial, so the jury is still not out on this one. DPU growth theme is still on the cards, I am hopeful that it could outperform like what AimsAmp has managed to do so far.

Saizen Reit

Added some at $1.085 in anticipation of the next dividend payout and the eventual sale of at least $1.10.

Capitaland Commercial Trust

Took profit on partial stake and then added more on weakness, average price lowered from $1.325 to $1.30. Investment theme remains the same as before.

Ho Bee Land

Initiated position as I felt the company is currently undervalued, even with the increase in share price over the years. With its anchor building metropolis doing pretty well, I think it has a very diversified portfolio of assets generating the cash flow needed for business functions. Also, it may be a possible takeover target, given the high proportion of shares held by its controlling shareholder.

AimsAmpCap Reit

Initiated position in the REIT as it has shown remarkable improvement in improving DPU despite the weakening of industrial rents. Added element of a growth play here and also to boost the overall yield of my portfolio as it was getting heavy on lower yield (defensive) reits.


Initiated position on NOL and waiting for CMA CGM to buy it from me at a higher price soon.

Sheng Siong

Initiated position on Sheng Siong for some growth element in the defensive retail segment. Smallish position given the a high premium in terms of PE.


Reduced position to take profit from the rally in prices. Retained a smallish position as the theme of investing in it remains.

Final Comments

I have made quite a flurry of actions on my portfolio in these 2 months and mainly in my SCB mini-portfolio. The portfolio despite having some laggards like Cache Logistics and Fraser Commercial, strength in the other counters reduced the impact from this. This is the usefulness of using SCB as a broker, particularly since they do not charge a minimum commission, as it allows me to hugely diversify my portfolio without incurring large commission fees. It is also a huge plus when it comes to the ability to do Dollar Cost Averaging (DCA) on my existing counters which my investing theme has not changed. Furthermore, any sudden huge gains in certain counters can also be realised without compromising on the entire position, which would be virtually impossible with other brokers given the high commission charges. People who have used the conventional brokers would definitely agree with me on this. And most of all, SCB platform is most friendly to the small retail investor who has only a small amount of money to invest. What I mean by small really means very small capital outlay, for as little as a few tens of dollars to a few hundred depending on the share price of the stock, 100 shares allows us great flexibility for the small retail investor like ourselves!

It is still along way to go in this investing journey, and the jury is still not out on this mini-portfolio.

Good luck to anyone still holding on in this choppy waters, keep it up!