I’m doing this earlier than my usual end of the month, but it’s to coincide with my monthly statements issued from my brokerage. They are only issued around the 10th business day of the month.

Going forward, this should be the new schedule, and the next portfolio update will be mid Sep.

I’ll post my transactions and holdings so you guys know I’m not full of crap. I won’t do this every month though, as its a lot of trouble to download and crop. I use the crop function rather than masking the account and name details, as it’s a little safer.

Leveraged portfolio

NameBought price Current Price Market Value Gain/Loss (SGD)
Temasek 3.625%102.2119.63USD $299,000$59,700
CMZB 7% perp106.85100.13USD $214,000-18,400
HSBC 5% perp104.498.27SGD $250,500-15,300
Pimco Income Fund 4%10.089.90SGD $246,000– 3,900
Lifelong Income Whole life planSGD $220,000
SumSGD $1.367m$22,100
As of 8 Aug 2020

Overall, leveraged portfolio fell from 1.38m to 1.365m. This is mostly because HSBC has decreased in price. I was watching HSBC’s CET 1 ratio for signs of deterioration. During their earnings they said they expect to maintain a CET 1 ratio between 13% -14% during the crisis. This is far above the 7% bond trigger to equity. So I think it’s ok, I can continue to hold.

Total real asset value = $1.365mil x 0.3 = $409,800

I went back to the 0.3 multiplier for leverage since it’s not easy to track exactly how much financing I’m using. It fluctuates along with the value of the underlying portfolio.

Stocks

I’ve been increasing my stock allocation, which now exceeds my fixed income portfolio. Overall, I think tech has more potential to rise over the next few years, rather than banks and insurers. I also don’t have to deploy the massive margin I apply on fixed income products, so it decreases some risk.

AMD and Amazon are big winners for me, though the gains are slowing. It shows about SGD $150,000 profit below on the unrealised portfolio.

I continue to count my chickens before they hatch. When it snowballs into a good class bungalow, I’ll put a plaque on the front saying:

“This is the house that Jeff and Lisa built”

Just joking of course.

(about buying the GCB. I’ll seriously put a plaque somewhere if they go to the moon)

Lord Jeff Bezos
Dr Lisa “Bae” Su

Total stocks $515,000 – $60,000 margin = $455,000

Cash

What’s new is that I have deposited $10,000 into Singlife at 2.5%, and another $20,000 in Singtel Dash at 2%. This is my emergency stash. Hope they last, as 2.5% is really high for a risk-free investment now.

Still holding on to another $39,000 USD, which will be deposited fully into the margin account. It went up as the Temasek bond just paid out its coupon.

Explanatory notes

So this week I was trying to get accredited investor (AI) status. It doesn’t make a big difference in generating returns. From what I understand, I’ll get access to more exotic products like private equity but I don’t really know what’s on offer now. It will probably vary from bank to bank. It’s not a huge priority for me as I don’t like to go into complicated products. Mainly because I often don’t understand it. It usually includes a lot of leverage and high fees. The main benefit I was interested in was getting lower financing for some bonds.

For AI, I need to show $1 million in liquid assets, and it excludes property and CPF. In my last update, I showed net-worth $985,000, which is pretty close.

Turns out I was reading my margin valuation report wrong, and was buying some stocks on margin. It was confusing since I had some stocks in my cash account, and some in the margin account. While I thought I had sufficient cash for some purchases, apparently I bought some stocks on margin. The brokerage doesn’t notify you when you go over your cash in the margin account, and it’s really unclear what is being financed. I’ve have struggled to calculate my total financing accurately because of the mixing of assets and margin, and the fact that I have leverage at two different institutions. They just blend it all together, and as long as you don’t hit that trigger of 140%, they won’t bother you.

I have now moved all my stocks and two bonds to the margin account, so hopefully I get a clearer picture. Below are my holdings and transactions for July 2020.

Total Net worth

$409,800 (bonds) + $455,000 (stocks) + $30,000 (SGD cash) + $53,430 (USD Cash) = $948,000. It has decreased due to the falling USD as well as on realisation that some stocks were bought on margin.

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