I am writing this earlier this year as the total amount should be more or less the same by year end. Objective for 2018: Increase REITs by 10%, increase portfolio yield by 0.5%, increase income to $14,000.
Verdict: Didn't meet, didn't meet, meet.
Average dividend yield in 2017 was 4.56%. I didn't meet my target, and my average yield was 4.73% this year. This was achieved by buying stocks with >5% yield to increase the average, but it got pulled down by other non-performing stocks that cut dividends. In 2017, the plan was to support the increase by increasing REITs to 50% of my portfolio, starting from REIT ratio of 23% in 2017, and slowly rebalancing and capital injection at the right prices over 3 years, from 23% -> 33% -> 43% -> 50%. I did not buy that many REITs. In fact, I bought Singtel instead because yields were more attractive than REIT yields.
In order to further increase the average yield by another 0.5% will not be as easy as it will require buying stocks with >6% yield to increase the average. I may want to increase the growth stocks proportion, but I will see how prices are next year.
Income was $15,500 ($1,290/month), so I exceeded the target of $14,000. The additional increase was due to better dividends and also high bank interest rates from Bank of China 2.75%, UOB One 2.43%, Hong Leong Finance 1.7%, CIMB Fastsaver 1%, Singapore Savings Bonds 1.8%.
I didn't increase my Autowealth portfolio much as I found the prices too eratic. I will continue to contribute $400/month after the prices reverse closer to the mean. After an insane annualised yield of 15% in 2017, in 2018, the returns are a mere 4%, and could have been lower if I had continued to contribute as prices escalated 2% per month only to watch a big fall a few months later.
Unrealised profits/losses:
Autowealth = S$50 (+$260 in 2017)
Singapore Stocks = -$20,000 (+$20,000 in 2017)
Overall, gains in 2017 had been reversed to losses.
Objective for 2019: Increase REITs by 10% (Trying this again, hope to have good bargains), increase portfolio yield by 0.5%, increase income to $16,800 (or $1,400/month).
 |
| Chart of humble beginnings |
I am also sticking to my slow and steady turtle income "methodology": Assuming that I continuously invest $36,000/year or $3,000/month,
In 2 years, accumulated dividends and interest = $100,000, $1,600/month
In 6 years, accumulated dividends and interest = $200,000, $2,200/month
In 9 years, accumulated dividends and interest = $300,000, $2,700/month
It may seem slow, sticking to $3,000/month for 10 years without factoring any increases, but I prefer the approach of buying on dips, which may not be the most optimal thing to do, but I feel that it helps to make my stock acquisitions dividend accretive (portfolio cost price wise). If there is a big market correction or flash crash then I will likely activate my warchest.
Wow! To invest $3,000 a month is really a lot, at least to me. Probably will need a higher income to achieve that.
ReplyDeleteHe is making SGD 1,290 in dividends, so reinvesting that only requires feeding in an additional SGD 1,710 of earned income monthly.
DeleteYes, it's an additional 1.7k more thereabout and some consider it rather conservative already. For the first few years, it was closer to $3000/quarter at max, but slowly and surely, it will increase if you continue to stick with saving and keeping up with times to stay employable.
Delete