Should I invest my CPF monies?

Wednesday, 25 July 2018 20:38
Posted by owq 2 comments
I've been thinking whether it's worth it to invest my CPF-SA monies. It's quite hard to beat the CPF-SA interest rate, assuming the rate stays at 4%.

Over 30 years: ((1.04^30)-1)/30 = 7.478% CAGR
Over 20 years: ((1.04^20)-1)/20 = 5.956% CAGR

For CPF-SA, we can practically invest only into unit trusts with crazy expense ratios. And only balanced funds. No pure equity funds. For example, I put some into First State Bridge with expense ratio of about 1.43%. The expected return could be around 5-6%.

Given the risk, is it worth it? I'm not so sure. CPF-SA is practically risk-free, but there is a policy risk. We can't assume that the rate will stay at 4% forever. Hopefully we get more lower expense ratio funds, like the new LionGlobal All Seasons funds. I'm planning to invest into that new fund for the CPF-OA, instead of the STI ETF, once I hit my 35% limit for common stocks.

DBS Group Holdings' crazy rise in price

Monday, 22 January 2018 20:27
Posted by owq 1 comments
It wasn't too long ago that there was fear in the market and DBS was selling at below book value. Now the price has almost doubled from those days and according to ycharts, is at around 1.5 price to book value, a 5-year high. Fear or greed? Certainly book value may not be the best indicator of value but I would think that 1.5 is a bit too high.

If banks are flourishing but their prices are too high, one proxy to consider is companies that provide software services to banks.

Alternative to Google Finance portfolios

Posted by owq 0 comments
Google Finance will retire their portfolios feature soon. I have been using it for a few years and even built an application to import from them to calculate dividends and rate of returns. I had a few requirements: easy to enter transactions, especially for SGX stocks and must be able to export to an open standard in case service halts. Indeed the export feature became useful as they really decided to stop service.

I tried a few alternatives and finally decided on KMyMoney. My focus is really on portability and ease of use, and although KMyMoney has a few quirks, it is reasonably easy to use. One con that I have to deal with is that I have to enter the stock name and details manually (at least for the first time). Updating of prices is also not in real-time but rather on demand but actually that turns out to be an advantage. It is no longer as easy to track prices in real-time which means I can focus more on the company itself, and also fundamentals, rather than fluctuating prices. The profit gains for each investments is also less obvious hence there is less of an anchor on past prices. I can focus more on current value. I believe this will help in long-term investing. Even though this is a desktop application, the data file can be easily put on the cloud. (For the IT inclined, the data is saved in an XML file which is easily deciphered. Hurray for open standards!)

Farewell Croesus Retail Trust

Friday, 7 July 2017 21:59
Posted by owq 2 comments
Yet another of my stock bites the dust. Fourth delisting! Not so long after internalization of the manager, someone decides to buy over the whole thing. It was around 20% premium to NAV, which I thought to be quite reasonable, so I sold it immediately at offer price. I'm fine with forfeiting the dividends as time is money. I'm left with a grand total of 1 share from DRP. Don't worry guys, I'll vote no to help with the headcount condition (lol)

I actually wanted to put the proceeds into Dasin Retail Trust, another business trust holding retail assets. With the latest acquisition of Shiqi Metro Mall at a huge discount to market value, the pro-forma NAV blows up to around $1.48, giving us a PB ratio of about 0.54! Even without the income support, the yield might be worth it. Then I thought, the shares were too illiquid and I don't really know how Zhongshan will develop... I still don't understand why the sponsor sold the property at such a big discount? I'll bank on my domestic bias and buy Capitaland Mall Trust instead. I have been wanting to buy it for a while but it was always too pricey. Seldom buy REITs at price above book but I really like their properties...