2014 Portfolio Review (Part 2): Foundation Stocks

My portfolio was set up using SGX, Starhub and SPH 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.

Now, as all dividends are collected and all tradings done for 2014, it is time to review the 3 foundation stocks:

1. SGX

there was a rare massive system failure that

there was a rare massive system failure that paralysed trading on the local bourse for over three hours. - See more at: http://www.straitstimes.com/news/business/markets/story/traders-and-investors-bemoan-yet-another-disruption-singapore-stock-mark#sthash.AG2cxYa3.dpuf

First, there was a rare massive system fault that paralyzed trading for over 3 hours, then the opening of the market was delayed to 12.30 pm because of a system problem caused by a software defect.  These incidents had tarnished the reputation of SGX as a top trading exchange.

Next, trading activities and volumes continue to languish after the infamous penny stocks crash of 2013. And we do not see mega IPO listings to SGX. When will we see an IPO blockbuster?

Trading activity fell in the first six months of the year - See more at: http://www.straitstimes.com/news/opinion/eye-the-economy/story/time-sgx-shake-the-blues-20141204#sthash.3TFV2Nhv.dpuf

Despite these failings, recently SGX share prices continue to trend upwards possibly because of the anticipation or expectation of the lot size reduction in Jan 2015.

I have added one lot of SGX when it was traded near to $7.  I was impatient then, else I could have gotten it below $7.

Chance of SGX failing as a company is minimal and together with the quarterly dividend payouts (almost like a REIT), SGX stays as my foundation stock.

2. Starhub

Several system failures too.  Seems like Singapore's infrastructures are falling apart?

The company also facing stiff direct streaming competition on cable TV and mobile phone operations.

A bit disappointed about the dividends payouts. $200 a year for one lot was great for a $2+ stock just a few years back, but not so fantastic when it is now a $4+ stock.

As Starhub has long history in consistent dividend payments, even during the financial crisis, it stays as my foundation stock for another year.

I have added one lot of Starhub, when it was near its 52 weeks low.

3. SPH

Everybody says it is a company in a sunset industry and a dying business, but the share price of SPH stays strong and not even affected much by the recent stock market dip.  The other non-core business are helping and compensating for the poor performance of the newspaper business.

There is also a psychological barrier for me on SPH.  As my average price for SPH is $3.99, I am hesitant to make a $3+ stock into a $4+ stock.

SPH dipped below $4 in February.  Then, I was too patient or hesitant and missed the chance to add SPH.  SPH never again dip below $4 for the rest of 2014.  Look like the old stalwart is not about to die yet.  

As mentioned in my previous post, SPH is my top dividend contributor, then perhaps I should forget my average price and collect some more SPH in 2015.

So, in conclusion, no change to my foundation stocks in 2015.