CPF Update - $400K Milestone (Apr 2021)

 

CPF + CPF Investment Account reached a milestone of $400K. I only started investing in the Infinity S&P 500 Index Fund via Endowus in October 2020 and I'm pretty impressed with the returns of almost 16% so far. Makes me wonder why I bother investing in REITs at all when a passive index fund can generate such good returns. Should I just liquidate all the REITs and pump everything into VOO and VTI ETF?

Coming back to CPF, I would have $500k saved by now if not for the fact that I used part of the money for the monthly housing instalments after I bought my flat. Saving $1 million using your CPF is a  possibility if you take Mr CPF Loo Cheng Chuan's advice to transfer your OA to your SA regularly, and invest your OA into a S&P 500 index fund when you reached your Full Retirement Sum (FRS).

The sad part is none of this $400k can help me achieve F.I.R.E. early because the money is locked in CPF till I turn 55/65. I'm going to have to work hard on saving more and getting better returns if I want to retire before 50.

Dividends Update - Quarter 1 (Jan to Mar 2021)

Sigh, in a sea of red, shall we concentrate on the dividends?

January 2021 gains were wiped out due to the market correction but Q1 (Jan - Mar 21) dividends reached an all time high of $10K.

Ever since joining the InvestingNote.com community, I've gotten a few inspirations but it's very easy to be distracted by the various views on investment strategy. Some think it's useless to invest in the Singapore stock market due to the phenomenal bull run of the US stock market, some think that the US market is over-valued and due for a crash. You basically got to form your own view and decide what's the best course of action for 2021.

For me, I've started positions in the US market by purchasing Apple, NIO and Alibaba shares. I think Apple has got a strong moat with its ecosystem of consumer products and services, while NIO is touted to be the next Tesla of China. Alibaba has been my best buy thus far as I bought it during the dip when the Ant IPO was scrapped and it was investigated by the China government for anti-competitive business practices. 

I really think Alibaba has the potential to become as valuable as Amazon so I'm going to accumulate more shares slowly during dips. Counting on the dividends and Alibaba to help me achieve financial independence early! HODL!

Total Passive Income (2020) - CPF Interests + Stock Dividends + S&P 500 Index Fund ($42.5k)

 

Don't you just love logging into your CPF account on 1st Jan to find out how much interest has been deposited? Last year's (2020) interest income from CPF is $13,751.

I also made the decision to purchase the S&P 500 index fund via Endowus with $40,000 of my CPF Ordinary Account (OA) funds in Sep 2020. It has since generated $2,859.92 (+7.15%) returns within a short time frame of 3 months, beating the 4% Special Account (SA) annual interest rate.

Add that to the dividend income of $25,917  generated by my stocks portfolio would bring the total passive income received to $42,529 for year 2020 (excluding capital appreciation of the stocks portfolio).

Not bad for doing nothing and earning money while sleeping, aye? It's like having a son earn money and him giving you all his paycheck as an allowance, haha. My goal is to earn $50,000 passive income annually because that's how much I think I will need to stop working and live a reasonably comfortable lifestyle.

Dividends Update (Year 2020) - $26K

 

With the final dividends announced by the various REITs in for 2020, I can finally tabulate the total dividends received for the year. I've received a total of almost $26K of dividends in 2020, five  thousand more than 2019. This is why I invest in REITs, the amount of dividend income received is relatively constant even in a year hit hard by COVID-19.

Thanks to my strategy to invest mostly in Industrial REITs, the portfolio has been quite robust in churning out dividends. Think about it, even in times of turmoil, businesses still need space to manufacture goods, store logistics and house data centres. I plan to grow the amount of dividends received next year to $30K, which means I will need to add another $100K in value to the portfolio with an average dividend yield of 5%.

With 42 REITs listed in the Singapore stock exchange, I can't possibly invest in them all or spread my investment too thin for sub-par returns. I'm going to stick to the 4 horsemen of Ascendas REIT, Mapletree Industrial Trust, Mapletree Logistic Trust and Frasers Logistic & Commercial Trust. I'm really tempted to jump into the US stock market and maybe I will in 2021, because the opportunities of growth stocks there are too hard to ignore.

For now, FLCT has been identified as the lead horseman to help propel this portfolio to the million dollar mark within the next 5 years. I'm crossing my fingers for it to be listed as a constituent stock in the Straits Times Index at the December quarterly review. It's time for FLCT to shine!

Stock Watch - Mapletree Logistics Trust (Oct 2020)

Did Mapletree Logistics Trust shock everyone with the announcement of its plan to add more than $1 billion worth of assets to its portfolio, in the midst of a pandemic?

I missed the boat on MLT in the past because I wasn't paying attention to the market as a casual DIY investor, but I'm definitely adding this REIT to my portfolio now and building it up to become one of the core stocks - together with A-REIT, FLCT and MINT.

It has the potential to become a $3 stock like A-REIT and MINT!

Likes

• Strong sponsor & pipeline
• Industrial REITs are less prone to economic downturn compared to retail/hospitality
• Giant REIT (component of STI) with economies of scale
• Multinational diversification (SG, MY, CN, VN, AU, UK)
• Appreciating share price and DPU

Dislikes

• Dividend yield is less than 5%
• Majority leasehold properties

REITs Portfolio Update (Sep 2020) - $543K

 

Transactions in Sep 2020:

• Accumulated 5,000 shares of Ascendas REIT at S$3.20
• Accumulated 14,000 shares of Frasers L&C Trust at S$1.35
• Accumulated 15,000 shares of Prime US REIT at US$0.815
• Portfolio Market Value: S$542,652

I'm a huge fan of Dividend Warrior (dividendsrichwarrior.blogspot.com) and his dividend portfolio strategy. While I probably started buying REITs on my own, following his blog over the years gave me confidence that such a strategy would work if I hold on to the REITs and reinvest the dividends received consistently.

I realized that the current portfolio market value of my REITs exceeds his REITs market value of $522K. This is because Dividend Warrior had focused more on non-REITs investment such as banks, since 2019, to diversify his portfolio. His total portfolio market value today is an impressive $643K over 10 years. I hope to be able to catch up with him soon, haha.

He had paid much more attention to the REITs market, and was able to catch the rapid growth of the Mapletree REITs and Keppel DC REIT. I've only managed to buy a small amount of Mapletree Industrial Trust back when it was still $1.50 (today's price is $3.27), and completely missed out on Keppel DC REIT. Part of the reason is that I only research which stocks to buy when I accumulate enough savings, or during bonus periods, which is probably only about 3 to 4 times a year.

I guessed I've never thought that attaining F.I.R.E. (Financially Independent, Retire Early) is possible, and that investing is only to help me accumulate sufficient retirement funds. Catching up and reading all your investment blogs during COVID-19 circuit breaker has changed my mind, maybe it's possible to dream about F.I.R.E. when this REITs portfolio hits $1 million.

A huge thanks to the investment bloggers community out there who are sharing your investment journey and portfolio data. It has given me renewed interest in taking my investment more seriously, and the possibility of leaving the rat-race one day to pursue my other interests.

COVID-19 Stock Market Crash (Mar 2020) - Missed Opportunities

What was your strategy during the big market drop in Mar 2020? Did you load up more shares or did you cut losses?

I wasn't pleased with how I reacted but then again hindsight is 20/20. I might have been pleased with myself if it was a prolonged bear market. This is why you should have a strategy on what to do when the market tanks, not just in a bull market, so you can execute your plans swiftly and calmly when the time comes.

I was shocked and paralysed when my portfolio not only lost its gains for the past 5 years, it also experienced a 50% loss in capital. Imagine waking up to a chart like the above! I knew I wasn't going to sell and incur all the losses, but I didn't want to buy either because I was unsure on how the market might react further.

What I should have done was to buy more positions of my two core portfolio stocks - Ascendas REIT and Frasers Logistics & Commercial Trust. At some point FLCT dropped as low as $0.665, if I had bought some I would have been sitting on more than 100% gains on those shares now. I managed to regain some composure in Apr 2020 and starting stocking up on Keppel Pacfic Oak US REIT and Prime REIT, but absolutely missed the opportunity to expand my holdings in A-REIT and FLCT.

I have been accumulating A-REIT and FLCT for years, they are good stocks, yet I couldn't bring myself to buy more during the crash in March 2020. Next time this happens again, I bet you know what I'll do - take a cold shower and open my war chest.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” ― Warren Buffett.