Finance Smiths

Personal finance apprentices-in-training

Final Dec 2021 liquid assets update and 2022 investment strategy

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Happy New Year everyone! It has been a busy time of Christmas and New Year celebrations since I’m on leave. I did manage to get some rest in between and it has been a nice long break away from work. From next week onwards in the new year, I should still be working from home more than my wife as she is heading back to the office about 3 days each week. Whereas I may start with 1 day before going on to 2 days in the office each week. I’m looking forward to a hybrid work arrangement where I can spend time in the office and at home on work days of my choosing. This flexible work from office and home arrangement is the way forward as it allows to me to build relationships with my colleagues and stakeholders while being there for my family at home.

I have been on a full-time work from home arrangement for a few months now and it’s starting to wear me down. Without face-to-face contact with my colleagues and managers, I’m left feeling isolated and disconnected working by myself. I haven’t been able to expand my professional network much, which is essential for moving jobs to increase my pay and expand my job scope as I get older. At the rate I’m going, I will end up stuck in my current role or moving around at the same level without any promotion if nothing changes. I’m happy to have all that extra time with my family by working from home full-time. But the balance is important to me because I want to build up my social and professional networks by spending time with friends and colleagues.

My hope for 2022 is that it’s better than 2021, which I felt was worse than 2020. I have low expectations for 2022 so I’m hoping to exceed them by end of the year. I mean, if 2022 ends up just meeting or worse, below expectations, that would be a real blow to my what can only be described as very cautious optimism. Anyway, I did my final Dec 2021 liquid assets update on my Google Sheet and will write about it here. I will probably make some review points about how 2021 ended financially for me as well as my investment strategy for 2022.

31 Dec 2021 Cash Balance – S$35,000

My cash balance went up by S$20,000 for the month because I sold more of my STI ETFs and my wife’s bonus was credited just before Christmas. It’s probably going to go down as I plan to reallocate the extra cash to cryptos.

31 Dec 2021 Stocks/ETFs/Bonds – S$843,000

My Chinese and US tech stocks and ETFs took a beating in the last 2 months of the year. Coupled with selling off my STI ETFs for capital rotation, the portfolio value went down by S$25,000 for the month. While the rest of my non-growth stocks and ETFs held up alright, gains on the latter were not enough to offset the losses on the former. A disappointing performance but it’s to be expected with growth stocks falling out of favour recently.

31 Dec 2021 Robo Advisors – S$106,500

This has shown a small and steady increase of S$3,000 for the month from regular contributions. Good to know that consistent capital injections is doing its work as the portfolios (index & thematic ETFs and funds) are very diversified when I compare across the various robo advisor accounts that I have.

31 Dec 2021 Cryptos – S$188,065

My crypto portfolio had a small increase of S$2,500 for the month. Mostly from regular crypto purchases and dip-buying that offset the losses as my crypto picks took a fall from its highs.

31 Dec 2021 CPF Ordinary Account – S$140,500

I did not include the 2021 interest credited so the increase of S$300 for the month came from the usual contributions minus housing loan instalment withdrawal.

Total 31 Dec 2021 Liquid Assets – S$1,313,065

When I added everything up and compared it to last month, this went up by S$50 for the month. Remember how it only went up by S$5 in the previous month. Meaning my total liquid assets has remained at the same level for about 2 months now, despite my capital injections and reallocations. Not a good way to end the year financially especially after the private property purchase wiped out my cash savings and CPF Ordinary Account. I was hoping for some form of recovery using investment gains but that did not happen.

2022 Investment Strategy

It’s clear to me that my investment focus for 2022 is about recovery. I’m not even thinking of investment growth at the moment because I don’t feel like I have positioned myself well to capture opportunities. I have deciding to divert even more of my cash funds into cryptos with larger weekly regular purchases and dip buying. Less cash funds will be flowing into the rest of my monthly investment plans of ETFs and robo-advisors (heavier weightage to thematic types). As for manual buying of stocks and ETFs, it should be split between tech and value but with a bigger focus on tech. Most importantly, I need to find my footing with cash allocation again. There is a good chance my expenses are going to spike this year with increased spending on property and family. How I manage my cash this year is going to significantly impact my financial performance at end of it.

Sell STI ETFs to buy more tech stocks, ARK ETFs, Dairy Farm and cryptos

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I cleared up the remainder of my urgent work and put the rest on hold last week. Because I’m going on a long 2 weeks leave away from work. Nice to take a break and wind down for the rest of the year. I have been going out more here and there with friends and family so I haven’t blogged in a bit. The stock and crypto markets have been interesting enough in the past 2 weeks for me to step in and do some capital reallocation. I was planning to wait until the salary income and bonus gets credited later in the month to invest. But I decided to do something about it in the meantime instead of letting the opportunity slip by.

I have maintained a large STI ETF position for a while now with my monthly investment plans and manual purchases. While I will continue to cash fund automated regular purchases of STI ETFs, I have been thinking about reallocating some of it to growth stocks and cryptos. With the recent dip in the tech stock and crypto markets (less so for the STI ETF), it seemed like a good time to try some capital reallocation. I sold some of my STI ETF position built up from the monthly investment plans and rotated the proceeds into tech stocks, ARK ETFs, Dairy Farm and cryptos. Not selling the remainder of my STI ETF position for now because I would still like to maintain a portion of it to stabilise my investment portfolio.

As for the salary income and bonus coming in soon, I should be flowing it into cryptos using regular purchases. Probably convert some into stablecoins for crypto interest. While keeping the rest to maintain my monthly investment plans for ETFs and robo-advisors. And leaving the last part for expenses that should last me until next month’s salary income gets credited. I’m still trying to find a balance between having enough for spending and maintaining a sufficient cash buffer for opportunistic buying in the stock and crypto markets without having to capital reallocate. A work in progress for the next few months.

Exploring decentralised assets liquidity mining on Cake DeFi

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It has been an eventful few days as I sold off all of my bond ETF holdings to raise cash to buy the dip in stock and crypto markets. I went in on a wide range of Chinese and US tech stocks, Ark ETFs and mid to large cap cryptos. There has been a rebound in these markets so I have stopped my manual buying activity on the dip. And let the automated regular purchases of ETFs and cryptos every week do its work. Consistent capital injections increase my investment positions while I build up cash for bigger purchases during dips and crashes. With salary income and bonus coming in the next few weeks, I expect a larger cash buffer to be built up. Some of which I will direct into stablecoins on Hodlnaut and Crypto.com to earn crypto interest.

The only crypto platform that I have not been injecting fresh funds into is Cake DeFi. And it’s for a good reason. The DFI price popped after the Fort Canning update and the introduction of decentralised assets and collateralised loans on the DFI chain. My frozen Cake DeFi holdings (staked DFI and liquidity mining pools) was underperforming my Hodlnaut ETH, BTC and stablecoin holdings for a while. This is no longer the case with the fall in ETH and BTC prices while the DFI price has gone up. While I plan to inject more capital into Cake DeFi in the future, my crypto holdings on it has grown proportionately larger than the other platforms.

So I’m going to take time to build up my crypto holdings more aggressively on Hodlnaut and Crypto.com first. Just to balance out my crypto holdings across the 3 platforms. A high volatility on cryptos means that I can wait for the dips to buy in more when the market is running cool and hold off when the market is running hot. While letting the crypto interest & liquidity mining increase my crypto positions over time regardless of what’s happening in the market. Speaking of which, Cake DeFi’s liquidity mining pools just got more interesting with the addition of decentralised assets so it’s not just cryptos anymore.

woman making pastry on table with flour
Photo by Klaus Nielsen on Pexels.com

I noticed the yield on Cake DeFi’s liquidity mining pools has gone up as there is more activity on the DFI chain. I have been swapping my stablecoin liquidity mining rewards – USDC and USDT into DFI, DUSD, dQQQ, dSPY and dTESLA (no dGME for now). Then adding them into the respective decentralised assets liquidity mining pools while the yield is high. Not doing any capital injections and just using my liquidity mining rewards to participate in any gains. I’m hoping decentralised assets take off as it will result in even higher activity on the DFI chain and increasing the DFI price and value.

I view my crypto assets as one ecosystem separate from my traditional finance assets (stocks, ETFs and bonds) that is another ecosystem. While cash is just fiat money that supports the 2 ecosystems. I will inject cash capital into both ecosystems and keep it circulating inside because I believe their value will continue to rise. I don’t plan to withdraw any cash capital for as long as I have the ability to generate cash, whether it be salary income, bonus or a secondary income source. I’m late to building up a secondary income at my age with a family. Once you get older and have a kid, priorities change and you can no longer push as hard or as long as you want to pursue income.

There’s no point regretting the decisions I have made that led me to this situation. There were some key good and bad outcomes along the way that could have changed if I had done something different. But it would have led me to an entirely different life from the one I’m living now. I find it more useful to look ahead and make the most of what I can now. Changing my beliefs, strategy and approach with new information flows while adapting to the evolving world has been tough. If you remember, I used to be a primarily ETFs investor until I decided to open up to the possibility of achieving higher returns by investing in stocks and cryptos. It continues to be a learning experience and work-in-progress as I try to figure things out along the way.