What we want to achieve with Finance Smiths

New self-hosted WordPress blog, domain and direction

If you haven’t noticed, this blog has been moved from Blogger to a self-hosted WordPress platform. After about a year of writing and wanting to continue with this personal interest & hobby of mine, I decided to spend some money on it. Have my own domain name and improve the design of the blog. I went with HostGator as my web host, Genesis Framework and Child Theme for the WordPress blog. There’s plenty of online material that guided me through the entire process of setting up the self-hosted WordPress blog and shifting my posts across from Blogger.

It was a slow process (about 2 weeks) to get to this stage as I was busy with work and personal commitments, hence the lack of new posts. But I’m happy to finally start writing again!  It also gave me time to think about the direction I want to head in with the blog for this year. In 2016, I was almost always writing from the perspective of my wife and I taking into account our personal circumstances. Not the best way to draw or even help readers since they might not identify with our situation. But people still bothered to read my posts and follow what I had to say.

Now that I have a more long-term perspective on this blog, I intend to improve my writing style so that readers can actually benefit from the content. It should take into account a wider range of circumstances, drawing from our current & past experiences, what we should have done, and from the experiences of others. It should also touch on more topics and I’m hoping these efforts translate into longer & better structured posts. But I know I have to change as well and to be able to do it – I should be more open to collaborations, communicate with readers & other bloggers and attend more events. You will notice I am terrible at replying emails & comments last year but I’m aiming to get better at it this year.

It’s one of the main reasons I changed the blog name from The Finance Smith to Finance Smiths. A reminder that I’m no longer writing for myself and I should consider others that are taking the time to read these posts. It’s the only way forward for the blog to become more sustainable, interesting and with the ability to evolve over a long period of time. This is my personal goal for the blog in 2017 and I shall evaluate my performance in this area at the end of the year. I can already see the challenges ahead with our ever increasing work and personal commitments but I will try hard to work towards and achieve it.

My wife’s ETF portfolio

As my first step, I know I haven’t been clear about the ETF portfolio that is being built for my wife. I have mentioned before that a ETF portfolio suits an investor that prefers to automate his/her monthly investments with minimal manual purchases, has a wide range of savings available each month to invest (from a little to a lot), does not like to do regular research in relation to equity & bond markets or monitor the financial news often.

My wife is like that in many ways and it’s not a bad thing. The important thing is to build an investment portfolio with an approach that suits her. Besides, it’s not that my wife is not interested in making money and what it can do for her, it’s just that she is not as interested in investing. This is why I have always believed my wife makes for the ideal ETF investor. Consistency in application, does not like switching investment approaches, no temptation to buy individual stocks, ever growing portfolio from the cash injections and minimal monitoring.

It’s probably not surprising but I have readers that are interested in the constituents of this ETF portfolio, how it’s being built, the rate it’s growing and the dividends received. I have to admit that even though my portfolio includes ETFs, it’s overweight on individual stocks and the ETFs overlap with each other. However, we were able to apply a simpler, clearer and more disciplined approach to my wife’s ETF portfolio. I guess it’s time to provide more specifics and a better context to what I’m talking about. As such, I have included a snapshot of my wife’s ETF portfolio in the Portfolio page of the blog.

ETF Portfolio Makeup

These are the constituents of the portfolio and the number of units, total market value, proportion and type are also tracked in the snapshot:

• Nikko AM STI ETF (G3B on SGX) – Automatic monthly purchase via POSB Invest Saver and OCBC Blue Chip Investment Plan
• SPDR STI ETF (ES3 on SGX) – Manual purchase via Stan Chart Online Trading Platform
• Phillip SGX APAC REIT ETF S$ (BYJ on SGX) – Manual purchase via Stan Chart Online Trading Platform
• Vanguard FTSE All-World High Dividend Yield UCITS ETF (VHYD on LSE) – Manual purchase via Stan Chart Online Trading Platform
• ABF Singapore Bond Index Fund (A35 on SGX) – Automatic monthly purchase via POSB Invest Saver

Although my wife’s ETF portfolio is cleaner and better organised than mine, there continues to be overlaps in the holdings of the ETFs. The most obvious one is between Nikko AM STI ETF and SPDR STI ETF. Main reason for this duplication of the Singapore Equity ETFs is due to the application of Dollar Cost Averaging (DCA) on the Nikko AM STI ETF and Value Cost Averaging (VCA) on the SPDR STI ETF. I have explained the differences between DCA and VCA on this blog before. Essentially, VCA has more of a market timing element to it as the monthly investment amounts can differ (greater when markets are going down and lesser when markets are going up).

There is minimal overlap in the holdings between these Singapore Equity ETFs, Phillip SGX APAC REIT ETF S$ and Vanguard FTSE All-World High Dividend Yield UCITS ETF. The less overlaps in the holdings of the ETFs, the better the risk diversification and the more diverse the markets distribution of your portfolio. Of course, this depends on the ETFs you have selected for your portfolio, the amount of automatic & manual purchases you intend to make and the investing platform you use. When robo-advisors such as Smartly become more prevalent in Singapore, you will find that all of the considerations above and the investing approach can change. In any case, we should be setting up a robo-advisor ETF portfolio for my wife when it’s available in case you are wondering why her portfolio is smaller compared to mine. We are still waiting for Smartly to launch and expect my wife’s portfolio to grow significantly after that.

I considered including the purchases (number of units and prices), average costs, dividends and profit & loss information as separate columns in the ETF portfolio snapshot. However, I decided against it since I am already posting about our monthly purchases and dividends received for the relevant ETFs and individual stocks. No point cluttering the blog Portfolio page with so much information and it’s more important that I’m tracking them on Google Sheets and SGXCafe instead. As a side note for future posts, I might explore how to select, build and track an ETF portfolio in Singapore in more detail so you can refer to these actionable steps for assistance.