I started this journey in late 2010 and even after 5 years of investing in the market (hopefully not 1 year of experience repeated 5 times), I still regard myself as a beginner. Nonetheless, I would say that I am learning. If not more about the market, then at least more about myself. The stock market is notoriously one of the most expensive places to find out who you are and I really hope I don’t get hurt in the process!
This is the third year I am updating my annual investment performance on this blog and you can refer to the earlier updates in 2013 and 2014.
What I Bought and Sold
Besides some individual stocks bought during the first half of the year, most of the purchases involved the STI ETF. This is largely due to a change in investment philosophy, which I have pondered over for more than a year. I will be elaborating more on it through posts in early February.
On hindsight, even though I missed the train to sell stocks during the May peak, the uneasiness I felt during the 3rd quarter of 2015 meant that I pared down my holdings. Darlings like First REIT, Spindex and Vicom were sold to increase my cash and bond position to close to 50% of our entire assets.
These decisions, along with the setting aside of $100K of emergency funds, have allowed me to, at least till now, still sleep pretty soundly at night.
If you’re into the nitty gritty, you can refer to the 2015 transaction page for the full breakdown.
Dividends
On a happier note, we received a decent $6,800 from dividends which translates to a little more than $500 every month. Including the dividends from bonds and interest from our bank accounts, that’s probably 2 months of expenses covered!
Investment Performance
My CAGR for 2014 came in at about -13.8% which is slightly below the STI index’s performance of -11.8%. This year, I have realised that double digit % declines are painful, especially when the portfolio is 6 digits instead of 5 digits. Just to compare, the declines in 2010 and 2011 scarcely annoyed me when the portfolio was still below $50,000 in value.
Summary Table
| Year | Initial | Injection | Sale | Dividends | Final | Returns |
| 2010 | $0 | $26,489 | $0 | $0 | $25,860 | -22.20% |
| 2011 | $25,860 | $32,487 | $0 | $2,209 | $55,555 | -1.40% |
| 2012 | $55,555 | $14,561 | $8,097 | $2,807 | $73,770 | 26.40% |
| 2013 | $73,770 | $43,519 | $0 | $3,717 | $138,550 | 28.30% |
| 2014 | $138,550 | $70,127 | $16,820 | $6,726 | $197,762 | 6.80% |
| 2015 | $197,762 | $43,001 | $65,182 | $6,839 | $142,640 | -13.80% |
| Total | $230,184 | $90,099 | $22,298 |
After accounting for the divestments and dividends, as at 31 Dec 2015, I still managed a gain of about $25,000 from 5 years in the market. Basically, all the capital gains have been given up, and the remaining profits are more or less the dividends.
With the less than decent/below average returns in 2015, the CAGR from Oct 2010 to Dec 2015 (our investment journey thus far) has fallen to just 4.9%. Still an outperformance as compared to the index, but really nothing much left to shout about.
With January 2016 all but confirming a bear market, the 4.9% is inching closer to zero. In fact, half of the $25,000 profit is probably gone at this point and it looks like a struggle just to stay in the black in 2016. If the market drops by another 10% (i.e. STI going below 2,300), all the gains would probably be wiped out. But then, it’s really anybody’s guess how the market would pan out for the rest of the year.
From this hindsight analysis into the local index, which I did half a year ago, many stocks, including the STI ETF, are looking cheap. I still believe in that analysis and will be adding to my portfolio if the market turns even more bearish.
But don’t say I didn’t warn you. Cheap can easily become cheaper, of course.
After all, the market doesn’t care about my opinions. Nor yours.
Hi 15HWW,
The market does reveal what type of person an investor is.
Sometimes, what you have been your entire life could be wiped out in a single day or by a single event.
Scary! o___O
Hi Dividend Knight,
To have everything wiped out by the market, one must either be super concentrated, or employing leverage. Both of them are principles I prefer not to ever break.
Hi 15hww
First time readers who are reading this might think the stock market is a waste of time because after all the heroes and struggles, we are all but back to square one. It does look on the outside like that but given how towards the long run STI will normalize, it should be fair saying that all your temporary gains wiped out will soon be back to you again, hopefully.
Hi B,
There’s a part of me that is upset that I failed to lock in gains but there’s also another part that is grateful that my portfolio is still not in the red. The gains are temporary and the losses are also temporary, hopefully.
I think the odds of good returns are higher now as compared to any point in the past 5 years.
When own portfolio is in the red, then it is time to buy more.
If don’t know what to buy, then just buy Spdr STI ETF.
Even if some of the companies in the STI index don’t survive, no need to worry,
SGX will always replace the worst companies in the STI index to better ones over time and STI will still be ok in the long term.
Very safe and earn at least 3% dividend or higher while invest and hold.
Hi abc,
I agree. If one lowers his/her expectations to ~5% and doesn’t want to be too concerned with individual companies’ prospects, index investing in various countries/regions is probably the way to go.
Is that better off to just purchase STI ETF from 2010 till now?
Hi Bruce,
I am not 100% sure but my guess is that overall, I am still outperforming the STI ETF, albeit barely. So if you discount the hassle of evaluating stocks, you might not be wrong!
hahaha…