A quick snapshot of my portfolio's year-on-year performance (accurate as of 30 Dec 2016)
- Market value of portfolio has increased almost 14.62% from S$301k to S$345k. Pure capital appreciation represents 5.32% of that increment while the remaining 9.3% represents fresh injection of funds.
- Total annual dividends collected has decreased 8% from S$16, 835 to S$15, 492 as I subscribed to significant amounts of SCRIPS/DRIPS offered by DBS, OCBC, MLT and RMG in 2016. If I had taken dividends instead, the total amount of dividends collected this year would have increased marginally to S$17, 270, which is still way off the target I made last year.
- Total Returns: $16k (capital appreciation) + $15,492 (dividends) = S$31,492
Walking A Thin Line in 2016
In 2016, I humbly re-learnt an important lesson from Mr Market - a stock is only as good as its fundamentals at the end of the day. The financial figures don't lie, especially over a few quarters. This prompted me to divest my Starhub, M1 and Cache positions completely. Fortunately, the dividends that I collected from these companies over the years have helped me to get out while barely in the black. My decision turned out to be right as their prices continued to tumble throughout 2016.
On the other side of the coin, my 'buy on dips' strategy for DBS, OCBC and UOB worked out pretty well. Their fundamentals remain robust despite the temporary weakness in the O&G, business and property loan sectors. I found myself walking a thin line when I had to make a judgement call. Questions like 'Is this a short-term scare?' 'Is a reversal of fortunes remotely possible?' 'Has the fundamentals changed permanently?' would flow into my mind. Navigating through seismic global events such as Brexit and Trump's election victory certainly did not make it any easier.
2017 Strategy - Passive Income Longevity
I would not allow the Fed rate hike cycle to derail my dividend investing style in 2017. In a world with low returns and uncertain markets, I shall maintain a sharp focus on high-quality companies with healthy balance sheets, sustainable earnings and dividend payouts in defensive sectors such as healthcare. In my opinion, global macro-economic growth will remain subdued with geo-political tensions arising from elections in France and Germany, official start of Brexit negotiations and Trump's first year in the White House. If the banking crisis currently unfolding in Italy requires a bailout package from EU a few months from now, will Germany and France (1st & 2nd largest economies in EU) have the political will to save Italy in the middle of an election campaign? Knowing that using taxpayers' money to help Italy is likely to lose them votes, the leaders of France and Germany probably would not want to put their political careers at risk. Or at the very least, they would drag their feet and delay financial assistance to Italy until their elections are concluded. By then, the problem might have deteriorated into a full-blown crisis. Remember the Greek sovereign debt crisis (Grexit) back in 2012 and 2014, anyone?
Projected Dividend Income 2017 - Planting the seeds today!
- Singtel: S$1, 400
- DBS: S$1, 254
- OCBC: S$1, 094
- SATS: S$640
- Raffles Medical Group: S$150
- Sheng Siong: S$227
- Ascendas REIT: S$1, 078
- CapitaLand Mall Trust: S$728
- Frasers Centrepoint Trust: S$1, 680
- Suntec REIT: S$600
- Mapletree Commercial Trust: S$320
- Mapletree Logistics Trust: S$2, 405
- Mapletree Greater China Commercial Trust: S$870
- AIMS AMP: S$3, 300
- Keppel DC REIT: S$668
- Parkway Life REIT: S$960
- Frasers Logistics & Industrial Trust: S$832
Projected Average Monthly Dividends: S$1, 517
Projected Average Daily Dividends: S$49.88
Merry Christmas and A Happy New Year!