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Some stocks do nothing for us!
Monday, April 15, 2024Posted by AK71 at 1:00 PM 4 comments
Labels:
investment
SRS portfolio in 2024. What did I do?
Tuesday, February 20, 2024
SRS was a topic I used to blog about pretty often.
I have not been blogging about it as much since I have not been making contributions in recent years.
Reason is because I no longer pay income tax.
If we are still paying income tax, contributing to our SRS account makes sense to enjoy some tax relief.
Of course, we want to put our SRS money to work or we would get a very miserable interest rate.
For many years, I used the SRS money to buy plain vanilla endowment policies.
They were savings plan with some insurance thrown in.
In fact, I still have one or two of those with NTUC Income using SRS money.
In recent months, I also used the money to buy T-bills with yields being so much higher than a couple of years ago.
Dividends paid by my investments in stocks using SRS money are used for this purpose.
Yes, I also use SRS money to buy stocks of businesses which I think make good investments for income.
I have blogged about this before and shared what kind of stocks I would buy with SRS money.
Basically, the businesses must be good income generators with strong balance sheets; nothing which is likely to do rights issues.
The very practical reason is because we must have the excess funds in our SRS account to take part in rights issues.
This can be difficult to ensure.
I shared my SRS portfolio of stocks before but that is outdated by now.
See:
Win and win again with SRS.
I had SATS in the portfolio.
Of course, regular readers would know that I sold it shortly after it announced the decision to buy WFS.
SATS just didn't have sufficient resources to do what they suggested.
They had to raise funds from shareholders.
It was something unexpected.
So, I took the opportunity to sell when there was a bounce in the stock price.
In place of SATS, there are ComfortDelgro and OCBC in my SRS investment portfolio now.
This is what the portfolio looks like now:
Based on the purchase prices, it is not difficult to guess that DBS and ST Engineering have been in the portfolio for some time now.
So, like what I did?
Paid less income tax and put the money to work to generate more tax free passive income?
We can certainly win and win again with SRS.
If AK can do it, so can you!
Reference:
How AK used his SRS money?
Posted by AK71 at 11:00 AM 13 comments
Labels:
ComfortDelgro,
DBS,
investment,
OCBC,
SRS,
STE
Added to position in DBS. T-bill 3.8% p.a. cut-off yield.
Friday, November 24, 2023
Just a quick update on what I have done in recent days to my investment portfolio.
For anyone who is following me on YouTube, it is no secret that I have been looking to add to my investment in DBS.
I identified the immediate support to be at $32.00, and if that should break, then, $31.80 would be next.
I added to my position at closer to $31.80 a share but it is just a nibble.
I see longer term support for DBS at between $30.00 to $30.50 a share.
So, that is where I would like to buy more.
DBS continues to impress me with its much higher ROE of 18% to 20% when compared to UOB and OCBC which have ROE of around 14%.
So, I feel that this justifies DBS trading at a higher price to book.
There is also the fact that DBS pays dividends quarterly and as a retiree who lives off his passive income, this is also attractive to me.
Next topic is T-bills.
The auction happened yesterday and the cut-off yield was 3.8% p.a.
I estimated it to be 3.88% p.a. but 3.8% p.a. is good enough to make me happy.
What also makes me happy is that non-competitive bids were fully allotted.
T-bill ladder is intact!
Next auction is happening on 7 December.
So, nothing earth shattering happened, really.
Just sticking to my plan.
Always have a plan, your own plan.
If AK can do it, so can you!
Posted by AK71 at 11:41 AM 12 comments
Labels:
bonds,
DBS,
investment
How to transfer from CPF-IA to CPF-OA? Must buy T-bill?
Monday, September 11, 2023
In my last blog post, I made a passing mention about a 6 month T-bill which I bought using money in my CPF-OA maturing in the same week.
I made a request to transfer the money back to my CPF-OA when I saw the funds sitting in my CPF-IA a day later.
It was all rather easy with DBS online banking.
I simply logged in and went to the "Invest" tab and selected "More investment services."
Then, I chose "Refund to CPF Board."
Clicked on "Refund Full Amount", and it was basically done after clicking "Next" and "Submit."
Today, I checked my CPF account and found that the funds are back in my CPF-OA.
Now, I am wondering whether I should buy another 6 months T-bill with the money.
To be quite honest, I am not as enthusiastic as before because the cut-off yield has reduced so much since the start of the year for 6 months T-bills.
In January, it was as high as 4.2% p.a.
The T-bill that matured last week had a cut-off yield of 3.93% p.a.
I am hazarding a guess that the cut-off yield for this week's auction is probably going to be around 3.7% p.a. or similar to what we got in the last auction.
For a sum of $50,000, we are looking at an additional interest income of less than $200 compared to what the CPF-OA would pay for a 7 months period.
Nothing to write home about.
Anyway, with CPF-OA money, I will not go the path of non-competitive bids just in case the unthinkable happens.
I will put in a competitive bid of 3.5% p.a. because I don't think I am interested in anything lower than that.
If the cut-off yield should come in at 3.5% p.a., the difference in interest income is going to be less than $120.
The cut-off yields for 6 months T-bills are declining but the CPF-OA still pays 2.5% p.a.
So, the difference is shrinking and it is really not a big deal.
There is quite a bit of talk in social media that we should all use our CPF-OA money to buy T-bills.
To be honest, unless the sum of money is relatively large, it isn't anything to worry about.
If we do not have a large amount of money sitting in our CPF-OA, we really are not missing out on any meaningful passive income.
I think some people would say don't sweat the small stuff.
Of course, I am just talking to myself.
If AK can talk to himself, so can you!
Posted by AK71 at 7:33 AM 18 comments
Labels:
bonds,
CPF,
CPF-OA,
investment
High yields to stay? T-bills paid 3.73% to 4.2% p.a. so far.
Tuesday, August 29, 2023
The next 6 months T-bill's auction is happening this Thursday.
So, if we are building or maintaining a T-bill ladder, don't forget to put in a bid.
I will be putting in a non-competitive bid again.
No reason to agonize over how much to bid for in a competitive bid when chances are any cut-off yield is likely to be higher than offers from the banks for a 6 months fixed deposit for now.
I just produced a video on a 3.6% per annum offer for a fixed deposit but that is for a 9 months tenure.
This is the link to the video for readers who do not follow me on YouTube:
Locking in 3.6% per annum for the next 9 months.
Cut-off yields for 6 months T-bill so far have stayed above 3.7% per annum.
However, it seems to be declining.
In January, we saw a 4.2% cut-off yield.
This month, we saw 3.73% which was the lowest cut-off yield this year.
Like I said in a podcast, interest rates are higher now but they are unlikely to stay high forever.
As investors for income, I did not get to where I am by relying on fixed income to grow my wealth.
However, I am not going to reject relatively attractive risk free and volatility free returns while they stick around.
If AK can do it, so can you!
Posted by AK71 at 8:39 AM 6 comments
Labels:
bonds,
investment,
money management
How to get $200K dividends yearly? Simpler than you think.
Friday, August 25, 2023
The sequel to the podcast I did with The Fifth Person last month is here.
I just watched it and I thought it would be good to tie up a few loose ends.
If viewers should spend some time ruminating on what I said in the follow-up podcast, they would not need to read this blog post.
So, this blog post is more for my benefit since I have a need to talk to myself all the time.
AK is mental.
1. My response to a viewer who said most regular folks would have to speculate in order to generate sufficient capital to get a $200K dividend annually from investments.
There is no need to speculate although we could certainly do it and in the podcast I shared my view on that.
There are other ways to make more money and regular readers know I did some trading and I also had side hustles to make more money.
I also blogged about how we should not wait until we have a larger amount of money before we start investing for income.
Dividends made in the early days, no matter how small, would grow our wealth, and could be used to invest for even more income.
2. Possible to make $200K dividends annually with $2M and how to get $2M in capital?
In the podcast, I said that my capital wasn't $10M, $5M, $4M or $3M.
It could have been closer to $2M.
And that is giving me $200K in yearly dividends now?
How is that possible?
Elementary, my dear Watson.
A lot of what I bought was bought during crises, when Mr. Market was suffering from severe depression.
By now, my experience with AIMS APAC REIT should be quite well-known.
It is one of my largest investments and probably my oldest one.
It generates a distribution yield of more than 10% on cost for me, year after year.
As I got into it in a big way during the Global Financial Crisis, it is a major contributor to my yearly passive income.
Of course, my investment has been free of cost for many years too.
I have recovered my capital and I am still receiving income from my investment.
So, of the $200K in dividends received last year, a big chunk of it was actually free money.
It is money generated from nothing.
How did this happen?
Time happened.
It is possible to get higher dividend yields during crises if we invest in the right businesses that would survive the crises.
Of course, we could choose to sell these investments if their stock prices should recover later on.
I used the examples of Lippo Mall Trust and First REIT in the podcast.
Regular readers of my blog would know there were others like Saizen REIT, Croesus Retail Trust and Accordia Golf Trust as well.
Selling for significant capital gains grew my wealth.
It gave me more capital to invest with.
We could also choose to sell a portion of our investments like what I did with Old Chang Kee and Hock Lian Seng.
I sold half of my investments in them when their share prices doubled.
So, whatever I am still holding now is free of cost.
And they are still paying me dividends, year after year.
More free money.
This brings me back to the earlier point on speculation.
Why is there a need to speculate in order to grow wealth?
Simply wait for the next opportunity to make significant investments for income like what I did during the Global Financial Crisis.
Invest in good businesses which are able and willing to pay us.
That opportunity came in the form of the COVID-19 pandemic not too long ago.
Of course, regular readers would know that I emptied my war chest during the pandemic and got into UOB at $19 a share.
That is one of my largest investments today.
It is rewarding me with a dividend yield of almost 9% per annum now.
I also talked about how I started buying into DBS at $13 and $14 a share back in 2016.
At $13 a share, the dividend yield is almost 15% per annum today.
Now, coupled with free money I get from AIMS APAC REIT and some other stocks, do you see why I say the capital deployed isn't as much as what some people say it is?
What I have done over the years isn't simply putting some of my monthly salary in fixed income instruments unless we count the CPF.
If that was my method, then, yes, to generate $200K yearly in dividends now, I would need around $4 million in capital today.
I agree this would be insurmountable for most regular folks.
So, I remind myself of what I did over the years and how I made what seemed impossible happen.
This might be a lot for some people to take in.
There is also the fact that my skill as a wordsmith has regressed in recent years.
So, maybe, read this blog post a few times.
Ruminate on it.
I know I had to.
AK is talking to AK here, after all.
Please don't let people tell us what AK has achieved is not possible for regular folks because the capital required is enormous.
It is simply not true.
This blog post is the truth.
Go share this with people you care about and tell them this.
AK is a regular folk too.
If AK can do it, so can you!
Posted by AK71 at 10:19 AM 37 comments
Labels:
ASSI,
investment,
passive income
68% expects downturn! CPF POFMA! Distressed REITs!
Tuesday, August 22, 2023I have three things to say.
Posted by AK71 at 9:28 AM 18 comments
Labels:
CPF,
investment,
money management,
REITs,
Singapore
AK sold SATS and Centurion? More T-bills for AK?
Thursday, August 17, 2023
For readers who do not follow my YouTube channel, I produced a new video yesterday.
It was a video about investing for income.
I covered a few things in the video like what to focus on when investing for income?
I also gave a brief explanation on why I sold my investment in SATS and Centurion Corp.
You might want to subscribe to my YouTube channel for free and timely notifications.
This is the link to the said YouTube video, produced and voiced by AK himself.
AK's YouTube video:
Another 6 months T-bill auction closed today.
Cut-off yield is 3.73% p.a.
Can't complain.
This is much higher than what DBS, OCBC and UOB are offering for their 6 months fixed deposits.
I increased the quantum in my non-competitive bid and I am pleased to get 100% of my application filled.
Getting some income from risk free and volatility free fixed income investments isn't a bad idea.
This is especially when interest rates have become much more interesting in the last year and a little more.
I am sticking to my plan to stay invested in income producing businesses while also strengthening my income producing T-bill ladder.
This way, I continue to get paid even as I wait for Mr. Market to go into another depression.
AK cannot predict when Mr. Market might go into another depression.
However, AK can certainly prepare for it, and fill up his war chest in the meantime.
If AK can do it, so can you!
Posted by AK71 at 4:38 PM 4 comments
Labels:
bonds,
Centurion,
investment,
SATS
UOB: Interim dividend 85c per share! Huat ah!
Thursday, July 27, 2023
During "Evening with AK and friends 2023", I said that UOB would continue to grow its earnings very strongly.
This is thanks in a large part to its acquisition of Citibank's consumer business in 4 South East Asian countries.
UOB has delivered and in terms of dividends, it has exceeded my expectation.
85 cents interim dividend per share has been declared.
Huat ah!
Source: UOB. |
Although I only started investing in UOB during the COVID-19 pandemic, it grew into one of my largest investments within a few weeks.
"When it's raining gold, reach for a bucket, not a thimble."Warren Buffett said this, not me.
Since then, I have been adding to my investment in UOB, most notably when the price of its common stock languished at around $26 a share for a while last year.
This enlarged investment in UOB is going to bring home a larger portion of bacon.
I remind myself that UOB retains 50% of its earnings which means that it is growing more valuable over time.
If the constant buying back of shares by UOB is anything to go by, this is probably going to be the case for some time to come.
Investing in UOB is not just investing for income, it is also investing for growth.
We can have our cake and eat it too.
If AK can do it, so can you!
Related post:
Banks: Even higher dividends?
Posted by AK71 at 4:04 PM 6 comments
Labels:
investment,
passive income,
UOB
From MUST to DC REIT to MINT, signs that US commercial real estate is in trouble. ARA Hospitality Trust to be spared?
Thursday, June 8, 2023
This is the transcript of a YouTube video I produced recently.
-----------------------
This is in the news today.
It is very likely that the valuations of those two hotels could have seen a decline, which would bump up the Loan to Value number, of course.
Shoes are dropping.
During "Evening with AK and friends 2023", I reminded myself that I was painting the entire US commercial real estate sector with a broad brush.
References:
1. Digital Core REIT.
2. Manulife US REIT.
Posted by AK71 at 3:55 PM 2 comments
Labels:
investment,
REITs,
USA
Digital Core REIT lost 2nd largest customer! Things to note!
Tuesday, June 6, 2023
This is the transcript of a YouTube video I produced recently.
-----------------------
With interest rates having risen so much and so quickly, the chaos at the regional banks in the USA already led to 3 relatively large banks failing.
While waiting to see if more regional banks could go under in the USA, businesses which are highly leveraged could fail one by one.
When a customer goes bankrupt, it is worse than a customer downsizing or right sizing their rental requirements.
Still, we don't want a good lesson to go to waste.
Posted by AK71 at 3:48 PM 4 comments
Labels:
investment,
REITs
Lost Hundreds of Thousands of Dollars! My experience!
Sunday, May 28, 2023
------------
What about now?
Now, with much pessimism surrounding REITs due to higher interest rates, I also found something I said in that blog from 12 years ago a useful reminder.
I also shared that I made some money trading stocks over the years.
Posted by AK71 at 11:00 AM 8 comments
Labels:
investment
DBS fair value $35 per share? Dividend to increase 24c?
Saturday, May 27, 2023
------------
I have been careful to side-step such questions not only because I am not allowed to give such advice, but it is also because what is a fair price is subjective.
DBS has always demonstrated its ability to deliver a higher ROE than its smaller peers.
Anyway, we see analyses like this often enough and the only thing that many would take away is the target price.
DBS has certainly demonstrated its ability and willingness to increase dividends in the past.
Still, in between dividend payouts, we could see Mr. Market acting irrationally.
DBS, OCBC and UOB: Higher dividends?
Posted by AK71 at 9:48 AM 8 comments
Labels:
DBS,
investment,
OCBC,
passive income,
UOB
"This stock is a WINNER! ALL IN!" The 3 Aces up my sleeves!
Thursday, May 25, 2023
For readers who who are not subscribed to my YouTube channel or who simply prefer reading blogs to watching videos, this is the transcript of another recent video I produced.
------------
I said this before.
I have always been careful to say that I was just talking to myself and that all of us should have a plan, our own plan.
I have invested in some stocks which have not done as well in terms of their stock prices, but if their businesses are humming nicely and if they continue to pay me, I am happy enough.
Of course, prices could go lower.
Reference:
How to have peace of mind as an investor?
Posted by AK71 at 8:38 AM 0 comments
Labels:
investment
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