Merry X'mas and 2023 EOY report

 This is mainly for self accountability. From now until 2030 I will try to keep a yearly EOY summary of what went right or wrong for the yearly investment, how to avoid similar mistakes and next FY planning and predictions.

Outline and Premise for 2024

SPY outperforms in longer timeframes of > 5 years against dividend etfs – however how to address draw downs and cash balances while is on bull up only market. Past 4 year had shown that barbell balancing high beta assets like big tech with S-Reits provided 2x beta with ample flexibility. Target to reduce drawdown phase via better profit taking methodology and diversification into some uncorrelated assets.

Will be liquidating part of portfolio to pay for downpayment- during re-establish of portfolio balance will be tilted to growth and crypto. Prices had run up so much, 2024 should be net buyer of cash and sreit wait for next drawdown to enter. (SPY4k/ for eg)

Summary and Learning Points 2023

Bought Elite Commerical Reits due to seemingly high yield + UK gov tenant, using SG lens, however default occured and UK currency dip sharply due to the mismanagement. Must always invest with consideration of oversea geopolicatical and local unique economic situation. 

Mis reentry into market low when I was trying to time SMH low entry again. During Oct there was bottom but was overseas. failure to set limit orders and get ready psychological buy in prices beforehand hurts even though i got the general idea correct. (Nv do homework)

Enter DTH in Jan 2023 - as "cash like" item (+4.7%), Entered $COIN in late Nov as BTC ETF proxy play (+30%), Entered TLT as Fed lowering interest rate 2024 (+4%) with higher potential in late 2024, 

Overall portfolio return what it has lost in 2022, with some to spare. Total AUM ATH again at 273k. Yearly gain of $93,000 gains or about 50%. 2024 will focus on preserving the gains and minimizing volatility with >10% upside target. Overall 3.5 out of 5 star performance for this, need to work to reduce simple mistakes and improve sustainability of returns. 

Bullish factors for 2024

Crypto halving, BTC ETF

Dovish fed – likely to drop at least 100bps in 2024.

If recession comes, high potential fed will cut rates fast. Will injection be targeted or flows to equity markets?

Bearish factors for 2024

Historically there may be potential recession 12-18 mths after rate hikes, but US presidential election year – which prevails? Or dump after election?? What is best hedge method?

Lower inflation is due to reduced spending power or is it really due to “transitory” factors? Again recessionary risks

2024 Action Plans & Strategy

Fed rate to drop 1% - TLT will have slight upside but will likely serve more as low vol item in portfolio with the underperformance vs broad markets. It should still out perform cash. HOLD TLT

BTC ETF matter of time in Q1 – risk of non-approval in Jan exhausted momentum

BTC April Halving – Look out for 30% declines *Diamond Hands, before upcycle but beware of front running. (48-50k may have a drop)  (HOLD BTC only DCA / ADD if S$36,000 or below)

$COIN - main beneficiary from all the institution custodial. (HOLD)

Increase cash holdings to 25%

$MOAT – DCA 1 -5 share every dip

$TSLA – HOLD

Recession case – Fed print money ? liquidity but to targeted areas (SVB case) but benefit big tech and BTC again?

SPY had good run in 2023, but market has yet to broaden to IWM. Is there need to redeploy?

 

2023 review of investing and thoughts

 

Reviewed my ten-year journey as a noob investor to somewhat lesser noob now. I do believe for my journey it is more of trial and error for first 5 years and some daring bets during year 6-7 before humbled and taking more of a knowledge/evidence approach. year 8 was the reset post covid and past 2 years i am gradually getting humbled and tactical with evidence based approach.

As a beginner I think better to start with large index funds with proven track records while initial position into growth stocks/ speculative investments controlled to a sizable portion. 

Most major lost belong to two groups, mainly greed (easy to avoid) and misjudgment. For misjudgment of stocks (during early year is mainly SGX catalyst or small cap stocks) it is only to blame with lack of judgement on the “soft” aspect and risk management – things like 100% believing in AR which may and can be manipulated or clever accounting.

Refine strategy as it goes, less panic sell, hold quality positions. Be humble and buy index some. Don’t miss out on macro trends.

Pace. 

Few days ago I was discussing with friend and came to a conclusion about pacing. In terms of investment, different people have different time preference. I quote example like Bitcoin, during any 12 month span anyone will deem it as high volatility and thus high risk investment. Spread the chart over one cycle or full duration of BTC's existence and it turns out to be an excellent investment. 

Another example was trading ( ref to options and <1 week holding period) or gamify or hustle culture. During bullrun of 2020-1h2021, with plenty of VC funds sloshing around anyone could have made a small fortune playing Axie or dump into some SPACs. But is that sustainable? Long term is that worth building expertise into this skillset,only to find that expertise being made irrelevant after 1 year when bear market comes and VC funds dried up?  The counter thesis to this is the old-school thought of building personal professional network and professional expertise with indemand skills to increase your salary. 

There is no right or wrong answer. As we cannot conclude what will happen in near future, especially so with advent of AI and other ground breaking tech. One can only travel at his own comfortable pace. For me that is having toes in as many areas as I could via my investment while trying to climb the corporate ladder to secure above average compensation to boost my wealth accumulation.

 

 An update on my investment portfolio: 

Dividend portfolio chugging along fine, producing much need mental well-being amidst the carnage for first three months of the year. Then from March 2023 onward, there's a silent bull among tech and infocom stocks (Nasdaq 100) 

BTC also recovered all the way from high teens 15-19k to 27-30k, Tesla went briefly below $110 only to double up to $200. 

Basically original new year plans of 2023 by sitting still and not selling or increasing exposure worked. 

Had some DTH position which served me well, up 6% around March with 1 round of dividend, then down back to +0% when tech stock boomed. Perfect hedge so far. Likelihood of keeping this at 3-4% position permanently. 

Much more luck and geopolitical peace required for this round of rally to sustain, likely to be sideway market that falls back to high $390s and ranges to $440 for SPY. Less trading and more accumulation. 

Fall short of saving target of $50,000 at this point, due to various credit card miles deals that were irresistible. Prob will make up for it once Dec rolls around. Main concern now is finding the right apartment. Fingers crossed. 

 

2023 New Year Resolutions

 My 2023 New Year Resolutions 

1. Keep my weight to 80kgs 
2. Improve my running timing to 5min/km pace 
3. Save up $50,000 (reach goal $60,000) for new home 
4. Stick with investing and continue learning
5. Read 12 books (not comics or LN)

EOY 2022 - Summary and updates to portfolio

Short summary of investment portfolio: 

1. YTD -27.01% (SPY: - 18.14%) 
2. Rolling ROI: 4.37% *
3. Oct to Dec: Averaged down on more BTC at $14.5K 
4. Cut Pltr just because every cent is worth scrimping to focus on more conviction stuff
5. Initiated Position for $DTH, since i wont know how long this environment will last, it may be a better ETF to hold if the high interest rates last for over 2-3 years 

Action Plan for Short Term (6 Months) , Medium (<2years), Long (5years or more) 

Short term: 

• Adopt wait and see stance 
• Minimum DCA on BTC if breaks ATL
• Slowly layer DTH until 4% 
• watch out for FED actions 
• Buff up cash reserves

Medium term: 

• Set aside $50,000 next year , reach goal $60,000 separate from investment 

Long Term:

• Entry $TSLA @$100/ 80 but reminder to look out for fundamental / PE/ FCF / etc. % Portfolio long term no > 20%
• BTC DCA monthly as hedge 

An uneventful year in terms of investment returns, technically if I exclude crypto from my investment portfolio I would be -13.06% which beats SPY - 18.14% by about 5% .... but it still sucks and it just an excuse for not performing.  My allocation strategy seem to work the way I intended to, minus the wrong bets for being itchy hands.. there wasnt any severe mistakes. 

Many people recommended selling earlier in year just to buy back later.. but as I historically sucked at timing markets I just avoided it and reduced by purchases (increased cash) time will tell if I did it right this time. 

From what I see, if rates continue and maintain at reasonable levels, value investing would make a comeback of sorts. Meanwhile Tesla is becoming value in its own way... lol.

Updates on Investing

The bear market of 2022 continues and it looks like the Fed / US will carry on with further hikes at least until 1H of 2023 or until something breaks. 

Between 1 June till now I had sold: 

• All remaining SMH @ around 200+ breaking even with small profit. 
• Small bit of Tesla at around $269/share , small profit
• All of Astera VII US Class B 6% Bonds, small profit.

The rationale is to hold cash for averaging down if needed, and to collect dividend stocks are depressed prices. A lesson learnt was to take some profits off the winning trades (especially so when profits hits >30%-50%) this will allow better redeployment of capital after the sell down or consolidation phases. 

Bought:

• MLT 
• Capland China Trust
• FLCT 
• Continue DCA small amounts to BTC 

Will continue to ride this market, slowly saving up more cash from regular income and buy sparingly if prices are good for reit and certain blue chips stocks.

This is a slower version of 2020, not as easy but it will prove to be fruitful and rewarding both monetarily and experience wise in the medium term (~5years) 

Great chance to add wealth - Bear of 2022

So the bear is real and it is upon us. Assets of all classes have pulled back significantly. 

My original plan of reaching 350k seem impossible right now, but definitely this will give me chance to add good assets at cheap valuations. I did felt that from 2021 onwards prices seemed very elevated and due to high inflation, investors were left with no alternatives (TINA)

The following are my presumptions for the bear market:

• traditionally style bear (not like the 6-month hi-bye covid bear)
• historically speaking whenever fed increase rates risk on assets tend to dip
• US cant possibly ignore its own debt (or could it?), hence the higher interest has a limit
• recession would come since not everyone recovered fully from Covid-19 impact
• supply chain issues persists. Fed can only control demand not supply by its interest rates 

my action thus will be 

• deploy my cash all the away to 0% , over the expected duration of 12 to 18 months at least
• 30% BTC , 40% dividend stocks (cashflow high yield entry), 30% stocks (SMH/MOAT/TSLA) 
• reduce expenses for investments - target 2k expense per month

Wish me luck for this year!!