$$$ KPO and CZM $$$: 2018

Saturday, October 20, 2018

Juggar - P2P Lending and Share Financing Platform

Disclaimer: This is our first sponsored article :)

Edmond Tan, one of the Co-Founder at Juggar reached out to us when Juggar did a soft launch a few weeks ago. After a few emails to and fro, I thought that this was pretty interesting and agreed to write an article on it.

What is Juggar?


Juggar is a P2P lending platform for share financing platform. If you are familiar with the other P2P lending platforms available in Singapore, names such as MoolahSense and Funding Societies would come to mind where you will be the "debtor", lending your money to various companies. However, with Juggar, you can actually become the "borrower" and use the money to invest in SGX shares using margin/leverage. In another word, Juggar is a combination of P2P lending + CFD trading.

As a borrower, there is the possibility of paying interest as low as 2% with 30% collateral. I thought this is pretty attractive because as a SCB Priority customer, we were given a fixed rate of 1.6% + 1-month SIBOR (in total, the interest rate we got would be ~3.1%) after pledging 70% collaterals - Leverage - A Double-Edged Sword. In addition, Juggar will provide the loan at a rate of 2.5% (claimed to be the lowest in the market by Juggar) while waiting for the loan to be funded by a lender.

Being a Lender


Being a lender is pretty straightforward, you go to the "Marketplace" and select a loan which you will like to lend to based on the various information such as loan amount, interest rate and maturity date. Do take note that the interest rate stated is on an annual basis and not on the loan tenure.

Being a Borrower


There are currently 40 stocks available for the borrower to buy.


As an example, if I would like to buy 1,000 units of DBS at $24.82. Under normal circumstances, I would need ~$25k cash to do that.


However, with Juggar, I would only need ~$7.5k including the trading commission. Do take note that the loan and fees are only paid at the end when the position is closed. Assuming if the price of DBS increase to $26.00 within the trade tenure, my profit would have been 13.33% [(26 - 24.82) * 1000 - 83.66 * 2] / (7529.66 + 123.38 + 8.57) as compared to 4.07% [(26 - 24.82) * 1000 - 83.66 * 2] / (24,903.66) without using any margin. The losses would also be magnified accordingly. That is why it is a double-edged sword. If you are not familiar with margin trading, I suggest that you read up more first.

Below are some of the questions I asked and Edmond's response:

KPO: When would you be expecting the MAS license to be granted? Technically, Juggar can't go live without one right?

Edmond: Our legal structure do not require us to apply for the MAS CMS license although we have to work with some limitations with our current legal structure. This structure is created in conjunction with our legal consultants and have been acknowledge by NUS Enterprise, SMU IIE and Spring Singapore.

KPO: Let's say if Juggar goes bankrupt/face liquidation, how would it work for both the lenders and borrowers?

Edmond: We maintain a separate account for cash and shares that is not commingled with Juggar's operations. Under the legal documents, it is also stated that we have to maintain a record for each lender and borrowers and their funds/shares is not an asset of Juggar and cannot be pledged for any other purposes.

KPO: At the start, I was told to select to be a borrower or lender. Does this mean after I selected the borrower, I will not be able to lend? In addition, I cannot find the option to change it.

Edmond: Yes, as part of our legal structure, user can only be either a borrower or lender. The change of role form a borrower to lender has to be done by us manually as we need to ensure there is no open positions.

KPO: Let's say if a borrower is unable to top up the difference and you guys had to force sell the shares before the loan period ends. Would the lender still be getting back the full amount? Will it be returned after the position is closed/force sell or would it be reloan to other borrowers until the initial loan period ends?

Edmond: If we force sell the shares, the principal, interest and early prepayment interest will be paid back to the lender. We trigger the force sell at 130% margin ratio (Market value of the shares is 30% more than the Principal of the loan). we do not lend the money out again to other borrowers.
KPO: If that is the case, it seems to be pretty safe for a lender to lend out their money. Under what scenario (if any) would a lender lose his capital?

Edmond: Lender will start losing their capital if in a very short time span (1 day) the share price drop by more than 30% and we did not have enough time to sell off the shares. 1 instance will be that something happen to the company after market close and the next day the market open,the price is down by more than 30%. We ran numbers on STI component stocks, this hadn't happen in the last 20 years.

KPO: What happens if I selected a 90 day period and decided to sell it on the 70th day? Do I pay interest for the 90 days or it will be automatically computed accordingly?

Edmond: You will pay 10% of the interest for the unused period. So for instance the interest for the remaining 20 days is $100, you will pay the lender a penalty of $10 that’s all.
KPO: For a borrower, once the loan tenure ends, I supposed the position will be auto-closed? How would the price be determined then? Or is there a way to extend the loan?

Edmond: Juggar will at its discretion sell the shares at the market price between 4.30pm - 5pm at the day the loan matures.

Referral
If you were to use our referral, you will be given a credit of $100 which will only be credited into the account after your first trade. To do that, simply email charlotte@juggar.co with the referral code "KPOCZM" and do keep us (kpooooooooooo@gmail.com) in the cc as well :) For every successful signup and upon your first trade, we will be paid $50.

Juggar: https://www.juggar.co/
LinkedIn: Edmond Tan

Do like any of the following for the latest update/post!
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Thursday, October 18, 2018

StashAway - September 2018

I blogged about StashAway Withholding Tax Reimbursement for FY 2017, compiled the total dividends and fees and concluded that the portfolio is pretty sustainable (dividends > fees) without injecting more funds.

In hindsight, CZM's decision to stick with the current P28 portfolio seems to be the better move as compared to a 100% equity (highest risk) portfolio as the stocks market went into another round of correction in the last 2 weeks.

1. ACCOUNT SUMMARY (as of the last day of the month)


Based on the statement (30 September 2018), we gain $310.18.


As of 18 October 2018, the total return has been reduced to just $39.27. In fact, it was negative a few days ago. We lost -$264.43 from investment returns with a huge currency impact of  $303.70. Not good! In our last monthly update, I said that I would have preferred the USD to be weaker because we will be going to the US for our honeymoon. Weaker USD meant that we can convert the same SGD for more USD to invest too.

SGD time-weighted returns: 0.7%
USD time-weighted returns: -4.7%

2. PORTFOLIO DETAILS 


3. TRANSACTIONS


SGD $990.00 converted to USD $723.01 (USD $722.64 last month)
Exchange Rate:  1.3693 (1.3700 last month)

4. FEE CALCULATIONS


The fee stated is based on the monthly-average assets SGD $11,674.30 x 0.8% / 365 days * 30 days = $7.68

StashAway VS STI ETF
Since there is no way to compare the performances among the robo-advisors, I came out with a spreadsheet to track our StashAway portfolio performance (General Investing - Risk Level 28) against that of STI ETF which I will be updating on a monthly basis. For simplicity, I shall assume that one can either invest in Nikko STI ETF using POSB Invest-Saver or invest in Nikko STI ETF/SPDR STI ETF using SCB Priority Online Trading (no minimum commission). These would be the opportunity costs while we continue to invest in StashAway.

Apart from the absolute P&L, we should also look at the Reward-to-Risk Ratio where risk/volatility is taken into account. For more information, do read StashAway Clarifications - Reward-to-Risk Ratio. StashAway has the highest ratio of 1.25 which is significantly higher than the other 2 STI ETFs (< 0.4). Let me quote Freddy Lim (Co-Founder & Chief Investment Officer of StashAway), "for every dollar of risk taken, StashAway P28 is producing 1.25 times the return".


This month commentary: All the investments regardless of the platform or underlying ETF are in red/losing money. StashAway is considered to be outperforming the STI ETFs as it is not losing as much. Assuming a capital of $1,000, losing $500 is equivalent to a 50% loss but to earn back that $500 (back to $1,000) requires a gain of 100%. The example may not be intuitive to some but a conservative portfolio will limit the losses and protect your capital.

Going forward it will be even more interesting when the commissions/fees incurred by StashAway exceed that of POSB Invest-Saver. This will be a battle between cheaper/lesser fees and asset allocation/diversification...

I believe there is a need to redo/regenerate the volatility used to compute the Reward-to-Risk Ratio. Do take it with a pinch of salt for now. I have been compiling some data in order to do so :) 

Which is the best? Only time will tell :)

This is the link to our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF which I have also added to Our Portfolio page.

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

You might be interested in previous months update too:
StashAway - January 2018
StashAway - February 2018
StashAway - March 2018
StashAway - April 2018
StashAway - May 2018
StashAway - June 2018
StashAway - July 2018
StashAway - August 2018 + An Unpleasant Experience

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

StashAway Withholding Tax Reimbursement FY 2017

2 weeks back, I received an email from StashAway titled "You've received a dividend withholding tax reimbursement" but have yet to look into it until a few days ago. Chances are you (StashAway users) would have received it as well.


This was a pleasant surprise because we had long accepted it as one of the cost to invest in the US and were not expecting to get the withholding tax back.


Interestingly, it was stated in one of the FAQs that the taxes can be claimed back and is done by the broker (in this case, StashAway's broker is Saxo). Not sure if this is unique to Saxo or is done by all the other brokers in Singapore. Do leave a comment if you have more information on this :)


Anyway, I realized that only 3 out of the 8 ETFs (TLT, TIP, and CWB) had withholding tax reimbursed so I dropped their support an email for more information. The response I got was roughly similar to what was stated on the above FAQs with slightly more details and a link to a PDF that states the ETFs that qualify for reimbursement:

For the withholding tax (WHT) reimbursement, we do not receive dividend reimbursement for all ETFs but only those that qualify under the QII (Qualified Interest Income) rule.

Only some of the dividend WHT from US domiciled funds (e.g. US government bonds) can be claimed back. As such, we did not receive any dividend reimbursement for XLK and XLY.

For further illustration, you may like to view the Dec 2017 iShares report on QII ETFs. Some examples of QII ETFs that StashAway invests in are 20+ Year Treasury Bond (TLT) and 10-20 Year Treasury Bond (TLH).

Our broker, Saxo, applies for the tax reimbursement on our behalf with the relevant tax authorities and we may not get all of the dividend WHT back. Just to share, the reclaiming of WHT will be done once a year, and we will notify you via email if you have any claimable WHT, which would be redistributed to your portfolio and automatically reinvested. 
- Kathleen


I also took this chance to compile the total dividends we received for the financial year 2017 including the withholding tax reimbursement which comes up to USD $14.64. On the other hand, the total fees charged by StashAway adds up to SGD $7.49 which seems pretty sustainable (dividends > fees). Ideally, the portfolio should grow in the future even without the injection of fresh funds and if the fees > dividends, that would mean that the fees would eventually eat into the capital.

A "Dividends" tab has been added to the spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF but I have yet to update the numbers using the latest statement. Shall get it done over the weekend!

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Saturday, October 13, 2018

Portfolio - September 2018

This update is way overdue! We were too busy with our wedding (I probably sound like a broken recorder) and didn't really had the mood to do any other thing. Now that it is over, I am back in action :) In total, we spent about $6.5k on our wedding which was within our budget. You can read this article for more information on the breakdown of our expenses - Our Wedding Expenses is Within Our Budget!


On 11th Oct 2018 (last Thursday), the market went all red and our portfolio lost $9k in a day! If we were to include the losses before 11th, it would easily add up to > $10k. Compare that to our wedding expenses, I would say the money spent on our wedding was well spent! With all the money sitting in the bank from the wedding banquet, I cannot help but bought a few stocks (averaging down Accordia Golf Trust, OUE and Thai Beverage) on that day too.

Our portfolio decrease by 1.19% to $354,522 - $3,948.29 of capital withdrawal and $1,213.04 of capital loss. The one in blue is the StashAway portfolio, green is SGX and the total is in black.


If you prefer to look at numbers, this is the raw data used to generate the above bar graph. These numbers are as of the last day of the month.


SOLD
- OUE Commercial REITs (8,000 units) @ $0.605

I blogged about it here - OUE Commercial REIT Rights Issue - Very Very Very Bad Deal. While writing this article, it just suddenly occurred to me that I should not have sold all of them! In the past, I learnt how owning the rights only does not allow one to apply in excess - Mistake on Rights Issue - CapitaLand Commercial Trust. Hence, I should have sold 7,900 units fo shares and keep the 100 units. Once I have been given 83 rights, I should proceed to exercise them and applied in excess! That would have been the best of both worlds (preserving my capital and entering at a lower entry) which is something I always wanted to test out. Having said that, I can do that (buying and selling just 100 units) because I do not have any minimum commission. Oh well, it is too late now, shall give this a try next time.

BOUGHT
- Lion-Philip S-REIT ETF (1,000 units) @ $0.98

We bought 1,000 units of Lion-Philip S-REIT ETF as part of our new strategy - New Singapore Budget, New REIT Strategy!

Dividends
The total dividends collected this month is $100.00. The breakdown is as follows:

CompanySymbolExDateSharesTotal
OUE LtdLJ313-Sep-1810,000$100.00

Total dividends collected for 2018: $10,997.38
Average dividends per month for 2018: $1,221.93

StashAway


Capital: $12,000
Current: $11,845.18 (IRR: -2.9%)

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Wednesday, October 10, 2018

Our Wedding Expenses is Within Our Budget!

Hello everyone! It has been a while and our wedding is finally over! Both of us have been upgraded from S to M (not Small to Medium but Single to Married) <-- that's what our JP (Justice of the Peace/solemnizer), Mr. Mike Tam Chee Wah said. The ceremony was entertaining and he was able to alternate between both languages (English and Mandarin) comfortably. We certainly made the right decision to engage him as our JP. One of my brothers was so impressed with him and tried to book him for next year but he was already booked. Do try to book/reserve him in advance!

Our wedding was exceptionally smooth thanks to all our brothers and sisters! CZM was also kind enough to spare me from those torturing gatecrash games and I only had to give a red packet + signed my life/money away to CZM (those contract where my money is hers while her money is still hers, do household chores, etc.). Unfortunately, everything happened so quickly on that day that we barely had time to interact/catch up much with our guests and both of us were feeling slightly unwell (headache, flu and no appetite). However, when it was time to count the ang bao (red packet) money, both of us miraculously "recovered". lol.

I might have blogged about this previously that we did not want to hold a wedding banquet initially but after sounding our parents out, we decided to go ahead with it. After all, we believe that a relationship is not just about us but our family too. Our plan was to keep everything small and simple so we had an initial budget of about $10,000 to $20,000 and I am proud to say we were lucky enough to keep it way below our budget!

Total Expenses: $29,858.63
Total Income: $23,406.00

Overall: -$6,452.63

Expenses


This is a breakdown of the top 10 expenses which accounts for 95.94% of the total expenses. If you think that we spent too much on a specific category/shop and should/could be cut for yours, look no further. Having said that, the full breakdown can be seen at the end of the article. We definitely took a lot more Grab/Comfort than usual because we were rushing/got tired from the preparation.



For those that prefer to look at pie chart instead of numbers.

Income


If we look at the cost of the banquet ($17,878.63) vs the ang bao we received ($23,406.00), we actually made a profit of $5,527.37. I guess this is what people meant when they say they managed to "cover back"? Realistically speaking, I think there is only an extremely slim chance of making a profit from the wedding after including all the relevant expenses and one really should not have such an expectation.

From the above breakdown, it is obvious that most of the money came from my relatives. How it works for us is when CZM's parents requested for X number of tables for their relatives, all those ang baos will go directly to them and it is theirs to keep.

My parents gave us $2,000 for Jin Cha (tea ceremony) and my 3 grandmothers gave us $1,700 in total for the banquet ang bao. These are outliers that really helped a lot. On average, our friends and colleagues gave more than enough for us to cover the cost of the banquet (~$102 per pax) too.

The one takeaway is even if you are not planning to hold a wedding banquet, the tea ceremony is a must! Hahahaha. The tea ceremony would cost you almost nothing (except for the tea set, tea + your mouth/voice) and you get lots of ang baos + some gold.

We were trying to value/include those gold into our income but most of the gold (5/8) that we received did not have any receipt with them. The overall damage would have went down further if we were to add the value of those gold in.

Hope you enjoy our wedding expenses and income breakdown!


Do like any of the following for the latest update/post!
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Monday, September 17, 2018

Expenses - August 2018

As usual, this should be my last post for the month before our big day! We will be having our 过大礼 (Guo Da Li - GDL) next week and it will be ten ten ten ten before we know it.

Current Profile: 28 years old male planning to get married this year and is still living with his parents


You can read more about how we manage our finances here. Removing our shared expenses which come out of our mutual fund (KPO Expense Fund), my expenses for August would be $3,008.64 - ($1,757.26 / 2) = $2,130.01.

Wedding
Banquet - We started making monthly installment payments to the hotel in order to avoid the lump sum pain.

GDL - Bought some cakes from Pine Garden. To be exact, 25 boxes of cakes -.-" The most ridiculous part apart from spending hundreds on cakes is that the bride (CZM) is not allowed to eat any of the cakes although she was choosing what she wanted to eat. LOL.

Photography - To save some money, we decided to make our own photo album and 3 12x12" Canvas through Photobook. It was supposed to be cheap until we realized that you cannot ship them in 1 order and had to pay $40+ for shipping. I got to say there are lots of hidden costs. Having said that, it is still slightly cheaper than the others.

Grooming and Others - CZM bought some hair accessory, decorations and suspenders from Carousell.

Parents
I previously blogged about my promotion and increment - Salary - You Are Your Best Investment and it was only effective from February so I gave my parents more allowance as well.

Insurance
This is a fixed monthly cost for the basic coverage - term life and hospitalization.

Gift
Attended a wedding at Crowne Plaza Changi.

Food
My food expenses are exceptionally low because I stay with my parents! Most of it is incurred when I am out with CZM. In addition, half the month we were in New Zealand and the food expenses were paid by the family mutual fund.

Transportation
I would always pay for CZM's cab ride home during night time since I am too lazy to send her home. That was one of our agreement. lol. EZ Link expenses were much higher this month which was probably due to the wedding preparation, hence we have been commuting a lot more apart from work.

Public transportation seems a lot lower because of 2 reasons:
1. I am no longer using EZ Link Auto-Reload. Account-Based Ticketing (ABT) is a much better choice as you pay what you use instead of triggering top up where the money is stored in the EZ Link card. The best part is miles can be earned too (using UOB PRVI Mastercard)!
2. $0.50 Discount for commuters who enter stations before 7.45am on weekdays.
3. Half the month I was in New Zealand driving a rental car. lol

Cab, on the other hand, was exceptionally high because the day when we returned, it was past midnight and had to cab from Changi to the west which cost around $40+

Me
The $69.97 is the installment for Surface Pro which I got about 2 years back.

Others (Vacation, Entertainment, Treat, Gambling, and Investment)
Vacation - Bought some food and drinks during our transit flight

Entertainment - Watched some movie

Treat - Either CZM or colleagues to some hawker food/drinks

Gambling - Bought ToTo, the fastest way to fulfill our millionaire dream

Investment - Commission for buying SSB (our ladder is almost completed! You might want to check this post out if you do not know what I am referring to - DBS Multiplier + SSBs + Joint Account = Higher Interest!)

Summary
January 2018 - $2,256.43
February 2018 - $1,759.01
March 2018 - $5,049.79
April 2018 - $1,572.54
May 2018 - $1,863.74
June 2018 - $2,282.07
July 2018 - $2,197.94
August 2018 - $2,130.01

Total expenses for 2018: $19,111.53
Average expenses per month for 2018: $2,388.94

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Friday, September 14, 2018

OUE Commercial REIT Rights Issue - Very Very Very Bad Deal

If you are an existing shareholder, you should be aware of the proposed acquisition of the office components of OUE Downtown. You might be aware that I actually do like rights issue as they present an opportunity to accumulate more shares at a lower price. However, I have sold all my OUE Commercial REIT today (8,000 units @ $0.605) and these are the reasons why I will not be participating this extremely bad deal (at least for my case).




Some important numbers to take note:
- 83 rights units for every 100 existing units
- issue price of $0.456
- TERP of $0.570
- Pro Forma DPU of $0.0354 vs Current DPU of $0.0467
- Pro Forma NAV of $0.70 vs Current NAV of $0.91


My average price was $0.70 and before the rights issue, the yield on cost was around 6.67% and with a NAV of $0.91, it was trading at >20% discount. However, after the rights issue, even with a huge oversubscription, I can no longer get back the same yield. Besides not being yield accretive, this proposed acquisition/rights issue reduces the NAV significantly! You can use my google spreadsheet/calculator to see how would this rights issue work out for you - KPO Rights Issue Calculator. Just fill in those in yellow and the rest are formula-linked.


OUE Commercial REIT IPO in 2014 and based on historical data since then, it has been trading at mean/median PB of 0.78/0.75 and mean/median dividend yield of 6.48%/6.59%. What does that mean? After the rights issue, with a lower NAV and lower DPU, the price will have to fall further in order for it to reach its mean/median PB and dividend yield. My REIT Scanner is predicting $0.54 which is lower than the TERP of $0.57.

Example:
Before the rights issue was announced, it was still trading at around $0.68 and with a NAV of $0.91, the PB would be around 0.747. Take this PB and multiply by the new NAV of $0.70 and we will arrive at the estimated price of $0.523.

In addition, note the falling NAV and DPU over the years since 2014. There was some safety margin when my entry price was way below the NAV but with the rights issue, it would simply disappear! One thing which I cannot understand is if there is a need to issue so many rights/shares and price it at such a low price. Theoretically, they can issue lesser rights at a higher price (e.g. $0.60 as compared to $0.68) to achieve the same result + the NAV/DPU would not have dropped as much @_@


On the bright side, after holding it for ~1,200 days (> 3 years) and including all the dividends collected over the years, the total return is 8.5% and the annualized return is 2.9%. Should have just top up this amount to CPF SA 3 years ago instead.

Good luck to the existing shareholders! Those that are planning to enter, my advise is to avoid it first and wait till it falls further. This rights issue is not attractive at all. Do not make the same mistake as I did previously - Mistake on Rights Issue - CapitaLand Commercial Trust.

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Monday, September 10, 2018

StashAway - August 2018 + An Unpleasant Experience

StashAway introduced 3 new portfolios last month and Financial Horse has done an excellent write up on it - The Weekly Horse: Review of StashAway’s new “High Risk” Portfolio. Do read it if you have not as it is definitely interesting enough for Michele, the CEO of StashAway to leave his comment.

Due to the introduction of the new portfolios, we had some unpleasant experience with StashAway. This would have been a post by itself if we did not go to New Zealand and gotten so busy with our wedding preparations. I am willing to take on more risks (stock picking, buy small caps, try out robo, etc.) while CZM is the more conservative one (STI ETF and blue chips). When I knew StashAway was introducing higher risk portfolios, I was pretty excited as I felt that the previous highest risk portfolio, P28 was still very conservative.

On the day it launched (16th August 2018), an email was sent out at 5:30pm. I WhatsApp CZM and after reading and updating the app, I flipped the switch to the highest risk portfolio. Around 7pm, CZM replied and said she's not comfortable with taking more risk so I flipped it back although I saw some pending transactions. I thought it should not be much of an issue since there were ~2 hours before the US market opens and the next batch job should correct/cancel the pending transactions or so I thought...

To my horror, the next day (17th August 2018), most of the shares were sold! The even more ridiculous part was there were multiple pending transactions to buy back the same shares and the transactions happened on the following day (18th August 2018). The shares were sold at a lower price and bought back at a higher price the next day. As a result, we now owned lesser units of shares than what we originally had. To be fair, it could have ended up either way (sold higher and bought back lower) but it was the more unfortunate way for us. Let that sink in...

Meanwhile, I was emailing StashAway to understand what exactly was going on. In short, the orders are consolidated only once at 6pm and there is no internal netting of orders if you are wondering. As usual, there is nothing to hide so you can read the whole email thread hosted here, word for word except for their emails and contact numbers which have been masked.

Having said that, it takes two hands to clap. I am at fault for not confirming with CZM first but it also shows the limitation of their system. In addition, given the limitation of the systems to consolidate orders only once at 6pm, such email communication should not have been sent out at 5:30pm. This would not have happened if it was communicated early in the day, after 6pm or even during the weekends.

Hopefully, you guys will learn from my mistake and not have to suffer :) Alright. Enough ranting, back to the monthly update!

1. ACCOUNT SUMMARY (as of the last day of the month)


Based on the statement (31 August 2018), we gain $370.75.


As of 10 September 2018, we gain $34.81 from investment returns with a huge currency impact of  $302.34. Not good! In our last monthly update, I said that I would have preferred the USD to be weaker because we will be going to the US for our honeymoon. Weaker USD meant that we can convert the same SGD for more USD to invest too.

SGD time-weighted returns: 6.9%
USD time-weighted returns: 0.7%

2. PORTFOLIO DETAILS 


3. TRANSACTIONS




SELL transactions - highlighted in yellow
BUY transactions - highlighted in blue

SGD $990.00 converted to USD $722.64 (USD $726.40 last month)
Exchange Rate: 1.3700 (1.3629 last month)

4. FEE CALCULATIONS


The actual fee as stated is based on the monthly-average assets SGD $10,662.31 x 0.8% / 365 days * 31 days = $7.24

I blogged about how the $5 fee credit in StashAway - April 2018. I was charged management fee despite having the referral waiver and was given this credit in return for their mistake.

StashAway VS STI ETF
Since there is no way to compare the performances among the robo-advisors, I came out with a spreadsheet to track our StashAway portfolio performance (General Investing - Risk Level 28) against that of STI ETF which I will be updating on a monthly basis. For simplicity, I shall assume that one can either invest in Nikko STI ETF using POSB Invest-Saver or invest in Nikko STI ETF/SPDR STI ETF using SCB Priority Online Trading (no minimum commission). These would be the opportunity costs while we continue to invest in StashAway.

Apart from the absolute P&L, we should also look at the Reward-to-Risk Ratio where risk/volatility is taken into account. For more information, do read StashAway Clarifications - Reward-to-Risk Ratio. StashAway has the highest ratio of 1.25 which is significantly higher than the other 2 STI ETFs (< 0.4). Let me quote Freddy Lim (Co-Founder & Chief Investment Officer of StashAway), "for every dollar of risk taken, StashAway P28 is producing 1.25 times the return".


This month commentary: StashAway is the only one making money with an XIRR of 5.34%! One year later, we finally see StashAway's fees > SCB Priority Online Trading commissions. The difference will only continue to get bigger and if such performance can continue, we certainly would not mind paying more fees for a higher return. Like I mentioned previously, those that are already doing DCA on STI ETF, do not be disheartened and stop your investment. Try as much as possible to stick to your plan and in the long run, it will turn out well.

Going forward it will be even more interesting when the commissions/fees incurred by StashAway exceed that of POSB Invest-Saver. This will be a battle between cheaper/lesser fees and asset allocation/diversification...

I believe there is a need to redo/regenerate the volatility used to compute the Reward-to-Risk Ratio. Do take it with a pinch of salt for now. I have been compiling some data in order to do so :) 

You might be interested in previous months update too:
StashAway - January 2018
StashAway - February 2018
StashAway - March 2018
StashAway - April 2018
StashAway - May 2018
StashAway - June 2018
StashAway - July 2018

Which is the best? Only time will tell :)

This is the link to our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF which I have also added to Our Portfolio page.

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Monday, September 3, 2018

Portfolio - August 2018

Time flies! We just came back from our 2 weeks vacation to New Zealand and there is only about 1 month left to our big day! I guess I will be blogging lesser this month as well in preparation for the big day. We have yet to make our photo album or prepare our script >.<

After doing a 2018 Mid Year Review, I decided to make some changes to my spreadsheet to track/include investment into StashAway too. The one in blue is the StashAway portfolio, green is SGX and the total is in black.

Our portfolio increase by 2.41% to $358,792 - $12,315.89 of capital injection and -$5,039.41 of capital loss.


If you prefer to look at numbers, this is the raw data used to generate the above bar graph.


SOLD
- None

BOUGHT
- Capitaland (1,000 units) @ $3.130
- City Development Limited (1,000 units) @ $9.940
- Lion-Philip S-REIT ETF (1,000 units) @ $1.012

I blogged about Capitaland - An Undervalued Blue Chip? and the price has gone up quite a bit since then.

With Capitaland being the 2nd largest investment in our portfolio, we were looking at other opportunities and decided to buy some CDL. The interesting thing about CDL is that its properties are stated at cost while the others/majority of the developers state them based on the fair value determined by internal valuation or independent professional valuation. As a result, CDL should be trading > PB 1 and it can be deemed as undervalued if it is below its NAV or < PB 1. In addition, CDL has started share buy-back in the last week.

We bought 1,000 units of Lion-Philip S-REIT ETF as part of our new strategy - New Singapore Budget, New REIT Strategy!

Dividends
The total dividends collected this month is $2,521.23. The breakdown is as follows:

Company Symbol ExDate Shares Total
QAF Ltd Q01 29-Aug-18 3,000 $30.00
Lion-Philip S-REIT ETF CLR 29-Aug-18 9,000 $162.00
APAC Realty Limited CLN 27-Aug-18 12,000 $240.00
Raffles Medical Group Ltd BSL 27-Aug-18 14,000 $70.00
Geo Energy Resources Limited RE4 27-Aug-18 25,000 $250.00
City Developments Ltd C09 23-Aug-18 1,000 $60.00
Wilmar International Ltd F34 20-Aug-18 2,000 $70.00
Singapore Post Ltd S08 15-Aug-18 7,000 $35.00
OUE Commercial Real Estate Investment Trust TS0U 8-Aug-18 8,000 $174.40
Sheng Siong Group Ltd OV8 7-Aug-18 18,000 $297.00
Far East Hospitality Trust Q5T 6-Aug-18 10,156 $102.58
Mapletree North Asia Commercial Trust RW0U 3-Aug-18 5,000 $55.85
Starhill Global Real Estate Investment Trust P40U 2-Aug-18 12,000 $130.80
SPDR STI ETF Units ES3 2-Aug-18 13,000 $780.00
Parkway Life Real Estate Investment Trust C2PU 1-Aug-18 2,000 $63.60

Total dividends collected for 2018: $10,897.38
Average dividends per month for 2018: $1,362.17

StashAway


Capital: $11,000
Current: $11,419.10 (IRR: 8.8%)

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Wednesday, August 15, 2018

Expenses - July 2018

This should be my last post for the month! CZM and I (together with her family) will be flying over to New Zealand this Saturday :)

Current Profile: 28 years old male planning to get married this year and is still living with his parents


You can read more about how we manage our finances here. Removing our shared expenses which come out of our mutual fund (KPO Expense Fund), my expenses for July would be $3,169.84 - ($1,943.80 / 2) = $2,197.94.

Wedding
Banquet - We started making monthly installment payments to the hotel in order to avoid the lump sum pain.

ROM (Registry of Marriages) - This is important! We read horror/funny stories of how couples forgot to file a notice with ROM within the deadline. The earliest you can file is 3 months in advance and the latest you can file is 3 weeks before your wedding date. Apparently, you can check if your other half is already married, we had some fun checking our parents' anniversary and reminding them about it after all they no longer celebrate it.

Ring - Decided to engrave our wedding band.

Parents
I previously blogged about my promotion and increment - Salary - You Are Your Best Investment and it was only effective from February so I gave my parents more allowance as well.

Food
My food expenses are exceptionally low because I stay with my parents! Most of it is incurred when I am out with CZM. This month was much higher because we manage to get hold of Burpple 1 for 1 deals and went to 2 places - Forlino and Tenkaichi Yakiniku Restaurant which cost $236.90 in total! Forlino was pretty good but we were slightly disappointed with Tenkaichi because they were already running 1 for 1 promotion even without Burpple (the difference is only drinks + ice cream) and I guess we are already over the buffet age.

I purchase a $60 for $100 voucher for The Palmary through Chope (If you use our referral link, we will get 300 Chope dollars each. 400 Chope dollars = $10 voucher OR 1,200 Chope dollars = 1,000 KrisFlyer miles!) to celebrate our 10th year anniversary. Yes, it has been a decade and CZM has been complaining that I made her wait for more than 10 years...

Insurance
This is a fixed monthly cost for the basic coverage - term life and hospitalization.

Vacation
Bought FWD travel insurance for our USA honeymoon.

Transportation
I would always pay for CZM's cab ride home during night time since I am too lazy to send her home. That was one of our agreement. lol. EZ Link expenses were much higher this month which was probably due to the wedding preparation, hence we have been commuting a lot more apart from work.

Public transportation seems a lot lower because of 2 reasons:
1. I am no longer using EZ Link Auto-Reload. Account-Based Ticketing (ABT) is a much better choice as you pay what you use instead of triggering top up where the money is stored in the EZ Link card. The best part is miles can be earned too (using UOB PRVI Mastercard)!
2. $0.50 Discount for commuters who enter stations before 7.45am on weekdays.

Me
The $69.97 is the installment for Surface Pro which I got about 2 years back. I bought black hairspray because I needed to go back to the army camp for a low key reservice.

Others (Treat, House, and Entertainment)
Nothing worth mentioning.

Summary
January 2018 - $2,256.43
February 2018 - $1,759.01
March 2018 - $5,049.79
April 2018 - $1,572.54
May 2018 - $1,863.74
June 2018 - $2,282.07
July 2018 - $2,197.94

Total expenses for 2018: $16,981.52
Average expenses per month for 2018: $2,425.93

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Tuesday, August 14, 2018

Capitaland - An Undervalued Blue Chip?

Capitaland needs no introduction. It is currently the 2nd largest investment in our portfolio and we have recently bought more of it even after the cooling measure.


The green arrow indicates that the latest action within 14 days is an increase in position. To be exact, we bought 1,000 @ $3.13 on 6th August 2018. Besides busy preparing for our wedding, I have been spending some time working on a side project.

The idea is simple and is based on mean reversion which means that everything will return to their mean/average eventually. I first load a bunch of historical stock prices and pull out 3 different financial numbers (NAV, EPS and DPS) from past annual reports.


These numbers will allow me to compute the various financial ratios (PB, PE and Dividend Yield). If you have no idea what they meant or what I am talking about, do read up more first.

1. From 2002-01-02 to 2018-08-10 


That is more than 16 years of data! The annualized return excluding dividends is 3.37%. Unfortunately, the annualized return including dividends is still a work in progress. Note that the mean price is $3.39.


Stock price by itself is meaningless hence the need to use various financial ratios. Based on these data, the mean PB is 1.03, the mean PE is 13.44 and the mean dividend yield is 3.01%. This allows one to know if a stock is undervalued or overvalued simply by looking if the current financial ratios are above/below the mean. To take it further, I try to predict the target price/upside by using the average of both the mean and median.

Current Price (2018-08-10): $3.31 (below mean price)
Predicted Price based on PB: $4.15 (25%)
Predicted Price based on PE: $3.82 (15%)
Predicted Price based on Dividend Yield: $4.13 (25%)

2. From 2010-01-02 to 2018-08-10 


One of the issue/limitation is that the mean can be easily skewed. Before the financial crisis, Capitaland actually once traded at around > $8, PB > 2 and PE > 30! Looking at data after the financial crisis (2010) will remove those ridiculous numbers. Notice how after investing for 8 years, one can actually be sitting at a paper loss (-2.70%) excluding the dividends? The mean price is $3.30 (lower as compared to the above).


The mean PB is 0.881, the mean PE is 12.45 and the mean dividend yield is 2.73%. You can see that the numbers are lower, hence more conservative.

Current Price (2018-08-10): $3.31 (above mean price)
Predicted Price based on PB: $3.79 (15%)
Predicted Price based on PE: $3.64 (10%)
Predicted Price based on Dividend Yield: $4.37 (27%)

3. From 2014-01-02 to 2018-08-10 


After all, 8 years is a long time. The policies/cooling measures then would have been very different from what we have now. If I were to use more recent data (within the last 5 years) to account for the more recent changes, interestingly the mean price remains at around $3.30. We are back to a positive annualized return of 2.01% excluding dividends.


The mean PB is 0.817, the mean PE is 11.41 and the mean dividend yield is 3.11%.

Current Price (2018-08-10): $3.31 (above mean price)
Predicted Price based on PB: $3.56 (7%)
Predicted Price based on PE: $3.39 (2%)
Predicted Price based on Dividend Yield: $3.80 (15%)

Investing is not as simple as just looking at these few numbers. Otherwise, all the mathematician will be millionaires. Hahaha. Notice how by changing the period/historical data, a different picture will be painted? The same stock/investment can be giving one investor positive paper gain over the years and negative paper loss to someone else. Hence, the entry price is pretty important. Having said that, I have yet to include dividends and I do believe the return should all be positive after that.

Is Capitaland an undervalued blue chip? I will leave it to you to decide :)

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)