Finance Opti: August 2024

Saturday, August 24, 2024

Portfolio Returns for Aug 2024

I felt it would be good to track the returns regularly since they fluctuate occasionally depending on the stock market.

Here are the movements for this month. USA, SPY, BCIP, and S-Reit ETF reached all-time highs. USA fund shot up not just because of market movements, but because I sold some losing positions to rebalance.

For the Robo-Advisors, most went back up again after the retracement of the previous month. For Syfe Reit, it has completed its double-dip pattern.

Additionally, I think it will be interesting to see the breakdown of my portfolios in percentages (below). There is a component 'X' which I do not want to disclose for now. The concentration of 'X' is now 14% but is still too high.

Market events over the last month:

https://www.channelnewsasia.com/world/feds-powell-says-time-has-come-cut-interest-rates-4564871

Interest rates are now at the historic high of 5.5%, which means the Fed has ample room to cut.

"Chair Powell's speech made it clear that there are likely a series of rate cuts on the way, and some could be of the 50-basis-point variety," wrote Omair Sharif, the president of Inflation Insights. "While some Fed officials may want to go in 25-basis-point increments, the Chair retained optionality ... i.e., 'we'll go 50 basis points if we feel like it is needed.'"

Markets are betting the Fed's policy rate will be in the 3.00 - 3.25 per cent range by the end of 2025, more than 2 percentage points below where it is now.

Onwards!

Friday, August 16, 2024

Dividends for Jul 2024 - Towards 5k a month

Here are my dividends for Jul 2024:

So I collected $3,617.16 in dividends for this month.

In case you are wondering, some stocks are repeated because I have 2 brokerage accounts.

Here are my monthly dividends over the last 6 years:

July is the month where things are starting to ramp up, with a peak harvest in August.

Here are the dividends I collected every year until the current day

Interestingly, in 2 years, I have already surpassed my total yearly dividends in 2022.

For the year 2024, my average monthly dividends per month is now $2,490.58.

Here is the progress of my average monthly dividends over the years:

I plan to first receive $2500 (almost there!), then finally $5000 in dividends every month on average.

Additionally, I share the interest I received from the various banks for the deposits in this month:

So I collected $578.71 in interest payments this month. This is the largest interest I have received thus far.

It was achieved with a bit of fine-tuning:

https://financeopti.blogspot.com/2024/07/financial-fine-turning-unlocking-my.html

Onwards!

Saturday, August 10, 2024

Update on my 5 Pots of Gold for Perpetual Income [Financial Independence]

Back in Dec 2023, I explained my strategy for 5 Pots of Gold for Perpetual Income:

https://financeopti.blogspot.com/2023/12/plotting-my-investment-strategy-for-2024.html

Now that the first half of the year is over, it is timely to provide my progress on this strategy.

I revised my strategy and decided having 8 pots of gold is best.

Here are my 8 pots of gold:

Here are my 5 pots of gold in Dec 2023:

As of Dec 2023.

Here is how full each pot is now as of Aug 2024:

As of Aug 2024.

I have made progress on the TLT, S-Reit ETF, ABF Singapore Bond, and SP500 ETF pots.

I wanted to start on the ACWI pot during the recent market downturn in Aug 2024. But it did not hit my target. I was planning to buy only when there is a correction, defined as a 10% drop from the previous high.

The QQQ did fall more than 10% from the previous high. Unfortunately, my soldiers from the SRS battalion are not ready. They are still trapped in a fixed deposit 😣.

The US ETFs pot is something I started in 2017 after reading the classic "A Random Walk down Wall Street". I followed the book's advice and invested in equal proportions of US stock, International stock, and emerging markets. I follow a DCA strategy for this one, but I purchase only once a year. Each year when I purchase, I re-balance the portfolio at the same time. These are the 3 ETFs that make up this fund:

Vanguard Total Stock Market ETF (VTI)
Vanguard Total International Stock ETF (VXUS)
Vanguard FTSE Emerging Markets ETF (VWO)

What is important is each of these pots provides dividends, ie. perpetual income. Further, by allocating across multiple countries and sectors, I believe it is defensive enough. This is unlike the case where I only invest in a single Reit to maximize my dividend yield. Since interest rates are now at all-time highs, the Reit can't be doing well. I will be suffering from paper losses if I use this strategy.

Will update my progress on these 8 pots of gold in Dec later this year.