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

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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!
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StashAway - July 2018

Time flies! StashAway sent out a 1-year anniversary email around the end of July. In the email, they shared the performance of the various portfolios (P4, P8, ..., P28) and gave a sneak peek into higher return/risk portfolios which will be introduced in the next few weeks. Rachel Dance from StashAway reached out earlier and provided additional information/charts but I shall not reveal too much until the official announcement is out! To be honest, I am looking forward to that because I do believe at our age we can take on more risk.

In addition, there was a "gift" for everyone too. Free management for 1-6 months depending on the fresh fund you invest with them between 24th July and 25th August 2018. I have modified the html (remove my real name) and hosted it here on Github if you are interested in reading the actual email.

If you have seen our Portfolio - July 2018 update and read New Singapore Budget, New REIT Strategy!, you might be wondering why did we not buy any REIT ETF last month. It was partially due to this StashAway email/gift where we would need at least $2,500 and there is always an opportunity cost. Putting more money into StashAway meant putting less elsewhere, we are still considering though...

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

Based on the statement (31 July 2018), we gain $213.52.

As of 10 August 2018, we gain $78.30 from investment returns with a huge currency impact of  $255.99. 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: 7.5%
USD time-weighted returns: 1.7%

2. PORTFOLIO DETAILS 

3. TRANSACTIONS

SGD $990.00 converted to USD $726.40 (USD $726.68 last month)
Exchange Rate: 1.3629 (1.3624 last month)

4. FEE CALCULATIONS

There will be no fee until August 2018 because I recommended some friend. Interestingly, we can see the GST stated as being absorbed by StashAway explicitly in this month statement. Not sure how it works but investors will not complain as long as they are not asked to pay more fees.

The actual fee as stated is based on the monthly-average assets SGD $9,552.93 x 0.8% / 365 days * 31 days = $6.49

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 6.49%! 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

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!
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Portfolio - July 2018

Busy busy, it should be evident from the frequency I am blogging and it has been months since I played Monster Hunter! We are currently preparing for Guo Da Li (过大礼) which means more expenses! We have about 2 more months to our big day! So near yet so far! CZM has been asking if I am excited and, to be honest, the excitement has yet to kick in (probably only the day/week before?). I am more worried/concerned that things will not turn out smoothly.

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 2.26% to $350,354 - $685.20 of capital injection and $7,054.65 of capital gain.

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

SOLD
- None

BOUGHT
- None

Surprise surprise! There were no transactions for the month of July! It was the month when the sudden cooling measure was announced and all the property related stocks tanked and our portfolio was not spared. Unfortunately, we were frightened by the huge drop and decided to stay on the sideline despite knowing that the stocks were trading at a larger discount (in terms of PB). Easier said than done!

In addition, we paid our taxes in lump sum (to accumulate miles) and we need to save up for the 聘金 pin jin (betrothal red packet). CZM's parents said they will return her the majority of the money so we have decided to "give" $8,888. If their definition of majority is different from ours then GG. lol.

Dividends
The total dividends collected this month is $1,391.04. The breakdown is as follows:

Company	Symbol	ExDate	Shares	Total
Ascott Residence Trust	A68U	30-Jul-18	7,600	$242.59
CapitaLand Mall Trust	C38U	26-Jul-18	7,000	$196.70
Singapore Telecommunications Ltd	Z74	26-Jul-18	4,000	$428.00
CapitaLand Commercial Trust	C61U	25-Jul-18	2,000	$15.80
Keppel DC REIT	AJBU	23-Jul-18	3,000	$25.50
First Real Estate Investment Trust	AW9U	23-Jul-18	7,109	$152.85
Soilbuild Business Space REIT	SV3U	20-Jul-18	15,000	$189.60
Singapore Post Ltd	S08	16-Jul-18	7,000	$140.00

Total dividends collected for 2018: $8,376.15
Average dividends per month for 2018: $1,196.59

StashAway

Capital: $10,000
Current: $10,289.54 (IRR: 6.6%)

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 -->)