Portfolio Update for August 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 August, it is the month of correction, or worse, it may be the beginning of the change in trend, probably the end of the bull run.  It all started with Fitch downgrading US credit rating from AAA to AA+.  This downgrade may make the cost of debt more expensive to the US government, which is already having a ballooning debt issue.  This caused the 10-year yields to shoot above 4% again, causing stress to the equity markets, especially the tech sector.  This marks the beginning of the downward slide in equity markets at the beginning of the month.

One week later, Moody's joined in the 'fun' and cut the ratings of 10 US banks, and also placed some big names on the downgrade watchlist.  This does not go well with investors as it successfully reminded investors the panic and worries of the bank failures and bankruptcies that happened in April this year, and that the financial woes still lingers around even today.

To make matters worse, the rebound in July CPI data, though better than expected, brought the markets down as the probability of the FED raising rates higher and keeping it high for longer than expected duration rekindles.  A rebound in CPI data means inflation is getting sticky and it may be hard for inflation numbers to decline further from here due to a declining base a year ago.

Without much surprise, the US Growth Portfolio is quite badly affected.  Coupled with the fall in prices due to XD in the SGX Dividend Portfolio, my portfolio once again dipped into the red (excluding reinvested dividends).  What a ride this got to be, because on 31st July, my portfolio just hit a new milestone, a value of SGD 505K (crossing the half a million mark).  However in a short span of a month, the portfolio is back down to the value last reached in June.  No doubt that is kind of sad, but I have to remind myself, to learn from AK71, that fluctuation in share prices and portfolio value is not the priority for income investors, instead, I should focus on my dividend income.  However, the last week of August staged a slight rebound that made the portfolio looks a tad better back into the green, though still down for the month.

As such, on a bright note, dividend income has increased meaningfully this quarter, thanks to the boost by Oversea-Chinese Banking Corporation, Capitaland Integrated Commercial Trust and ParkwayLife REIT. Regardless, I will just continue to hold on to my portfolio, and continue to reinvest dividends collected.

For this month, I injected approximately SGD 2.9K capital buying the following shares:

SGX:    Capitaland Integrated Commercial Trust

             Frasers Logistics and Commercial Trust

             Hong Leong Finance

             Mapletree Logistics Trust

             Oversea-Chinese Banking Corporation

US:       Tesla

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

SGX:    Frasers Logistics and Commercial Trust

             Hong Leong Finance

             Oversea-Chinese Banking Corporation

Total Portfolio Value has fallen by about 2.0% to around SGD 498K including capital injection.  This further emphasize the importance of being patience.  I will continue to slowly DCA into the market, and also reinvest the dividends back into the market to compound my portfolio, while waiting to ride out this correction (hopefully).  Moving ahead, I shall continue to stay positive but remain cautious, while collecting my dividends in the upcoming months!  Hopefully by 2024, inflation will be more contained and pressure from high interest rates can be alleviated. 

Comments

  1. Anonymous3 September 2023 at 16:40

    Hi Baristafire,

    Investing in the stock markets is all about ups and downs. And that is one reason, I prefer dividend investing. While the markets do their thing (go up and down), we sit back and collect our dividends. The other thing to do is when the market retreats, we can do "shopping" and add to our holdings.

    Companies (businesses) have mostly put the Covid induced downturn behind them and have started to dish out their usual dividends since last year. And this year, the momentum looks like its continuing, especially our three local banks. Last year, I collected $88K in dividends and this year, as of August, I have already collected $80K! $20K of it was collected in August!

    Looking back, actually the Covid period was a good time to shop and add to our holdings. I added UOB, Jardin C&C andd many other stocks during that period. It was not easy mentally, I admit, especially when you see businesses shutting.

    The comforting signs were that our government stands ready to help and were prompt in dishing out rescue package after rescue package in quick succession. The government was decisive. They helped the economy and it paid off !

    So I dont always see a market downturn as necessary a bad thing.

    ReplyDelete
    Replies
    1. BFIRE3 September 2023 at 19:37

      HI Anonymous,
      Yeap, that is what I like about dividend investing too. I would love to reach annual dividend levels like yours too, but I suppose I started a tad too late and now I need time to do its compounding magic. Got to be patient, but at least I have started.
      I am also delighted that by 3Q 2023, the total dividends has surpassed the total dividends I have collected for the whole of 2022. So that is definitely an improvement and something to be happy about.
      Market downturns are not a bad thing, only when you have a warchest. I think this is my weakness, as every month I tend to DCA into the market, and thus my warchest is forever low, haha. So when the opportunistic crash comes, I am always low in cash. I suppose I am just a slow investor, and I will need a longer time to reach my goals.

      Delete

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