The Value Fund Portfolio Report 2022

 1. The year 2022 was worse than 2021. My TWR for 2022 was -6.5% despite my best efforts. My portfolio diversification strategy mitigated the very large losses experienced in the HK and US markets. In general. I did better than most my fellow singapore investors on stockscafe, investingnote and youtube. I suppose I should feel thankful but losses still hurt especially in absolute amounts.  

2. The Value Fund had a mixed performance against the three benchmark indexes. It did worse than ES3 (+7.6%) but beat SPY(-19.1%) and VT(-19.0%). I missed my personal goal of exceeding ES3 by at least 5ppt significantly. :(

3. With a TWR of -6.5%, the absolute loss was -$104K. This was partially cushioned by a dividend haul of $63.4K.

4. In terms of capital injection, I had added siginificantly to the portfolio with my dividends, inheritance windfall(sad) and leverage from wealth lending. Total capital injection into portfolio was $442K for the year.

5. Going forward, I will switch from Total AUM (incl cash holdings) to Total Stock Portfolio (stocks only). This is due to the distortion from inheritance windfall and leverage while my cash cash/SSB/T-bill holdings exceed my leverage by multiple times. For 2022, Total Stock Portfolio reached $1.72M for the reasons described above. 

6. Against my 2021 Financial Goals Scoreboard :

a. Stretch target to reach Total AUM of $1.75M - (Failed). Total Stock Portfolio did not reach target due mainly to severe declines in US and HK markets.

 b. Maintain or exceed CAGR of 10%. (Failed). Some of my SG stocks recovered from the pandemic but this was more than offset by the declines in REITs & key stocks as global interest rates spiked. As the US and HK markets tanked, I failed miserably with a -6.5%. :(

c. Raise dividends to $60K p.a. (Success). Increased investments in SG & HK Banks and REITs lifted dividends significantly to $63.4K.

 d. Create Wealth Lending Account for shares to use leverage and abitrage between investment classes. (Success). I finally got off my lazy bum and also found a good relationship manager that helped educate and setup my wealth lending accounts. By transferring my core SG stocks to bank custody AND connecting it to foreign currencies, I could lever up my portfolio by arbitraging the interest rates across countries. Specifically, I borrowed in JPY(or CHF) with low interest rates, and bought good quality SG company shares. This should boost dividends and returns in the coming years but I have to watch central banks like a hawk.

7. Separately, I continued to practise an Option Strategy to earn kopi money every month by selling Covered Calls and Cash Covered Puts. I got assigned and unassigned a few times but only thrice which was reluctantly. Puts are a good way to accumulate shares for value investors while earning kopi money. However, I can only do this off and on as I trade options only in the US markets (most liquid). Averaged earnings was about USD1K per month.

8. For 2023, I plan to continue to practise my core value based investment strategy (with some leverage) but supplemented with a basic options strategy.

9. Going forward into 2023, my investment goals are:

a. Grow my Stock Portfolio to $1.85M.

b. Raise dividends to $85K per annum. (My 12mth projection is already at 80K and most my buys in 2022 paying out in 2023)

c. Maintain or exceed CAGR of 10%. 

d. Top-up Medisave on 1 Jan 2023. (Exceeded FRS in SA and working towards ERS)

e. Review and Refine Options & Risk Strategy to raise returns to USD2K per month.

10. My current portfolio can be found at https://stocks.cafe/user/profile?username=thevaluefund