Finance Smiths

Personal finance apprentices-in-training

End Sep 2021 Liquid Assets Update

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It has been a busy weekend as we are finally feeling well enough to catch up with friends at their place. We brought our boy out to various parks to play as the weather has been cloudy and cool. We are also meeting our families as part of the usual weekly gatherings. We have been staying at home more and limiting our social events to the same small groups of people to minimise our exposure. But it’s nice to get out once in a while so we don’t go crazy from the same daily routine.

I updated my Google Sheet liquid asset numbers for end Sep 2021 and they are not looking good. The markets have been falling recently and my capital injections are not sufficient to make up for it. Since I no longer have a blog page to show the figures, I shall go through each component with some commentary.

water drop
Photo by Pixabay on Pexels.com

Cash – S$20,000

After paying the final downpayment amount to complete the private property purchase transaction, our cash balance is at an all-time low. It’s unsettling but we have to get used to it. Our increased automated monthly investment plans will draw down quite a bit of the salary income and the higher living expenses means that cash savings will not be as high as before. But it should still build up my cash position over time, just a lot slower than before.

Securities – S$858,434

After selling some of our US tech stocks and the continued decline of our Chinese tech and SG stocks, the value of our main portfolio has gone down as well. This does not include our robo-advisor portfolios and all of our holdings can be found on the StocksCafe blog page. We are hoping for some recovery here with our regular capital injections into ETFs and averaging down of stocks.

Robo Advisors – S$92,200

Since we have set up new robo-advisor portfolios with Endowus, StashAway, OCBC and UOB, this has gone up slightly even though our main StashAway portfolio has gone down due to the continued weakness in Chinese tech stocks. We expect this to climb as we are directing a significant portion of our increased automated monthly investment plans here.

Cryptos – S$125,000

There has been a bounce in the crypto markets and our holdings in Hodlnaut and CakeDefi have gone up. We had previously invested some of our spare cash into cryptos earlier in the month so this has started to pay off. We are still keeping the asset allocation to cryptos at about 10% and probably won’t raise this until we see some recovery in the other components of our liquid assets. Since we are not committing additional funds here yet, this may trend sideways for some time.

CPF Ordinary Account – S$139,200

Just like our cash balance, this has gone down a lot as almost all of my CPF OA has been wiped out to pay for the downpayment of the private property purchase. We didn’t use my wife’s CPF OA so she gets to keep her balance high, hence only her having the Endowus portfolio that uses these funds to invest. As long as our CPF contributions can be maintained, this should rise steadily even with me using some of my CPF OA for the monthly mortgage payments.

Total Liquid Assets – S$1,234,834

A sum of the above components and numbers to show my total liquid assets. It has done down significantly due to the private property purchase and will be the new base level going forward. Month on month comparisons will be more meaningful from now on since the private property purchase has been completed. It was a once-off event with the downpayment draining a lot of our liquid assets. Rebuilding starts from here so we are hoping nothing major happens that can derail our plans.

New automated monthly investment plans are in losses

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My family is still recovering from our recent bout of cough and cold. It has helped to take our focus off the fact that we seem to be taking a step backwards with the recent Covid stabilisation restrictions. While we managed to meet up with our families and friends for dinners and drinks a few times in the past few weeks, it’s frustrating that we are unable to build on that for more social gatherings. At work, my wife had been going into the office a few times every week. It helped to form stakeholder relationships and it’s just easier to start a new job when you are in the office.

My wife now has to work from home for the next few weeks so it does hamper the momentum of settling into her new role. She has to readjust by working from home. I was looking forward to going into the office a few times each week too and start meeting up with my colleagues. It was supposed to happen this week but never materialised with the tightened Covid restrictions. I have to admit that working from home has been a great flexible arrangement for my family, especially with a young kid going to preschool. But it has affected the level of engagement with my job as I struggle with feeling disconnected and bored of my work at times.

Anyway, I’m hoping for a more consistent approach to managing Covid as an endemic by the Government going forward. This one step forward and half a step backward approach is not sustainable. It actually feels like we are not progressing at all even though we are factually still moving forward somewhat. I guess it’s difficult to be clear-minded and objective when you are in a constant state of frustration and confusion as to what the plan actually is. I’m not going to dwell on this because it doesn’t change anything. Just have to find a way to navigate the next few weeks mentally and physically.

green grass field
Photo by Amelie Lachapelle on Pexels.com

I was having a look at the performance of my new automated monthly investment plans into Endowus, StashAway Thematic Portfolios, OCBC RoboInvest and UOB SimpleInvest. Most of them were started at the beginning of Sep with the funds transfers happening every week of the month. With the dip in the markets, all of them are now in losses. I only committed a small sum of cash to each funds transfer to average out the automated investments throughout the month. Not a bad call because it seems like the markets may dip further in Oct. But a disappointing start to my new increased Dollar-Cost Averaging investing strategy nevertheless.

Coupled with my low cash balance after completing the private property purchase (took a big hit from the downpayment), it seems like my investing options are limited at this time. I can’t move aggressively on any good opportunities and have to think twice often when utilising my cash for anything. I know it’s important to be patient and wait for my cash recovery to kick in. Self-discipline is going to be key here to maintain this approach for the next few months. I’m going to take my mind off this by distracting myself with the monthly Sep net worth update on my Google Sheet that I will work on in the morning.

Categories // MIP

Private property purchase completion and StashAway Thematic Portfolios

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This is the week I complete my private property purchase and I have submitted the cashier’s order for the remaining portion of the downpayment to my lawyer. It’s the most significant sum of money I had to put down so far and I have been preparing for this in the last few months. Even though it’s an expected big drawdown of my cash balance, I’m still shocked by how little cash I have left. This is going to be a long rebuilding journey of my cash position given the upcoming renovation and car purchase costs in the next few years. I have allowed for this lifestyle inflation on housing and transport because I believe they will bring more value to my family in terms of time and effort savings in the long run.

While it will cost us financially in the short run to set up, the right level of lifestyle inflation can pay off. We are able to access our offices, kid’s preschool, general amenities (groceries, dining, etc) and parents’ caregiving support more easily than before. Resulting in a positive cycle of time and effort savings that allow us to squeeze more activities (personal, couple and family) and rest in a week. It’s not obvious when we look at it on a daily basis but more noticeable on a weekly basis. Especially when things go badly such as over the weekend when everyone was unwell because of my son falling sick and spreading it to us. It could have been a lot worse but we managed to weather it. The important thing is to know when to stop the lifestyle inflation because it doesn’t offer much value after that point. Instead, it does the opposite and the the upkeep drains you mentally and financially.

Anyway, we got emails today about StashAway introducing Thematic Portfolios. We have been wondering how long it would take for StashAway to start offering thematic investing since it has gotten more popular this year. We logged into our StashAway mobile apps to explore the 3 available Thematic Portfolios:

  1. Technology Enablers – Invest in Artificial Intelligence, Blockchain, Cloud Computing, Robotics, Semiconductors, and more.
  2. The Future of Consumer Tech – Invest in E-commerce, Fintech, Gaming, Internet, Future of Mobility, Social Media, and more.
  3. Healthcare Innovation – Invest in Biotech, Genomics, Medical Devices, Pharmaceuticals, and more.
brown field and blue sky
Photo by Pixabay on Pexels.com

These are exciting themes that offer a lot of upside potential in the future. We decided to increase our automated monthly investment plans with StashAway and split the deposits equally between our General Investing Portfolios and the 3 Thematic Portfolios. Essentially, we have diverted some of the monthly cash funds meant for investing into our General Investing Portfolios to the 3 Thematic Portfolios. Given the size of our General Investing Portfolios, we are comfortable with increasing the overall risk using Thematic Portfolios to generate higher returns from StashAway.

Automated monthly investment plans into a variety of ETFs and funds form a key component of our investing strategy. Regular capital contributions contribute to the growth of our investment portfolio just as much as gains. The selection of ETFs and funds used to be narrower but has since gotten wider in the past few years. This is the set and forget part of my Dollar-Cost Averaging approach where I just let the consistent capital injections do the work over time. While we use the remaining cash savings to manually invest to market time for even higher returns when there are good opportunities.

It’s an optimal combination investing strategy that works for us. Allows us to stay calm and vested with continuous investing to ensure we don’t feel like we are missing out on not buying into dips or not enjoying further gains in the markets. Also gives us a warchest on standby to use during market crashes for more excitement. A natural balance between being objective and emotional to managing our investment portfolio. The longer we stick to this, the higher the pay off. It just requires a lot of time and patience to see the results as we go through more market cycles.