It has been a while since I last did an update on my portfolio. My previous update was in June 2017 (read here).

In the previous post, I did mention that I wanted to increase my war-chest and perhaps reduce my allocation to equities.

Back in Nov 2015, my cash holdings (including the amount in my SRS account) was only a mere 7% of my total net worth (which excludes the property I am staying in). It then increased to 33% in June 2017.

Today (1 Jan 2018), the cash proportion in my portfolio is now 40%. Well, that may not seem much, but when I compare it with my stock holdings, the proportion becomes much bigger.

The reason being is Stock and Cash is typically the 2 major variables in my portfolio.

The rest of the components like CPF, Insurance Cash Value and Crowd Funding (which is now almost close to zero as I have since stopped investing in P2P loans and Invoice Financing) are more or less fixed, except for the monthly top up from my active income. I don’t use the money in my CPF Ordinary Account to invest, but I do use the money in my SRS account to invest (when the opportunities arise).

Technically, I can say I am now ‘65%’ in cash. And I am still trying to increase that cash percentage.

The below table shows the cumulative profit or loss I have achieved by holding to the stocks. Those yellow highlight rows are for stocks which I have sold or have been delisted (eg. totally divested). So far it has been positive. And the profit/loss takes into account the capital gain/loss via the rise or drop in share prices as well as the total dividend payout received.

Actually, the results aren’t that great as it was over many years, and oh yeah, I did not really record down all the dividends I received esp. in the earlier years. The big rise in the equity markets in the US is not really reflected in the equity markets in Asia (for the past 10 years). And the rise seems to be only concentrated in some industries.

I am sure many who have invested in cryptocurrency would have much higher percentage gains over a much shorter period.

I think my shortest holding period for a stock is approximately 4 months (eg. TalkMed). However, do note that I do sometimes buy and sell the shares, from the time I first bought the shares to the time I totally divest my holdings in that particular stock.

Most of the time, I just add on to my position. I don’t really like to sell my stock holdings unless there is something fundamentally wrong with the company. With that in mind, I also do occasionally fall into the ‘value traps’ while attempting to bottom fish stocks which have declined in price.

The reason why I am reducing my stock holdings is primarily due to the fact that I feel that equities are on the expensive side, and market volatilities are low…. again, there is no science about it. Maybe I just wanted to take a break. I am not forsaking stocks forever. It is difficult to time stocks. Ideally, people want to get out of stocks when they are expensive and then buy when the market corrects or crashes. However, that would be hoping to be right twice. It is the hardest thing to do.

On the other hand, this phrase “Regret Minimization Framework” used by Jeff Bezos do occasionally pop up in my head. I think about the two possible scenarios. (A) Keep the gains and miss the potential upsides… or (B) Remain in stocks and risk my gains. Which option I want to go for so that I would have the least regret? I can’t predict the future, but I know at this point of time, to reduce stock holdings and keep my gains (while increasing my war-chest), seem to be the option which allows me the least regret.

Well, I don’t need the passive income from my stocks to survive. I have a job. There is no rush.

• The Jeff Bezos Regret Minimization Framework (read here)

I am terrible at timing … and this is especially apparent in Fu Shou Yuan. Actually, I was quite reluctant to sell Fu Shou Yuan. But oh well, a gain is still a gain….

Having said that, there are stocks which I am glad that are divested from my portfolio eg. SIA, SMRT, CapitaLand… to name a few. I feel that stocks in some ways can be a mental burden, especially when the companies (or the industries they are in) have a lot of issues/headwinds. I may have sold SIA at the wrong time given the run-up in its share price after I have divested, but still, I don’t see how SIA can rev up its profit margins anytime soon.

Moving forward, I do intend to further increase my war-chest, and perhaps lock in some of the gains in my remaining stock holdings.

Nevertheless, I do hope that there will be opportunities to increase my equity holdings and perhaps invest in more income stocks. And of course, I will like to buy back those shares which I have divested should they become under-valued again.

So far, my net worth, to me are just figures on a computer screen (or ATM screen). Kind of like playing a PC game (a multi-year one :p). I secretly wish that one day I can actually see the actual amount in the form of cold hard cash. You know, to know how it is like to have that amount in my hand. The pile might look better (or shall I say ‘more substantial’) if the notes are in small denomination :p (eg. like in 2 dollar notes or 10 dollar notes)…..The bank teller would probably think I am nuts hahahahaha…

• US Debt Visualized in $100 Bills (read here)
• Sim Lim Square shop pays $1,010 refund in coins (read here)