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.

StocksCafe - Tracking Stock Dividends Automatically ($20K Milestone)

I have a new toy!

StocksCafe is a website/app that helps you track and monitor your stocks portfolio and dividend income. Check out the full suite of functions at www.stocks.cafe.

Thanks to some of the other finance bloggers who have been using this nifty little piece of software at their blogs, I went to StocksCafe and started tinkering around. I loved it so much I purchased a one-year subscription at $39.

This thing is so idiot proof - all you have to do is key in your historical stock trades and it will automatically calculate your profit and loss, returns and dividends received over the years. Thankfully, I was able to pull out the trades information from my POEMS account and transpose them into StocksCafe.

This was what I found out.

I have received in total $70K worth of dividend income over the past 5 years from REITs. Wow!

I have reached the milestone of $20K in annual dividends in 2019. Yay!

Dividends received have added +16.8% points returns to the portfolio, when combined with the P&L. Not arguing with that!

If you are a serious dividend growth investor, you really should be tracking these statistics to help you refine your holdings and strategy along the way. For example, I have sold off SPH and Singtel as they can no longer match the growth and returns of REITs.

We are living in volatile times where disruptive technology and COVID-19 can change the fate of traditional blue chip stocks in a matter of years - think SPH, Singtel, Keppel, Sembcorp, SIA. We should manage our portfolio actively to pick up the stars and let go of the non-performing ones.

It is very important to protect your capital and not get caught up in a dividend yield trap.

"Rule No.1: Never lose money. Rule No. 2: Never forget rule No.1." -- Warren Buffett

Net Worth Update (Sep 2020) - Central Provident Fund (CPF)

Long before the 1M65 ($1 million in your CPF by 65 years old) movement became viral (watch video above), I was already transferring my CPF Ordinary Account (OA) to my Special Account (SA) every month once I started working. To me it was a no brainer, the government is giving you a higher interest rate of 4% compared to the 2.5% in OA, just grab it!

It didn't bother me that I would not be able to use the funds in my SA to purchase my own home. I grasped the concept of CPF - it's meant to be your retirement fund at 65 years old so just leave it alone. If you use it or withdraw it for anything else, you are reducing your nest egg when you retire and no longer have an income. Everyone knows how high the cost of living in Singapore is, we need to be prepared.

When I bought my flat, I had to take a loan on the entire mortgage because you can't use your SA for property purchases. This was fine by me because any HDB or commercial home loan will not exceed the 4% interest rate earned by leaving your money in SA. Therefore I would be earning more money on interest by taking a home loan versus paying the flat purchase price outright. Not all loans are bad.

However, once I reached the Full Retirement Sum (FRS) in SA, I wasn't able to transfer any more money from OA to SA. At this point I was quite happy to use my OA to pay the monthly housing loan installments, since I can invest my cash in REITs which can yield more than 5% returns.

Today, my CPF has accumulated about $365K and is earning an annual interest of $13K as of 2019. With continual contributions from my salary and the power of compounding interest, this sum is expected to reach the goal of $1 million when I reach 65. Since the CPF is a relatively "risk-free" savings account guaranteed by the government, I can afford to take more risk with my stocks investment portfolio to earn higher returns. At the end of the day, I will still have the projected $1 million savings in my CPF to fall back on for retirement.

Total current net worth = $890K. Your CPF can be your second risk-free dividend portfolio yielding 2.5% to 6%.

Let the time value of money be your friend in your F.I.R.E. journey!

Dividends Update (Sep 2020)

 

$4,081.40 of dividends were received from Keppel Pacific Oak, Cromwell and Prime REITs in the month of September 2020.

Keppel Pacific Oak = $2,164.48

Cromwell = $558

Prime = $1,358.92

This brings the total dividends received from REITs to $16K in 2020 thus far. This is why I love dividend stocks, they basically help you to reach your investment goals faster if you reinvest them back into the portfolio. Some of the bloggers described it as having another person helping to earn more salary, which is funny but true.

To me, its more like Chinese New Year and getting ang pows on dividend day.

Don't underestimate the power of dividends!

REITs Portfolio Update - $500K Milestone

I haven't been checking my portfolio regularly since March 2020 when the market tanked as COVID-19 engulfed all aspects of reality, and all I could see is a sea of red when I logged into my trading account. I did, however, picked up a few counters with some spare cash that I have - namely, Keppel Pacific Oak US REIT, Prime REIT and Frasers L&C Trust. 

At one point my portfolio was negative 50%, down from a positive $80k in profits. Thankfully the market picked up in July, and by September I was back in the green zone, thanks to the robustness of REITs. What a roller coaster ride! The last time something like this happened was the sub-prime crisis in 2008, and my portfolio consisting of small-cap stocks never recovered even after years later.

$500k is a major milestone for me and a wonderful surprise in this uncertain COVID-19 times. Even though I started dabbling in stocks since 2006, I never thought of myself as a serious investor until 2014 when I bought my very first REIT - Ascendas REIT. I wanted to build a stable, dividend income portfolio and REITs are the answer to my call. Overtime, REITs became the only instruments that I buy as the other stocks became lackluster and lose their investment value.

What's next after $500k? $1m? It's time I start to document this journey towards $1m, because I think it will be as eventful as the first $500k.

First Post: My Journey into Singapore Real Estate Investment Trusts (S-REITs)

I'm inspired to start blogging about my investment portfolio consisting of Singapore REITs, after it reached $500,000 in September 2020.

My goal is to reach $1 million, the big hairy bodacious number that every investor is aiming for as a milestone in their investment journey.

I'll use this platform to share my journey, as well as what has led me to invest exclusively in REITs.

My investment strategy for S-REITs are:

(1) Reputable manager/sponsor - CapitaLand, Ascendas, Keppel, Mapletree, Frasers etc.

(2) Market capitalisation of at least S$1 billion

(3) Dividend yield of at least 5%

(4) Potential capital appreciation of at least 10%

(5) Suitable for long-term holding (>5 years)

(6) Dividends are reinvested back into the portfolio

The above investment strategy have been working out so far for me, and are based on experience of researching and buying REITs over the past 5 years.