Tuesday, March 31, 2020

Dividend Warrior's 1Q2020 Portfolio Update - Never Let A Crisis Go To Waste

Top 10 Holdings As Of 31 March 2020

Portfolio Cost: S$484, 338
Portfolio Market Value: S$534, 228 
Portfolio Overall Unrealized Profit: S$49, 890 (+10.3%)
Portfolio YTD Returns: -16.06%
Dividends Collected (1Q2020): S$4, 751
Current Warchest: S$16, 185

(*All figures are accurate as of 31 Mar 2020)

Portfolio Actions in 1Q2020:
  • Full divestment of HRnet Group at $0.47. Including dividends received, the total return is around -33.2% in almost a year.
  • Full divestment of F&N at $1.53. Including dividends received, the total return is around -12.3% over 10 months.
  • Accumulated DBS in 2 batches - 200 shares at $24.30 and another 200 shares at $20.55
  • Accumulated 300 shares of UOB at $19.60

Sit Tight, Stay Calm & Follow Your Plan
Over the last 2 months, global headlines and social media would have you believe that the world is ending soon. Economists and experts are forecasting an imminent global depression. Unemployment rates are spiking. Consumer spending had cratered. Supply chains disrupted. Individuals and corporations facing loan defaults. 

All the news outlets dishing out the usual rhetoric and common narrative on a daily basis. Number of confirmed coronavirus cases, number of deaths and number of recovered patients. They are literally regurgitating similar headlines from the SARS and H1N1 pandemic periods. Just replace 'SARS' with 'COVID-19' in the articles and viola! The older folks who had experienced the previous pandemics would remember that the economy recovered eventually. If they have an investment plan ready, this market crash is exactly the buying opportunity they have waiting for. I intend to tune out the media noise and stick to my plan. You should stick to yours, if you have one.

Throwing The Kitchen Sink... and then some
Governments and major central banks all over the world had flooded the economic system with trillions of dollars. Nightmarish memories of the 2008/09 great financial crisis must have been fresh in policymakers' minds. They learnt their lesson the hard way. I believe they will never allow the global financial system to ever get so dangerously close to total collapse again. Some major cities have gone into full lock-down mode. Strict social distancing measures have also been implemented on a global scale. Most international flights already ground to a halt. Tourism, aviation, retail and transport industries are teetering on the edge of the cliff. The US Federal Reserve is pulling out all stops to support and stabilise the markets. Governments have launched massive fiscal stimulus packages to save jobs and keep businesses afloat. Putting much needed cash in their hands. In Singapore, the supplementary Resilience Budget turned out to be significantly larger than the first one. 

I am not betting against these unprecedented measures to combat the economic impact of COVID-19 virus. Zero interest rate and unlimited QE is a robust combo. In my opinion, after 6 months of sharp economic pain, the global economy should start to get back on its feet. Right now, there is a huge pent-up demand from consumers. People are not spending much because they are stuck at home for weeks. Once the virus is gone, consumer spending will return. If you believe that the future is going to be brighter and better, start positioning your portfolio for the recovery.

Turn adversity into opportunity
Dividend Warrior

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