2015 Portfolio Review (Part 2): Foundation Stocks

2015 is a very challenging year for investment, especially in the last two quarters of the year.  China market crashed from its height, devalued renminbi, fear of US interest hike and persistent low oil prices weighed heavily on the market.  Sometimes you think you are moving one step forward, but then you are actually forced taking two steps backward due to strong headwinds.

In the month of August, my portfolio crashed $20K.  On the Black Monday (24th Aug), my total portfolio value marginally fell below the total invested capital value.  

My portfolio was set up using SGX, Starhub and SPH as foundation stocks, and Reits and other dividend stocks are supporting casts.  While the Reits and O&G counters got battered by the market downturn, luckily my foundation stocks are more able to withstand the barrage.  And on the same week of Black Monday, my portfolio recovered back to positive territory.

I think the major factor is probably due to the deep roots that the foundation stock trees managed to grow over the years.  However, there is no short-cut here, and we really need time for the roots of our trees to grow.

I did some small shopping on Black Monday.  However, I found out that low can become lower as banks and O&G counters continue their march downwards. 

My portfolio managed to stay positive at Christmas, meaning the current value is more than the invested capital value, without counting the dividends received.  The dividends collected are like roots growing under the dividend trees.

Now, as all dividends are collected and all tradings done for 2015, it is time to review the 3 foundation stocks:

1. SGX

Trading activities and volumes continue to languish despite reduction of lot size from 1,000 to 100 shares.  Only one pathetic mainboard IPO listing in the whole year of 2015.  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, SGX share price is relatively resilient in the year 2015.  Interim dividend increased from 4 cents to 5 cents from November.  And my SGX tree already grows very deep roots. 

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 

The company is facing stiff direct streaming competition on cable TV, mobile phone operations and uncertainties in market dilution after the 4th telco starts operation.

Starhub has long history in consistent dividend payments, and the Starhub tree has deep roots and remains standing during the August gale.  Starhub stays as my foundation stock for another year.

3. SPH

Everybody says it is a company in a sunset industry and a dying business.  The SPH tree does not have the deep roots as SGX and Starhub in my portfolio but it remained standing during the August gale.  Look like the old stalwart is not about to die yet.  


So, in conclusion, no change to my foundation stocks in 2016.