Wednesday, August 5, 2015

[XMM STI ETF Investing] July 2015 Update

It has been quite a while since my last update. I have been updating on my spreadsheet monthly, but I always forget to post up my review.

As mentioned previously, this will be my attempt at having a monthly update of the small portfolio that I am running for my sister and mother. The aim to have as little downside risk as possible, and maximize returns from there.

No changes to the portfolio this month, I am still playing it safe because the STI doesn't seem to offer any very compelling entry points yet. It looks fair valued, but I just feel a buying opportunity coming around soon.

Here are the current stats of the portfolio as of end July 2015.

31 July 2015       Sister             Mom               Total       
Amount Contributed
$10,325.52
$17,696.28
$28,021.80
Percentage
36.8482%
63.1518%
100%

31 July 2015  Stocks  BondsCashTotal
Amount Contributed
$0
$10,263.75
$17,758.05
$28,021.80
Percentage
0%
36.63%
63.37%
100%

- Bonds are in UOB SGD Fund Class A with 5902.1 units.
- Cash is earning 2.25% from filling up the remainder of my OCBC 360 account.
- Additional $600 was added to Cash.


Starting May 2015, the OCBC 360 account now only gives 2.25% interest. This is unfortunate, but it is still the best cash option for me.

Returns for the rest of this year should be quite optimistic considering that the bond fund was busy paying off its sales fee last year. I will most likely be running out of space in my OCBC 360 account as I near the $60k limit myself, which means I must find this cash another good yielding alternative

I have rebalanced the portfolio in January to have a better portfolio allocation between bonds and cash. I think a 40/60 split between bonds and cash is a good "war chest" allocation, especially since I highly suspect that 2015 will have an opportune time for me to pick up some lots of the STI. 2014 did not even experience a 10% correction the whole year, so just simple probability is telling me that there will be an opportunity soon. Very very soon.

Based on the amount of cash I have on hand in the portfolio, I will be executing this plan below:

I buy my first STI lot once the 10% drawdown mark is reached. After that, every additional 5% will call for another additional lot compared to the previous time.

-10%: Buy 1 lot
-15%: Buy 2 lots
-20%: Buy 3 lots and etc.

It's not a scientific method at all, but it follows the basic principles of value averaging which calls for buying more when the price goes lower.  Of course, I don't want things to be so mechanical, so on top of this, I may opportunistically invest the fresh cash added each month into the STI or even liquidate my bond holdings if the opportunity really is once in a lifetime.

The goal is to average down without being too kan chiong or humji, so I think the base case would suit me fine to help me dip my toes into the STI at increasingly safer levels. That's right, the lower the STI falls, the safer it is to invest!

No rush at all, really.

2 comments:

  1. Sales fee? I've been buying that UOB fund on dollardex. No sales fee.

    ReplyDelete
    Replies
    1. Hi owq,

      Yeah, I use Phillip and they also have 0% sales charge now for that fund. However, the units were bought a year ago when they had the sales charge. Oh well!

      Delete

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