10 years ago I opened my CPFIS investment account to start my journey in stocks investing with CPF money. After a decade, the conclusion I get from those experiences is you can only achieve good return (beating that 2.5% pa on OA) if you do it correctly, that is through long-term fundamental or value investing. There has been talk on CPFIS is not "fit for purpose", time for review, etc lately. Frankly speaking, I do not agree to that 100% neither do I object that 100% too.
Like many others I started doing short-term investing/trading from 2006 to 2008 from stocks like Allgreen, HG Metal, K1 Venture, NOL, Saizen Reit, Mapletreelog Trust, Ascendas Reit, Swiber, Parkway Life and SIA Engg. The result was mixed with some hits and misses. Net outcome was a 4.19% capital loss (inclusive of dividend). Then from 2009 till now, probably with improve trading skills and better understanding of investing, I have invested/traded short-term in the following stocks, SingPost, UMS, Ho Bee, United Engineer and Frasers Cpt. With those I have managed to narrow down the net outcome to a 2.94% capital loss (inclusive of dividend). Based on that I have to agree CPFIS is not "fit for purpose".
After the loss in 2008, I've decided to change my approach on CPFIS investing, that is going for long-term fundamental or value investing. STI ETF, First Reit, Kepland, FrasersCom Trust and OCBC are the lists of stocks that I have vested or still vesting. The outcome (for those that I have divested) was much much better and even beat the 2.5% pa OA return.
1. STI ETF from 2008 to 2015 (refer here and here). I get a realized annualized capital gain of 1.68%, annualized dividend return of 2.28% and net annualized return of 3.75%, beating the 2.5% pa OA return.
2. First Reit since 2009 (refer here). The best return I have ever had and totally blown away the 2.5% pa OA return, making that 2.5% looks like mickey mouse. Mathematically, for this investment, it is impossible to lose money as the dividend collected so far already exceed the capital being put in. I have been collecting scrip dividend since then until recently when the scheme was terminated. The scrip has increased my holding by 10.2% so far. This investment is now on a floating profit.
3. Kepland from 2015 to 2015 (refer here and here). I have intention to go for long-term for this but the timing was just so nicely timed that in less that 3 months the investment journey ended when it was being privatized, giving me a 25.50% return in less than 3 months. Beat the 2.5% pa OA ? Definitely without any doubt !
4. FrasersCom Trust since 2015 (refer here). This is the one that the investing strategy is totally different from the norm (or tradition) because I used Sun Tzu Art of War investing method (孙子兵法). Detail of that shall not reveal. Basically, it involves little capital or no capital at all to hold the stock. As of now, the holding price is $1.0641/unit. Going forwards, the aim is to reduce the capital to $0. I like this method as I can still have cash in my CPF to get the 2.5% pa OA return (as claimed by so many that it is a good scheme) and at the same time get to enjoy the potential capital gain from the stock should I divest in the future. One stone kill 2 birds. Beat the 2.5% pa OA ? Don't even try to argue with me it is not ! haha. Note, this method is not for anyone !
5. OCBC since 2015 (refer here). This one nothing surprising as fundamentally I don't think anyone can disagree that this is a good fundamental stock. My aim is to collect dividend or scrip dividend for the long-term. Currently holding price after including the scrip dividend being collected is $9.9606. It is also the only stock in my CPFIS portfolio that is having an unrealized loss (more than 10%) as of now. Beat the 2.5% pa OA ? Definitely not now but can't rule out in the future.
So if based on long-term fundamental or value investing as can be seen from my result and experiences, I have to disagree that CPFIS is not "fit for purpose".
Looking back the past 10 years what I have done to my CPF money, I should be pleased with it as I managed to get it right after learning through mistakes. Me not a genius in investing or any investment guru but I believed, a strong believer that things can be done if you learn through your mistakes. So if someone tell me it will be better to leave the CPF money untouched to enjoy the 2.5% pa OA return, I would not argue with you and I will also not agree with you. CPF money CAN beat the 2.5% pa OA return if you invest it correctly.
