Mid August review of my portfolio, records of my recent actions and justifications.

 

First off, some rambling...

Between having a stable, meaningful dividend portfolio I also felt like I had to make up for lost time due to the relatively late start to savings and investment game. Starting from 2019, I have allocated a portion of my resources to start a position for growth. For now I am satisfied with the weightage, with my dividend: growth at 2:1 for the near term. (current ratio is at 4:1), progress is better than expected and I should be able to hit my near term portfolio aum goal earlier than planned.

Buy & Sell

I added some AIT due to the positive results, in hindsight I could have done a quick trade before adding again if I wished to once the excitement die down (locals are a forgetful bunch) but nonetheless I was too impatient and bought it at market price on opening. Mid-long term wise it is still a good purchase and I am looking forward to receiving meaningful income and expect its dpu growth.

Sold AEM after deliberating for a couple of days at 30% profit.  I didn’t get it cheap and although I may miss out on its potential splits / issues the recycling allows me to replenish some cash and this is key especially in frothy market conditions this year.

At the same time, I resisted selling UMS for its yield still falls within my acceptable range of >5%. Being a good year for semicon industry it should be able to provide great income for the upcoming year too. 

Opted for cash this time for CRCT due to the weightage in my portfolio plus I am having Lendlease reit too. Both are affected negatively by COVID-19 and I would expect the price to weaken, again replenish cash for deployment.

Initiated a small position in Brookfield Renewable Energy (BEP), it checks a few boxes of stable income, dpu growth, sustainable payout, and more importantly it is a hedge for the future trends which I identified as potential challenges for old world business (veganism/sustainability/animal cruelty/feminism/racism/sexuality orientation) Going forward, I would continue to identify business or themes which provides a natural hedge towards consumer and social trends changes for the foreseeable 20 years to future proof my portfolio. Sustainable energy is the first one which I felt is reasonably addressable from a business point of view, we shall see.

Portfolio review

Yield of portfolio has improved but still far from my target of 6.5% now that most stocks / reits have ran up due to the QEI I would either have to take more risk by entering subpar reits or buy beaten down industries and hope they survive (neither is a good idea) I am looking at some HYBs and if they provide at least 6% it may be a reasonable entry. Also this will serve to prevent such a big drawdown during the next blackswan (my portfolio got a -35% during the march period). I have also learnt the beauty of sustainable dividends vs purely high year to date dividends.

Thematic ETF play has been the new weapon of choice for me this year. It has absolutely outperformed the rest of my portfolio and my local market of cos I would underperform the Nasdaq and stock pickers for tech sector but being far from markets and without reliable network, I think thematic ETF play style is the most risk adjusted way to get alpha for myself. I just need to identify the trends, basic long term potential , all of which are more qualitative analysis and quantitative. I reduced the need for technical analysis to a bare minimum.

After the V

The macro environment of the last few months from February to June only be only described as V shaped roller coaster ride. After the huge crash on 17 March, the markets recovered all the way to close to the recent high for major markets.

Despite plans made to deploy my funds, the main bulk of the purchases were actually made in early April to early May. Not really cheap. Just to make a note, these is the following deployment of my allocated funds:

• March - 25%
• April - 35%
• May - 30%
• June / July - 10%

I did not manage to catch absolute lows but still managed to come out having the portfolio at minor +-ve prior to July drop.

Keeping this short, as I didnt purchase in last 3 weeks of July except to increase stakes in ARKK and AIT reit.

I felt that two decisions which I made gave me boosted confidence of my judgement and assurance that I can "do it":

• did not listen to "hot tips" and sell off everything in Feb. In hindsight i could have made money, but this will not give my the confidence booster i need.  Nothing is better than doing it yourself as the saying goes.
• begun to establish position for the long term in ETF which i have been eyeing as well as purchasing several counters with marco enviroment view instead of stock metrics 

Currently, portfolio stands at breakeven... it was slightly up prior to the end July drops (-5% across for the week for major sti stocks). There are now discussions on 2nd wave induced drop, bad results.. but this should be factored in. I am looking to dispose MNACT due to deteriorating fundamentals of HK as a state, (should have done so at quick profit at 95c but that was when its situation wasnt so bad in June). Redeployment of  office reit shares to something that can survive in the future economy as I already have enough exposure to office buildings via AReit/ AIT . 

Looking forward for the next 4 months to end the year!