I have been somewhat busy in real life lately.
So, I have not been producing much content.
However, I did manage to make a few videos recently.
For those who do not follow me on YouTube, here they are:
Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.
Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...
I have been somewhat busy in real life lately.
So, I have not been producing much content.
However, I did manage to make a few videos recently.
For those who do not follow me on YouTube, here they are:
Posted by AK71 at 12:31 PM 2 comments
Stock prices of DBS, OCBC and UOB have been rocketing higher!
How do I feel?
I have mixed feelings, really.
I would like to add to my investments in all three banks but not as their stock prices make new highs.
What am I doing?
Just waiting.
I will simply do nothing and collect dividends.
Filling up my war chest and taking things easy.
Money in my war chest will go to buying more 6 months T-bills in the meantime.
I expect the T-bill cut-off yield tomorrow to be around 3.8% p.a.
This is a pretty decent return for something that is risk free and volatility free.
I don't see any need to take on price risk especially when stock prices are going higher.
Uncle Warren Buffett said before that we should avoid doing this:
"Buying a stock merely because you think it’s going to increase in price."
For my current investment in DBS, OCBC and UOB, my favorite holding period is forever.
Of course, if we are trading, then, we might sell some if we think prices are going back down.
More from dear Uncle Warren Buffett.
"Time is the friend of the wonderful company, the enemy of the mediocre."
"Only buy something you’d be perfectly happy to hold if the market shuts down for ten years."
This, perhaps, explains why I sold some of my investments in the past and increased my investment heavily in DBS, OCBC and UOB in recent years.
If AK can talk to himself, so can you!
Related post:
A simple strategy.
Posted by AK71 at 3:55 PM 18 comments
This is probably going to my final blog post for 2023.
Planning on taking it easy for the rest of the month when it comes to social media.
Have been a little too active in the last few months on YouTube.
Now, going to spend more quality time with myself.
Being able to play three games everyday on my new gaming laptop makes me very happy.
That is what retirement is about.
It is about being happy.
A few things to talk about.
1. T-bills and SSB.
The Singapore Savings Bond being offered this month is offering a stunning 3.07% p.a. 10 year average yield.
Stunning for the wrong reason since last month's offer gave an attractive 3.4% p.a. 10 year average yield.
I think I will give this one a miss.
Am I veering away from my plan to keep buying Singapore Savings Bond as long as the yield is above 3% p.a. or not?
Well, the plan was to replace CPF Voluntary Contributions with Singapore Savings Bonds.
I have already done it with money meant for the CPF in 2023 and 2024.
2025 is work in progress and there is really no hurry.
In the meantime, I will continue to strengthen my T-bill ladder.
The last T-bill auction had a cut-off yield of 3.8% p.a.
Hopefully, it stays there for the auctions happening this month too.
2. DBS and UOB.
I still want to increase my investment in the local banks.
OCBC is already a very large position.
So, the idea now is to grow my positions in DBS and UOB.
For me, the stock prices to add would be between $30 to $30.50 for DBS and closer to $26 for UOB.
3. Taking it easy.
I have been thinking of taking it easy when it comes to investing for some time.
However, after a recent recording with The Fifth Person, I have been thinking about it even more.
The decision to retire early was a big step for me.
I was always a worrier and I still am a worrier.
Still, I convinced myself that I had sufficient financial resources to retire early.
Then, in retirement, I began to question if I really did have enough.
I continued to invest for income and increase my passive income in retirement.
In recent years, I have been telling myself to take it easy and that I have enough financial resources not to have to worry.
I have had some success but something Adam said during the recording hit home.
So, I could simply just buy more Singapore Savings Bonds and T-bills from now on and still be quite comfortable.
Risk free and volatility free.
Don't have to do anything else.
This would be another phase in my life, if I should do this.
To be honest, I rather like it.
Anyway, that's all the talking to myself for now.
If AK can talk to himself, so can you!
Merry Christmas and Happy New Year!
I received an SMS from CPF that went:
"You have a CPFIS investment deduction from your Ordinary Account."
I suppose this means that my competitive bid (using CPF-OA money) for the last 6 months T-bill auction that took place on 14 September was successful.
A quick check revealed that the cut-off yield was 3.73% p.a. and this is still relatively attractive.
This is relatively attractive when our local banks are offering much lower interest rates for 6 months fixed deposits.
Definitely, it is more attractive than the 2.5% p.a. offered by CPF-OA even when accounting for a loss of 7 months worth of interest income which would have been paid by CPF.
Why 7 months?
This is due to how CPF calculates and pays interest on our CPF savings, taking only the month-end balance into consideration.
So, all three of my applications using cash on hand, SRS and CPF-OA money were successful.
I find it strange that there seems to be less interest in 6 months T-bill now.
It seems to be weaker compared to a year ago, for example.
I remember non-competitive bids being so plentiful that my offer to buy was only partially filled at times.
Could it be that more people are buying the common stocks of DBS, OCBC and UOB instead, given the higher level of public awareness of how attractive their dividends are?
After all, a 6% dividend yield beats 3.73% p.a. return hands down.
Could AK be doing something wrong?
OMG!
I can feel an anxiety attack coming.
Time to go sink some enemy warships to calm myself down.
Related post:
Must buy T-bill?
(How to transfer from CPF-IA to CPF-OA?)
If we have been investing in Singapore equities long enough, we would be familiar with the talk that August is a seasonally weak month.
Of course, there is always some hope for a National Day Rally.
What about AK?
If there is a correction, and if prices hit my target buy prices, I might buy some.
Usually, Q3 is pretty good in terms of passive income received from my investment portfolio.
So, I should be able to take advantage of any market weakness in August.
My plan is still to add to my investments in DBS, OCBC and UOB so that, together, they form 40% of my portfolio.
Looking at the charts, I see the following supports which could be tested in case of a correction.
DBS.
At what seems to be a neckline at $31.87 per share and if that were to break, we could see $30.00 per share again.
With DBS common stock's rich premium to valuation, I am not in a hurry to increase my investment in DBS.
OCBC.
We could see a gap covering at $12.45 a share and this is also where many moving averages are bunching up which should provide a strong support.
If this were to break, we could see a pessimistic Mr. Market selling down to the next gap at $12.20 per share.
I would probably buy some if that should happen.
UOB.
We could see $28.00 per share again, give or take few cents.
If that were to break, we could see the share price going a lot closer to $27.00 a share.
That is where I might buy some if it should happen.
I would not go in with all guns blazing in case there should be extreme pessimism in the market for some reason.
With limited resources and with Q4 being usually a weak month for me in terms of dividends, it is better for me to err on the side of caution.
Before I sign off, if you do not follow my YouTube channel, I produced a new video today and you might be interested in watching or listening to it.
If AK can do it, so can you!Posted by AK71 at 8:26 PM 20 comments
Was feeling a little tired after a morning of activities.
Medical appointment followed by grocery shopping.
Lost some blood and still had to carry heavy bags.
After settling down at home, I read the news and I suddenly felt energized!
DBS increased their dividends to 48 cents a share per quarter!
Huat ah!
The decision to invest in DBS back in 2016 at $13 to $14 a share and continuing to accumulate over the years whenever Mr. Market felt depressed is paying off handsomely.
Annualizing 48 cents a share, annual dividend per share is $1.92 which means the dividend yield on my initial investment is in excess of 14% per annum!
Of course, with DBS being one of my largest investments, this is probably going to have an outsized impact on my passive income for the year.
I so stunned like vegetable!
What is even more impressive is that the higher dividend is probably sustainable.
DBS revealed that the expected catch up in funding cost has not been as bad as feared.
In fact, net interest margin saw a further increase of 12 basis points, quarter on quarter.
Net profit grew 48% year on year and 5% quarter on quarter!
I have said before that DBS is able to trade at a juicy premium to book value because of its very impressive return on equity or ROE when compared to UOB and OCBC.
DBS saw its ROE hit a new quarterly high of 19.2%, up from 13.4% in the same quarter last year!
DBS has a CET1 ratio of 14.1% which is in excess of what it feels is optimum.
So, we could possibly see higher dividends to come if DBS has no better use for the money.
DBS could, of course, simply hold on to the money for a rainy day.
Whatever the case might be, DBS is a rock solid investment for both income and growth.
Yes, just like what I said about investing in UOB, we can have our cake and eat it too.
OCBC should deliver good results tomorrow too.
I am feeling so giddy now, I need to go lie down for a bit.
If AK can do it, so can you!
Reference:
DBS fair value per share?
Transcript of my YouTube video @AK71SG.
Posted by AK71 at 12:08 PM 4 comments
Whenever I could find some free time, I would go out to sea in the last few days.
It is my latest hobby!
Well, in a sense, anyway.
Look at my latest ship!
Look at those cannons!
If you are interested in some naval warfare too, this is my latest free to play find.
Absolutely free to play and perfect if you feel like destroying stuff to feel better after a rough day.
Use my referral link for the Asian server and both of us will get some freebies in the game:
World of Warships. (AK's referral link.)
Anyway, now that the serious stuff is out of the way, let's look at other stuff.
In my last blog, I talked to myself about the bumper interim dividend from UOB.
Up by 40%, it made me giddy with joy!
I expect OCBC and DBS to pay higher dividends too.
This means they should at least match their dividends in the last quarter.
If nothing goes wrong, my passive income for Q3 2023 should be somewhat higher than for Q3 2022.
If this pans out, it would be quite a feat since 2Q 2022 passive income generated by my investment portfolio increased by an impressive 42% compared to 2Q 2021 (mostly because the banks were still paying lower dividends in 2Q 2021.)Whether passive income in Q3 2023 would be higher than Q2 2023 is less certain and, for that, I would wait and see.
On to another happy discovery.
When I checked my bank account, I found a few thousand dollars deposited by my old friend, AIMS APAC REIT (AA REIT.)
With my war chest largely depleted by IREIT Global's rights issue, getting some free money from AA REIT makes me love the REIT more.
As there will be quite a bit more dividend to be received from UOB and probably OCBC and DBS too next month, I decided to increase the quantum in my application for the upcoming 6 months T-bill with some of the money.
It is now open for application and the auction is happening on 3 August.
I will be going for non-competitive bid, as usual.
There is no need to agonize over a competitive bid since whatever the cut-off yield might be, it would most likely be higher than whatever interest rate the banks are offering for a 6 months fixed deposit.
So, the exercise to strengthen the fixed income component of my investment portfolio continues.
It gives my portfolio greater stability.
It gives me greater peace of mind to know that if I need more money, I have a T-bill ladder I can rely on.
This means I would not have to sell my stocks at prices not of my own choosing if some things should go terribly wrong in life.
Being forced to do something, not having control over our lives is not a good feeling.
With the yield curve still inverted, 6 months T-bills are going to remain rewarding.
So, they help to keep me sane and happy at the same time.
If AK can do it, so can you!
Related posts:
1. 2Q 2023 passive income.
2. 2Q 2022 passive income.
3. T-bill ladder is attractive.
Posted by AK71 at 6:11 PM 12 comments
Labels:
AIMS-AMP Capital Industrial REIT,
bonds,
DBS,
IREIT,
OCBC,
passive income,
UOB
During "Evening with AK and friends 2023", I said that UOB would continue to grow its earnings very strongly.
This is thanks in a large part to its acquisition of Citibank's consumer business in 4 South East Asian countries.
UOB has delivered and in terms of dividends, it has exceeded my expectation.
85 cents interim dividend per share has been declared.
Huat ah!
Source: UOB. |
Although I only started investing in UOB during the COVID-19 pandemic, it grew into one of my largest investments within a few weeks.
"When it's raining gold, reach for a bucket, not a thimble."Warren Buffett said this, not me.
Since then, I have been adding to my investment in UOB, most notably when the price of its common stock languished at around $26 a share for a while last year.
This enlarged investment in UOB is going to bring home a larger portion of bacon.
I remind myself that UOB retains 50% of its earnings which means that it is growing more valuable over time.
If the constant buying back of shares by UOB is anything to go by, this is probably going to be the case for some time to come.
Investing in UOB is not just investing for income, it is also investing for growth.
We can have our cake and eat it too.
If AK can do it, so can you!
Related post:
Banks: Even higher dividends?
Posted by AK71 at 4:04 PM 6 comments
Labels:
investment,
passive income,
UOB
Latest 6 months T-bill auction had a cut-off yield of 3.99% per annum.
That is the good news.
The not so good news is that more people are now in the non-competitive bid camp.
Still, having 94% of my application filled is not too bad.
As the front end of the yield curve is still elevated, 6 months T-bills will remain rewarding.
This is especially when the banks have toned down in their fight for deposits.
The reason seems to be that the growth in loans has slowed while deposits have increased.
So, the banks don't need more deposits.
Given this situation, I could divert funds from maturing fixed deposits into T-bills in the coming weeks.
As for equities, I am still interested in adding to my investments in OCBC and UOB.
OCBC has broken its trend line support.
It could retest support at $12.00.
If $12.00 fails to hold, we could see supports at $11.50 or $11.00 a share tested in the coming months.
I hope I would have the funds to buy more in such instances.
As for UOB, it could test support at $27.00 and if that were to break, a much stronger support is at $26.00 a share.
Again, I hope to buy some at those levels.
If AK can talk to himself, so can you!
Recently published:
2Q 2023 passive income.
Posted by AK71 at 9:38 AM 16 comments
I have been busy gaming in the last few days as Neverwinter celebrates its 10th birthday.
Posted by AK71 at 10:18 AM 32 comments
Labels:
AIMS-AMP Capital Industrial REIT,
bonds,
DBS,
IREIT,
OCBC,
UOB
This is the transcript of a YouTube video I produced recently.
-----------------------
Posted by AK71 at 3:13 PM 4 comments
Posted by AK71 at 3:04 PM 0 comments
Labels:
UOB
Posted by AK71 at 9:48 AM 8 comments
Labels:
DBS,
investment,
OCBC,
passive income,
UOB
For readers who who are not subscribed to my YouTube channel or who simply prefer reading blogs to watching videos, this is the transcript of another recent video I produced.
Posted by AK71 at 9:25 AM 23 comments
Posted by AK71 at 9:48 AM 14 comments
Labels:
DBS,
investment,
OCBC,
UOB