Saturday, December 11, 2010

Kaminsky's Call: Hedge Funds Do Worse Than Market? - CNBC

Kaminsky's Call: Hedge Funds Do Worse Than Market? - CNBC

More shockingly, the study, aptly titled "Higher Risk, Lower Returns: What Hedge Fund Investors Really Earn," found that simply buying and holding stocks over that period produced even better returns.


Something I have experienced and probably will never return to hedge fund or mutual fund investing again.

Thursday, November 11, 2010

Investment Banking Valuation

How assets are valued - spoof video reveals shonky banking practices :) Clicked on other videos of the same series to discover banking motivations and Forecasting Techniques?

Thursday, November 4, 2010

Portfolio Update October 2010

2010 Year to date (YTD) Return
Portfolio 5.22%
Equity(Include Funds)  8.79%
Direct Shareholding12.46%
Dividend/Coupon/Interest received for 2010 YTD$156,959

Absolute Return Since Nov 2007
Portfolio 10.38%
Equity(Include Funds) 31.01%
Direct shareholding31.25%


Just a little peek into my equities performance (since Nov 2007) grouped by bourses.
1) NYSE - 26.97%
2) SGX    - 41.41%
3) HKEX - 33.33%
4) ASX    - 11.79%


Best performer so far is SGX & HKEX as I invested a bulk of the funds earlier in 2009 and subsequently into NYSE and ASX. Though appreciation of Aussie would have tip the ASX % more into the 20% region for me.

No correction so far of desired magnitude(touching indexes support lines) to partake in more equities. Hopefully a correction will come soon, though I wouldn't bet my horses on it with the impending US govt QE will keep the market running (Market will rely on past experience of QE and draw the conclusion that it will explode upwards like 2009). For the local scene, Singapore's drumming up of its own Election (as can be seen with the recent increased coverage of Election matters) will keep spirits high. Recent M&A or "intended acquisition" globally and locally (of noticeable interest is the high profile Peter Lim) might mean that most smart money are betting that the good times are back big time. No one will want to do acquisition at peak (ok.. maybe some sovereign wealth funds like that..keke).. But let's trust the smart money.. it's their money at stake.

So what are the best risk/reward for the upcoming year  (assuming bull run continues)? I would guess it will be the small & mid-caps. Everything goes up in a bull market but the magnitude of rise will be higher with the small and mid-caps than the blue chips. M&A activities is usually value-destroying for the blue-chips(with their hoards of cash for M&A citing synergy and strategic fit but often at a premium) and value-creating for the small/mid-caps (usually at the other end of the acquisition). That's my guess.

Disclaimer : I'm not adding more to equities unless there is a correction. I'm already vested 60%, no point adding more with no increased in the reward part of the risk/reward ratio.

Sunday, October 10, 2010

What will you do with $1 million dollar?

This was a question posted by another blogger @http://sgboleh.blogspot.com/2010/09/what-will-you-do-with-1-million-dollar.html 

This is what I would do with the $1million dollars.

When you come into the money, refrain from spending it on frivolous items you yearn for(Audi) or your family desires (holidays) with the money. These are expenses, you whittle down your money just like that? Poof... memories are forever, but it is only for once. What if you could repeat the memories for many times more?

Use "Delayed Gratification" instead.

Instead of thinking of how to spend the money, think of how to make every penny of the money work for you. Your business is a good idea (you mentioned $100k?). Though, would the business be able to break even or make a profit in the first year. What is the probability - calculate that. Now, what is the probability of getting a 4-5% yield in a year thru' investing? Is it higher? If after you assessed the probability and find the business to be more highly probable (your own confidence and knowledge of the business model and environment), then go ahead and plonked some money into the business.

However, if you think the probability of getting 4-5% yield on your stocks or bonds or properties are higher, then probably, you should put spread the money out into investments that yield 4-5%. After a year, you will get $40-50k. Why not use the $40-50k to start your business then in the first year.

For the family holidays, delay the gratification till the 2nd year, where another $40-50k, comes in.

For the audi (a "selfish" toy for only 1 person to enjoy :p ), you should delay the gratification till your investments are showing results more or equal to the costs of the car. That is, if you made $130k on your principal, you buy the car (but i would still use a 50% car loan.. that is just me as I believe the $65k balance can be invested and reap more than the interest on the loan).

What I do for my own portfolio is the same. I forbid myself from touching the principal and delays gratifications of all "desired but not needed" items till my portfolio generates enough for me to afford them. Any excess is re-invested to make more money for me to enjoy more passive income the year after (which indirectly increases my budget for gratifications I delayed). Of course, it is even better if you can delay the purchase of the items indefinitely and get more capital to invest.

Summarizing what I think people who come into the money should do : Learn to invest for yourself and Never ever touch the principal for spendings classified as expenses. Delay the gratifications till your profits on the principal is enough for the "desired but not needed" items and you will get a more sustainable way of creating more loving memories with your loved ones.

Monday, October 4, 2010

Portfolio Update September 2010

2010 Year to date (YTD) Return
Portfolio 3.27%
Equity(Include Funds)  4.36%
Direct Shareholding 7.77%
Dividend/Coupon/Interest received for 2010 YTD$139,593
Absolute Return Since Nov 2007
Portfolio 8.33%
Equity(Include Funds) 25.57%
Direct shareholding25.67%
The market, thus far, refused to go down drastically on bad news but charged ahead on NOT SO BAD News. I am still a believer of the recovery and the market is showing the way (usually, market leads the economy..). Low interest rate is good for the market as investors have no safe alternative(cash) to park their money and would move to riskier assets like properties and equities or carry-trade a foreign currency to seek yield. Staying vested in equities and possibly will be increasing the allocation when a correction occurs soon.
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Thursday, September 2, 2010

Portfolio Update August 2010

2010 Year to date (YTD) Return
Portfolio -1.24%
Equity(Include Funds)  -0.39%
Direct Shareholding 2.46%
Dividend/Coupon/Interest received 2010 YTD$115,981
Absolute Return Since Nov 2007
Portfolio 3.26%
Equity(Include Funds) 18.06%
Direct shareholding19.17%
I would think the economy is still in recovery mode and market is in a stage of confidence building and accumulation for the next leg up. Staying vested in equities, though, I have allocated more cash into Australian short-term deposit of 1-3months tenure. I find having more cash, even if it earns a meager return of 4.5%, allows me to sleep better at night  and not worrying too much on the fluctuation of the equity portfolio.

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Saturday, July 24, 2010

Property Prices and Investment Decisions

With reference to a discussion on the suitability of property as an asset class in investment. Someone quoted the Bubble decade and slump of property prices in Japan which have not recovered yet while I find that property is a suitable investment vehicle for long-term.

Yes, when you do investing, you are pitching your judgement call against or with the market.

We make our judgement call using data we obtained and sometimes extrapolate to see what we want to see.

I could also extrapolate similarly by looking at the chart below. For me, I am looking at the chart and see a similar pattern of the blue line and the purple line (since you also using pattern recognition for your jap bubble chart). When I look at the chart, I think we are at the start of a great bull run again (similar to 1990).

But for someone else, he is probably looking at the chart and see us at the start of the 1997 Peak which took 10yrs (in 2007) to retake its peak and subsequently overtook it in July 2010. So for that person, his pattern recognition is that of 1997 peak and so he stay out of the market.

That's why there is buyer willing to take from the seller. People see different things from the same chart. When doing investing, you cannot be right all the time. Whenever you made a judgement call on the market and take action, you must have figured out the downside invovled and how to mitigate it or whether you can survive it. If you have taken care of the downside, the upside will take care of itself.

And by the way, if you think we have a property market about to go into a 10yrs slump. Then probably stock market is not going to do any better.

Chart Source : The religion of Propertism as preached by a property guru in a property forum



















Disclaimer : we are using charts pattern only.. but property prices and movement have a lot more to do with :-
1) The strength of the global & local economy
2) The power of inflation/deflation
3) The tightening/easing of monetary policy
4) The demand/supply

So when making property investment decision, remember to make your judgement call on the above factors and then deduce where property prices are headed.

Short-term (<10yrs) - we might be at 1997 peak.
Long-term (>20yrs) - we might be at the start of the 1990 bull run.
It's your perspective and time horizon and your faith in the religion of propertism.

Sunday, July 18, 2010

My own opinion on funds

The "bell curve"—the probability den...Image via Wikipedia
[QUOTE=sXXX]whoa.. .. i read ur blog too... i learnt in sch from my lecturers that only extremely sophiscated investors can invest in hedge funds... as the fund managers are really tip top in the investment arena and hedge funds will almost definitely provide absolute returns year on year... so from ur experience, not that true after all, rite?[/QUOTE]




Why hedge funds have so much allure to people? :)

Most get-rich course will tell you that they invest in hedge funds and get absolute returns so that the trainer built their credibility with you. You think they are very sophiscated investors since they have access to things you cannot invest. Human nature.. When you cannot have it, you will yearn for it.

Most rich people want to invest in hedge funds coz it sounds good to tell people I put my money in hedge funds or private funds. Again, coz most retail investors cannot do that, they think it's good.

Then ..there's the people who have not invest in hedge funds or private funds but are educated or trained by their managers to tell you hedge funds returns are good etc etc. So when your lecturer tell you that, maybe he is just reading it from the literature or he could have really good access? I don't know. You have to ask him.

Ok, on to the hedge funds...
Absolute returns ? That is the allure of hedge funds, they promised absolute returns 'coz they explained they can short market/securities or long market or can hedge etc etc. But go do some research and see whether they really have absolute returns every year. Or why not you look at a chart of a hedge fund and see if you had invested in a high point, how long would you break even. Again, I think entry price is very important to your investing success. Then look at the chart of some blue-chips stocks and see whether you can get the break-even point earlier or later than the hedge funds. If both are around the same break-even period, are the hedge fund managers really giving you the "Alpha" you are paying 2/20(2% mgmt, 20% profit sharing) for?

I am not saying there is no such hedge funds around, but really, like all things, the bell curve in statistics applies. There are really bad hedge fund managers and there are really in-between managers and there will be very good hedge fund managers. You need to go find out the cream of the crop where you can get your money's worth. If not, why are you paying so much fees for? I think the rest you can do better by investing in your own stock portfolio which generates income too :)

A few good ones I know of are mainly in the US. The John Paulson funds, The Seth Klarman fund, The Bruce Berkowitz fund. But most are already closed and only open to institutional investors, the family offices and the super rich. It's not for the peasants millionaires, myself included :p

But if you die die want to be in a hedge fund, there are local and overseas offerings that goes for a lot less as they are just starting up or could be they are lousy as hell. Example, in singapore, you can start a hedge fund but can only accept money from max of 30 accreditated investors and most probably you can get away with even a $150k investment(or even less since the pre-requsite is accreditated investors but nothing is said of the investment amount) for each investor for a $4.5mil seed capital. I manage more than that and I can call myself a hedge fund manager if I wanted to :)

For the not so rich, there are funds of hedge funds that you can invest in as long as you are an accreditated investor. The rules for accreditated investor again differs from country to country. For example, in HK, retail investors can invest in fund of hedge funds for a minimum starting of USD$10,000. In singapore, I believe those financial planners can help you get started in a fund of hedge funds for SGD$20,000. But fund of hedge funds are not so good as it adds another additional layer of charges on top. This is because the fund of hedge funds(fof) managers will invest into individual hedge funds and his value-add is he is adept at picking the performing hedge funds (or so they want to lead you to believe:).

Then there's the managed funds from private banks. That one goes for a lot more and minimum entry is USD$250K per fund. Again, I have shared my experience of that. I am sure there are good funds out there. I just don't know about it. So I can only say probably the bell curve applies here as with in everything in life. :)

Private equity funds? For the private banks, you can go in for USD$500K with liquidity only when certain events occurred or min. with 5yrs holding period or . That's what I've been told and I was not interested since it is really too illiquid for my liking. This one probably could yield good results for those very high networth individuals. I'm not one of them.

Or you can be involved in those investors grouping together to buy a smallish company and they say they are doing private equity deals (which is true no doubt). I've come across people boasting of being involved in private equity investments and the company they acquired is less <$200k. So if got 5 investor, each one pay only $50k. But of course, does not mean the returns will be lousy. It could be a good deal if you can find $200k business that generates income(not revenue) of $100k per year.

Ok, to conclude my off the cuff entry, I would say not all funds are bad, not all deals are bad. If you do find one good hedge fund, congrats to you and do let me know :) It's with everything in life that bell curve applies and due diligence and critical thinking is needed in every investment you do. Just look at how many people sign up for those "millionaire" workshops or investments scheme that promised you guaranteed returns and yet people are signing up blindly to find out later on they are all duds.

Disclaimer : One man's meat is another man's poison. Just like property investing, some say mass market is good, some say prime is the only way to go, some say buy 999/Freehold only, others say 99LH near MRT is good.



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Friday, July 2, 2010

Bold Call - Doug Kass Called the Bottom!

Douglas Kass (DougKass) on Twitter
DougKass

1. death cross is b.s. indicator.. more on that tomorrow morning $ about 12 hours ago via TweetDeck
2. Emotional Abuse! http://bit.ly/9fNFOX $ about 13 hours ago via TweetDeck
3. i beleive today will mark a classic bottom $ about 14 hours ago via TweetDeck

He was also the one who called the bottom in 2009. Two times lucky? Hopefully .... for the benefit of my portfolio :)


Thursday, July 1, 2010

Portfolio Update June 2010


2010 Year to date (YTD) Return
Portfolio
-4.61%
Equity(Include Funds) 
-3.84%
Direct Shareholding
-2.62%
Dividend/Coupon/Interest received 2010 YTD
$91,676

Absolute Return Since Nov 2007
Portfolio -1.96%
Equity(Include Funds) 12.70%
Direct shareholding13.15%


Another month of uncertainty and zero returns. My performance have been dismal as I have basically not earned anything (after taking dividends into account) after 3 years in the market.

The purpose of tracking your returns is to see how you fare against the benchmark. In this case, if we benchmark to the indices(mine is a weighted composite of HSI, STI, ASX, DOW), I might have outperformed them relatively (like almost all fund managers who tell you they outperform the market). However, investors should go for absolute returns, not relative returns. That is we compare our returns to what you would have gotten if you had put your money into almost risk-free investments like Deposits and govt/investment grade bonds.  On that count, I've failed thus far with a portfolio return of -1.96%.

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Tuesday, June 1, 2010

Portfolio Update May 2010



2010 Year to date (YTD) Return
Portfolio
-4.90%
Equity(Include Funds) 
-3.93%
Direct Shareholding
-2.59%
Dividend/Coupon/Interest received for 2010
$64,699

Absolute Return Since Nov 2007
Portfolio -0.78%
Equity(Include Funds) 12.28%
Direct shareholding12.80%


1) A market with very conflicting views. Positive economic data globally coupled with negative news about European Debt Contagion and Tensions arising in the korean peninsular and Israel/Iran Straits. From a Technical perspective, the market is definitely capabale of breaching and morphing into a bear market as most indexes have touched the major trend lines. However, I still believe this is the correction that is due and the bull market will resume soon. Though I will not buy further on dips as I believe Cash holdings are necessary for those unexpected events. Just keep a watch out now!


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Tuesday, May 25, 2010

Portfolio Hedging with VXX

Anyang, South Korea, Orderly Tent and UNK. sol...Image via Wikipedia
Risk aversion is high and sentiments bearish. Markets are pricing in the risk of contagion in europe as Spain just saved a local bank. War creates more fear as tensions are arising in North/South Korea and Iran/Israel with US military increasing their prescene in both region. 

One of the ETF to consider for portfolio hedging in times of volatility is VXX (the short-term futures ETN for VIX). If it crashes, this one is a potential >50% gain (though those who bought in March/April would have already gotten 100% ..

If it doesn't, the portfolio value will go up and VXX goes down .. but will likely negate and breakeven.

This trade is more for those who like to keep the portfolio intact and collect dividends but want to offset some of the losses if the market do crash.

More information can be found at http://www.ipathetn.com/VXX-overview.jsp



Some related articles about VIX by other traders/investors.

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Friday, May 7, 2010

How market perception feeds itself

How a market crashes | Analysis & Opinion |
How a market crashes
May 6, 2010 16:30 EDT


How can the market go, on a random Thursday afternoon, completely insane? The story which is emerging centers on old, boring Procter & Gamble, as can be seen in the PG chart from this afternoon.

pgtips.tiff Look at the volume chart: what you see here is a big block of shares trading in P&G at around 2:30, followed by another huge block right before the market crashed. And then, nothing. The two big blocks were probably sell orders, which were big enough to blow through all the bids in the market. As Henry Blodget says, “for a few minutes, buyers just disappeared”.

It’s worth noting here that none of this data is particularly reliable: the Nasdaq is reportedly confirming that there were technical problems with the P&G quote, and there are persistent rumors of a “fat finger” trade as well, which I’m not sure that I believe.


This was what I was talking about. Short-term, market sentiments determines the price. Long-term, fundamentals determines the value. All it takes is market perception to take a turn for the worse, someone starts selling, market participants see the panic selling and joins in the fray (either because investors emotions of fear or traders taking advantage of short-selling). Computer programs see a certain decline in price and starts selling.. and the death spiral begins and feeds itself.

As I am still in the money for my portfolio, I will monitor the situation and hopefully, this weekend, ECB do something instead of saying something and help change market perception.

Sunday, May 2, 2010

Portfolio Update April 2010



2010 Year to date (YTD) Return
Portfolio
3.95%
Equity(Include Funds) 
4.29%
Direct Shareholding
7.42%
Dividend/Coupon/Interest received for 2010
$42,981

Absolute Return Since Nov 2007
Portfolio 9.04%
Equity(Include Funds) 20.31%
Direct shareholding22.43%


1) Fear in the market once more. The Greece issue have brought up fear of a contagion on sovereign debts. Defaults are not likely as government interventions have proven to be the defacto way of solving monetary issues. Debt issuances thru' a fiat currency system supported by the Euro is sound as long as Greece guarantees the debt payment thru' taxations and prudent financial measures (that's why Euro wants Greece to adopt austerity measures). Though inflation becomes a side-effect as paper money losses its value.  I am still long in the market as I believe this is possibly a correction in the on-going bull. But I will stick to proper money management strategy and adhere to my trailing cut loss for my positions. Most times, market perception creates trend we can either go against or go along with. 


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Tuesday, April 6, 2010

Portfolio Update March 2010



2010 Year to date (YTD) Return
Portfolio
5.08%
Equity(Include Funds) 
4.64%
Direct Shareholding
8.20%
Dividend/Coupon/Interest received for 2010
$30,894

Absolute Return Since Nov 2007
Portfolio 10.15%
Equity(Include Funds) 19.88%
Direct shareholding23.31%


1) You start seeing monetary tightening by governments thru' interest rate movements. This is nothing to be afraid of as this is the initial tightening phase from a period of excess liquidity and low interest rate. Tightening of interest rate will only affect investment sentiments when interest rate is at normal levels but start moving up. On the contrary, interest rate tightening is a form of indication by governments that the economy is indeed in recovery mode and this is reason to be in equities still.

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Wednesday, March 3, 2010

Portfolio Update February 2010



2010 Year to date (YTD) Return
Portfolio
0.31%
Equity(Include Funds) 
-0.47%
Direct Shareholding
2.08%
Dividend/Coupon/Interest received for 2010
$15,077

Absolute Return Since Nov 2007
Portfolio 5.28%
Equity(Include Funds) 13.90%
Direct shareholding16.18%




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Sunday, February 7, 2010

Portfolio Update January 2010



2010 Year to date (YTD) Return
Portfolio
-3.03%
Equity(Include Funds) 
-4.48%
Direct Shareholding
-2.88%
Dividend/Coupon/Interest received for 2010
$2,584

Absolute Return Since Nov 2007
Portfolio 2.27%
Equity(Include Funds) 9.19%
Direct shareholding10.38%



1) Add on to my existing positions in some companies by recycling the capital recovered from selling my funds. From what i see so far, it is unnecessary to reduce exposure to equities as I still believe this is a healthy correction and the market will be higher than it is now in 6 months time.


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Thursday, January 21, 2010

My experience with funds


My experience with hedge funds and managed account:-
1) underperformed in bull market and outperformed in bear market RELATIVELY (not Absolute returns).

2) redemption typically takes 3-6mths to complete and is subject to their terms. In 2008, 3 of the hedge funds I have freezed their redemption and you can't take your money out even if you know the fund is going to blow up on you.

3) I got one managed by a swiss bank which blows up, refused to let anyone redeemed and now is liquidating their properties portfolio slowly and you see the value dropping every month. They stopped redemption in 2008 and early this year indicated that they will give back all the shareholder the balance after the liquidation by end 2010.


Experience with all funds (inclusive of hedge funds/managed accounts).
1) funds are overhyped and past performance is not indicative of future results. In other words, all the analysis on how the fund performed in the past is absolutely useless. They moved with the markets most of the time.

2) too many variables that are unrelated to the companies invested by the fund to consider in making the fund selection decision.
    i) fund redemption at the worst possible time by other shareholders will cause the fund to sell away holdings at  worst possible value which causes the fund to plummet in value even more.
    ii) When fund value plummets, more shareholders redeemed till the point where the fund might not be cost-effective going forward and you will get them closing the fund and transferring to another. (that's why i go mostly with big funds)
   iii) Change in fund manager or other key personnels in the fund which you need to monitor
   iv) When you looked at the fund managers with all their spanking achievements, somehow it doesn't show up in the results of the fund.




My results with the funds so far..
1) Liquidated a few mutual funds at losses of around 40-50% and redeployed the balance to work in direct equities. Pleased to say the equities have made back most of the losses incurred by the funds. Individual stock tend to move up a lot during upturn , which is why they are perceived as more volatile than funds(which is a selection of the market).

2) For the mutual fund that I am still holding (only 1 left - Asian Templeton Growth Fund), it outperformed the indices xx% in 2009, but it is still sitting at a loss in my portfolio. A 50% loss needs a 100+% gain to breakeven. Probably also because I didn't took the opportunity to dollar-cost average into the position. Though i am hesistant to DCA as I don't know what other retail holders of the fund will do. At least for direct stock, I only need to know what the market is doing, what the company is doing to figure out how stock holders of that specific company will react.

3) Hedge funds that I redeemed in 2009 (after they allowed redemption) showed a loss of only 10-20% in 2008 against the market performance of 50-60% in 2008. However, the money gotten back is again redeployed into direct equities and I am pleased to say I've recouped the 10-20% loss. Again, it is relatively easy to get 30-50% gain in stocks during 2009. If you had waited for the funds to recover.. it might take a few years? As of today, the funds are still under water, if I had not redeemed. Oh, and probably a 50% loss for the other ppty fund that is still in liquidation mode.

4) Managed Account in private bank fell around 30%. Again, I redeemed it but moved a part of the balance into another managed account (give them another chance). The remainder I have put to good use in direct equities.


My take on who is suitable for mutual/hedge funds :-
1) investors who are not in tune to the market and don't want to know about the market. You pay the price for ignorance - a mediocre return.

2) investors who feel strongly about certain fund managers and believe they can outperformed the market RELATIVELY(not absolutely).

3) investors who do not have sufficient capital to achieve adequate diversification of assets (I believe in asset allocation, it's just the weightage). So probably 20% bond, 10% cash/money-market, 50% regional funds, 20% thematic funds.

4) for investors who do not believed in diversification of asset classes but have insufficient capital to buy blue-chips companies they want, a fund might do it.




Though in this age and time, I believe ETFs should be the defacto choice for all the above investor groups.


Myself going forward :-
1) I now have only 1 hedge fund (SHK Corp Arbitrage), 1 mutual fund (Templeton Asian Growth), 1 managed account (Asian Mandate - 70% equities weighted). I intend to hold for another 2 years or whenever I believed market is reverting back to bear cycle before liquidating all and not dabble in funds again. (Yes, heard all the argument about you can't time the market but let's just not debate this. Just assumed I can. Or just assumed that whatever rocks his boat as long as his boat takes him to where he wants to at the end).

2) Maintaining a preference weightage of 15% bonds, 70% equities, 15% cash for the market cycle which I believe is in uptrending mode - In the beginning of Phase 2 of bull. (again, assumed I can time the market).

3) I am more reassured of my portfolio performance by dividends that pay you to wait for the capital appreciation (or appreciation might not come at all). Currently, around 16% of my portfolio is still in non-dividend paying funds. I intend to move into a 100% dividend/interest-bearing portfolio by 2012 so that I can move my dividends up another $xxk assuming a less than optimal yield (yield and performance drag will be inevitable with cash allocation). The dividends are great for people who are investing lump sum and do not want to invest more but don't mind re-investing the dividends and letting compounding worked its magic. I'm sure funds reinvest ur dividends too , but I feel CASH in Hand is better that Units in Fund. I choose to put the cash to work in where I want it to.


Thursday, January 7, 2010

Portfolio Update December 2009






2009 Year to date (YTD) Return
Portfolio

19.86%
Equity(Include Funds) 

37.72%
Direct Shareholding

51.94%
Dividend/Coupon/Interest received for 2009

$120,761

Absolute Return Since Nov 2007

Portfolio
8.20%
Equity(Include Funds)
16.04%
Direct shareholding
20.18%



1) I made a mistake in calculating the YTD returns for the equity & direct shareholding. I forgot to add in the subsequent capital invested this year. The YTD returns now reflect correctly the new capital infusion this year. I have also changed the 2nd heading of Cumulative Return to Absolute Return to reflect that the 2nd set of figures is to track how my portfolio have grown against the total amount of capital invested since Nov 2007. For anyone who is interested in the exact definition and formula for tracking returns, this is what I am using :-
  • What is Total Return?


    The rate of return that approximates the position's or portfolio's Internal Rate of Return by taking cash flows into account using the Total Return (Money Weighted Return) calculation incorporating realized gains and losses from historical transactions as well as the effects of currency translations of underlying assets held in other currencies translated at historical rates. The calculation includes accounting for return generating events such as dividends and realized gains and losses from purchased and sold positions that occur over the life of the portfolio. Cash flows into and out of the position / portfolio are time weighted to their economic impact to the portfolio.


2) Bought ANZ Convertible Preference Share (CPS2) which is currently yielding 5.85%(after tax) but i figure it could go up to 7+% as the coupon rate is fixed quarterly using the 90 day aussie bank bill rate plus 3.1% * (1-30% tax). The quarterly reset of the coupon rate means CPS2 will be better value-protected as it will be rising in tandem with interest rate as compared to fixed coupon bonds. CPS2 shares pays quarterly and are convertible to ANZ shares in 2016.

3) Not a bad year with the resumption of dividends as I allocate from cash to stocks. Barring any unforeseen circumstances, I should be seeing $150,000 to $200,000 in dividends/interest income in 2010. Let's all pray to our Fortune God and wishing everyone a Happy and Prosperous NEW YEAR! :)