Objective for 2022 was "Stay the course and trim down the non-performers."
2022 was really volatile and most of the times, I was in self-doubt, which also explains the lack of blog posts. I wasn't even sure if my analysis was 51% correct or 51% wrong. Fed's tightening started many corrections. Each time after a correction happens, there is a rally, and no one knows if it's a bear rally (which means just up a bit but head down even more) or bull rally (up up and away).
Stocks I bought for the year:
Astrea 7 4.125% (Mar)
Daiwa House Logistics Trust (Jun)
UOB (Aug)
Prime US Reit (Oct)
Stocks I sold:
Isoteam (Mar)
Japan Food Holdings (Sep)
ST Engineering (Nov)
STI ETF (Nov)
Full year dividend income for my SG portfolio was higher at $13.8k (4.9% yield), mainly because of dividend recovery post- pandemic. I also sold some shares to cover losses for some of the non-performers. The shares I sold were at prices where their dividend yields were below the 4% SG gov treasury bills yields.
I was buying every single issue of Singapore Savings Bonds to the max of $200k/person, and then redeeming earlier issues that had lower yields to recycle them into the higher yield issues. I also put some money in FD when it was 4%, and 6 month treasury bills when it was 3.3%. I don't know, but somehow stock yields are just 5% and it's like a no-brainer to put money in FD that is risk-free and pays 4%.
My objective for 2023 will be to continue to load up on FD if rates stay at 4% and above, and buy stocks when yields are attractive. By attractive, I will look at prevailing 1 yr FD rate +3%.
Overall, my gut feel is that we are already in a recession, but it's a balance sheet recession kind of recession. Maybe a technical recession will be logged in 6 month's time, but we are deep in one now. Inflation will likely remain until the next black swan event which we won't know what it will be.
Interest rates increased a lot in the last 6 months. My view is that it's mathematically impossible for loan interest rates to remain high because many countries and companies will go bankrupt. The question without an answer is how much non performing loans can the market absorb. We had been fortunate live through 2 decades of growth fueled by loans and no one can imagine the impact with loans are reduced.
And finally... a glimpse of my boring chart. Passive income went up a teeny bit, but still in the same range of 1.3k/month.
