Finance Smiths

Personal finance apprentices-in-training

Another sell transaction in Jan 2018

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This is a continuation of my efforts to restructure and simplify my portfolio. As I start my Maybank Monthly Investment Plan into a few REIT ETFs from today, I have decided to sell my last profitable individual REIT holdings – Starhill Global REIT (SGX: P40U).

Sale Proceeds: S$610

Profit Amt: S$20

Profit %: 3.28%

I’m now stuck with a number of individual stock positions in losses of varying degree. The worst ones are in the Telecommunications, Oil & Gas and Media industries i.e. M1, Starhub, SembCorp Marine, SembCorp Industries and SPH. The unrealised losses add up to about S$12,000, which is terrible.

I can’t even exit these positions with the current bull market and this goes to show how bad my individual stock picking skills are. Somehow, I chose a few of the worst-performing blue-chip stocks to be in my portfolio. I’m wondering whether I can still make small profits in the end if I wait long enough and these industries improve. It’s kind of like waiting for time to fix my mistakes, which is a benefit of long-term investing. Haha.

In the meantime, I hope to gradually reduce my portfolio to just ETFs so I can focus on my Dollar-Cost Averaging (DCA) and Value-Cost Averaging (VCA) index investing strategy. Without having to worry about how my individual stocks are performing. I plan to accumulate my ETF holdings to a large enough size such that I only need to do occasional portfolio rebalancing. While receiving dividend income (albeit lower) and reinvesting some of the dividends.

Sell transaction Jan 2018

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Just a quick update here. After setting up our robo-advisor accounts and standing instructions to transfer funds into them weekly, I started to realise it was pointless maintaining a separate portfolio of 6 x Vanguard LSE-listed ETFs on our Stan Chart Online Equity Trading Platform. A reader pointed this out to me a while ago about incurring high transactions costs when it comes to buying and selling these Vanguard LSE-listed ETFs. Plus they overlap with each other and our robo-advisor accounts.

I took advantage of the recent run-up in equity markets to sell all of our small 6 x Vanguard LSE-listed ETFs holdings for another round of restructuring.

Sale proceeds: S$2,000

Profit amount: S$100

Profit percentage: 5%

I keep trying to simplify our portfolio but continue to over-complicate matters by not sticking to one strategy. If you remembered from my past posts, I have done this once before i.e. selling our entire 12 x Vanguard LSE-listed ETFs holdings and ended up building a simpler 6 x Vanguard LSE-listed ETFs portfolio. Now, I’m doing the same thing but simplifying it into a 2 x Vanguard LSE-listed ETFs portfolio.

Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYD)

Vanguard FTSE Emerging Markets UCITS ETF (LSE: VDEM)

My wife will hold the LSE: VHYD since she’s mostly Value-Cost Averaging (VCA) and Dollar-Cost Averaging (DCA) on Singapore Equity and Bond ETFs. Would be good for her to have the global equity component (strong focus on developed markets) and increase the dividend yield on her portfolio. I will hold the LSE: VDEM since I mostly DCA on Singapore Equity and REIT ETFs. It’s also useful for me to have the global equity component but with a strong focus on developing markets instead to reduce the overlap.

I’m still making a number of mistakes with my portfolio construction as I switch to an ETF investing strategy. The bull market is providing me with an opportunity to fix them since I can still exit positions with profits. I’m hoping to firm up my approach and stop changing my mind by the time the next bear market comes around. It would be a much tougher and harsher learning environment if I get this careless.

Showing my support in a small way

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I have always been a fan of the SG Finance Bloggers Community. We come from different backgrounds, work in various industries or self-employed and write about all sorts of personal finance topics. I enjoy reading their posts and believe in what we are doing – educating ourselves, each other and the public with the knowledge we have gained from our failures and successes.

It takes effort to maintain a personal finance website and I appreciate the time taken to prepare for & write those articles. I have closely followed 2 female finance bloggers for a while now – Dawn from SG Budget Babe and Jes from SimplyJesMe.

They are around the same age group as my wife. Probably the reason why I can identify more with their views and opinions, which they have been generous enough to share openly. Especially on the aspects of dealing with topics such as personal finance and work issues.

As I read about Jes’ journey to starting her own business with SnackFirst, I wish her all the best with it and hope it becomes successful. By the way, I tried those packets of nuts at the gathering last month and they were great. I might order some as snacks for myself and my colleagues to try in the office.

I also read about Dawn’s doubling of net worth in 1 year. The bit about increasing her income through her job or side hustles and maximising returns from expenses struck a chord. You essentially become more efficient at profit-maximising your own income and expenses, which is an important concept to keep in mind.

Those gains on cryptocurrencies are amazing and I also like the note of caution Dawn included at the end of that section. Well done to all of you who have made money on them! I still think cryptos are speculative in nature but I have to say it was an incredible wealth building opportunity if you knew how to take advantage of their price volatility with sizeable positions.

In such a short amount of time, you could potentially replicate or even exceed the returns from other asset classes that would only have been achieved over a much longer period of time. Fascinating stuff that we now live in a world where so many things are possible!

Anyway, I went on to read Dawn’s latest post about The Ultimate Guidebook to the Best Cashback Tools in Singapore. Must have been a lot of work to prepare it and there is this note that caught my attention – the fact that she wasn’t paid to write or give out this guidebook and none of its content is sponsored.

This is perhaps the biggest challenge for a personal finance blogger in Singapore. How to monetise your website without losing your authenticity and independence? But yet be adequately rewarded for putting in all that time and effort into preparing a useful resource that is shared publicly.

Then I see the next bit about supporting Dawn on her Patreon page as an appreciation of the work she has done. I really enjoy learning about new things and it was fantastic reading about how Patreon works. I cannot believe I am only just finding out about this now.

At different monthly contribution levels, you get rewards for pledging that amount of money. Which means you get something in return for showing your support. And this gets more valuable as your contribution amount increases. What a smart way to build a financially beneficial relationship at low costs between a personal finance blogger and his/her supporters!

It becomes a question of how many supporters and how fervent they are that determines how much the creator receives every month. Just for teaching me something new about a recurring revenue model for a personal finance website, I was happy to share what I have learned. As you can see, this is the most number of external links I have included into any one of my blog posts.

The next part was whether the rewards were sufficient to motivate me to make financial contributions every month. There were a few interesting things but they didn’t quite align with my investing strategy and approach. Plus my current cashback credit cards and high interest bank accounts model has worked so far. Given our limitations with what products we can use since we work at banks ourselves.

But I am pleased with learning about this new thing. So I have decided to offer a small token of appreciation and show of my support for all the effort Dawn has put in so far. $2 per month is nothing to shout about but it’s a start. Keep putting out good work and I hope to be convinced to raise that amount!