Portfolio Update for August 2024

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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 was a month of roller-coaster ride.  The first half of the month was a wild ride, with the Nikkei plunging a frightening 12% in a single day.  The main culprit was due to the sudden shock that the Japan finance department decided to raise interest rate by 0.25%.  Technically speaking, an increase in interest rate by 0.25% is nothing worrisome, however this is worsen by the huge sum of monies involved in the 'Yen Carry Trade'.  A detailed explanation of the 'Yen Carry Trade' and its impact on the financial markets has been explained in this post by Dollars and Sense.  The outcome of these series of events resulted in the rise in Japanese Yen against the US Dollar and institutions and investors hurriedly unwind their positions to minimize their risk exposure.  This led to the plunge in the markets, with investors turning the tide from greed to fear in days.

In a turn of events, just a couple of days later, the Japanese Government announced that they may hold back the subsequent pace of raising of interest rates, and calm almost immediately returned back into the markets.  Volatility plunged and all markets returned to their uptrend, and most importantly, the 10 year yield falls below 4% most the time this month.  This is great news for REITs.

With the release of July CPI numbers this month, which remains on its declining track, it is good news for the market.  However, employment numbers seem to show some worrisome hints, especially with the massive downward revision in employment figures, which may further threaten an increase in unemployment rate.  However, this event also kind of confirms that the FED will definitely cut the interest rate in the September meeting.  The only thing that remains now, is how much the cut will be, and how frequent the interest rate cuts may be subsequently.  No matter what, this is light at the end of the tunnel for REITs.

Closer to home, banks announced their earnings, which were all satisfactory.  Both United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) announced an increase in half-yearly dividends while Development Bank of Singapore (DBS) maintained its quarterly dividends.  Even Hong Leong Finance (HLF) performed way above my expectations and increased their dividends for the first half of the year.  Overall I am pleased with the performance of the shares in my portfolio this quarter, especially with the dividends collection.  I will give the detailed update of dividends collected for this quarter in the quarterly update next month.

For this month, I injected approximately SGD 3K capital buying the following shares:

SGX:    Development Bank of Singapore

             Hong Leong Finance

             Oversea-Chinese Banking Corporation

             United Overseas Bank

US:       Google-C

             Microsoft

             Palantir

             Tesla

             VOO ETF

On the other hand, I have sold the following shares:

SGX:    Hong Leong Finance

Total Portfolio Value has increased slightly by approximately 1.8% to around SGD 583K including capital injection (value is lower than expected due to the declining USD/SGD exchange rate).  Nonetheless, I am quite happy that the portfolio is able to hit a new all time high this month, all thanks to the recovery in REITs, while the US Portfolio experienced a slight pullback.  Hopefully, this uptrend can continue, as we enter the last month of the quarter, where the first rate cut may finally materialize.  With that, hopefully by the end of this year my portfolio can creep towards SGD 600K value, as we look forward to a couple more possible rate cuts till the end of the year.  For now, I will just sit back, relax, and wait for the remaining dividends to come into my bank account.

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