Portfolio Update for May 2023

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This will be a relatively short post, just to update on the transactions for the month.

For the month of May, it is a case of 2 different stories between the US Growth Portfolio and the SGX Dividend Portfolio.  For this month, the headline story is on the US debt ceiling issue, and that has definitely overshadowed the slight improvement in CPI.  Negotiations are ongoing regarding the debt ceiling.  Although the market broadly believes that the US government will not make the wrong move because of political disagreements to result in any defaults, any undesirable news out of the current negotiations will still send short-term shockwaves through the market.  On the other hand, Fed Chairman Jerome Powell has signaled that there will be no interest rate hikes in June.  However, whether this is the beginning of the pivot or not, will very much depend on the CPI numbers in the coming months.

As mentioned in last month's update, analysts have commented that 1st quarter's earnings may be the worst earnings by the US companies since 2020.  However, many companies have proved them wrong and the better than expected results have helped many companies' share price to recover or even hit new highs.  Furthermore, the rise and focus on the AI theme boosted the share prices of AI-related companies, including Nvidia, Microsoft, Google and Palantir.  In addition, the turnaround in confidence in Google after the previous decline mentioned here definitely helped to propel my portfolio value, especially when Tesla is still under pressure.  These have helped my US portfolio to finally turn green after a very long period of red.

However, closer to home is a totally different story.  After the XD date, Singapore banks have fallen from highs, dragging the value of my portfolio down.  Nonetheless, this may present another opportunity for me to add on when the price is right.  With the 10-year yield creeping up above 3.5% again, REITs are once again under pressure.  As shared in an earlier post, the current high interest rates environment and the persistently strong Singapore dollar are denting the performances of many REITs, causing many REITs to report a decline in distribution per unit for the 1st quarter of 2023.  That adds on to the selling pressure that REITs are facing in the past year.  This is especially so on the last trading day of May where ParkwayLife REIT, the largest holding in my portfolio, fell by a staggering 3.2%, crashing below the short term support of SGD 3.69 and signaling more selling pressure to come.  For the month of May, ParkwayLife REIT has dropped by an accumulative 8.0%.

Overall, my portfolio is down for the month as the weightage of my SGX Dividend Portfolio is 3 times the size of my US Growth Portfolio, thus the recovery in the US portfolio is not sufficient to cover the decline in the value of my Dividend Portfolio.  Regardless, I will just continue to hold on to my portfolio, and continue to reinvest dividends collected.

For this month, I injected approximately SGD 1.5K capital buying the following shares:

SGX:    Hong Leong Finance

             Mapletree Industrial Trust

             Mapletree Logistics Trust

             Oversea-Chinese Banking Corporation

             ParkwayLife REIT

             Singapore Technologies Engineering

US:       Google-C

             JP Morgan

In addition, I have also reinvested dividends on the following shares:

SGX:    Hong Leong Finance

             Mapletree Industrial Trust

             Mapletree Logistics Trust

             Oversea-Chinese Banking Corporation

             Singapore Technologies Engineering

Total Portfolio Value has fallen slightly to around SGD 475K including capital injection.  This further emphasize the importance of diversification, which limits the profits but definitely cushion the decline.  I will continue to slowly DCA into the market, and also reinvest the dividends back into the market to compound my portfolio.  Moving ahead, as mentioned by many REITs' investors, REITs will continue to face pressure as PCE and CPI remained sticky, and interest rates continue to remain elevated through 2023.  I shall continue to stay positive but remain cautious, while collecting my dividends in the upcoming months!  Hopefully by 2024, inflation will be more subdued and pressure from high interest rates can be alleviated. 

Comments

  1. Blade Knight1 June 2023 at 17:58

    HI Baristafire, I am also holding on to Hong Leong Finance- High Five!

    Btw, what are your thoughts on Parkwaylife REIT given that its distribution yield seems to be on the low side relative to the current high interest rate environment. Are you still holding on to it?

    ReplyDelete
    Replies
    1. BFIRE1 June 2023 at 19:39

      Woohoo Hi Blade Knight! I am a fan of your blog! Hong Leong Finance is stable and a great dividend play, especially after it has resumed its dividend payout post-covid.
      With regards to ParkwayLife REIT, yup, I am still holding on to it. It is still the largest holding in my portfolio based on capital. Its distribution is on the low side, but I think it is still a solid REIT to hold. I think it has good prospects moving forward, especially after 2026 when its DPU is expected to jump after the AEI of the Singapore hospitals. However, certain risks do remain like the possibility of the increase in interest rate by Japanese government, which may impact ParkwayLife much more than US 10-year yield (but the possibility of the corresponding strengthening of the Japanese Yen may also help to improve its income). Will continue to monitor, but I am waiting for the manager to acquire Parkway Novena. I believe if that happens, investors will all be very excited to participate in any type of fund raising means ParkwayLife seeks. Nonetheless, just remain inactive for now and reinvest dividends.

      Delete
    2. Blade Knight2 June 2023 at 14:56

      Thanks BFIRE for the sharing on Parkwaylife REIT…..no wonder so many folks holding on to it. I like your blog a lot and seems that you are doing very well and coasting to Financial Independence soon.

      Do continue sharing your well analyzed thoughts and your journey towards barista fire. Have a great weekend ahead!

      Delete
    3. BFIRE2 June 2023 at 15:50

      Thank you Blade Knight. I am honored. I am doing okay I guess, and just building up the portfolio. I can only say I am 10 years too late, but then again, better late than never. Same to you too! Have a great weekend!

      Delete

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