Portfolio Update for October 2024

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

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Quick update: Basically, all this while I have combined the investment capital that I am managing for my family with my own capital.  Because of this, certain stocks in my portfolio are not shares that I would like to own, like Tesla, which is too volatile for my liking (just a personal opinion) but my family wanted.  The investment capital for family makes up about 10% of the total capital of my investment portfolio.  To simplify matters, I decided to take this opportunity to liquidate the portion of the portfolio (within the US Growth Portfolio) to return the capital and profits back to family.  Therefore, in this sale, I will sell all Tesla shares in the portfolio, and a larger composition of the shares that I would like to lower my exposure.  With this action, future quarterly updates of the portfolio will be solely mine moving forward, with a much lower allocation to US Growth Portfolio.

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For the month of October, it was a eventful month for my portfolio.  In the first half of the month, attention was on the 'We, Robot' event by Tesla.  The anticipation to the event was high, leading to the rise in share price.  However, greed clouded my judgment as I did not sell the shares with the earned profits.  After the event, we all know what happened, as the share price dropped by more than 10% in one day.  To institutional and many retail investor, the event lacked details and short term profit guidance.  However in the turn of events, in late October, after the release of their 3rd quarter results, the improving profit margins and cash-flow indicates that probably the near term worst case scenario is over for Tesla.  This caused the tables to turn, with its share price surging by more than 22% in one day. I took this opportunity to sell all Tesla shares (nope, I did not manage to sell at the high price, as I sold rather prematurely before market trading started that day at the low).

In the overall picture, US shares continue to rise slowly and gradually despite increased volatility nearer to the Presidential election.  However nearer to home, a different picture is painted.  Although the FED has cut interest rates by 0.5% in September which caused the rocketing of REITs' prices, things took an abrupt turn in the second half of this month.  With the looming Presidential election in the US and with a high probability of Donald Trump winning and returning back into the White House, institutions are fearing the return of inflation due to Trump's policies.  With such uncertainty, the 10-year yield starts spiking, and even return to 3-month high above 4.2%.  This spike has put tremendous pressure on asset prices that are highly sensitive to interest rates, especially REITs.  In the last trading day, there was major selling both in the Singapore market and US markets.  Probably this is just the beginning of all the volatility we are going to get in November.

On more undesirable news, Mapletree family REITs have announced their results for the 3rd quarter of 2024.  Mapletree Logistics Trust (MLT) and Mapletree Pan Asia Commercial Trust (MPACT) have announced disappointing results, with decline in revenue, decline in net income, but increment in expenses, partly due to the strong Singapore dollar against foreign currencies.  All these inevitably resulted in the double digit decline in distribution per unit (DPU).  With such disappointing results, it is no wonder that their share prices tumbled after the release of their results.  I think with their current property portfolios, any sustainable recovery will be largely dependent on the economic recovery in China and Hong Kong.  How long this recovery will take is largely unknown and beyond my control.  For now, just waiting it out and collect dividends.  Thankfully on the flipside, Mapletree Industrial Trust (MIT) has reported a better performance year-on-year, but a slight dip in DPU quarter-on-quarter.  This contrasting performance further consolidate the idea that the Greater China related investments are still under pressure in current macroenvironment, even with the recent fiscal policies.  Recovery may still be a long gradual road ahead.

Another important event this month is the private placement this month by ParkwayLife REIT (PWLR), where the proceeds will be used to acquire 11 new freehold nursing homes in France.  Europe and UK is going to be the 3rd pillar of growth within the plans of PWLR.  Personally I think it is a positive move as I had written in this previous post.  However, Dr Wealth has a different opinion on this expansion, which, from a balanced viewpoint with MPACT as a case study, is also valid for consideration.  Will keep a lookout on how the manager consolidate and synergize this acquisition in time to come.

As shared above, with so many events and news to digest, it seems like my portfolio is still too REITs-heavy.  Therefore, I may carry out another rebalancing of my portfolio in future.  The purpose of this future rebalancing is to further lower my exposure to the whole REITs sector, and to lower the composition of each stock.  This would also mean that I will need to add new non-REIT stocks into my portfolio.  To date, I have not taken any action for this rebalancing because I am still considering what to do next.  I suppose more details will only be shared after my decision is finalized.  For now, I will continue with my current portfolio.

For this month, I injected approximately SGD 6.5K capital buying the following shares:

SGX:    CapitaLand Ascott Trust

             ParkwayLife REIT

US:       Apple

             Google-C

             JP Morgan

             Microsoft

             Tesla

             VOO ETF

On the other hand, I have sold the following shares (to liquidate the family's part of the portfolio):

US:       Apple

             Google-C

             JP Morgan

             Microsoft

             Nvidia

             Tesla

             VOO ETF

Total Portfolio Value has decreased by approximately 2.0% to around SGD 602K including capital injection, very much due to the impact that the ever rising 10-year yields have on the REITs, and the profit taking by investors during this earnings reporting season to lock in profits before the heightened volatility during the upcoming elections.  Looking at the numbers and the need for me to rebalance my portfolio in future, I probably need to continue with my full time work a couple of years more before I can move on to Barista FIRE.  Hopefully, this wish can materialize before I am 45.  Nonetheless, I am glad that my portfolio market value can remain above SGD 600K for 2 consecutive months, however, I am also embracing the heightened volatility that may arrive next month after the US Presidential elections.  For now, I will just sit back, relax, and wait for the next round of dividends to come into my bank account.