As we approach mid-year 2019 (Guest Post)

As we approach mid-year 2019 (Guest Post)

Since the last post, the STI did indeed fell further forming a trough by early June. By this week, the STI regained some of its lost territory, landing at 3214.85.

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This post was originally posted here. The writer, Brennen Park is a veteran community member and blogger on InvestingNote, with username known as Brennen Park and 3400+ followers.

Banks are still lagging as the fall out of the US-China trade war began to infiltrate into smaller economies. It is a situation that when giants fight, all the others feel the ripples. For the 1st quarter of 2019, the actual GDP growth of 1.2% fell short against the forecast of 1.9%. Economists are now downgrading Singapore’s yearly growth rate from 2.5% forecast in March 2019 to 2.1% for year 2019. Certainly, the banks stocks are not going to fare well when the state of the economy worsens. Just months ago, it was widely expected that the FED would continue to increase the interest rate well into 2020. This would help mop off the liquidity in the system, resulting in higher net interest margin (NIM) for the banks. Right now, more and more are expecting the FED to lower the interest rate in response to the slowdown due to the on-going trade war. This would inadvertently slacken the interest margin again. Banks, which have been increasing their deposit rates recently, in preparation for higher interest rates may find their efforts come to naught if they are not able to lend them out efficiently.

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Lessons from a Discussion of the Net Lease Corporate Real Estate ETF (Guest Post)

Lessons from a Discussion of the Net Lease Corporate Real Estate ETF (Guest Post)

Ben Carlson and Michael Batnick’s Animal Spirits have become a great podcast to listen to. If you are the sort that wants a short 30 minute entertaining take on what are some of the best financial data points out there, and discussion on some of the latest articles that they have read (they read a lot), this is the one.

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This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 700+ followers.

They have introduced a Talk your book segment where they bring on some interesting financial products that they find, could have a role in your portfolio, and ask the people behind it to talk about it.

You will appreciate the way they context the discussion to a strategic level, thinking about whether you need this financial product in your portfolio.

In last week’s episode, they brought on the folks behind Fundamental Income to talk about their new Net Lease ETF and the index behind it.

The NETLease Corporate Real Estate ETF (ticker: NETL) seeks to track the performance, before fees and expenses, of the Fundamental Income Net Lease Real Estate Index (NNNLSCTR). The index’s goal is to track the performance of the U.S. listed Net Lease real estate sector in a diversified manner by screening for real estate companies that focus on investments in net lease real estate and assigning only those companies identified to the Index. The Index places constraints on constituents to protect against concentration in any one company or tenant.

This ETF that they are discussing is not listed in Singapore. It is listed in the USA and thus if you are attracted to the dividends, you have to take into consideration a 30% dividend withholding tax. So if the forecast dividend yield is 5% the after tax return is 3.5%.

Still, I think the value of this discussion is to hear from the management why they think this segment has a unique proposition that more investors should know about.

You could also benefit from contrasting this to the other type of REITs you invest in.

You could also benefit form the discussion of portfolio positioning, risk management for the REITs.

The Net Lease segment is interesting. In the past, I wrote an article about the Perfect REIT experienced investors are looking for and the Net Lease like REITs have many of these characteristics.

In Singapore, perhaps Keppel DC, Parkway Life REIT matches that description the most.

You can listen to the podcast here:

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The Astrea V Structured PE Bond – 3.85% Yield for Class A-1 available for Retail Investors (Guest Post)

The Astrea V Structured PE Bond – 3.85% Yield for Class A-1 available for Retail Investors (Guest Post)

Last year around the same time, in early June, Azalea Capital issued their Astrea IV bond.
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This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 700+ followers.

Last year around the same time, in early June, Azalea Capital issued their Astrea IV bond.

What was significant was that this was the first bond that Azalea Capital open a specific tranche that retail investors are able to purchase with smaller denomination. The reception for Azalea IV was very good.

And so now, 1 year later, Azalea Capital decide to release the Astrea V.

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Generating Perpetual Passive Income – Contrasting the American and British Way of Measuring Wealth (Guest Post)

Generating Perpetual Passive Income – Contrasting the American and British Way of Measuring Wealth (Guest Post)

There are two ways of measuring wealth.

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This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 700+ followers.

I didn’t realize this explicitly. I did note this implicitly.

The American Method of Measuring Wealth

The first way is the American method. In United States, when they refer to wealth, you tend to hear someone say, “He has a net worth of $1,500,000.”

What she means is that if this person in question sold her assets, settled all her debts and deposited the remainder of her money into a checking account in a particular bank.

This method of measuring wealth grew in popularity during the rise of Rockefeller and Carnegie.

We can call this net worth or net wealth (because people find the link of wealth to worth to be uncomfortable)

And you can compute this using the personal net worth here.

The British Method of Measuring Wealth

The second way is the concept very prevalent in Great Britain a century ago. In London, the financial capital of the world back then, you tend to hear someone say, “He has a private income of $100,000 per annul.”

This is referring to the household income generated by her portfolio of investments.

This income represents the money the owner could spend without touching her principal. According to the experts, this is not similar to the sustainable maximum withdrawal rate, which is the constant inflation adjusting method of withdrawing money.

Household Income Accentuates the Functional Utility of the Wealth Compared to the American Method of Determining Wealth

One draw back of the American method of measuring wealth is that some of the assets can be rather unproductive.

Here are some examples:

1.Richer people can own a piece of land that is valued at a very high price but cannot be easily sold. They might not be willing to sell it as it is a family heirloom, many family members vested interest determining what they should do with the piece of land

2.A landed property in land scarce Singapore is very valuable so the landed property, if liquidated can fetch a lot of money. However, in terms of how much it could rent for, it might not perform as well, in terms of per square foot net rent, compare to other forms of property. Against other form of investments it might not provide the same level of efficiency as well

3.You could own many different assets such as an expensive motorcycle, and cars. You should be able to liquidate them. However, if you lose your high tier job, a person might be caught in a frame of mind that cannot readily liquidate these assets and turn them into cash flow. They might be unwilling as well

The British method focus on the functional utility of your wealth. It allows you to see how the wealth can change your life.

The first thing is how much of your expenses, that you pay with your work income, can this stream of cash flow replace. This stream of cash flow increases your current overall purchasing power.

It allows you to:

1.wear nicer clothes

2.donate more to charity

3.expand your investment holdings

4.send your grand children to university

5.have better food

The savvy people would know what to do with a lump sum of wealth. Unfortunately, not many are that savvy. But if you have an inexhaustible stream of cash flow, it is easier to think how you could spend this money to help the people around you and yourself.

Most importantly, it limits you from making poor decisions with your money.

Based on sunk cost theory, if you wake up, you could always say “I do not care about what I do with the cash flow in the past, let me plan what I would do with the cash flow going forward”. If you have a lump sum and you erroneously spend it in an inappropriate way, it is not going to come back.

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Another Student Visit From NUS, NTU And Local Polytechnics!

Another Student Visit From NUS, NTU And Local Polytechnics!

Today, we had another opportunity to share our startup company’s values, business model and our team to a group of students from NUS, NTU and local polytechnics!

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These are the students who are currently pursuing their studies in Singapore. We’re very fortunate and privileged to have them visit our company!

The previous time was back in December, where we hosted students from National University Of Singapore!

We love to share our experiences, our startup working culture and meeting bright students. As the saying goes, “you will be successful if you help others to succeed”, we hope that in one way or another, we’ve inspired the students through our startup philosophy, and hope they had some key takeaways and enjoyed their visit with InvestingNote! 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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A Tale of Two REITS (Guest Post)

A Tale of Two REITS (Guest Post)

There are investors who like to base their Reit selection on two criterias: Price to Book Value and Dividend yield.
real-estate-singaporeThis post was originally posted here. The writer, D Wong is a community member on InvestingNote, with username known as Pizzaprata.

M Reit: $Mapletree Ind Tr(ME8U.SI)
S Reit: $Sabana Reit(M1GU.SI)

Based on the latest quarter’s results and closing prices:
M Reit’s P/B is 1.41 and yield is 5.7%
S Reit’s P/B is 0.76 and yield is 6.9%

From the above M Reit looks overpriced and S Reit looks attractive. Both Reits had their IPOs just one month apart in Oct/Nov 2010 with similar IPO prices of 0.93 and 0.917 respectively. That’s where the similarity ends, from the price performance chart below you can see that M Reit has doubled it’s share price since IPO while the other has dropped to less than half.

The reason is simple, M Reit has consistently improved it’s DPU every year whereas S Reit had to cut it’s DPU over the years. Therefore a good management track record is a more important criteria. So quality reits don’t come cheap and if you are hung up about P/B ratios you would never have bought M Reit as it has never dropped below its book value since IPO. Including dividends, M Reit’s total return is more than 200% so you would have missed a 3 bagger.

However past performance is no guarantee for future performance. You need to look at the Reits results in detail to see if the distributions are sustainable and what projects they are doing to increase DPU. Tomorrow I will reveal the Reits and why I accumulated M Reit last week although seasoned investors would have guessed which Reits I am talking about.

 

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TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates (Guest Post)

TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates (Guest Post)

May 2019’s a tough month, and no, there’s no new “Best. May. Ever” series… (Continuation of these:)

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This post was originally posted here. The writer, ThumbTackInvestor is a veteran community member and blogger on InvestingNote, with username known as ThumbTackInvestor and 2400+ followers.

Best. January. Ever.

Best. February. Ever.

Best. Mar……….. You Know The Drill!

TT Portfolio Performance & Review

Like most of everyone else, TTI’s portfolio ROI declined in May, alongside the volatility and market uncertainties from the trade wars.

SG Markets

Total portfolio value in SG markets is SGD 357,660.

Again, not much activity here, took profit on a tiny itsy bit of Geo Energy to redeploy into US markets, otherwise, holdings remain the same. I’m also not really spending much time looking in these waters.

Bonds

Again, nothing much to talk about here,the bond portfolio is approximately SGD 550,000.The intention is to leave all coupons to compound, with next to zero activity here.

US / Global Markets

ROI has declined from April 2019’s 40.61%, to the current 37.19% YTD.

Net Quantum investment gains YTD (excluding any capital injections/withdrawals) is thus USD 164,707.26

Current top/large winners include Wirecard, Avenue Therapeutics, Tesla shorts, JD.com shorts and a small position in the volatility derivative VXX.

The 2 biggest/most irritating losers are Centurylink (CTL) and Chesapeake Energy (CHK). I remain fairly optimistic about CTL, I just think the management needs to show a single quarter of revenue gain or even, just stabilization, and the share price would pop through the roof. In the meantime, I’m collecting like a 8% yield after the witholding taxes.

CHK on the other hand, is dead in the water. While Lawler has done a fantastic job deleveraging over the past couple of years, this may be too mammoth a task for him. Or he may need several years more. There’s hardly any difference in both scenarios.

Overall, I’m pretty pleased with how things are turning out for my US portfolio. Despite a drop of around 5% due to the trade wars in May, the gap between my ROI and the passive benchmarks is increasing, and the 3 indices I compare against are all at the 9-10% mark, and that puts my ROI this year at 3x that of mere mortals.

Alongside the huge volatility in May, the USD-SGD pairing also showed massive movements.

I’ve always said I’m no forex expert.

I don’t even think there’s such a thing.

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How I Am Planning For An Early Retirement In Singapore (Guest Post)

How I Am Planning For An Early Retirement In Singapore (Guest Post)

Most people aspire to achieve financial stability to enjoy their retirement with peace of mind. My dream is no different from others. Since I entered the workforce, I have been working towards achieving financial independence before the age of 35 and having an early retirement. The journey which I took has pushed me out of my comfort zones at times, and it’s tough.

Thankfully, my wife has been supportive of my decisions and goal.

Happy woman on the sunset in nature in summer with open hands

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and 1700+ followers.

When we had our first child in 2014, my wife had to quit her job to care for our son and deal with the household chores. This decision had a direct impact on our savings and lifestyle. It was not easy to manage the additional expenses with a single income.

We began to tweak our strategies. Unnecessary spending was reduced. We also started to save aggressively and managed to save about 40% of the income over time.

But savings alone will not be enough to achieve our goal.

The various investments I had made were relooked at to find ways to grow our income. For it to be sustainable, we need our income to grow at a rate of 8% per annum. I looked at the various options that were available and performed allocations based on prevailing market conditions.

These are some of the investment tools which I currently have on top of my current equity portfolio:

SPDR Straits Times Index ETF

The SPDR STI ETF was introduced in 2002 and is managed by State Street Global Advisors, while the Nikko AM STI ETF was introduced later in 2009 and is managed by Nikko Asset Management.

The main benefit of investing in the STI ETF is that the investor gets to gain exposure to the 30 blue chip constituents of the benchmark index through a single purchase at a very low cost.

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