Thoughts on my Portfolio (Nov 21)

I have not blogged about my portfolio for some time now. I guess it is probably because StocksCafe did such a good job at tracking my portfolio that I do not really need to record it down in my blog.

Nevertheless, I guess I will just like to pause, pen down some of my thoughts for my current portfolio and my plans ahead.

Income Stream

I wrote a post about my thoughts about the importance of income streams from my portfolio at the end 2019.

Income Streams (read here)

I still think it is important. StocksCafe does a great job at tracking the dividend payout (from stocks) and interest payment (from bonds). See below.

Technically, I am receiving more than $2000 per month (on average) of dividends for the year 2021 (from my Singapore and Hong Kong dividend portfolios, and Singapore Saving bonds).

In addition, the total dividend payout in 2021 has already exceeded that of 2020. With Singapore (and the rest of the world) slowly re-opening, I foresee more of the old-economy dividend stocks’ payout to recover and even exceed the pre-pandemic level.

While the focus is on growth stocks (for the past few weeks), I guess like many I am also expecting better days for recovery stocks (within my portfolio). They do help in contributing to the dividend income. In fact, many of these recovery stocks have already trended up in the month of Oct 21.
I have added small portions of Straco, BOC Hong Kong, ST Engineering (and also Mapletree Logistic Trust), to my portfolios.

On another note, with reference to the report by a team of researchers from Lee Kuan Yew School of Public Policy, which stated that a couple with two children (one teenager and one younger) will spend $6426 per month. Even if I exclude housing purchases from the equation (eg. $6128.03), I guess I myself need to continue to contribute in building up my passive income. Although personally, I don’t think as a family of 4 we spent that much.

Some people consider selling Options (on a regular basis) as having an income stream. I personally do not consider that as an income stream. Likewise, StocksCafe does not have a function of tracking premiums received as part of the passive income tabulation.
Nevertheless, I generated a small chart (below) for the 2021 passive income and added in the premiums received from Aug 21 onwards. Nov and Dec 21 income payouts are not in yet, hence I did not include any in the chart. I do not really trade Options often.

Usually, I take very small positions with far-out strike prices and short durations (less than 2 weeks), which also translate to very low premiums. I guess I am just risk-adverse in that way (not much of a trader or technical analysis type).

Branching Out

Now that I have covered the passive income portion, now let’s think about my Story Fund (Growth portfolio). I am not really a ‘purist’ eg. 100% dividend income investor. Part of my portfolio consists of growth stocks.
The barbell strategy by DBS is not new. I do believe that in the long term, I am able to further develop my overall portfolio by adopting a barbell strategy, eg. investments are heavily weighted at both ends of the risk spectrum. This means being overweight on high-growth stocks on one end of the portfolio, while having stable, income-generating investments on the other end.

Although I doubt it will ever be equally weighted as I am more tilted towards income-generating investments. It is not easy, as I essentially like the idea of passive dividend income… however, on the other hand, I also do not want to miss out on the upsides of the growth stocks.

Having spent much of my time from 2019 to 2021 building up the income-generating (dividend/bond) portfolios, I am slowly looking at the growth stocks.

In a way, I am using the income-generating portion as a ‘base’ from which to slowly grow the other portions. Although, almost every month I do reinvest part of the dividends/interests received into dividend stocks as well.

Generally, I feel that valuations in the US Growth stocks are rich, and values can be found in Chinese tech stocks at the moment. Many renowned investors (Charlie Munger, Monish Prabai, Ray Dalio, etc) have waded into this sector in 2021.

Why Mohnish Pabrai Loves Tencent : (I Bought More Tencent Stock) (Watch here)

In recent months, I have added to my positions in Pinduoduo and Alibaba (9988.HK, P/E: 19.61, and seriously thinking about Tencent (00700.HK, P/E: 19.84). However, 100 shares of 00700.HK is not cheap (more than SGD 8000)…. maybe will come down lower :p…. Well, from a fundamental point of view, be it Revenue growth, Income growth, EPS growth … growth stocks such as Alphabet, Alibaba and Tencent are just all ‘green’ (ever-growing). Although I would probably rate Tencent’s growth as better than Alibaba’s (less CAPEX, more aggressive/higher net income growth).

Alphabet’s growth is spectacular (excluding 2017 due to a one-time charge of $9.9 billion for repatriating foreign earnings). However, compared to the mega Chinese Tech stocks, Alphabet’s valuation is higher (P/E:28.65), then again, it is probably due to my own anchor bias.

The Trade Desk and Pinduoduo are still in the early stages … However, revenue growth is good. The Trade Desk is reporting earnings today (8 Nov 21).

Portfolio Performance

The month of Oct 21 has been a good one in terms of capital appreciation for stocks in general, and I am just enjoying the ride up.

I don’t really focus on the capital appreciation portion of my portfolio, partly because most of them are dividend stocks (rather than growth stocks). A good way is to look at the time-weighted rate of return (TWR) which is a measure of the compound rate of growth in a portfolio.

For my Singapore Dividend Portfolio, the 3-year TWR of the portfolio (in red) still lags behind the STI Index ETF TWR (in orange). Nevertheless, it has been trending up nicely. I am comparing it to ES3: SPDR Straits Times Index (STI) ETF. Please see below.

For my Hong Kong Dividend Portfolio, the 3-year TWR of the portfolio (in red) still lags behind the Hang Seng Index ETF TWR (in blue). I am comparing my portfolio to 2833.HK, Hang Seng Index ETF HKD (not really Apple to Apple since some of the top holdings of 2833.HK are tech stocks like Alibaba Group Holding Ltd Ordinary Shares, Tencent Holdings Ltd, Meituan, Xiaomi Corp Class B).

Nevertheless, it has been trending up slowly (esp, in Oct 21). Please see below.

For my Story Fund. the 3-year TWR of the portfolio (in red) is above the S&P500 ETF TWR (in green). I am comparing it to SPY: SPDR S&P 500 ETF Trust. Please see below.

I would like to spend more time with the family for the rest of the year; and yes, saving up for my parents’ allowance for next year (normally give a yearly amount at the beginning of the year). I reckon it is too late to start planning any year-end Staycation… well shall see.

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