This post is to bookmark down this page which is a huge gem.
It capture the essence of that blog and financial freedom. Aside from the more US-specific investment strategy, all the ideas written there are fantastic and applicable to Singapore.
The first 7 chapters are must read, especially on the market always going up and how fund managers rip us off.
"The market always, and I mean always, goes up. Not each year. Not each month. Not each week and certainly not each day. But relentlessly up."
"The fact is only 20% of fund managers will beat the Index over time. 80% will fail. 100% of them will charge you high fees to try. There is no predicting which will be in that rarefied 20%.
Every fund prospectus carries this phrase: “Past results are not a guarantee of future performance.” It is the most ignored sentence in the whole document. It is also the most accurate."
And how we have become so accustomed to debt - the greatest obstacle to wealth building.
"If you intend to achieve financial freedom you are going to have to think differently. It starts by recognizing that debt should not be considered normal. It should be recognized as the vicious, pernicious destroyer of wealth-building potential it truly is. It has no place in your financial life."
Saturday, April 29, 2017
Sunday, April 02, 2017
Letter To Shareholders (6) - Performance Review 2017Q1
Performance Highlights
The market went on a crazy bull run since the start of the year with STI exploding 300 points. Rising tides lift all boats and our portfolio leapfrogged 9.5% into positive territory after 2 years.
Looking back, we can only regret not pumping more capital into the market during the downturn, even though we are intrigued with the crazy run-up in US.
On a positive note, we paid out dividends of over $1000 (base on pay-date), highest ever for Q1 since inception.
Operating Highlights
As forecasted, income for the quarter were almost 40% lower than the same period last year. This was mainly due to:
- Absence of bonus in January and March.
- No Chinese New Year winnings (compared to Feb last year)
Earnings is expected to catch up in the following 3 quarters.
Expenses were about 16% higher compared to last year, but inline with 2 year average. This was mainly due to:
- Gambling losses during the CNY period (charged in January).
- Wedding events in February.
- Mayday Concert and board game purchase in March.
Acquisitions & Divestments
The market run-up means less opportunities, although we managed to nibble a tiny bit of CapitalMall Trust due to partial fulfillment. Lesson learnt: Do not be afraid to just buy at market value if we strongly believe in the purchase. In this case, we missed a substantial run up due to wanting to save $50.
Super Group was finally privatized and we let go of our holdings at a overall loss of 25%. A lesson for blindly buying at high prices and not having the conviction to average down after the shares plummet 50%. Thankfully, this is the smallest holding in our portfolio and the damage is minimal.
Bank Accounts
The unexpected bad news was yet another downgrade of OCBC360 account. Fortunately, we have maxed out our Maxigain counter (our plan 1 year ago finally bearing fruit) at 1.2% bonus interest. With rising US interest rates, SIBOR rate is also expected to trend up.
Considering these changes, our cash account rankings are as follow:
1. Citibank Maxigain: 0.55+% for the first month, ~1.75+% subsequently. Withdrawal conditions.
2. OCBC 360: 1.55%, 1.85% on certain months.
3. CIMB Fastsaver: 1% unconditional.
We are saddened by the change and have explored other options, but have not find any with a definitive advantage over OCBC360. This is because we are unable to the meet the $500 spending in most months which most other banks require.
For now, our immediate action is to reduce reliance on CIMB Fastsaver and direct more into our stock holdings to meet this year dividends goal. Any long term reserves will go straight into Maxigain, and OCBC360 will store our bullets.
We applied for the SCB Unlimited Cashback card with 1.5% rebate, which we believe present the best value for us at the moment. We will be closing the Bank of China account.
Financial Strength
DBS Vickers is currently having a major promotion with reduced commissions (0.12% with min $10, down from 0.18%) until June.
In other news, Budget 2017 announced tax rebate of 20% up to $500 this year, which would result in slightly lower tax expenses.
Our financial strength is at an all time high with more than 5 years of emergency funds and 10 years of warchest.
Outlook
Our immediate priority is to deploy cash as soon as reasonable opportunities come along before the strong dividend months of May and August arrive. Hopefully we can see some market corrections soon.
Barring unexpected circumstances, we expect higher dividends for the next 3 quarters.
The market went on a crazy bull run since the start of the year with STI exploding 300 points. Rising tides lift all boats and our portfolio leapfrogged 9.5% into positive territory after 2 years.
Looking back, we can only regret not pumping more capital into the market during the downturn, even though we are intrigued with the crazy run-up in US.
On a positive note, we paid out dividends of over $1000 (base on pay-date), highest ever for Q1 since inception.
Operating Highlights
As forecasted, income for the quarter were almost 40% lower than the same period last year. This was mainly due to:
- Absence of bonus in January and March.
- No Chinese New Year winnings (compared to Feb last year)
Earnings is expected to catch up in the following 3 quarters.
- Gambling losses during the CNY period (charged in January).
- Wedding events in February.
- Mayday Concert and board game purchase in March.
The market run-up means less opportunities, although we managed to nibble a tiny bit of CapitalMall Trust due to partial fulfillment. Lesson learnt: Do not be afraid to just buy at market value if we strongly believe in the purchase. In this case, we missed a substantial run up due to wanting to save $50.
Super Group was finally privatized and we let go of our holdings at a overall loss of 25%. A lesson for blindly buying at high prices and not having the conviction to average down after the shares plummet 50%. Thankfully, this is the smallest holding in our portfolio and the damage is minimal.
Bank Accounts
The unexpected bad news was yet another downgrade of OCBC360 account. Fortunately, we have maxed out our Maxigain counter (our plan 1 year ago finally bearing fruit) at 1.2% bonus interest. With rising US interest rates, SIBOR rate is also expected to trend up.
Considering these changes, our cash account rankings are as follow:
1. Citibank Maxigain: 0.55+% for the first month, ~1.75+% subsequently. Withdrawal conditions.
2. OCBC 360: 1.55%, 1.85% on certain months.
3. CIMB Fastsaver: 1% unconditional.
We are saddened by the change and have explored other options, but have not find any with a definitive advantage over OCBC360. This is because we are unable to the meet the $500 spending in most months which most other banks require.
For now, our immediate action is to reduce reliance on CIMB Fastsaver and direct more into our stock holdings to meet this year dividends goal. Any long term reserves will go straight into Maxigain, and OCBC360 will store our bullets.
We applied for the SCB Unlimited Cashback card with 1.5% rebate, which we believe present the best value for us at the moment. We will be closing the Bank of China account.
Financial Strength
DBS Vickers is currently having a major promotion with reduced commissions (0.12% with min $10, down from 0.18%) until June.
In other news, Budget 2017 announced tax rebate of 20% up to $500 this year, which would result in slightly lower tax expenses.
Our financial strength is at an all time high with more than 5 years of emergency funds and 10 years of warchest.
Outlook
Our immediate priority is to deploy cash as soon as reasonable opportunities come along before the strong dividend months of May and August arrive. Hopefully we can see some market corrections soon.
Barring unexpected circumstances, we expect higher dividends for the next 3 quarters.
Subscribe to:
Posts (Atom)