H1 2015 Investment Performance Report

 Read? Q1 2015 Investment Performance Report

A Goal-based Approach Investing StrategyUncle8888 has adopted a Goal-based Approach investing strategy by setting for himself a 10-year progressive Goal Targets to be achieved for each year from 2012 to 2021.

Our investing journey is not Horse Race or Rat Race where we compete against others.  No! It is our investment Marathon Race where we set our own pace and compete against ourselves to win our own race.


Year 4: H1 2015 Result for Tap No 3 (Cash Flow from Investment Portfolio)

Achieved 32.1% against 34% of 2021 Goal Targets.

 

Investment Portfolio XIRR

Track, Measure and Visualize!

Without doing it; how to revise investing strategies and to improve year-on-year investing performance?

Investment Portfolio's XIRR includes all investable cash plus the current stocks value at market closing price as on 30 Jun 2015.

Since one year ago: -4.2%
Since 1 Nov 2008: +1.8%
Since 1 Jan 2003: +8.8%
Since 1 Jan 2000: +8.1%

The reality of riding market cycles of Bull and Bear

This reality cannot be anyhow extrapolated in any form of theoretical knowledge including the most popular form of compounding interests - the Eight Wonder of the World.

No. You can't!

Embracing Three Taps Solutions to Retirement Income For Life Model






Uncle8888's Wealth's Formula:

Wealth = Asset Value + Cash Flow

Where Sustainable Cash Flow = Tap 1 + Tap 2 + Tap 3

and volatile market pricing of Asset Value becoming less significant.

Since Tap No 3 is enough to supply the liquidity needs; Tap No 1 will remain shut.

 

Investment Portfolio Performance Measurement: Absolute and Relative???

In absolute term; Uncle8888's investment portfolio total return on 11 Oct 2007 is 145% and on 29 Jun 2015 is 148%

Does the two absolute number of 145% and 148% look same and okay?

It is how absolute number says it loud and clear!

145% and 148%!


SMOL: Trust but Verify!

From Jan 2000 to 11 Oct 2007, the relative return in CAGR is 12.2%; but from Jan 2000 to 29 Jun 2015, CAGR is just 8.1%

Still same? Still okay?

When somebody tells you their Absolute Return. You should ask them for their Relative Return e.g. CAGR too.

When somebody tells you their Relative Return e.g. CAGR. You should ask them for their Absolute Return too.


Trust but Verify!

 

Human Asset Value and Financial Assets Protection???

When we, the most savvy Financial Bloggers or Retail Investors are GONE! 


What can happen to our assets? 

How to protect our human asset value and financial assets value?

How many financial  and investment bloggers talk about it?

Wealth = Asset Value + Cash flow

Asset Value = Human Asset Value + Financial Assets value.

For our human asset value, we can use life insurance to protect it. 

But, for our financial assets especially our investment portfolio, our powerful investing strategies, our most savvy investing Mind; seriously have we, the most savvy investment and financial bloggers think about it? 

Can our dependents or next-of-kin safely take over and protect our financial assets and continue to generate that kind of cash flow without some active portfolio management when we are GONE?

Can they?


For the past few years, Uncle8888 has been thinking very hard. 

Have you started thinking?

The Myth of Two Arms Fighter Is Better???

Long and Short: The Hedge Fund. Bao Jiak?

Long only Investor: Warren Buffet. Bo Bao Huat?

Some may be too young to know them.  

Got Goals. Got Plans. But No Shame!!! (2)

Read? Got Goals. Got Plans. But No Shame!!!

SMOL: Grasshoppers fly with BOTH wings. Ants have forgotten the art of flying after their maiden mating flight. More like the Queen conveniently don't share this truth with her daughters... 


Okay. Ants don't fly so ants lose out?

Never mind. Ants know that bad times and uncertainties are always some years ahead of them so they plan and plan. 

Got Plan A, Plan B and Plan C. 

They will crawl anyhow. They will crawl anywhere to build up bit by bit a large Reserve or Reservoir for the long Sunny days when Grasshoppers are dancing happily for the longest. Long summer. Shiok!



Tap 3 (Plan A: 10-years investment goals from 2012 to 2021)

Cash flow from his investment portfolio come from his realized net profit/loss (Uncle8888 won't like to sell at losses. He seldoms has net realized losses. If the paper losses become so unbearable; he will just write them off and take a hit on his performance for that year. It is non cash item like any company accounting principles) and dividends received for the year.

Since he is not an active trader most of his cash flow will come from dividends.

Ants don't anyhow pluck Goals from the sky hor! He will count using Microsoft Excel to the nearest decimal points and not akar akar using his 21 up and down fingers. :-)

His basis for his 10-year Goals for Tap 3

Tap 3 is his yearly goal to meet his yearly family living expenses for the next 10 years (2012 to 2021). His family living expenses are calculated from his historical expenses when he suddenly woke up and realized the importance of tracking his family expenses if he wanted to know "How Much Is Enough?". 

Trust but Verify! 

He trusts History but verify the Numbers with future inflation and with Chart, Graph and the Image. 

How Future You Will Thank You!

and when History becomes Goals.

His Goals is more commonly known by folks as passive income.  

Depending passive income from dividends? 

Someone has already said ...

pansy t27 June 2015 at 22:55:00 GMT+8

I feel that dividend into is not very passive nor dependable. It is a good supplement but cannot be "depended" on.

Uncle8888 has known Mr. Market too well. We can't really trust Mr. Market and be too dependent on him to meet our day-to-day survival.


Know The Three Risks? Your Personal Finance and Investment - Three Risks That Are Seldom Actively Discussed by Personal Finance and Investment Bloggers


Ants are good at planning so he has Plan B (Tap 1 : His Large Reserve or Reservoir)

His assets for Tap 1 is NOT subjected to market asset pricing volatile so it is non-volatile asset class.

Tap 1 is normally closed and will only be turned on to top up Tap 3 when Tap 3 is not enough during poor market condition and dividends are not enough to cover his family living expenses.


Tap 1 is built with large capacity in mind to last till his EOL...

Plan C (Tap 2: Medical and Health Care Self Funding)


$XX,XXX as emergency cash + CPF MA, SA, and RA and also covered by MediShield and ElderShield.



Now, who said Ant cannot fly?

Got Goals. Got Plans. But No Shame!!!

Keynes: "I do not believe that selling at very low prices is a remedy for having failed to sell at high ones... I feel no shame at being found owning a share when the bottom of the market comes."

Uncle8888's 10-year Goals for all to see. Ants, Butterflies and Grasshoppers are included.

Got Goals!  Got Plans

This year didn't hit the target. No shame! 

Next year, we can walk, run, jump or screw to plan to make it. No shame!

No shifting Goal Posts. No shame!

He wrote: "I do not believe that selling at very low prices is a remedy for having failed to sell at high ones... I feel no shame at being found owning a share when the bottom of the market comes. - See more at: http://business.asiaone.com/news/stock-picking-tips-great-economist-keynes#sthash.G0GHnC4H.dpuf

Durians are addictive!

Some can skip their lunch or dinner for durians!

Uncle8888 and Auntie8888 have been eating durians for years and already immune from heatness.

LOL!

Not Too Worry Over The Future Cost Of Nursing Home???

How come?

It is the way how Uncle8888 thinks how much is enough over his remaining lifetime.

Now, he sees what he likes. He eats what he likes. He likes some fun. He likes some traveling. He is not so frugal now.

But, when the day he needs to stay at the nursing home. He will be absolutely frugal! He will spend on needs to stay alive. No more eating out. No more fun. No traveling. Absolutely frugal!

From not-so-frugal to absolutely frugal lifestyle how not to afford it?

Right?

No?

CPF investment account is good at locking up profits! (2)

Read? CPF investment account is good at locking up profits!

An update to the amount of CPF OA 2.5% interest rate earned on the yearly dividends that I received from Kep Corp since 2001.

An additional of 57.4% ROC that hasn't been included as Total Return.

 

Expert Mode In Investing: Patiently Collect Dividends Over Long Run or Good Market Timing???

Right or Wrong?

No right. No wrong?

Known Unknown?

Unknown Unknown?


What do you think?


Real people. Real Example ...

Uncle8888's top three holding and also his top three longest holding period from 12 to 14 yrs.

12 years is a long time! Long enough for a baby to reach his or her secondary school level. :-)

14 years of collecting dividends from Kep Corp. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about 2.5% above 2007 peak.

Market timer won!

13 years of collecting dividends from Semb Corp. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about -9.1% below 2007 peak.

Market timer won big!

12 years of collecting dividends from DBS. It should be more than enough to show good patience. Right?

Total Return Vs. 2007 Peak Stock Price:

Just about 33.4% above 2007 peak.

Tortoise won!

Made 10,000 People Millionaires???

At course fee of $3,000 per person and let say net margin of 50%. 

Here is the Maths ..

Net margin = 20% of $3,000 = $600

10,000 were tutored or trained faithfully or diligently to become millionaires = $600 * 10,000 = $6,000,000


At course fee of $2,000 per person and let say net margin of 50%. 

Here is the Maths ..

Net margin = 20% of $2,000 = $400

10,000 were tutored or trained faithfully or diligently to become millionaires = $400 * 10,000 = $4,000,000


Think about it.

Which is easier?

10,000 people contributing $3,000 or $2,000 per person to make one person Multimillionaire or One person to make 10,000 people millionaires.

Think for yourself. Folks!

Trust but Verify - SMOL

One veteran sent me this note last night ...

Cleared all today… switch to short term notes for now 

Track and Measure : No Illusion hor!!!

Want to track and measure?

Mai illusion. Made it swee swee!

You can see the amount of paper profit flying away from the peak. 

Can Offend Your Father But Not Your Bosses!!!

Soon after Uncle8888 started working; he learned this from an old man in his office. Now, being old man himself; he frequently repeated it to his younger colleagues.

Can Offend Your Father But Not Your Bosses!

Your father will forgive you NOT your bosses!

More Cash Means Our Portfolio Can't Cheong When The Bull Charges Back???

We will learn the most from our own experience and that will teach us how to behave in the stock market. Right?

You see for yourself!

What did you see?

More cash but what really happened?

Compounding: What Other Financial and Investment Bloggers Seldom Mention it!!! (2)

 Read? Compounding: What Other Financial and Investment Bloggers Seldom Mention it!!!


Compounding is the beauty and wonder of investing?


WTF!

Is Uncle8888 stupid or what?

Where is the compounding?

The Three Matters On Personal Finance: Saving, Insurance, and Investment!!! (2)

 Read? The Three Matters On Personal Finance: Saving, Insurance, and Investment!!!



That day when his doctor brought bad news to him. He was about to die. What did he do after hearing that bad news?


He spent the next few days busy working out his numbers on saving, insurance, and investment. For a single household income and three schooling children; it was money, money, and money!

He was quite relieved after knowing the number and he was also debt-free. His family shouldn't have any financial difficulty i.e. his family would reach financial independence when he has gone.

When such thing happened, a dead body is worth so much more. That is why life insurance matters during our active human asset phase.

Know the truth behind personal finance.

John Wasik on "Keynes's Way to Wealth: Timeless Investment Lessons from the Great Economist" (2)

"I do not believe that selling at very low prices is a remedy for having failed to sell at high ones ... I feel no shame at being founding a share when the bottom of the market comes." - Keynes

CW8888:

How much do we lose when we are terribly wrong?

Just 100% of our capital. No shame! Losing is part of the Game.

How much can we win when we are right and continue to be right?

X%, XX%, XXX% or even X,XXX% 

Why still so many cannot bear to do it?

Panic when they see the market!!!

One good remedial is to stay calm and make Pillow Stocks. We will sleep better across market cycles.

Read? John Wasik on "Keynes's Way to Wealth: Timeless Investment Lessons from the Great Economist"

Long-term Investing can be as Simple as .........

When you have patience ...

When you are investing for your future in the decades head of your time ...

When your human asset is compounding well ..

Use STI Blue chips as our watch-list.

For most of us as retail investors, we better be honest with ourselves. Our war chest is limited. The 30 blue chips in STI is more than enough to deplete our war chest. Right?

Escape From Hard Works or Escape From Time???

Why FIRE?

Why Financial Independence AS SOON AS POSSIBLE?


Are some of them trying to escape from hard works and monetizing less time for being paid to do something? More free time?

Are some of them trying to escape from time? Work more so less time. Less free. Less thinking on what else to do. Some really don't know how to spend their free time. Right?




Think it is more on Time rather on money that really bother us.

Time is fixed amount. All of us have the same amount; but money is variable to every one of us. 

No one has the right number to achieve their financial independence; but we need to be really really comfortable with the FIRE number as it will be extremely difficult get back to correct it. 

Track. Check and Benchmark against the nation's median figure. 

We can't be too wrong if we stick somewhere near to the Median. Right?

Climbing My Corporate Ladder

Lacking of ambition and lacking of real hard work. The outcome is ....

No choice!

Uncle8888 has to climb his investment ladder. 

Ambition is irrelevant. 

How much hard work? 

May be irrelevant too. Right?


The outcome is ....

STI Falling Down Next Week???

Compounding: What Other Financial and Investment Bloggers Seldom Mention it!!!

For the younger ones, do you fully understand the power of compounding?

Now, open your eyes wide and see closely and very careful. 

What did you see on Right, and on the Left, and back to the Right? 

Close your eyes. Open wide and focus on the Right side again. 


Think deeply!


What did you understand about compounding?


You may like to answer in your own free-form!




 

We know or at least heard it that one day most of us will have to become SERIOUS investors when our human asset depreciate to ZERO!!!

To be good at it. We have to be seriously SERIOUS and put in our time and effort into it!

 

 "For the things we have to learn before we can do them, we learn by doing them." - Aristotle

CPF OA 2.5% is a low target to beat???

767,000 CPF members may have learned that 2.5% return is not that easy to beat!

It is a high six figure number!

Do we think that it is Kopitiam uncles and Pasar aunties who are losing their CPF money?


Read? Many CPF investors get their fingers burnt!