1. The year 2023 was slightly better than 2022 but I still failed miserably by my benchmarks. My TWR for 2023 was only 4.9% despite my best efforts. My valuefund portfolio diversification strategy reversed on me with large losses experienced for HK and SG portfolios. Complete disaster was only averted by the outstanding performance of my (smaller) US portfolio and a last minute (window-dressing) rally in SG. I suppose I should still feel thankful that I eked out a small positive gain but the capital losses in HK and SG still hurt.
2. My 2023 TWR & XIRR was 4.9% & 5.0% respectively. Ironically, my portfolio diversification strategy prevented the [valuefund portfolio from riding the SP500 and Nasdaq bull for 2023. In the meantime, the schizophrenic China/Hong Kong markets and the interest rate pressures impacted my HK shares and SG Reits. SG Banks on the otherhand did reasonably well especially in terms of dividends.
3. The Value Fund performed poorly against the three benchmark indexes. It only did marginally better than than ES3 (+3.4%) but worse than SPY(+24.1%) and VT(+19.6%). I significantly missed my long term personal goal of exceeding ES3 by at least 5ppt .
4. The absolute gain was +$79.8K consisting of a realised gain of +$170.9K but offset with unrealised losses of -$91.1K. No thanks to the China/Hong Kong markets and SG Reits. In 2023, I entered the JP market for the first time.
5. In terms of capital injection, I continued to add siginificantly to the portfolio with my dividends, and leverage from wealth lending. I collected $90.4K dividends in 2023 based on pay date. Thus, total capital injection into portfolio was $352.4K for the year.
6. In summary for 2023, Total Stock Portfolio Value reached $2.18M for the reasons described above.
7. Against my 2023 Financial Goals Scoreboard :
a. Achieve a Total Stock Portfolio Value of $1.85M - (Meet Target). Total Stock Portfolio exceeded my annual target with continuous dividend and capital injections in SG, HK, JP and US markets tp $2.18M.
b. Raise dividends to $85K per annum.(Meet Target). Increased investments in SG & HK Banks and REITs lifted dividends. In 2023, I collected $91K which was a new high. My dividend snowball is building up!
c. Maintain or exceed CAGR of 10%. (Hopelessly Fail Target). I failed miserably with a +4.9% gain this year. Long term CAGR declined to 8.3%. Need to work harder for 2024.
d. Top-up Medisave on 1 Jan 2023 (Meet Target). I topped up my Medisave on 1 Jan 2023 and working towards hitting ERS limit in SA. Based on current trajectory, I should be able to reach ERS in 3 years at this compounding trajectory
e. Review and Refine Options & Risk Strategy to raise returns to USD2K per month (Meet Target). My total proceeds for Options & Risk Strategy has reached $33.4K which exceeded the annual target.
8. For 2024, I plan to continue to execute my value based investment strategy (with wealth lending leverage) and supplement it with a options strategy. Meanwhile there is a need to manage the risks from leverage and options in the event of a recession and/or a further unexpected spike of interest rates.
9. I am slowly getting the hang of using options to produce regular income by collecting premiums while balancing the risk exposure. My options have been exercised by buyers in some cases while I rolled some out into the future. At the moment, these proceeds are not added to the portfolio but used to cover expenses. I will continue to refine my risk management strategy in 2024 and plan to include options income as part of capital injections in 2025.
10. An additional note of caution to myself on future interest rates. Currently, everyone is cheering that the Fed has paused and/or will lower interest rates from this point on. The truth is that the Fed (Powell) doesn't know and in fact "Nobody Knows!".
11. Going forward into 2024, my increased investment goals are:
a. Grow my Stock Portfolio Value to $2.5M.
b. Raise dividends to $120K per annum.
c. Exceed or Maintain CAGR of 10%.
d. Top-up CPF Medisave on 1 Jan 2024. (Exceeded FRS and working towards ERS in SA)
e. Review and Refine Options & Risk Strategy to raise returns to USD3K(SGD4000) per month.
12. My current portfolio can be found at https://stocks.cafe/user/profile?username=thevaluefund
