Saturday, October 10, 2015

[XMM STI ETF Investing] September 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.

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

30 September 2015       Sister             Mom               Total       
Amount Contributed
$10,331.67
$18,907.43
$29,239.10
Percentage
35.3351%
64.6649%
100%

30 September 2015  Stocks  BondsCashTotal
Amount Contributed
$1995
$10,275.56
$16,968.54
$29,239.10
Percentage
6.82%
35.14%
58.03%
100%

- Stocks are in the STI ETF (ES3.SI) with 7 lots.
- 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.

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 opened up a CIMB FastSaver account which yields 1% in preparation of this.

I have rebalanced the portfolio in January of 2015 to have a better portfolio allocation between bonds and cash. I think a 40/60 split between bonds and cash was 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 to shift into risk assets at a good price in 2015.

I have begun following my STI ETF Playbook, which is a mechanical strategy to help me overcome emotions and to buy more stocks as the stock market falls. 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. In the month of August, I have already hit the 10%,15% and 20% trigger, so I currently hold 7 lots of the STI ETF.


Of course, I don't want things to be so strictly 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 very tempting.

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. Steady she goes.

2 comments:

  1. Hi! I chanced upon this investing you have been managing for your family members and it has been an interesting read.

    I am currently signed up for POSB Invest-saver and i feel inclined to switch over to DCA-ing myself using SCB online trading. Would like to enquire if i start now, can i still follow your excel sheet with Highest price of $3.54? or will that have to be adjusted.

    Hope you could provide some kind assistance!

    Do also keep this section updated! Thank you!!

    ReplyDelete
    Replies
    1. Hi keenlearner,

      I think there's no need to liquidate your POSB Invest-saver and move it all to SCB. You could possibly just continue your monthly contributions and also ad-hoc enter the market through SCB. Alternatively, if cash is tight, then you could stop your monthly contributions and just allocate your new capital through SCB.

      You can follow my spreadsheet or you could come up with your own, it doesn't really matter. I used the high of the STI ETF as my 100% level and worked backwards from there. You may want to adjust the intervals and also the allocation % on each step. Mine is quite aggressively exponential, which has the plus side of having a lower average cost if the index plunges, but has the downside of buying too little of the bottom is not so deep.

      There is no perfect strategy, but it is possible to alter a strategy to suit your preferences and also take advantage of the situation that you most likely think would happen.

      All the best!

      Delete

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