My first time experiencing the market crash has been a bewildering affair. It could have been a popcorn worthy moment if not for the bulk of my cash already invested in the market. Unlike my colleague who had liquidated his holdings in SYFE and incurred a realised loss of over $2k, I am still observing the situation tepidly.
As my Facebook home page become plagued with Covid-19 related articles, I really appreciate the CLOY articles sneaking up amidst this tense situation here and there.
These articles made me feel better about my predicament.
The bedrock metrics show one thing for sure: Even after the repeated drops, stocks have simply gone from outrageously overpriced to overpriced.
- You have to get used to market crashes
- Understand the trade-off between risk and reward
- Don’t worry about timing the market
- Saving is more important than investing
Deciding on REITs portfolio
Investing in a REITS portfolio had been on my mind for some time. Although Lion S-REIT ETF came out much earlier, I did not purchase it as there are multiple layers of fees and they were not yet confirmed previously. Nevertheless, the upwards trend of the performance was reassuring that REITs portfolio is viable, and work in tandem with my long term investment horizon.
Lion S-REIT ETF
0.50% Management Fee
0.25% Brokerage Fee*
0.04% Clearing and access fee
0.15% Custody / Trustee fee
0.10% Rebalancing fee
I bought SYFE Reit+ Portfolio on the day it came out (2nd Feb 2020). It is suitable for a young investor like me who needs REITs diversification, low cost annual fee and hands-off approach in investment.
As captured from the website, REIT+ is a Syfe portfolio built by combining 15 S-REITS and Singapore government bonds.
They have a white paper on their Automated Risk-managed Investments (ARI) strategy to reduce the overall risk of the portfolio. It is their proprietary investment methodology, combining the best of two leading approaches – Global Market Portfolio (GMP) and Risk Parity Portfolio (RP). It aims to reduce an individual’s risk when markets are unfavourable by reducing the % of REITs. When markets are optimistic, it increases REITs to deliver better returns.
There is no customisation of REIT+ portfolio, unlike their Global Portfolio (via selection of risk). * I bought that after reading several comparisons between Stashaway vs Syfe.
The updates for my portfolio is available at 2pm daily on their app. The REIT+ portfolio will be rebalanced as necessary based on market circumstances to minimize fluctuations in our portfolio value. I have opted to reinvest the dividends. Individuals and resident corporations are not subject to Singapore withholding tax on S-REITs or Bonds as per IRAS guidelines. Should any tax be withheld, Syfe will reimburse its clients the entire amount.
Currently, my REITs portfolio is in red. The portfolio % allocation is leaning heavily towards Singapore Bonds.
ABF Singapore Bond index fund currently occupies 49.45% of my portfolio (#1), followed by Ascendas Real Estate Investment Trust (#2) and finally, Mapletree Commercial Trust (#3). I missed the opportunity to purchase Mapletree Commercial Trust in 2017, as I was not ready to enter the market yet.
Portfolio performance: Feb-Mar 20
Although there is no minimum investment amount, I deposited $20K so that my annual fee is 0.5%.
Thoughts about my investing journey which happen before COVID-19
I started investing in late 2019. I purchased VTI, IWDA, EIMI, Syfe Reits and Global Portfolio. As I invested in ETF, I took a hands-on approach to a large extent as they are safe investments. With my long term investment horizon, it was suitable for a new investor like myself. However, the magnitude of the impact caused by Covid-19 was tremendous. I was caught off guard and recalled Warren Buffett’s timely liquidation of stock prior to the crisis.
Some hints to exit the stock markets which I missed out
- I cancelled my trip to Bangkok on the 3rd week of February – I was genuinely concerned about going to a country that is widely popular among Chinese Tourists. The fear of uncertainty was present within myself. Since uncertainty does not sit well with the stock market, it was a clue
- US markets went to an all-time high in February despite the alarming rate of incidence caused by the virus – that is not a rational phenomenon, given how information flow easily in the globalised context. The movement of people, goods and information is incredibly fluid. With my prolonged usage of social media in my daily life, I placed an emphasis on the ease of information flow and neglected the other 2 factors.
- 2019 was surprisingly smooth. Nothing major, the upward trend of S&P 500 is primarily smooth. Things are looking to good to be true. Stock prices are too expensive/overpriced. What comes up will come down.
- I used to think about how it seems easy to come out from the 2007 financial crisis, like a winner, given how low the prices of stocks were and how the good businesses’ stock prices soared overtime. But experiencing this current market crisis had given me a new perspective. There are so many factors to consider: Have you diversified your investment portfolio? Were you prepared for a crisis to happen? Did you liquidity your holdings in time? If you haven’t, do you have the courage to cut loss and buy the discount stocks while not being scarred by the realised loss? Have you prepared enough emergency cash in the event of retrenchment?
- With all the memes focusing on the humourous and puzzling sight of supermarkets being wiped out, the seriousness of the matter was covered by the ridiculous nature of the incident. I find it hard to look at the matter seriously when I was so amused by the videos of people rushing to stock up their supplies, dumping their groceries when the queue is so long and what not. When people act foolishly (eg by hoarding up supplies) in the event of fear and uncertainty, it will reflect in the stock market to an extent. After all, stock market is not perfectly rational.
- Even if I bought safe ETFs instead of stocks, I shouldn’t be complacent and should monitor and plan for contingency. To be honest, monitoring my ETFs were not my priority as I have 0 liabilities.
- Opportunities are present everywhere, not just in the stocks market but only the prepared could take advantage of it promptly.
- How tempting it is to be invested in the stock market when holding cash is so unattractive when the market is doing well. With the influx of financial bloggers emphasising on the importance of investing, FOMO of not being inside the market is real. It is true that investing is vital but the intangibles such as mindset, level of preparedness, experience need to be taken care of first.
- While the short-sellers being able to make so much money that it became the highlight amidst the chaos of uncertainty, there are others whose stories are not featured more prominently in the news.
- I think it is so helpful to dip one’s toes into the stock market, to experience the range of emotions as the stock prices moves like a rollarcoaster. It is painful to cut loss and in my case, it is a realised $500 loss. That realised loss could have been larger if I were in my 30s with more capital to deploy. In the past, when I came across the wisdom of experienced investors via real life or books, their messages do not sink in deeply as I have not experienced it firsthand yet. Now that I had read Warren Buffett’s insights for the second time, everything came together and makes sense in the flurry of activities.
- Numbers are really sensitive and in light of recent events, these things are shared more freely to seek assurance and validation (oops). I have become more enthusiastic in carving out a path in PF area more clearly.
I guess overall, I am lucky to experience this market uncertainty and fear life, partly by checking the prices of S&P 500 at 9.30pm daily, while being at the early years of my career. When SARS and 2007 financial crisis happened, I was in primary school and oblivious to everything except doing well in exams LOL. This incident was a wake-up call to spend even more wisely, to build up capital with a higher and stable paying job through self-improvement and learning, to be financially-savvy.
I will be more of a spectator in the unfolding of events, unless the market will be going down for an extensive period of time. Meanwhile, I am furiously reading the shareholders’ letter by Warren Buffett.. my reading materials for now. There’s this certain timeframe when something foreign gets internalised more efficiently in the space of vulnerability.
For anyone considering to purchase REITs portfolio, feel free to use my referral code – SRPRCBM3S. We will get the following bonus.
$10 bonus for the first deposit above $500.
$50 bonus for the first deposit above $10,000.
$100 bonus for the first deposit above $20,000.
To enjoy the promotion, clients will have to be new users of Syfe and keep their initial deposit with Syfe for at least 6 months. The bonus is applicable on the first deposit made only. Clients will receive the bonus after 5 working days of their initial transfer and it will be automatically credited to their portfolio and invested along with their existing investments.
Do drop a message to their customer service team after using it, to make sure that the system captured it:) I usually use the live chat to communicate with them.