As mentioned in my previous post, 2014 will be a major step in my journey towards financial independence. As the HDB housing loan is my highest expenditure per month, getting rid of it is certainly one huge stone off my chest.
As my priority for the year is getting rid of the HDB loan, probably I will not be injecting too much money into my stock portfolio.
My projected dividends for 2014 (based on current portfolio):
1. SPH: $1,100
2. Starhub: $1,000
3. SGX: $840
4. AIMS AMPI Reit: $432
5. CDL HTrust: $330
6. CMT: $300
7. Starhill Global: $288
8. Suntec Reit: $276
9. SIA Engg: $220
10. Frasers CT: $208
11. SingTel: $200
12 HPH Trust: $184
13. CapitaLand: $140
14. SPH Reit: $100 ?
15. CitySpring: $98.40
16. Far East Orchard: $90 ?
17. Boustead: $70
18. SingPost: $62.50
19. FEHT: $62
Total: $6,000
Avg/month: $500
Monday, 30 December 2013
Saturday, 28 December 2013
Looking Ahead to 2014 (Part 1): To be debt-free
2014 will be a milestone year for me. I am planning to be finally debt-free by the end of 2014.
My outstanding HDB housing loan will dip below $100K in 2014, making it impossible for further re-financing with the bank.
I have done a loan re-financing in 2012, with 2 years locked-in period. It was not a bad deal as the interest rates were 1+% for the first year, 2+% for the second year and 3+% for the third year.
I am planning to pay off the remaining HDB loan by the combination of the followings:
1. Matured endowment policy
- Luckily I have one 21-years endowment policy maturing in mid-2014. Time really flies and 20 years have already gone by since the day I started contributing to that endowment.
2. Housing loan "pay-up fund"
- I have started this fund after the last re-financing, contributing a fixed sum every month into it.
3. Central Provident Fund (CPF)
- I will need to check how much can I use?
4. Fixed deposit or Investment-linked Policy (ILP)
- Depending on the sum of 1 and 2, I may liquidate one of my FD or ILP, also depending on the ILP price. I do not need to touch my CPF, but why not if it is available?
The goal is to be debt-free by end 2014.
My outstanding HDB housing loan will dip below $100K in 2014, making it impossible for further re-financing with the bank.
I have done a loan re-financing in 2012, with 2 years locked-in period. It was not a bad deal as the interest rates were 1+% for the first year, 2+% for the second year and 3+% for the third year.
I am planning to pay off the remaining HDB loan by the combination of the followings:
1. Matured endowment policy
- Luckily I have one 21-years endowment policy maturing in mid-2014. Time really flies and 20 years have already gone by since the day I started contributing to that endowment.
2. Housing loan "pay-up fund"
- I have started this fund after the last re-financing, contributing a fixed sum every month into it.
3. Central Provident Fund (CPF)
- I will need to check how much can I use?
4. Fixed deposit or Investment-linked Policy (ILP)
- Depending on the sum of 1 and 2, I may liquidate one of my FD or ILP, also depending on the ILP price. I do not need to touch my CPF, but why not if it is available?
The goal is to be debt-free by end 2014.
Tuesday, 24 December 2013
2013 Portfolio Review (Part 2): Dividends
I am continuing my review of my stock portfolio:
Dividends collected:
Total dividends in 2013: $5,717.51
Average monthly dividend: $476.46
Annual portfolio yield: 5.54%
In comparison,
Total dividends in 2012: $3,590.86
Average monthly dividend: $299.24
This represented an increase of 59.2% in dividends collected.
Best dividend yielder in my portfolio:
(based on dividends collected against stock values at Christmas 2013)
1. SPH: 9.83%
- Included special dividend after listing SPH Reit
2. FE Orchard: 9.78%
- Included special dividend after listing FEHT
- I did not add the free Yeo Hiap Seng shares here, if added, FE Orchard would be the best performer.
3. HPH Trust: 9.17%
- This is probably due to weakening of the HPHT stock value than anything else.
- Need to monitor closely in 2014.
Worst dividend yielder in my portfolio:
1. CapitaMalls Asia: 1.65%
- Consigned to the dustbin
2. CapitaLand: 2.32%
- Sleeping giant. I am still holding and will divest it when the price is right.
3. Hyflux: 2.72%
- Consigned to the dustbin.
Dividends collected:
Total dividends in 2013: $5,717.51
Average monthly dividend: $476.46
Annual portfolio yield: 5.54%
In comparison,
Total dividends in 2012: $3,590.86
Average monthly dividend: $299.24
This represented an increase of 59.2% in dividends collected.
Best dividend yielder in my portfolio:
(based on dividends collected against stock values at Christmas 2013)
1. SPH: 9.83%
- Included special dividend after listing SPH Reit
2. FE Orchard: 9.78%
- Included special dividend after listing FEHT
- I did not add the free Yeo Hiap Seng shares here, if added, FE Orchard would be the best performer.
3. HPH Trust: 9.17%
- This is probably due to weakening of the HPHT stock value than anything else.
- Need to monitor closely in 2014.
Worst dividend yielder in my portfolio:
1. CapitaMalls Asia: 1.65%
- Consigned to the dustbin
2. CapitaLand: 2.32%
- Sleeping giant. I am still holding and will divest it when the price is right.
3. Hyflux: 2.72%
- Consigned to the dustbin.
Saturday, 21 December 2013
2013 Portfolio Review (Part 1): Deadwood
Time flies and 2013 is ending soon. All my tradings are done and all dividends are collected. It is time to review my portfolio in 2013.
Getting rid of deadwood (Sold):
1. SMRT (75.1% gain) (from initial investment including dividends):
- Past dividend angel with historic good dividend payouts.
- However, now no longer attractive with escalating maintenance costs resulting from past management mistake in neglecting maintenance and excessive dividend cut by new management.
- Verdict: Correct decision. All my gain would be wiped out if I hold SMRT till now.
2. SP Ausnet (64.1% gain)
- Uncertainty due to class action act against the company in Australia (black Saturday bushfire in 2009).
- Probably correct decision as share price weaken further.
3. CapitaMalls Asia (0.5% gain)
- Pathetic dividend yield.
- Probably correct decision as share price weaken further.
4. Yeo Hiap Seng (220 shares)
- Something does come free.
- Given by Far East Orchard after successful listing of FEHT.
- sold off odd lots.
5. Hyflux (24.3% loss)
- Low dividend yield.
- Weak stock price.
- Cut loss (lesson learnt from Global Yellow Pages)
- Probably correct decision as share price weaken further.
6. Global Yellow Pages (71.9% loss)
- An eye sore in my portfolio.
- No further discussion needed.
Overall positive from selling off these stocks.
Wishing everyone a Merry Christmas and a Prosperous 2014.
Getting rid of deadwood (Sold):
1. SMRT (75.1% gain) (from initial investment including dividends):
- Past dividend angel with historic good dividend payouts.
- However, now no longer attractive with escalating maintenance costs resulting from past management mistake in neglecting maintenance and excessive dividend cut by new management.
- Verdict: Correct decision. All my gain would be wiped out if I hold SMRT till now.
2. SP Ausnet (64.1% gain)
- Uncertainty due to class action act against the company in Australia (black Saturday bushfire in 2009).
- Probably correct decision as share price weaken further.
3. CapitaMalls Asia (0.5% gain)
- Pathetic dividend yield.
- Probably correct decision as share price weaken further.
4. Yeo Hiap Seng (220 shares)
- Something does come free.
- Given by Far East Orchard after successful listing of FEHT.
- sold off odd lots.
5. Hyflux (24.3% loss)
- Low dividend yield.
- Weak stock price.
- Cut loss (lesson learnt from Global Yellow Pages)
- Probably correct decision as share price weaken further.
6. Global Yellow Pages (71.9% loss)
- An eye sore in my portfolio.
- No further discussion needed.
Overall positive from selling off these stocks.
Wishing everyone a Merry Christmas and a Prosperous 2014.
Thursday, 19 December 2013
Initiated a small position in SIA Engineering Co
I have always wanted to buy SIA. It is one of the premium brand/stock in Singapore. However, the price is high and there are many associated risks with the stock, such as ridership numbers, oil price, stiff competition, etc.
I think SIA Engineering Co is a safer and less volatile option. SIA has a substantial stake in SIA Engineering Co, which is a leading aircraft maintenance, repair and overhaul (MRO) company providing MRO services not only to the SIA fleets, but to other airlines fleets as well.
Air travel is here to stay and maintenance activities cannot be compromised for the air transport industries. Even if SIA's ridership numbers fall, SIA will not compromise on maintenance. Especially that we already have one bad example in SMRT.
After buying into SGX in November and now SIA Engineering Co, I have used all my investable capitals. I can only stay at the sideline and watch the market now while I return back to "saving" mode.
However, the market is very tempting now, especially some of the Reits and I have to restrain myself from using my emergency fund.
I think SIA Engineering Co is a safer and less volatile option. SIA has a substantial stake in SIA Engineering Co, which is a leading aircraft maintenance, repair and overhaul (MRO) company providing MRO services not only to the SIA fleets, but to other airlines fleets as well.
Air travel is here to stay and maintenance activities cannot be compromised for the air transport industries. Even if SIA's ridership numbers fall, SIA will not compromise on maintenance. Especially that we already have one bad example in SMRT.
After buying into SGX in November and now SIA Engineering Co, I have used all my investable capitals. I can only stay at the sideline and watch the market now while I return back to "saving" mode.
However, the market is very tempting now, especially some of the Reits and I have to restrain myself from using my emergency fund.
Saturday, 14 December 2013
My biggest loss - Global Yellow Pages
Last month I told my buy and hold strategy that works with SGX. As promised, now I will blog about another of my ex-stocks that buy and hold strategy failed miserably.
As you can see on the title of this post, that stock was Global Yellow Pages. Although it was my biggest loss, some lessons are learnt.
While I have a lot of travels in my early days, I was in Singapore when Yellow Pages went IPO. It was just "Yellow Pages" then, without the "Global". Yellow Pages's IPO price was a lofty $1.66. Unfortunately, I was a noob then and I listened to my friend that "Yellow Pages was good and have a lot of advertisements, etc, etc".
Lesson 1: Do not listen to others. Do your own research on your investment.
In the old days, during the annual renewal of new telephone books, my company dedicated one whole room to hold all the new telephone books, before distributing to every employee with a telephone extension. Now, with internet and various search engines, nobody flips the "yellow pages" anymore.
Lesson 2: Beware of obsolete business model.
Similar to SGX, I held Global Yellow Pages since its IPO days. I was busy with work and practically kept it and forgot about it.
Lesson 3: Monitor your stock portfolio closely.
After the 2008 stock market crashed, people may think what goes down must come up. Global Yellow Pages went into free-fall and because of its obsolete business, never recover.
Lesson 4: What goes down may not come up.
When I finally sold Global Yellow Pages, it was just 7.2% of my initial investment capital for GYP. On hind sight, I should have monitored my stocks closely and exit much much earlier. Luckily, GYP made up just about 2% of my total portfolio.
Lesson 5: Adopt stop-loss for capital preservation.
Beginning this year, I have no more traveling. I have more time to read and learn from books and from many investment bloggers. At the same time, I am able to grow and nurture my stock portfolio.
As you can see on the title of this post, that stock was Global Yellow Pages. Although it was my biggest loss, some lessons are learnt.
While I have a lot of travels in my early days, I was in Singapore when Yellow Pages went IPO. It was just "Yellow Pages" then, without the "Global". Yellow Pages's IPO price was a lofty $1.66. Unfortunately, I was a noob then and I listened to my friend that "Yellow Pages was good and have a lot of advertisements, etc, etc".
Lesson 1: Do not listen to others. Do your own research on your investment.
In the old days, during the annual renewal of new telephone books, my company dedicated one whole room to hold all the new telephone books, before distributing to every employee with a telephone extension. Now, with internet and various search engines, nobody flips the "yellow pages" anymore.
Lesson 2: Beware of obsolete business model.
Similar to SGX, I held Global Yellow Pages since its IPO days. I was busy with work and practically kept it and forgot about it.
Lesson 3: Monitor your stock portfolio closely.
After the 2008 stock market crashed, people may think what goes down must come up. Global Yellow Pages went into free-fall and because of its obsolete business, never recover.
Lesson 4: What goes down may not come up.
When I finally sold Global Yellow Pages, it was just 7.2% of my initial investment capital for GYP. On hind sight, I should have monitored my stocks closely and exit much much earlier. Luckily, GYP made up just about 2% of my total portfolio.
Lesson 5: Adopt stop-loss for capital preservation.
Beginning this year, I have no more traveling. I have more time to read and learn from books and from many investment bloggers. At the same time, I am able to grow and nurture my stock portfolio.
Saturday, 7 December 2013
SGX Purchase - Balancing my stock portfolio
My post last month mentioned that the cost for my SGX will come down to zero within the next three years. However, this is not going to be as I have added one more lot of SGX at end of last month.
The purpose of adding SGX is to balance my portfolio. My portfolio was set up using SGX, SPH and Starhub as foundation stocks, while Reits and other dividend stocks are supporting casts.
For the purpose of diversification and not to tie down the well being of my portfolio to the fortune of any single company, my three foundation stocks should not exceed 20% of the overall portfolio. On the other hand, the supporting casts should not exceed 10% of the overall portfolio.
One of my friend is holding Starhub in about 80% of his stock portfolio. While Starhub is a good company, he is bearing unnecessary risk by concentrating too much in a single stock - meaning putting too many eggs into a single basket. He is also working in Starhub, so his career and investment are all tie together with Starhub.
We do hope Starhub continues to do well in the coming years!
The purpose of adding SGX is to balance my portfolio. My portfolio was set up using SGX, SPH and Starhub as foundation stocks, while Reits and other dividend stocks are supporting casts.
For the purpose of diversification and not to tie down the well being of my portfolio to the fortune of any single company, my three foundation stocks should not exceed 20% of the overall portfolio. On the other hand, the supporting casts should not exceed 10% of the overall portfolio.
One of my friend is holding Starhub in about 80% of his stock portfolio. While Starhub is a good company, he is bearing unnecessary risk by concentrating too much in a single stock - meaning putting too many eggs into a single basket. He is also working in Starhub, so his career and investment are all tie together with Starhub.
We do hope Starhub continues to do well in the coming years!
Thursday, 5 December 2013
Dec Fixed Deposit Rates Update - 1.10% P.A.
First some clarifications: Fixed Deposit is not for real investment. My review on Singapore's FD is limited to S$50,ooo and below; and tenure term not exceeding 12 months. Fixed Deposit is for parking the emergency fund and allowing immediate access to the fund when needed. These are also based on the following considerations:
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update:
The highest interest rate in the market now is still 1.10% p.a., offered by 3 banks:
1. ICICI Bank
HiSAVE Fixed Deposit is an online fixed deposit account linked with the HiSAVE online Savings Account and all monetary inflow and outflow of funds happens online from and to such HiSave accounts. Minimum placement sum for HiSAVE Fixed Deposit account is $1,000.
HiSAVE online savings account starts from as little as $1. No minimum balance requirements and no monthly fees.
2. CIMB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $25,000.
3. RHB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $50,000.
Please let me know if there is better offer in the market.
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update:
The highest interest rate in the market now is still 1.10% p.a., offered by 3 banks:
1. ICICI Bank
HiSAVE Fixed Deposit is an online fixed deposit account linked with the HiSAVE online Savings Account and all monetary inflow and outflow of funds happens online from and to such HiSave accounts. Minimum placement sum for HiSAVE Fixed Deposit account is $1,000.
HiSAVE online savings account starts from as little as $1. No minimum balance requirements and no monthly fees.
2. CIMB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $25,000.
3. RHB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $50,000.
Please let me know if there is better offer in the market.
Monday, 2 December 2013
My Stock Portfolio @ end November 2013
| No. | Stock Name | Lots | Portfolio% | Avg Cost$ | Breakeven$ | Market$ | |
|---|---|---|---|---|---|---|---|
| SGX | |||||||
| SPH | |||||||
| Starhub | |||||||
| CapitaLand | |||||||
| CapitaMall Trust | |||||||
| CDL HTrust | |||||||
| Starhill Global | |||||||
| Suntec Reit | |||||||
| AIMS AMPI Reit | |||||||
| SingTel | |||||||
| Frasers CT | |||||||
| HPH Trust | |||||||
| SPH Reit | |||||||
| FE Orchard | |||||||
| Boustead | |||||||
| CitySpring | |||||||
| Sing Post | |||||||
| FE HTrust | |||||||
Sold:- CapitaMalls Asia.
Bought:- Frasers CT, SGX.
Dividends collected in November: $614.97
2013 avg dividends/month: $441.42
Saturday, 30 November 2013
SGX - Buy and Hold Strategy that works
Someone asked me about the low cost of my SGX (average cost $2.68). Yes, I am holding SGX since its IPO days. I was very busy with my work then and practically brought the stock, kept it and forgot about it.
SGX has complete monopoly on its business and probably the only stock that will not fail. Although I have set aside an emergency fund, I treat SGX as my emergency fund in my stock portfolio.
After so many years, after many quarterly dividend payouts, and after the recent dividend in October, my breakeven cost for SGX has come down to just $0.81.
So, even if I am not doing anything, and suppose SGX maintains the same dividend payouts, my breakeven cost for SGX will come down to zero within the next three years. By buying low and keeping SGX over these years, buy and hold strategy does work.
Of course buy and hold strategy will not work its magic so soon if you brought SGX at cost >$10. And buy and hold strategy will not work on other companies without good fundamentals. I will write about another of my ex-stocks in the near future that buy and hold strategy failed miserably.
SGX has complete monopoly on its business and probably the only stock that will not fail. Although I have set aside an emergency fund, I treat SGX as my emergency fund in my stock portfolio.
After so many years, after many quarterly dividend payouts, and after the recent dividend in October, my breakeven cost for SGX has come down to just $0.81.
So, even if I am not doing anything, and suppose SGX maintains the same dividend payouts, my breakeven cost for SGX will come down to zero within the next three years. By buying low and keeping SGX over these years, buy and hold strategy does work.
Of course buy and hold strategy will not work its magic so soon if you brought SGX at cost >$10. And buy and hold strategy will not work on other companies without good fundamentals. I will write about another of my ex-stocks in the near future that buy and hold strategy failed miserably.
Friday, 29 November 2013
Mistakes to Avoid, #2 - Gambling (Squandering Your Fortune Away)
I do not need to say too much on bad mistake #2. While you could take a lifetime to accumulate a fortune, you could easily throw it all away by gambling.
While Singapore's two casinos have started operations several years ago, I am still a "mountain tortoise" or a "country bumpkin" and have yet to step into the casinos.
However, in this tech-savvy world, online gambling is easily accessible to everyone with a computer or a mobile phone. You do not even need to step into a casino but could access to many gambling sites online.
Worst of all, you could use your credit card(s) for gambling online. After credit card#1's limit is reached, you could use credit card #2, #3 and so on. And the pit you fell in is getting bigger and bigger.
Some people may think that they could beat the casino/ betting site by doubling up the bet after each lost bet. However, there will come a time when a long losing sequence that you will not be able to crawl out of the "doubling-up" hole you created.
About seven or eight years ago, I won a "guess the score" from a soccer site for English Premier League. The prize was 100 pound sponsored by William Hill and hence I opened an account with William Hill. I started to use this account for sport betting. At first I only bet on soccer, then after some success, I started to bet on Formula 1 and tennis too.
Money easy comes, and so easy goes. Less than one month and my account was ran down. Lucky for me, I have managed to snap out of this bad habit and not topping up my account with my credit card.
Today, I applause Singapore Government's plan for new laws to curb online gambling. Measures include blocking illegal gambling sites, prevent payment to operators and ban advertisement for online gambling. Gambling is a highly addictive habit and the government should step in to restrict accessibility to online gambling.
While Singapore's two casinos have started operations several years ago, I am still a "mountain tortoise" or a "country bumpkin" and have yet to step into the casinos.
However, in this tech-savvy world, online gambling is easily accessible to everyone with a computer or a mobile phone. You do not even need to step into a casino but could access to many gambling sites online.
Worst of all, you could use your credit card(s) for gambling online. After credit card#1's limit is reached, you could use credit card #2, #3 and so on. And the pit you fell in is getting bigger and bigger.
Some people may think that they could beat the casino/ betting site by doubling up the bet after each lost bet. However, there will come a time when a long losing sequence that you will not be able to crawl out of the "doubling-up" hole you created.
About seven or eight years ago, I won a "guess the score" from a soccer site for English Premier League. The prize was 100 pound sponsored by William Hill and hence I opened an account with William Hill. I started to use this account for sport betting. At first I only bet on soccer, then after some success, I started to bet on Formula 1 and tennis too.
Money easy comes, and so easy goes. Less than one month and my account was ran down. Lucky for me, I have managed to snap out of this bad habit and not topping up my account with my credit card.
Today, I applause Singapore Government's plan for new laws to curb online gambling. Measures include blocking illegal gambling sites, prevent payment to operators and ban advertisement for online gambling. Gambling is a highly addictive habit and the government should step in to restrict accessibility to online gambling.
Sunday, 24 November 2013
Mistakes to Avoid, #1 - Smoking (Burning Your Fortune Away)
I will post a series of posts that discuss the mistakes that we should avoid in life and on our investing journey.
First, smoking is like burning money and is a habit or addiction that we should not pick up.
1. Cost of cigarettes
Singapore is one of the most expensive place for smokers. One pack of cigarettes costs between $8 to $15, depending on brands. For simplicity's sake, I use $10 for calculation: $10 a day becomes a massive $3,650 a year, $36,500 in 10 years and $109,500 in 30 years! This should be much higher, considering the interest to be earned and the compounding effect.
2. Higher Insurance Premium
A smoker is paying higher premiums for his/her insurance policies. This is to compensate the insurer because of the increased health risk of the insured person. But thing done (smoking) cannot be undone, and the insurer will not reduce his premium even if the smoker quits smoking.
3. Increased health risks
Smokers have higher health risks, meaning more money is needed for medication.
4. Harmful to your loved ones
Second-hand smoke is harmful for your family members. There is no risk-free level of contact with second-hand smoke; even brief exposure can be harmful to health.
Therefore, a smoker is burning away a fortune.
First, smoking is like burning money and is a habit or addiction that we should not pick up.
1. Cost of cigarettes
Singapore is one of the most expensive place for smokers. One pack of cigarettes costs between $8 to $15, depending on brands. For simplicity's sake, I use $10 for calculation: $10 a day becomes a massive $3,650 a year, $36,500 in 10 years and $109,500 in 30 years! This should be much higher, considering the interest to be earned and the compounding effect.
2. Higher Insurance Premium
A smoker is paying higher premiums for his/her insurance policies. This is to compensate the insurer because of the increased health risk of the insured person. But thing done (smoking) cannot be undone, and the insurer will not reduce his premium even if the smoker quits smoking.
3. Increased health risks
Smokers have higher health risks, meaning more money is needed for medication.
4. Harmful to your loved ones
Second-hand smoke is harmful for your family members. There is no risk-free level of contact with second-hand smoke; even brief exposure can be harmful to health.
Therefore, a smoker is burning away a fortune.
Tuesday, 19 November 2013
"Robbed" by bank
Recently I placed a sum of extra cash in OCBC bank fixed deposit at interest rate 1.08% p.a.
Today by chance I saw my parent's FD renewal notice from the same bank. I was astonished to see that the renewed interest rate for another 12 months tenure is just 0.25%.
I called the bank and was told that the 1.08% p.a. interest rate is for fresh fund only. All existing FDs who are on the auto-renewal option are renewed at 0.25% p.a.
It is reasonable that the bank offers higher promotional interest rates to attract new funds. However, it is totally unacceptable that existing FDs are renewed at the pathetic interest rate of 0.25% p.a.
Giving customers the convenient option of auto-renewal, but then renewing their FDs at 0.25% p.a. is practically daylight "robbery". A lot of senior customers, who may not know English or can't read the small 0.25% interest rate, are not aware of how their FDs are faring. I wonder how much the bank saves by paying less/fair interest rates to their loyal customers. My parent's FD has been with the same bank for 25 years and I wonder how much they have been "robbed".
The bank officer said this is bank policy but offered one solution. My parent could close the existing FD, hold the money for at least one day, then open another FD the next day. Now the money becomes fresh fund and they can enjoy the interest rate of 1.08%.
I think this small inconvenience is worth it to convert 0.25% p.a. to 1.08% p.a.
My emergency fund in my FDs are usually transfer out to banks with the current highest interest rates in the market after matured and seldom stay in the same bank for more than two years.
Readers who know how other banks' policy on FD auto-renewal, please share.
Today by chance I saw my parent's FD renewal notice from the same bank. I was astonished to see that the renewed interest rate for another 12 months tenure is just 0.25%.
I called the bank and was told that the 1.08% p.a. interest rate is for fresh fund only. All existing FDs who are on the auto-renewal option are renewed at 0.25% p.a.
It is reasonable that the bank offers higher promotional interest rates to attract new funds. However, it is totally unacceptable that existing FDs are renewed at the pathetic interest rate of 0.25% p.a.
Giving customers the convenient option of auto-renewal, but then renewing their FDs at 0.25% p.a. is practically daylight "robbery". A lot of senior customers, who may not know English or can't read the small 0.25% interest rate, are not aware of how their FDs are faring. I wonder how much the bank saves by paying less/fair interest rates to their loyal customers. My parent's FD has been with the same bank for 25 years and I wonder how much they have been "robbed".
The bank officer said this is bank policy but offered one solution. My parent could close the existing FD, hold the money for at least one day, then open another FD the next day. Now the money becomes fresh fund and they can enjoy the interest rate of 1.08%.
I think this small inconvenience is worth it to convert 0.25% p.a. to 1.08% p.a.
My emergency fund in my FDs are usually transfer out to banks with the current highest interest rates in the market after matured and seldom stay in the same bank for more than two years.
Readers who know how other banks' policy on FD auto-renewal, please share.
Friday, 8 November 2013
Good Riddance - CapitaMalls Asia
Finally sold off CapitaMalls Asia. Although CMA manages a pan-Asian portfolio of about 100 shopping malls in Singapore, China, Malaysia, Japan and India; its share price is very weak.
CMA has been a submarine to me and its price was always below my entry price. However, I see no value in averaging down because of its pathetic dividend yield of less than 2%.
For some unknown reasons, the price of CMA increases this week and finally surfaces above my breakeven price for the stock. I took this opportunity to divest CMA and earned some small coffee money.
CMA may have good fundamentals and may be a good stock in a few years' time. However, its poor dividend yield does not justify in holding onto the stock.
After I sold CMA, due to the overall market uncertainties, CMA price goes down again.
CMA has been a submarine to me and its price was always below my entry price. However, I see no value in averaging down because of its pathetic dividend yield of less than 2%.
For some unknown reasons, the price of CMA increases this week and finally surfaces above my breakeven price for the stock. I took this opportunity to divest CMA and earned some small coffee money.
CMA may have good fundamentals and may be a good stock in a few years' time. However, its poor dividend yield does not justify in holding onto the stock.
After I sold CMA, due to the overall market uncertainties, CMA price goes down again.
Monday, 4 November 2013
Nov Fixed Deposit Rates Update - 1.10% P.A.
First some clarifications: Fixed Deposit is not for real investment. My review on Singapore's FD is limited to S$50,ooo and below; and tenure term not exceeding 12 months. Fixed Deposit is for parking the emergency fund and allowing immediate access to the fund when needed. These are also based on the following considerations:
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update: Bank of China's 12-months FD rates of 1.12% p.a. has ended.
The highest interest rate in the market now is 1.10% p.a., offered by 2 banks:
1. ICICI Bank
HiSAVE Fixed Deposit is an online fixed deposit account linked with the HiSAVE online Savings Account and all monetary inflow and outflow of funds happens online from and to such HiSave accounts. Minimum placement sum for HiSAVE Fixed Deposit account is $1,000.
HiSAVE online savings account starts from as little as $1. No minimum balance requirements and no monthly fees.
2. CIMB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $25,000.
Please let me know if there is better offer in the market.
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update: Bank of China's 12-months FD rates of 1.12% p.a. has ended.
The highest interest rate in the market now is 1.10% p.a., offered by 2 banks:
1. ICICI Bank
HiSAVE Fixed Deposit is an online fixed deposit account linked with the HiSAVE online Savings Account and all monetary inflow and outflow of funds happens online from and to such HiSave accounts. Minimum placement sum for HiSAVE Fixed Deposit account is $1,000.
HiSAVE online savings account starts from as little as $1. No minimum balance requirements and no monthly fees.
2. CIMB Bank
The promotional interest rate is 1.10% p.a. for 12 months tenure. Minimum placement sum $25,000.
Please let me know if there is better offer in the market.
Friday, 1 November 2013
My Stock Portfolio @ end October 2013
| No. | Stock Name | Lots | Portfolio% | Avg Cost$ | Breakeven$ | Market$ | |
|---|---|---|---|---|---|---|---|
| Starhub | |||||||
| SPH | |||||||
| SGX | |||||||
| CapitaLand | |||||||
| CapitaMall Trust | |||||||
| Suntec Reit | |||||||
| CDL HTrust | |||||||
| Starhill Global | |||||||
| AIMS AMPI Reit | |||||||
| SingTel | |||||||
| HPH Trust | |||||||
| CapitaMalls Asia | |||||||
| SPH Reit | |||||||
| FE Orchard | |||||||
| Frasers CT | |||||||
| Boustead | |||||||
| CitySpring | |||||||
| Sing Post | |||||||
| FE HTrust | |||||||
Sold:- Nil
Bought:- AIMS AMPI Reit
Dividends collected in October: $320
2013 avg dividends/month: $424.06
Saturday, 19 October 2013
The Power of Compounding
Compounding is a simple investment strategy in which you put your
money in an investment that pays a return. At the end of the year, you take your
return, or dividend, or interest and reinvest it with your original stake. Your dividend, or interest,
earns a return, too, building you a bigger dividend -- or higher interest payments
-- for the next year.
A snowball is the best analogy for compounding. As you roll the ball through the snow, the surface area gets bigger. The more surface area on the snowball, the more snow it picks up. The snowball gains mass slowly at first... but pretty soon, it's so large you can't move it.
Compounding is slow and boring at first. But gradually, the dividends grow, and your reinvestments increase. One day, you will wake up to find your account producing thousands of dollars per year in dividends and your wealth a giant snowball.
I find this is very true. My stock portfolio (snowball), although still small and gaining mass slowly, have already passed two milestones this year:
May - Dividends collected exceeded $1,000 in a month.
Aug - Dividends collected exceeded $1,500 in a month.
A snowball is the best analogy for compounding. As you roll the ball through the snow, the surface area gets bigger. The more surface area on the snowball, the more snow it picks up. The snowball gains mass slowly at first... but pretty soon, it's so large you can't move it.
Compounding is slow and boring at first. But gradually, the dividends grow, and your reinvestments increase. One day, you will wake up to find your account producing thousands of dollars per year in dividends and your wealth a giant snowball.
I find this is very true. My stock portfolio (snowball), although still small and gaining mass slowly, have already passed two milestones this year:
May - Dividends collected exceeded $1,000 in a month.
Aug - Dividends collected exceeded $1,500 in a month.
Tuesday, 15 October 2013
Alternative Investment - Rebuilding America
Recently received this alternative investment from a colleague. Rebuilding America is an investment opportunity formed by leading real estate experts to buy foreclosed properties, refurbish and sell them in key growth areas of Chicago, USA, which is able to provide investors with a fixed returns of 38% in a fixed time frame of 24 months.
Features: To acquire, refurbish and re-sell the properties. Properties are more suitable to mid-upper scale lifestyle.
Security of Investment:
- All funds are in Escrow Account with sole intended purpose to purchase, refurbish and sell the properties.
In brief:
Investment time frame : Fixed 2 year
Investment return : 38% fixed return (18% on the 12th month, & 20% on the 24th month+100% capital return)
Minimum investment : S$20,000
Maximum Investment : S$40,000
Investment return : 38% fixed return (18% on the 12th month, & 20% on the 24th month+100% capital return)
Minimum investment : S$20,000
Maximum Investment : S$40,000
Location: In the city of Chicago such as Washington Park, Hyde Park, Woodlawn, South Shore, Kenwood (home of President Obama).
Why Chicago?:
- 4th largest GDP, Financial and Manufacturing hub of US. Chicago city workers or civil servants required to stay in the City area based on employment regulations.
- 4th largest GDP, Financial and Manufacturing hub of US. Chicago city workers or civil servants required to stay in the City area based on employment regulations.
- Chicago have an upcoming and APPROVED development such as Chicago Loop development and New Lakeside development.
Features: To acquire, refurbish and re-sell the properties. Properties are more suitable to mid-upper scale lifestyle.
Target Consumers: Middle to high income earners and city workers or civil servants.
Program Benefits:
- Asset backed investment.
- Asset backed investment.
- Short/fixed period investment of 2 years.
- Fixed payout of 18% on the 1st year and 20% on the 2nd year.
- Proven Method
- Established Property Management and Development Team.
- No currency exposure.
- No maintenance, management fees, capital gain tax or hidden charges.
- The ultimate “armchair investment” with no hassle.
- Secured investment!!
Security of Investment:
- All funds are in Escrow Account with sole intended purpose to purchase, refurbish and sell the properties.
- Investors hold a first charge over all unsold properties plus all monies in the Escrow Account.
- Fully collateralized on physical properties.
- All properties are insured with First American Title, US biggest title insurance.
- Full Trustee administration with FCA regulated Trustee.
- Properties are classified as Trust Property with investors as Beneficiary to the Trust Property.
- SIPP, UK government pensions approved programme.
Rebuilding America is an investment program from Infinity Treasures. They claimed that:
1. They will only receive S$2,000,000 for each month tranche.
2. Ever since it was first launched in September this year, this investment is over subscribed and balloting is required.
Sound too good to be true? And no risk no gain, but Caveat Emptor !
1. They will only receive S$2,000,000 for each month tranche.
2. Ever since it was first launched in September this year, this investment is over subscribed and balloting is required.
Sound too good to be true? And no risk no gain, but Caveat Emptor !
Saturday, 12 October 2013
SPH Final Dividend - Christmas Presents
Yesterday, SPH announced a Final Dividend of 15 cents per share, comprising a Normal Dividend of 8 cents per share and a Special Dividend of 7 cents per share for the financial year ended 31 August 2013.
Together with the Interim Dividend of 7 cents (paid in May) and Special Dividend after SPH REIT listing of 18 cents (paid in August), total Dividend payout for FY2013 will be 40 cents.
This high dividend payout makes SPH the star performer in my stock portfolio in 2013.
However, the main challenge faced by SPH is the shrinking returns of its core business. People no longer depend on buying and reading newspapers as their main source of information, as many obtain news from the Internet (for free).
Hopefully the venture into properties (Paragon, Clementi Mall and Seletar Mall) could mitigate some of the losses from the core newspaper business.
The final dividend will be paid on 20 December 2013. Just in time for me to buy Christmas presents using the payouts.
Together with the Interim Dividend of 7 cents (paid in May) and Special Dividend after SPH REIT listing of 18 cents (paid in August), total Dividend payout for FY2013 will be 40 cents.
This high dividend payout makes SPH the star performer in my stock portfolio in 2013.
However, the main challenge faced by SPH is the shrinking returns of its core business. People no longer depend on buying and reading newspapers as their main source of information, as many obtain news from the Internet (for free).
Hopefully the venture into properties (Paragon, Clementi Mall and Seletar Mall) could mitigate some of the losses from the core newspaper business.
The final dividend will be paid on 20 December 2013. Just in time for me to buy Christmas presents using the payouts.
Sunday, 6 October 2013
Oct Fixed Deposit Rates Update - 1.12% P.A.at Bank of China
First some clarifications: Fixed Deposit is not for real investment. My review on Singapore's FD is limited to S$50,ooo and below; and tenure term not exceeding 12 months. Fixed Deposit is for parking the emergency fund and allowing immediate access to the fund when needed. These are also based on the following considerations:
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update: Bank of China's 12-months FD rates of 1.12% p.a. is still currently the highest in Singapore. The minimum deposit amount for BOC FD is S$50,000.
This promotion is valid for customers with fresh funds only, meaning it is not applicable for money transferred from existing BOC accounts.
There are few branches of BOC in Singapore:
1. Battery Road (BOC Building),
2. Chinatown branch (Furama Hotel),
3. Katong branch (188-192 East Coast Road),
4. Middle Road (BOC Plaza),
5. Maxwell Road (Maxwell House).
According to BOC's website, this promotion is for a limited period only.
Promotion Details:
Please let me know if there is better offer in the market.
1. Singapore's Deposit Insurance Scheme maximum coverage up to S$50,ooo only.
2. Long tenure term will potentially affect your cash-out value for your emergency fund, as you may suffer a penalty fee for early withdrawal.
Back to the update: Bank of China's 12-months FD rates of 1.12% p.a. is still currently the highest in Singapore. The minimum deposit amount for BOC FD is S$50,000.
This promotion is valid for customers with fresh funds only, meaning it is not applicable for money transferred from existing BOC accounts.
There are few branches of BOC in Singapore:
1. Battery Road (BOC Building),
2. Chinatown branch (Furama Hotel),
3. Katong branch (188-192 East Coast Road),
4. Middle Road (BOC Plaza),
5. Maxwell Road (Maxwell House).
According to BOC's website, this promotion is for a limited period only.
Promotion Details:
| SGD Time Deposits Promotional Interest Rates % p.a. | ||||
| 3-Month | 6-Month | 9-Month | 12-Month | |
| S$50,000 and above | 0.55% | 0.85% | 0.95% | 1.12% |
Please let me know if there is better offer in the market.
Friday, 4 October 2013
UOB's Structured Deposit 2013 Series (3)
UOB's Structured Deposit 2013 Series appeared to be quite popular. Series (1) in August and Series (2) in September. Now, Series (3) is launched in October, but with some revisions from series (1) and (2):
Series (3) promotional information:
1. Total Guaranteed Fixed Interest of 9.6% of the Principal Amount over 5 years and 11 months (equivalent to an effective interest rate of 1.6193% per annum)
2. 100% Principal Amount guaranteed when held to maturity.
3. Minimum investment of $5,000
This structure product has a bonus interest component linked to 5 Singapore companies' shares price performance:
Potential Bonus Interest of up to 6% linked to 5 Singapore Company Shares
Assuming an investment amount of S$10,000, held till maturity:
1. Best case scenario - If all 5 stocks are at least 95% their initial values:
2. Worst case scenario - If any one of the 5 stocks is less than 95% their initial values:
The bonus interest structure for Structured Deposit 2013 Series (3) has changed again. Instead of giving out maturity bonus interest at the end, as in Series (2); there are potential bonus every year again, like in series (1). The best case scenario in series (3) has total of 15.6% interest, comparing with the total 19.3% interest for Series (1) best case scenario. The total interest for Series (2) best case scenario is only 12.5%.
Yes, your principal amount is guaranteed, but it is also locked in for the next 5 years and 11 months. There is a loss of liquidity, if any other opportunity arises.
I have mentioned in my earlier post that the additional 2% bonus interest for Series (1) is not easy to get. You would need all of the 5 stocks to be 105% over the initial entry price in order to get the 2%. And it is 2% or nothing, there is no in-between bonus.
Now, the additional 1% bonus interest for Series (3) is also not easy to get. You would need all of the 5 stocks (in 5 different sectors) to be at least 95% over the initial entry price in order to get the 1%. Any of the 5 stocks performing poorer than 95% entry value, and your bonus interest goes down the drain.
Lastly, the interest rate 1.6% is fixed, which means it won't get higher with market fluctuation. Currently, ICICI Bank is offering 1.50% p.a. for FD (<$50,000) on 36 months tenure term.
This structure product supposed to end 12th October, but is it really a "smarter way to invest"?
Series (3) promotional information:
1. Total Guaranteed Fixed Interest of 9.6% of the Principal Amount over 5 years and 11 months (equivalent to an effective interest rate of 1.6193% per annum)
2. 100% Principal Amount guaranteed when held to maturity.
3. Minimum investment of $5,000
This structure product has a bonus interest component linked to 5 Singapore companies' shares price performance:
Potential Bonus Interest of up to 6% linked to 5 Singapore Company Shares
| Shares in Underlying Basket | Ascendas Real Estate Investment Trust ("AREIT") DBS Group Holdings Limited ("DBS") Keppel Land Limited ("KPLD") SembCorp Marine Limited ("SMM") Singapore Telecommunications Limited("ST") |
Assuming an investment amount of S$10,000, held till maturity:
1. Best case scenario - If all 5 stocks are at least 95% their initial values:
Best Case Scenario (Maximum Interest Potential)
| |||
End of Year
|
Guaranteed Fixed Interest Rate on Principal Amount
|
Maturity Variable Interest Rate on Principal Amount
|
Total Interest Payable
|
1
|
|
|
|
2
|
1.6%
|
1.0%
|
2.6%
|
3
|
1.6%
|
1.0%
|
2.6%
|
4
|
1.6%
|
1.0%
|
2.6%
|
5
|
1.6%
|
1.0%
|
2.6%
|
At maturity
|
1.6%
|
1.0%
|
2.6%
|
Total interest payout
|
9.6%
|
6.0%
|
15.6%
|
Principal + Interest payout
|
S$10,000 + S$960 + S$600 = S$11,560
| ||
2. Worst case scenario - If any one of the 5 stocks is less than 95% their initial values:
Worst Case Scenario (Minimum Interest Payable)
| |||
End of Year
|
Guaranteed Fixed Interest Rate on Principal Amount
|
Maturity Variable Interest Rate on Principal Amount
|
Total Interest Payable
|
1
|
|
|
|
2
|
1.6%
|
-
|
1.6%
|
3
|
1.6%
|
-
|
1.6%
|
4
|
1.6%
|
-
|
1.6%
|
5
|
1.6%
|
-
|
1.6%
|
At maturity
|
-
|
-
|
1.6%
|
Total interest payout
|
9.6%
|
-
|
9.6%
|
Principal + Interest payout
|
S$10,000 + S$960 + S$0 = S$10,960
| ||
The bonus interest structure for Structured Deposit 2013 Series (3) has changed again. Instead of giving out maturity bonus interest at the end, as in Series (2); there are potential bonus every year again, like in series (1). The best case scenario in series (3) has total of 15.6% interest, comparing with the total 19.3% interest for Series (1) best case scenario. The total interest for Series (2) best case scenario is only 12.5%.
Yes, your principal amount is guaranteed, but it is also locked in for the next 5 years and 11 months. There is a loss of liquidity, if any other opportunity arises.
I have mentioned in my earlier post that the additional 2% bonus interest for Series (1) is not easy to get. You would need all of the 5 stocks to be 105% over the initial entry price in order to get the 2%. And it is 2% or nothing, there is no in-between bonus.
Now, the additional 1% bonus interest for Series (3) is also not easy to get. You would need all of the 5 stocks (in 5 different sectors) to be at least 95% over the initial entry price in order to get the 1%. Any of the 5 stocks performing poorer than 95% entry value, and your bonus interest goes down the drain.
Lastly, the interest rate 1.6% is fixed, which means it won't get higher with market fluctuation. Currently, ICICI Bank is offering 1.50% p.a. for FD (<$50,000) on 36 months tenure term.
This structure product supposed to end 12th October, but is it really a "smarter way to invest"?
Tuesday, 1 October 2013
My Stock Portfolio @ end September 2013
| No. | Stock Name | Lots | Portfolio% | Avg Cost$ | Breakeven$ | Market$ | |
|---|---|---|---|---|---|---|---|
| Starhub | |||||||
| SPH | |||||||
| SGX | |||||||
| CapitaLand | |||||||
| CapitaMall Trust | |||||||
| Suntec Reit | |||||||
| CDL HTrust | |||||||
| Starhill Global | |||||||
| SingTel | |||||||
| AIMS AMPI Reit | |||||||
| HPH Trust | |||||||
| CapitaMalls Asia | |||||||
| SPH Reit | |||||||
| FE Orchard | |||||||
| Frasers CT | |||||||
| CitySpring | |||||||
| Boustead | |||||||
| Sing Post | |||||||
| FE HTrust | |||||||
Sold:- Hyflux
Bought:- SPH, SPH Reit.
Dividends collected in September: $324.91
2013 avg dividends/month: $435.63
Sunday, 29 September 2013
Whither SMRT?
A south bound train experienced an electrical failure as a result of a
lightning strike somewhere in around Kranji station area during this
morning’s (29 Sep) thunderstorm. The affected train stalled at Woodlands MRT station at about
0640 hr and was later pushed back to the depot by another empty train.
The incident caused an approximate delay of 35 minutes, affecting approximately 3,500 passengers. Luckily today is Sunday, else much more passengers would be affected.
Is this a bad omen for SMRT?
Our MRT was truly efficient and was the pride of Singapore just 10 years ago. When we were in a rush, we took MRT. Nowadays, when we are in a rush, we have to avoid MRT. MRT service is so unreliable that it even overloads the bus and the taxi services.
How did MRT ended up in such pathetic state in the present day? Is it due to POOR planning of over populating our small nation or is it due to POOR maintenance and management of our MRT system?
I was a SMRT shareholder since its IPO. SMRT was a dividend darling in the past, with stable and growing earnings providing shareholders with a steady stream of dividends to look forward to. It was a defensive stock and it didn't go down too much even during the stock market crash.
However, the POOR management and short-sightedness in neglecting maintenance had caught up with SMRT and those past days of stability has come to an end. Dividend was cut so drastically that the yield becomes just above 1%, which is not much better than bank fixed deposit interest rate.
SMRT shareholders are currently on a south bound train as we see SMRT share price keeps heading south or downwards. I had jumped off SMRT when it was at $1.615 and counted myself lucky for about $2,000 profit.
The incident caused an approximate delay of 35 minutes, affecting approximately 3,500 passengers. Luckily today is Sunday, else much more passengers would be affected.
Is this a bad omen for SMRT?
Our MRT was truly efficient and was the pride of Singapore just 10 years ago. When we were in a rush, we took MRT. Nowadays, when we are in a rush, we have to avoid MRT. MRT service is so unreliable that it even overloads the bus and the taxi services.
How did MRT ended up in such pathetic state in the present day? Is it due to POOR planning of over populating our small nation or is it due to POOR maintenance and management of our MRT system?
I was a SMRT shareholder since its IPO. SMRT was a dividend darling in the past, with stable and growing earnings providing shareholders with a steady stream of dividends to look forward to. It was a defensive stock and it didn't go down too much even during the stock market crash.
However, the POOR management and short-sightedness in neglecting maintenance had caught up with SMRT and those past days of stability has come to an end. Dividend was cut so drastically that the yield becomes just above 1%, which is not much better than bank fixed deposit interest rate.
SMRT shareholders are currently on a south bound train as we see SMRT share price keeps heading south or downwards. I had jumped off SMRT when it was at $1.615 and counted myself lucky for about $2,000 profit.
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