Tuesday, January 10, 2017
2016 in Retrospect, 2017 Looking Ahead
I'm late. Some bloggers started writing such posts about 2 weeks ago already! I guess I'm the last blogger to come and play this game, eh? Well, the good news is that maybe during that 1 week where every other post was about the same new year thing, maybe you got bored and skipped reading half of them. Hopefully mine is a bit more interesting!
For my personal SGX portfolio (which I have unfortunately been extremely lazy to post about, but still update my spreadsheet which is linked to my sticky page), I actually did pretty well I thought. My portfolio total returns for the year is almost exactly 5%.
I use some strange method to calculate my performance and my benchmark. It is using IRR and comparing it to the STI ETF if I had invested in the same amount of money as well. It's definitely not comparable to annual returns. Whenever I inject capital, I similarly buy the STI ETF in my hypothetical portfolio and vice versa when I sell. The problem is that odd lots would exist, but I just imagine that if I could buy almost exactly, how would that hypothetical portfolio perform. And to give myself a disadvantage, I not only buy the STI ETF in exact decimals (no odd lots, so no idle money), there is no transaction costs counted for that portfolio (while my portfolio includes transaction costs) and finally, I take the lowest price of the STI of that month to purchase the units.
It's a bit weird to do it this way, but it suits me because I couldn't give 2 shits about annual performances of my own portfolio. I'm not a fund manager and I have no KPI. I don't need to hit some arbitrary number for my annual returns because I don't invest annual. Returns aren't 7% every year. Returns are lumpy. I invest when I have money to spare and I sell whenever I feel like it, not at the end of the year. Annual performance is useful to compare asset classes since it's basically time weighted to one year and removes all the complications of cash flows, but that's not what I'm measuring. I'm measuring if my money is better spent sitting elsewhere.
Surprisingly, my real world SGX portfolio has bested my hypothetical STI ETF portfolio. Comparing both strategies, I have beat it by about 1.5% in 2016. If comparing since inception, I would have 8% more value than my hypothetical portfolio. I'm quite surprised and I guess I would put it down to the fact that my portfolio has very low beta to the STI ETF.
My best portfolio trims were PEC and Frencken, where I net 57% and 36% total returns in those investments. My current best is Super Group, up 35%. My current worst are Casa Holdings, Sing Heng Heavy Mech and Valuemax, down 57%, 47% and 36% respectively. These duds make up just 2.8% of my portfolio based on current valuation, or 5.1% based on capital investment. Though eye popping numbers, they are contained and managed within my portfolio.
My capital investment is up about $5000 from last year. I received $1552.31 in dividends over the last 12 months. That works out to about almost $130 in dividends per month.
The portfolio that I run for my mother and sister is also chugging along just fine. Their portfolio is using 3 asset classes - stocks / bonds / cash - and the allocation is now 10% / 27% / 63%. I might be increasing the bond portion of the portfolio up to 35% or 40% by the end of the month. Anyway, their performance for 2016 was a nice 2.44%. The portfolio dipped slightly in Jan and Oct, but it has been slowly and steadily increasing in value. It's a rock solid portfolio. I am prepared to blast away and shift allocation to all stocks if and when the STI starts to falter.
Investments aside, I've been a good little saver, saving up money for when the time is right to jump into the property market. I have been literally waiting for years now, and I am pretty sure that we still go lower inspite of whatever all those biased "property experts" say. We go at least another 10% or 15% down before cooling measures are lifted, and that won't even be a guarantee to stop the landslide in property prices. Private property owners are grossly overestimating the waiting power of the millennials like myself with the purchasing power to buy private properties. I can wait indefinitely and stay with my parents and lose nothing. They are drained by monthly condo maint fees and mortgage repayments. Let's see how long they can hold out. The development that I have been looking at has had sellers hold its price for well over a year, but the cracks are appearing. The listed price has recently dropped over 10% in the past month, but it still has plenty of ways to go before I even start reaching for my chequebook.
Health-wise, I've managed to slowly (and healthily) manage my weight and change my diet habits. I'm now a full belt hole down on good days, though that is not always the case, haha. I've changed my mindset to be more okay spending more money to eat healthier and more conveniently, which is an upgrade in lifestyle, but a good one if it leads to better health and wellness. These days unhealthy food are no longer as appealing to me as before. I've also lost the will and drive to sample 1 bite of everything at a buffet line. Now I just eat what I enjoy without trying to "eat my money's worth". The new diet and mindset has made quite a change. My complexion is slowly improving, while my fitness has also gone up. I managed to get the IPPT incentive, but I was just 2 points away from Silver! My scores for all stations have improved from the previous year.
Travel-wise, I only managed to escape just once in 2016. I went to Japan for a week long holiday and spent just $1400 and had one of the best solo trip experiences ever. It's was a timely reminder why I used to enjoy travelling and how travelling alone can still be super fun.
I would say that overall 2016 was a decent year, though it didn't have very notable highlights to me. I'm glad that it didn't just flash past with zero improvements to my life. I am wealthier, more knowledgeable, hopefully wiser, healthier and happier.
2017 Looking Ahead
First up is definitely about my house. If the property markets starts cracking, I'll be busting out my resources and will be self-teaching myself everything about housing and real estate before I finally take the plunge. Like TTI said, it's like big game hunting with 1 bullet. I'll try to make it count.
With such high cash needs for a house, I'm not so sure what will be left of my warchest. If the market falters, I'll likely be jumping off the cliff right after it to chase it with whatever I can spare. I do have to emphasize that I am still going to keep my emergency funds intact and I strongly doubt that I will be taking advantage of any of the leverage options to buy stocks.
I'd imagine that there would be a lot of opportunity in the local market. As previously mentioned, I will TRY to stick to my plan and buy blue chips on the way down, and non-blue chips on the way up, especially REITs. In any case, I don't think that we bust and boom within a year. I'm thinking it's going to be more of a slow and painful death as opposed to a cliff drop.
Gold and Silver looks ready for a magnificent take off. The problem for me will be deciding how much I would want to continue holding onto, and how much I am willing to cash out and realize my profits. I have quite high hopes for gold, with more muted and shorter term expectations for silver. Hopefully by May we can see Silver up to $25 USD and I can unload some of my positions. It will definitely come in handy to provide more cash.
I'm going for 2 trips this year and I will definitely give you guys an update. The upcoming 2-week trip is going to be awesome! I can't wait to blog about it once I get back from it. Hopefully I will have decent photos to share. My phone is getting very slow and buggy. I can't wait to upgrade handset to the new Samsung flagship in a few months.
I'd continue to focus on my health. I'm aiming to improve my fitness to IPPT Silver and try to build up and maintain a habit of regular routine exercise, as opposed to the very messy and ad-hoc scheduling system that I have now.
My next goal is to actually continue with my language studies. As much of a basket case that I am with Mandarin, I'm actually well on the way of reaching very comfortable language skills with a language I started from scratch just 2 years ago. I've ended my once a week formal classes and I'll be winging it on my own, self studying and trying to improve! I have to say that I really enjoy and am quite glad that I decided to learn a language, instead of something else. It has been a fulfilling experience so far!
The final goal is to continue to be an active financial blogger. My posts have dwindled down drastically from 2 posts a day to now just once a week. Hopefully I can get back into a groove. Maybe a routine would be good for me, with scheduled posts every month and special editions along the way if something comes to mind. If I can get back into a good groove, I might be exploring a new ad network to increase my revenues at the mid year mark!
So yup, that's probably what I'll be focusing on for 2017. Staying cool and calm in a potentially chaotic market, and continue to improve myself bit by bit.
And also as always, to continue to be very happy and content with my life.
Let's see what 2017 is in store for us! I'm excited! Are you?
at 5:00 PM