Wednesday, July 3, 2024

Dividend Warrior 1H2024 Portfolio Update - Power of BTO! Power of Banks!






Equity Portfolio Cost: S$606, 181

Equity Portfolio Market Value: S$702, 163

Equity Portfolio Unrealised Profit: +S$95, 982 (+15.8%)

Portfolio XIRR (1H2024): -5.1% (inclusive of dividends)

Dividends Collected (1H2024): S$21, 761 (-2% yoy)

Total Cumulative Dividends (2010 - 1H2024): S$303, 406

Current Cash & Cash Equivalents (SSB/T-bills): S$42, 000

(*All figures are accurate as of 28 Jun 2024)


Portfolio Actions in 1H 2024:

  • Accumulated more Alphabet at US$137, US$171 and US$178
  • Accumulated more Amazon at US$176 and US$180
  • Initiated position in Nvidia at US$124
  • Accumulated more Sheng Siong at S$1.50 and S$1.52
  • Accumulated more NetLink Trust at S$0.84
  • Partial divestment of Apple at US$190
  • Full divestment of Microsoft at US$409


New Milestone Unlocked - Becoming A Property Owner


My apologies for the lack of updates in 1Q 2024. I was too busy with my BTO flat renovation. Long-time readers of my blog would know that I kickstarted my plan to secure a ‘second pot of gold’ five years ago. The pandemic delayed the construction progress by a year. Finally, I am now a proud owner of a fully-paid HDB flat. My block is just a short 5-minute walk away from the future MRT station, community centre, mall & bus-stop. It is also located within a 1-km radius of four Primary Schools, one of which is the prestigious ACS Pri. In the context of Singapore’s residential property market, it’s a pretty decent location. Resale flats of similar size in the neighbouring estate of Bukit Batok are being transacted at more than double my BTO purchase price. Absolute madness! 




DBS The Out-performer


The three local banks delivered a strong set of results in the first half or 2024, especially DBS, which did a bonus share issue with the share price rising even further afterwards. The bank achieved significant growth in private wealth management fee income. The more uncertain the world becomes, the more ultra high-net-worth individuals will seek to park their wealth in a safe haven such as Singapore. We are kinda like the Switzerland of Asia. The banks’ higher dividend payout also helped to mitigate the decline in REITs’ distributions.  


DBS CEO Piyush Gupta said, “Our record earnings have given us a strong start to the year. We had broad-based business momentum as loans grew and both fee income and treasury customer sales reached new highs. While geopolitical tensions persist, macroeconomic conditions remain resilient and our franchise is well positioned to capture business opportunities. We are optimistic that total income and earnings will be better than previously guided and we will be able to deliver another year of strong shareholder returns.”



The biggest contributor to DBS's growth is due to Wealth Management. The family office business has seen significant growth, with many high-net-worth individuals and families seeking services for wealth preservation and succession planning. When DBS say they eye S$500 billion in wealth assets by 2026, that is rather conservative. I think the figure should be at least S$750 billion to S$1 trillion. According to Capgemini Research Institute's World Wealth Report 2024, global high-net-worth-individual wealth and population is growing exponentially at 5%.



Building The Pyramid Top


I spent the past 15 years building up my dividend portfolio and CPF savings. Now, with the addition of SSB and a fully-paid property to my asset allocation, I consider the foundation-building phase of my investment journey to be mostly done. Nice timing too. The era of near-zero interest rate and easy monetary policies from the US Fed is likely over. My heavy REIT-accumulation days are over. I already own enough REITs. My current portfolio is already well-positioned for future rate cuts. I already made hay while the Sun was shining. This ties in with my shift towards non-REIT stocks with strong balance sheets, such as US Tech, three local banks & Sheng Siong. Last year, I tried to stick to a ratio of 50:50 with regards to my capital deployment. For example, for every dollar invested in Sheng Siong, another dollar was invested in Apple. Moving forward, I shall tweak the ratio to 20:80. For example, for every $2 dollar invested in DBS, another $8 shall be invested in Alphabet. The bulk of my passive income from REITs shall be channeled towards US Big Tech. Rain or shine, every quarter accumulate. When the market is toppish, buy less. When the market is bearish, buy more. Never all-in. Never use margin. 



The peace of mind provided by a fully-paid HDB flat and sizeable CPF savings is priceless. A strong foundation allows me to better stomach the volatility in the US market. Subconsciously, I know I would always have something to fall back on. I just hope the government can continue to grow Singapore’s GDP over the long-term so that my new 99-year lease flat can appreciate in value. :P 



Possible Future Landlord


Alright, with the boring concrete strategy out of the way, let’s talk about some possible plans far far into the future. This is just me doing some fun brainstorming and speculation. Perhaps you can call it daydreaming even. Hey, doesn’t hurt to dream a little sometimes, right? Anyway, always prudent to have a Plan B, a viable way to get out of Singapore if there ever is a need to escape the escalating cost of living. Based on my simple research, the average rental rate for a flat of similar size near my neighbourhood is around S$2.5k per month. Let’s be super conservative and assume the rental rate stays the same after 10 years. S$30k per year rental income converted to Malaysian Ringgit or Thai Baht can go a long way in JB or Bangkok. I can live in those cities without compromising my quality of life as a young senior. Both countries are starting to offer more types of retirement Visas. Cheap condo rental. Delicious & cheap local food. 



During my trip to Bangkok last November, I observed the food pricing is one level lower than Singapore’s. Their restaurant pricing is similar to our Foodcourt pricing. Their foodcourt pricing is similar to our hawker pricing. And if you are willing to be more adventurous, their street food pricing is lower than anything you can find in Singapore. Their BTS train system is similar to our MRT network. I am planning another longer trip to Bangkok next year! :)



~ Don't Wait To Buy Real Estate. Buy Real Estate & Wait. ~

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