How much have I earned and lost in 2023?

 Objective for 2023 was "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%."

I was extremely lucky to have deposited FD when FD rates peaked at Dec 2022 and Jan 2023. Every month after that had seen FD rates going lower and lower until 3%. When the FD matures, the prevailing rate now is around 3.5% which is still decent.

I was extremely lucky to have applied and allocated the Dec SSB issue where 10-year interest rate was 3.40%. The maximum allocation was $20,000, and I applied for $20,000, so I am grateful. Every month I had to evaluate whether to redeem an earlier issue, while balancing the odds for partial allocation, and to maximise SSB returns. For example, do I redeem 3.0% to apply for 3.2%, and what if I redeem $20k, but I only get allocated $10k in the new issue due to over subscription? or do I redeem my 2015 issue that is currently paying me 3.3% for another 2 years until Oct 2025 to apply for 3.4% for 10 years, but what if I get partial allocation?

In Jun, I wiped out a large sum of savings to make partial repayment for my mortgage loan so that my monthly repayment remains the same. After my 1% fixed rate was up and the float rate was like 4.5%! As I don't know where rates were heading, I signed a 3-year fixed rate of 3.38%. In the freak event that rates drop to 1.8% and below next year, I will pay the 1.5% penalty for early loan redemption.

Stocks was so-so for me. I decided to buy into the dip for REITs, which I thought is right for my portfolio, but I must also set a disclaimer that the risk premium for stocks is not justiable. Risk free rate is 3.5% but Reit stock dividends are just 5-6%. So it does seem that there are cash rich investors who are loading up on Reits too anticipating a rebound.

Stocks I bought for the year:

Prime US Reit (Jan, Jun)

Seatrium (Feb - because of Keppel Corp sold away their oil and gas business to Semb Corp, so shareholders were given shares in the new entity Seatrium)

AIMS AMP Reit (Jun)

Keppel Reit (Jun, Nov)

Mapletree Pan Asia Commercial Reit (Jun, Aug, Oct)

Stocks I sold:

Singtel (Jun)

SIA Engineering (Jun, Jul)

Unfortunately my "managed funds" are all losing a lot of money. Those double whammy kind where I have to pay the investment specialist 1% and still make a loss of 50%. Total amount of money in this managed fund portfolio is 50k (in China unit trusts and US ETFs). I won't add anymore to it and also won't be cutting losses because I can't guarantee that I can recover the losses in another investment because there is definitely economic slowdown in the various China industries from the government's clamp down efforts to prevent escalating debt, banning monopoly, banning tuition, banning gaming, and we don't know what else.

What caught me by surprise was the CPF SA and MA rates were  revised upwards slightly to 4.08%. Who would have thought that the the 4% floor rate could change? 

Finally the silver lining to the less than ideal investments made in managed funds, my passive income is slowly rolling and reached $2k/month this year. Yield was 6.1% largely due to increasing Reit holdings and record profits from banks. It's amazing to think that I persisted for 20 years, reading financial reports and reading even more financial reports and not getting sick of it. Many of my colleagues and friends say that I am one-of-a-kind now because my investment philosophy is seen in everything I say and do everyday and for every kind of situation, be it family, personal, work, or any other random situations.

I thought a technical recession will hit this year but it didn't. I thought it was mathematically impossible for interest rates to remain high because many companies will go bankrupt, and it's still high and hasn't come down.

My objective for 2024 will be to add more Reits for as long as valuations are attractive (i.e. > 95% occupancy and good location and >7% yields). Reits are becoming like investment funds where some funds can just go bust if they don't manage their cash flow and maintain their assets and customers well.