Sunday, May 22, 2016

[XMM STI ETF Investing] April 2016 Update

It has been quite a while since my last update. A long long while. My last update was in September 2015! 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 March 2016.

30 September 2015       Sister             Mom               Total       
Amount Contributed
$10,545.09
$23,530.82
$34,085.91
Percentage
30.9368%
69.0632%
100%

30 September 2015  Stocks  BondsCashTotal
Amount Contributed
$3731
$10,547.05
$19,807.86
$34,085.91
Percentage
10.95%
30.94%
58.11%
100%

- Stocks are in the STI ETF (ES3.SI) with 13 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.


Interestingly, the end of March marks the 2 year period that I have taken stewardship of my sister's money. From the $10,000 that she had given me 2 years ago, I have put that money into use and I've $10,547.05 to show for it. With almost zero downside volatility (only 3 instances of negative month-on-month performances, which have never been more than unrealized gains, and thus have never put the capital at risk), I have managed to produce annualized returns of 2.67%.

If the markets were to go down further, I will continue buying stocks and the depressed value of my current stock holdings might eat into my buffer of unrealized profits, but that is of no long term concern. If the stock markets were to rise, there should be a rather nice boost to my portfolio performance. We shall see how things turn out.

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. This change would likely happen soon.

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. I have already hit the 10%,15%, 20% and 25% trigger, so I currently hold 13 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.

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