After thorough thought, decided to bring forward the restructuring of the Investment Portfolio. Original intention was when the stock market experiences bull run shall be a good times to divest those unwanted holdings. While unsure is the market going on a bull run or the worst yet to come in 2022, weighing out the benefits and risks, pros and cons, restructuring and rebuilding the portfolio now would be a better move. Moreover, it is also like a psychological clock that the restructuring and rebuilding is due. The 1st portfolio was started in 1993. The restructuring and rebuilding to the 2nd portfolio was in 2006, 13 years later. Now it is the 15th year into the 2nd portfolio, look like time is ripe to make changes again.
There is chance that should I divest now those unwanted holdings, might miss some capital gain (or prevent some capital loss) if bull run is the next. On the contrary, there is also chance that should I divest now those unwanted holdings, might register some capital gain (or prevent further capital loss) if the worst is yet to come in 2022. In actual fact, after going through what stocks that will be divested away, majority of those are in capital loss but nett gain due to dividend return. As a whole, if taking action now, will not suffer any nett investment loss.
The restructuring and rebuilding of the Investment Portfolio that is happening now shall be the 3rd time since started investing back in 1993. Unlike the first two portfolios, this one is with a specific objective in mind which will be building around the principles of 孙子兵法 (Sun Tze's Art of War) that have been experimenting since 2015.
In present portfolio, it is divided into Non-Strategic and Strategic sections. The non-strategic section comprises of stocks ranging from S-Reits (income stocks) to blue chips (both growth and growth-cum-income stocks). The strategic section which was actually formed in 2015, divested in 2019 and restarted again in 2020 mainly focus on acquiring stocks via strategic mean so that they are either at $0 or a very low cost.
For the ongoing restructured portfolio, it will be grouped into Income and Strategic sections. The Income section will solely comprise of S-Reits only. For the Strategic section, it will comprise of stocks that will be acquired either at $0 or very low cost and stocks use as tool to generate cashflow. Dividend return for the Strategic section is not a priority but shall be a bonus if have. Furthermore, divestment of the Strategic stocks will not be based on fundamental reasons but rather "timing" of the market. That is like the full divestment in 2019 when foreseeing stock market will be crashing. In 孙子兵法 perspective, the Income section is the 正兵 which takes on defensive role while the Strategic section is the 奇兵 that will win the battle and the war, getting the most of the capital gain.
With that principle in mind, the restructured or rebuilt Investment Portfolio shall be as followed :-
Income Section
1. CapitaLand Integrated Commercial Trust (CICT), previously as CapitaMall Trust
2. Mapletree Industrial Trust
3. Keppel DC Reit
4. Frasers Centrepoint Trust
5. Lendlease Global Commercial REIT
All the above except for Lendlease was acquired before the stock market crashed in 2020 due to Covid-19 pandemic with both CICT and MIT already holding for more than a decade. Lendlease was acquired in 2020 in the Strategic section at $0 cost (the only one among the 5 to be at $0 cost) and relocate to the Income section for this restructuring. For these stocks, the primary objective is to collect dividend without doubts. As for capital gain, all of these (except Lendlease) are enjoying at least 30% capital gain at the moment, so they are having a little cushion as of now. Going forward, shall not inject anymore capital into any of these stocks even if there is preferential offering. Any increasing in holding will be done via strategic mean of acquiring them at $0 cost. In additional, it will also open to add in more S-Reits going forward but on the condition of only acquiring at $0 cost.
Strategic Section
1. Genting Singapore Limited
2. SingPost
3. Keppel Corporation
4. SIA-SATS
5. STI ETF
6. Fu Yu
7. InnoTek
This section will be a bit complicated going forward. There will be stocks that going to be divested away during the restructuring even if results in capital loss (overall still nett gain due to dividend return over the years). There will also be stocks that will be kept as a tool to generate cashflow. Genting, SingPost, Kep Corp and SIA-SATS shall be the stocks in those category. As for STI ETF, Fu Yu and InnoTek, these 3 were acquired in 2020 during the market crash and will continue to hold and at the same time increase the holding via strategic mean at $0 cost or very low cost. In fact, among the 3, only STI ETF was injected with capital. While might open to add in more stocks in this section but the priority is to build up the quantity first going forward.
As a reference for building up investment portfolio, something worth mentioning.
The 1st portfolio was started in 1993 with SingTel IPO as the first stock in my investment journey. Pan United IPO was the next in the portfolio in 1994. 1994 was also the peak of the stock market before it started to crash. This was a novice portfolio and after the stock market crashed in 1994, the 2 stocks became passive investing, just collect dividend and not doing anything.
Then in 2006 decided to be more active in stock investment and built up the 2nd portfolio. Genting was the first stock added to the 2nd portfolio with Pan United and SingTel divested in 2007. Again, second year into the building up of the portfolio, stock market reached peak in 2007 and crash due to the US sub-prime crisis.
Then in 2015, decided to do a major revamp of the 2nd portfolio by incorporating the Strategic section (experimenting with the principles from 孙子兵法) and starting to add in stocks at either at $0 or very low cost. Again, 2nd year into the major action on the portfolio, stock market crash and hit the rock bottom in 2016.
Next in 2019, decided to divest away all the holding in Strategic section, another major action on the portfolio, stock market crashed in 2020 due to the Covid-19 pandemic.
Now, in 2021, restructuring and rebuilding the 3rd portfolio, another major action to the investment portfolio, given the precedence and record, any chance stock market will not crash in 2022 ?
