Tuesday, February 11, 2020

My Portfolio Trail (17-year Game from 1st Paycheck till Semifire)

Hi SFFians,

Some readers have requested to see in details on how I grew my investment portfolio over last 17 years to my net worth today (from age 25 to 42). There is no hard science or magic behind this.

Some background pointers on my source of funds:
  1.  I can't print money. I earn money the old fashioned way - work my rank up in a banking career.
  2.  I do not have a rich wife/ sugar mommy to fund me - every penny is earned through my own sweat.
  3. I do not have any side gigs, though I wish to sell my skills there to build a side business. However, time is limited as most of time is burnt at work, further studies and some family time
Here's a table on my net savings (arising from salary and bonuses after deducting all expenses), passive income (mainly dividend income and bond/ FD interests) over the last 17 years starting from the day I got my first paycheck. I only started the precise tracking over the last 7 years which I find it more meaningful to manage different parts of my investments using Excel. I spent first 12 years in full time active banking career before I switched to semi-FIRE mode doing freelance training work from Year 2015 onward (highlighted in yellow). 


Wow, as you can see, I hit my 1st million in Year 2012 after working for 10 hard years in investment banking and survived a few big crisis along the way, mainly SARS and GFC. 

Year 2003
I started investing actively in 2003 SARS period at depressed prices and mainly buy and hold blue-chip names. I hardly trade as I am focused on my bank training as a management trainee in a local bank learning the ropes and tackling political issues affecting me.

Year 2004
I started to ballot for all IPOs online/ ATMs to grab a piece of the hot frenzy IPOs which can earn me a few hundreds/ thousands within a few days. Typically, I am getting 1-2 successful hits per month. Nice lottery wins. I did some S-chip trading but with a mixed result as I can win big and lose big here and there. Very stressful and not fruitful, so I decided not to trade too much that affects my lifestyle.

Year 2005 - 2007
My salary jumped by 40% as I jumped from a local bank to an offshore bank. I knew I need to speed up my accumulation process with a high savings and investment rate. I focus mainly on government-linked companies such as Singtel, Singpost, SGX etc which I enjoyed both good dividends and capital gains without much monitoring.

Year 2008 -2009
GFC landed a big bomb on my portfolio. I remembered vividly that my portfolio declined by 10% and I decided to exit entirely. I was 100% cash right after I analysed that the sub-prime problem has contagion effect worldwide. I played the safest card. In addition, I opened a CFD account and shorted some pennies stocks and made more than 30k over 6 months of rapid decline. When Lehman Brothers landed in bankruptcy, I know for sure that it was doom day, be it the financial market and my job then. I do worry about the possible retrenchment to come, and indeed, my boss was immediately fired and left in a day - merciless. Good thing that my paycheck was not fat, and so I survived one year plus of no deals to chase, but many debt restructuring work to be done, a.k.a cleaning shit.

Year 2010 - 2013
Things started to stabilize and I see some dim light at the tunnel of investing. Started my few buys in Singtel, SPH, Starhub, M1, Singpost, CMT to form my core portfolio. The thinking was simple, they are somewhat Singapore-linked and won't collapse with that quasi support element. I played the safe card while expected the market to recover from its wounds. When the indexes recovered, I keep adding without selling with savings and bonuses, plus reinvesting of my dividends.

Year 2014
I remembered my portfolio keep growing year-on-year to a good level that I can "fire" my boss anytime. With $1.8 million in my bag and a running yield of around 5+%, I am drawing a passive paycheck of 90k/ year or $7500/ month. Sounds good enough for my needs, and support my parents into their retirement days. My portfolio was heavy on mega REITs and Singapore-linked blue chips, a very retiree-type of portfolio. I had no bond/ FDs on hand, almost 100% into stocks. My parents are retired by then, truly "jobless" and doing their much deserved travelling around. I was paying them around $2k/ month to support their lifestyle (including house expenses + car + grocery).

I took the plunge to quit and became a freelance trainer. Indeed, I jumped blindly into this dark pit without thinking much on the downsides of a freelancer. No income certainly, no jobs visibility and constantly waiting for calls to get jobs...but I knew I wanted a lot of time to find myself back and to start a family.

Year 2015 - 2016
First year as a freelancer, not earning much. My active paycheck drop by 65% in the first year, getting 1/3 active pay was no joke. It took a while to adjust mentally. The good part was I have lots of time to travel, read, explore, meet people and finding my interests and be fit.

The 2015–16 stock market selloff, also known as The Great Fall of China, was the period of decline in the value of stock prices globally that occurred between June 2015 to June 2016. It included the 2015–16 Chinese stock market turbulence, in which the SSE Composite Index fell 43% in just over 2 months between June 2015 and August 2015. Investors sold shares globally as a result of slowing growth in the GDP of China, a fall in petroleum prices, the Greek debt default in June 2015, combined with the effects of the end of quantitative easing in the United States in October 2014.

I didn't sell any positions, hanging on. I have some warchest and keep adding on aggressively on dividend stocks especially REITs which suffered massive losses. I stockpiled a lot on FCT, CMT, CRCT, AREIT, AIMS Apac, Viva, First Reit, Parkway Reit and M-REITs etc. I repeated my process of what I believed in amid the noises. Invest, grab dividends, reinvest, keep some cash, and buy more when they dipped. Repeat this throughout the year to gain more and more, non-stop. I called it the velocity of wealth accumulation - keep spinning to get more.

Year 2017 - now
I did nothing much different, just a bit more active trading to take advantage of market volatility. One common thing I do is to keep a watchlist of my favourite solid/ value stocks which are dividend-paying. Based on both FA and TA, I will put my desired buy and sell prices to each stock to monitor them. When opportunities present, I will buy/ sell them to make some good short-term alpha. If prices didn't move, I keep them to enjoy their dividends. I often manage around 30-40 stocks in one go, and 80% are deep in the money. Year 2018 saw a slew of retail bonds coming, so I use some spare cash to buy them for some good coupons. I do flipped some of them out when I saw a good price spike which compressed my yields to very low (near 2%) and rotate to other higher-yielders. I measured my stocks and bonds on a total return basis (dividend return + expected capital gains), but I am not too anal about the precision.

Remember - investing is both science and art at the same time. No matter how solid your quantitative analysis can be with sophisticated models, it cannot replace the qualitative analysis of the industry/ business/ management etc.

I have a few key strategies to share, but to be very detailed, I need another post to write more if my readers are deeply interested. I believe some of you may want to learn and use them actively to help to gain more alpha in the market. Keep a lookout!













6 comments:

  1. JustHappy
    "Wow Bro, very interesting back story - hardworking plus a very steady, disciplined approach throughout the years. Your story will bring inspirations to many! Thanks for sharing and keep it up and wishing you a good future ahead :)"

    ReplyDelete
  2. Wow! Congrats, impressive IRR and net worth!! Thanks for sharing the detail of your journey...hope better year for us in 2020 and the world could survive this new coronavirus...cheers

    ReplyDelete
  3. like ASSI, you are our role model and aspiration !

    ReplyDelete
  4. Very impressive networth growth!
    What is net savings? Is it the amount u saved and not deployed to the market? Just curious on how u define net savings :p

    ReplyDelete
    Replies
    1. Net savings is defined as salary + bonus - expenses. Yes, they are fully deployed into the market to generate dividends and capital gains!

      Delete
  5. Very nice write up and very inspiring to our fallow retail investors here. Thanks and hope all of us here can follow your footsteps and becoming financially freedom fishes swimming in the big ocean!

    ReplyDelete