• jeffreyleezq

My Portfolio & Dividend Updates (End June 2020)

Monthly update on my Portfolio percentage breakdown and dividends received (if any).

It’s almost the end of the month, so it’s about time to do a portfolio update. (:

My portfolio listed here consists purely of equities only, and excludes social security (CPF & SRS), debt instrument holdings (i.e. bonds & SSBs etc), emergency funds, as well as personal savings.

As such, any returns from the excluded items above (e.g. dividends from CPFIS, bond coupons and interests from CPF/savings accounts etc) will be excluded in the total amount in the 'Dividend Updates' section below as well.

Portfolio Breakdown by Securities

For the month of June, I added shares of Vanguard S&P 500 growth ETF (VOOG), iShares Edge MSCI USA Momentum Factor ETF (MTUM) and Singapore Telecommunications Ltd (Z74) into my portfolio.

Both VOOG and MTUM are Exchange Traded Funds (ETFs) that tracks large-growth indexes, and hence their portfolios compose mostly of growth companies. VOOG tracks the S&P 500 Growth Index, while MTUM tracks the MSCI USA Momentum Index. Large-growth indexes or ETFs that tracks large-growth indexes like VOOG and MTUM offer high potential for investment growth, but their share value also rises and falls more sharply than that of large-blend or large-value indexes, and are thus more appropriate for long-term goals where one's money growth is desired. This is alright for me, since I am looking at staying in the market long term.

That being said, I am still likely to maintain a large percentage of my portfolio in the more conservative large-blend Vanguard S&P 500 ETF (i.e. VOO), since it is not guaranteed in the long term that growth indexes will do better than the conventional total market indexes. It is true that large-growth index ETFs like VOOG or MTUM have outperformed conventional total market index ETFs like VOO over the past decade (in light due to the larger technology holdings in these growth index ETFs that have done pretty well over the past decade), but if you go back further in time, VOO has actually performed better than VOOG or MTUM. However, my take is that technology will continue to be the main driving force for the next decade at least, so I am willing to hold a little more index ETFs with higher technology holdings - which also explains why I am holding some Invesco QQQ Trust ETF (QQQ) as well, an ETF that tracks the Nasdaq 100 index, a technology sector heavy index. Note: This is not a buy call.

Locally wise, Z74 is Singtel, which I think most of us are familiar with. I am somewhat optimistic about Singtel in the next three to five years given their winning bid to operate the 5G networks across Singapore, and who knows, maybe its endeavour into the digital banking scene with Grab might be successful too (keeping my fingers crossed on this one haha). This, along with the fact that I think that its stock price is quite undervalued right now due to COVID-19, makes it a pretty decent investment to me at least. However, I am expecting dividends to be on the low end for the next few years as Singtel spends its spare cash mostly on rolling out its new 5G network facilities.

I still have a little bit of working capital left, so I would still be on the lookout for any equities that I deem to be undervalued or worth a buy. For now, I am looking more at our local stocks. I will likely not add anymore new US equities into my portfolio as most of them has already recovered to pre-crisis level, and is no longer that undervalued. QQQ for one has already (way) outperformed its pre-crisis level, so much so I kinda feel that its trailing a bit too high now. Anyways to all my readers in case you misunderstood what I am doing - I am not trying to time the market here. No one is able to do that. I am merely deciding in my own opinion if any good equity is undervalued and possibly worth a buy, or to keep my funds for other purposes instead. It doesn't hurt to have more liquidity on hand after all. Otherwise, if an equity is good and undervalued in my opinion, I would still buy it, whether or not the market has recovered or not. Or as Warren Buffett like to say, "It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price." Again, I ask all my readers to do your own due diligence - this is not a buy call.

Across the globe, the US unemployment rate in May 2020 surprised analysts when it dropped to 13.3% from the all time high of 14.7% in April 2020, and against the widely speculated rate of 20%, all while the stock market continues to recover fast. I guess this is a very good reminder to all of us again of how irrational the market can be - the “Wall Street vs Main Street” conundrum (i.e. financial markets vs real economy). Despite the fact that millions of people around the world had lost their jobs due to the COVID-19 pandemic and the world economy continues to shrink with weaker consumer demand, the stock market continues to soar, and in some instances with some stocks already outperforming their pre-COVID-19 price levels, a perfect “V” shape recovery.

While some analysts claim that this is just a dead cat bounce for a larger dip to come in the later half of the year when all the relevant economic impacts fully set in, it goes to show, very importantly, the number one rule in investing that no one is able to predict the future, and that we shouldn't try to time the market by trading in and out with market swings. That said, I am for one still not optimistic about a similar massive dip in the US stock market like the one in March 2020 happening again anytime soon. Maybe some dips here and there, but a massive one again is not likely given all the economic stimulus that governments around the world had already pumped in. But well, we never know right. haha. Note again that this is not a buy or sell call, and it's purely my personal opinion. Please do your own due diligence before executing any trades!

Dividend Updates

Received some dividend payout for the month of June, and with this, the total amount of dividends received since the start of 2020 stands at S$2,236.75, giving me an average dividend amount of S$372.79 monthly from January till June 2020.

Note: Dividends are recognised after ex-dividend (EX) date.

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Disclaimer: All information contained herein this blog is solely the writer's personal opinion, and does not constitute an offer, recommendation or solicitation of an offer of any kind. Readers are also advised to do their own due diligence, and to consult a financial adviser for any financial advice.