More Realistic Stock Indices

After an exceptional year in 2020, US stock indices were brought down to earth. Nasdaq was up 43.6% in 2020! It increased 0.2% so far this year. The S&P 500 Index was up 12.1% in 2020. It was only up 2.3% so far.

The Shanghai Composite Index was up 11.2% in 2020. It only increased 0.8% so far this year.

Stock Indices Change in 2020 31-Dec-20 5-Mar-21 YTD 2021 Change
Hang Seng (HK) -6.6% 27,231.13 29,098.29 6.9%
STI (Singapore) -12.9% 2,843.81 3,013.85 6.0%
Mumbai BSESN 7.0% 47,751.33 50,405.32 5.6%
Nikkei 225 (Japan) 11.7% 27,444.17 28,864.32 5.2%
CAC 40 (France) -7.7% 5,551.41 5,782.65 4.2%
Dow Jones (USA) 3.9% 30,606.48 31,496.30 2.9%
UK FTSE 100 -16.9% 6,460.52 6,630.52 2.6%
S&P 500 (USA) 12.1% 3,756.07 3,841.94 2.3%
Germany DAX 0.3% 13,718.78 13,920.69 1.5%
Australia All Ordinaries -0.9% 6,850.60 6,943.00 1.3%
Shanghai Composite 11.2% 3,473.07 3,501.99 0.8%
Nasdaq (USA) 43.6% 12,888.28 12,920.15 0.2%

At the other end, the Straits Times Index (STI) lost 12.9% in 2020. It gained 6.0% this year so far. Hang Seng Index was down 6.6% in 2020, It was up 6.9% so far this year.

Confidence is coming back this year with vaccinations against Covid-19 gaining momentum since the start of 2021. Economic growth is generally expected this year from a recession in 2020. This alone will lend support to the equity markets since company performances improve with economic growth in business activities.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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Financial markets finding new directions

Yields for 10-Year US Treasury Bills were on an upward momentum since end January.

27 Jan 2021 = 1.018%

26 Feb 2021 = 1.460%

This 44 basis points jump in just one month was too fast and too much. Bond markets have to take the cue from Treasury Bills, which means that bond prices are expected to trend lower.

On the other hand, equity markets are moving lower on account that borrowing costs are getting expensive in order to pay for equity purchases. A year of stock market euphoria in 2020, especially the US markets, may have halted.

Gold prices were brought down to earth as well.

6 Aug 2020 = US$2,051.50

26 Feb 2021 = US$1,733.00

Price dropped 15.5%.

Brent Crude Oil was going up on the other hand.

30 Oct 2020 = US$37.46

26 Feb 2021 = US$66.08

The above developments came about because of optimism that global economies are expected to see economic recovery in 2021 after a Covid-19 pandemic hit last year. Some normality instead of panic prevails now because of the roll-out of vaccinations against Covid-19 globally.

The Year-to-Date changes for 2021 are shown below.

Stock Indices

31-Dec-20

26-Feb-21

Change (%)

Hang Seng (HK)

27,231.13

28,980.21

6.4%

Nikkei 225 (Japan)

27,444.17

28,966.01

5.5%

Australia All Ordinaries

6,850.60

7,105.70

3.7%

STI (Singapore)

2,843.81

2,949.04

3.7%

Mumbai BSESN

47,751.33

49,099.99

2.8%

CAC 40 (France)

5,551.41

5,703.22

2.7%

Nasdaq (USA)

12,888.28

13,192.35

2.4%

S&P 500 (USA)

3,756.07

3,811.15

1.5%

Dow Jones (USA)

30,606.48

30,932.37

1.1%

Shanghai Composite

3,473.07

3,509.08

1.0%

Germany DAX

13,718.78

13,786.29

0.5%

UK FTSE 100

6,460.52

6,483.43

0.4%

The Straits Times Index (STI) was up 3.7% so far this year. Hang Seng Index was the star performer above. S&P 500 managed to rise by 1.5%.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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This Chinese New Year …

We did not have Lo Hei, the tradition of tossing of salad and Yu Sheng during the Chinese New Year (CNY). This is a major break of past years when we had Yu Sheng every year, sometimes several times in a year. Lo Hei (in Cantonese) is to bring lucks and fortunes in the coming year. Because of Covid-19, we just did not do it because of the restrictions of tossing without the auspicious sayings that go along with the setting up and tossing. We have to wear gloves to avoid contamination of the dish.

The mood at this CNY was subdued. I do not feel the festivities that go with each CNY. We did not get together in extended family for reunion dinner/lunch because gathering is only allowed up to eight persons. I did not visit my siblings and relatives for they belong to the vulnerable group to Covid-19.

As the Chinese New Year is drawing to the close today (Fifteenth day of First Lunar Month), I wish all of you happiness and good health! May the world get back to pre-pandemic normal sooner.

Copyright © 2021, limkimtong for Living Investment

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Moving away from investing without professional advice

In recent years, I have been less active in selecting stocks/bonds/Reits to add to my investment portfolio. The volatility of the financial markets is a cause of concern as 2020 had shown us. I am not caught up with Bitcoin and some recent IPOs frenzy.

When a Personal Wealth Executive from UOB called up about some investment ideas to grow my money, I decided to meet up and see what he could offer.

I bought into a Participating Endowment Plan of Prudential Assurance Company. This product is called PRUActive Saver II. At this point, I would like to emphasise that I have no pecuniary interest in writing this blog post. My point is that I am trusting Prudential Assurance to provide professional advice in managing the participating fund for the interests of many insurance holders. Prudential’s performance in managing the Investment Returns on this fund is a consideration for deciding to go along.

2017 2018 2019 Average of last 10 years
Investment Returns 10.63% -2.12% 12.26% 5.77%

The average investment returns of last 10 years was 5.77% per annum. (Note: Historical performance may not be indicative of future performance.) This track record is respectable.

Another example of my investment approach was to put some money in robo-investment platform of DBS Bank. DBS called it DigiPortfolio. I rely on the expertise of DBS in managing this investment portfolio. Since 3 September 2019, the fund has been good for me. The capital value has grown 17% so far.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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Keppel Reit – Private Placement of $270 million worth of new units

Keppel Reit sought funds to acquire 100% of Keppel Bay Tower. This was by way of Private Placement to institutional, accredited and other investors. Retail investors are left out unless they are accredited investors.

This is not Rights Issue offered to existing unitholders of Keppel Reit.

Results of the Private Placement:

Issue price of New Unit = $1.130 per unit.

Total New Units = 238,939,000

Total Proceeds = $270 million

What I did was to buy additional units of existing Keppel Reit from the Singapore Exchange stock market. This is to ensure I do not lose out because of New Units issued to Private Placement at a discount (that I did not enjoy).

When Keppel Reit was opened for trading today (after lifting from a halt in trading), it opened at $1.15 and went down to $1.12 at one point before settling at close of $1.15. At $1.15, it was down 3.361% from the previous closing price of $1.19. This price is quoted Cum Dividend (indicative of 0.94 cents per unit).

By buying extra units of Keppel Reit at lower price from the stock market, my cost per unit has come down. I also get to enjoy the 0.94 cents distribution on enlarged number of units I own.

The question I will be asking is whether Keppel Reit has a good deal in acquiring 100% of Keppel Bay Tower? Time will tell.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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How to Invest this time for people like me?

Global equities showed improvements for this year so far.

The Year-to-Date changes for 2021 are shown below.

Stock Indices 31-Dec-20 17-Feb-21 Change (%)
Hang Seng (HK) 27,231.13 31,084.94 14.2%
Nikkei 225 (Japan) 27,444.17 30,292.19 10.4%
Nasdaq (USA) 12,888.28 13,965.50 8.4%
Mumbai BSESN 47,751.33 51,703.83 8.3%
Shanghai Composite 3,473.07 3,655.09 5.2%
S&P 500 (USA) 3,756.07 3,931.33 4.7%
Australia All Ordinaries 6,850.60 7,158.80 4.5%
UK FTSE 100 6,460.52 6,710.90 3.9%
CAC 40 (France) 5,551.41 5,765.84 3.9%
Dow Jones (USA) 30,606.48 31,613.02 3.3%
STI (Singapore) 2,843.81 2,920.43 2.7%
Germany DAX 13,718.78 13,909.27 1.4%

Singapore’s Straits Times Index (STI) rose 2.7% to 2,920.43 points yesterday. This performance paled when compared with the rest of the world stock indices. Hang Seng Index was up 14.2%!

My Singapore equity portfolio only went up by 0.9% when compared to the STI going up 2.7%. There is nothing to cheer about my portfolio.

I belong to the category of retirees when come to investing, having no employment income. I rely on investment income instead. Investing at my age group must be cautious. I do not have long “runway” to build my wealth.

As investment incomes (such as dividends and interest incomes) suffered during this time of Covid-19 pandemic, my immediate action is to reduce spending.

Asset Mix

Only 17.5% of total assets are in equities. Insurance related products and bonds are 62%. Cash and cash equivalent amount to 20.5% of total assets.

Asset Mix in percentages (%) 17-Feb-21
Equities (see below) 17.5
Fixed Income/Bonds 29.2
Insurance related investments 32.8
Cash & Equivalent 20.5
Equities – Singapore 15.0
Equities – Others 2.5
17.5

This kind of asset mix is very conservative. I am not prepared to take risk during this period and for my age group.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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New Year of the Ox

This Chinese New Year of Ox (CNY) is turning out to be a whole new experience for us as a family.

Mask wearing was not mandated during CNY of the Year of Rat. This year, we must wear face masks. We shook hands when greeting others. This year, we refrain from doing so. We gathered together in multi-generational reunion dinner at a restaurant. This year, we ate at home limiting to just my small family. Last year, we tried to get out to soak in the Chinese New Year festivities. We avoid crowded places now.

These are the visible differences between this year’s and last year’s CNY. Our mental makeups were different between both CNY. Last year, we were still hoping for Covid-19 coronavirus would disappear after a few months just like SARS. I am still feel nervous this year.

Despite all these, I still feel that we can survive this pandemic. This too is not permanent. It has to evolve and we will adapt with changes.

In this Year of Ox, I wish all a Happy New Year and Keep Safe. Be Kind to yourself and towards others.

Copyright © 2021, limkimtong for Living Investment

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Happy New Year of Ox

H is for Health, H is for Hope, H is for Happy. Happy 牛 New Year!

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Every step can be taken mindfully

When we walk, it is not just the walking. We do something more. We recall something of the past; we plan the next thing; we read our hand phones; we talk to someone walking with us. This has long been ingrained in us in our consciousness as a habitual action. We seem to be compelled to multi-task because of the scarcity of time.

When we are doing all that, we may crush a snail accidentally at our feet. The snail has the same right to use the path as us. We may miss a step and twist an ankle.

Besides, we lose the joy of just walking without the distractions. We are caught up with the rush in our lives. It needs not to be this way.

Each time we take the first step, it can be a step we are mindful of. Each step is on solid ground, on this earth. We can feel the earth supporting us when we are walking. We show gratitude to this earth that we live in. We feel thankful that we can still walk normally instead of on a wheelchair. Whenever when our minds run to some other places instead of on the walking, bring them back to the walking. Over time, we can be more mindful of the walking.

One cautionary advice: Being on public roads, pavements or places, we do not ignore our personal safety. We can still be aware of the surroundings while we focus on the walking. What we should do is to cut down on the “internal chatter” of our minds. In this way we stay in the present moment by being mindful of our walking.

So when next time we walk, feel the sole of our feet touching the solid ground. This is the start of mindful walking.

Copyright © 2021, limkimtong for Living Investment

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Chinese New Year of the Ox

This Chinese New Year will be different. Covid-19 coronavirus is still with us. Barely 8 days to go before we start the Year of Ox. I do not feel the frenzy of CNY shopping or even excited about it. For one thing, we will not be having our usual traditional big reunion dinner of 34 members of our multi-generational family. Instead, we will be celebrating in smaller groups. This is a huge difference.

We are limiting making home visits to reduce social contacts and to prevent passing on the virus inadvertently.

By this time last year, we would have done preparations for the Chinese New Year. The mood is not there. We are leaving it till the last moment, such as buying Mandarin oranges. We are also avoiding crowded places like Chinatown area. Safe distancing is really a problem there.

Having said all that, my family will celebrate CNY a little differently. We will make hot drinks make from red dates. (We normally drink it at someone’s home.) It will be a mini-scale celebration without other people. It will be a quiet and an intimate affair of just the three of us to ring in the Year of Ox.

Copyright © 2021, limkimtong for Living Investment

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