Finance Smiths

Personal finance apprentices-in-training

Big sell transaction in Jan 2018

by //

I got really lucky with this exit position. I have been noticing a strong upward price action on SembCorp Marine (SGX: S51) for a few days now. And it seems to be related to an upgrade to a “buy” rating by Nomura and market speculation that it might be privatized. Honestly, I was happy for the share price to finally climb above my average purchase price. This is one of my Big 4 individual stock positions with heavy unrealized losses.

It was my first individual stock buy since returning to Singapore prior to the oil crisis and significant decline in oil price. I have held it for the longest time hoping for a profitable exit. I would have been happy for even a small profit and it’s finally happened! Haha, I have no idea other than speculative forces as to what’s driving the price upwards because the underlying business has yet to show sufficient improvement to justify that.

Summary of SembCorp Marine (SGX: S51) sell transaction in Jan 2018

Sale proceeds: S$13,000

Profit amount: S$300

Profit percentage: 2.31%

I know I still have three of my Big 4 individual stock positions with heavy unrealized losses left to worry about. I’m hoping that the bull market and economy improvement last long enough for me to exit them profitably. Not looking to be greedy here. Just want to rectify my stupid investing decisions.

Why I like to wait and see

by //

It’s the weekend again! Plans involve going for a friend’s barbeque to catch up with friends on Sat and celebrating our total asset achievement with a nice lunch on Sun. While waiting for my wife to finish her drinks session with colleagues, I might as well squeeze in a post now. By the way, I hope you tennis fans are watching the Australian Open 2018 because I’m looking forward to finally seeing some live matches on TV this weekend. I haven’t been able to do that on weekdays since most of the matches are over by the time I get back home.

As I browsed the financial news this week, it’s hard not to notice the multiples articles on cryptocurrencies. In fact, I see online material on them everywhere now even if I’m not interested in viewing them. They are shoved into my face until I eventually just click on the links to find out what’s going on. Not surprisingly, I see all sorts of facts, opinions and views about them. This has been the case for cryptocurrencies since they became mainstream.

Honestly, I have no idea what’s going on. There’s pieces of truth in everything being said and I guess it really depends on your individual circumstances as to where you stand. Of course, I don’t appreciate being called an idiot for missing out on one of the most game-changing and innovative technological developments in recent history. The next digital great leap forward is happening and I’m being left behind like a fool.

In a way, it’s probably true that I’m slow when it comes to things like that. I always prefer to wait and see. It’s how my wife and I have approached our life, career and money. We are bad active planners but good passive planners. We do a rough plot point in the future of where we want to be but we don’t plan out exactly how we get there. We have an idea of what we have to do but we just go and adapt along the way as we move.

It’s a flexible strategy that allows us to pick up new opportunities along the way but also means we have to be okay with losing out on opportunities that we could have taken advantage of with better planning. This happens all the time for us but it helps that we always try to look forward and not backward. Feeling bad about what we missed out on can have a destructive effect on many aspects of our life.

Back to cryptocurrencies because I’m still seeing my newsfeed being overloaded with related content. I was thinking whether it’s okay for me to come in after the market matures and stabilizes. Maybe when I can actually see the mainstream business applications of their underlying technology in the consumer, commercial and government markets. At least, that’s how I gauge whether a technological development is really that game-changing and innovative.

Do you think that’s possible? Being lazy and still be on-time to profit a little from this? Haha, I know I’m being greedy. Plenty of smart people already make me feel stupid for thinking like this. Not only just about this by the way. I’m made to feel dumb by wanting to just focus on my career, earn a decent salary income, have work-life balance and not worry about building a side-business at the same time to be more efficient. Not enough that I’m satisfied and happy. Must make me feel bad for being like that. Oh well, there’s not much I can do about this. Just leave me behind for now but I will catch up eventually!:)

Significance of capital injections

by //

I checked my wife’s Central Provident Fund (CPF) balances today and found out that her contributions from last month’s annual performance bonus and this month’s salary have been credited. It’s a pleasant surprise because I was expecting the crediting to only happen next week. As I load the net worth Google Sheet on my phone to key in the updated figures, I know this is an important moment.

For the first time in our lives, the total assets (cash, investments and retirement funds) sum to more than S$1 million. I don’t count us as having joined the double comma club because our net worth (after subtracting for the entire mortgage, tax and credit card liabilities) is way below that. I don’t include the value of our owner-occupied apartment in the net worth calculation because it will only inflate the number unnecessarily. Does nothing other than make me feel better about my self.

But I already consider it an achievement for our total assets to hit S$1 million. It’s still satisfying to see the double comma in the cell and I had to expand the cell width in the Google Sheet to see the full figure. It represents 8 years of hard work, especially in the last 4 years in Singapore. At the beginning, we felt like we were going no where with our wealth-building journey but our efforts eventually made a difference.

There are still a few problems with our total assets distribution, which is probably overweight on cash holdings and retirement funds. I found it difficult to increase the investment component aggressively when the equity markets have been priced at such high levels for a sustained period of time. The Dollar-Cost Averaging (DCA) approach still ensures I keep myself invested just in case the bull market keeps going for the rest of this year. Only time will tell whether I am an idiot for not investing more of the cash holdings.

Which reminds me about something else I’m not doing. I stopped tracking the profit/(loss) performance of my investment portfolio a while back. I still refer to StocksCafe to track the profit/(loss) on my individual stock holdings because I hope to one day sell those worst-performing stocks at a profit. Though I fear I may have to wait a long time for that to happen.

But I figured the profit/(loss) performance of my investment portfolio mattered less the more I relied on DCA. Isn’t that the point of monthly capital injections? Once it gets high enough and I don’t plan to adjust it downwards but only upwards when there’s market dips and crashes, I’m not sure why I should be worried about the portfolio performance anymore. At least not in the short to medium term. As long as I keep this up over the long term, odds are it should work in my favour.

I know it’s a stupidly simple approach but I’m lazy and I can’t be bothered doing too much thinking and planning. I guess capital injections inflate the investment portfolio growth performance but it’s not even a key indicator for me with this strategy. I just need to ensure that every component of my total assets grows over time and I can’t see how this is a bad thing.