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HomeInvestmentAlpacaInvestments' Portfolio Updates for August 2023

AlpacaInvestments’ Portfolio Updates for August 2023

Portfolio allocation as of August 23rd:
August was a decent month for adding to my existing positions. I purchased more of 2800HK amidst concerns about China real estate, and I added to my Syfe Reit+ portfolio multiple times. In previous posts, I mentioned having an asset allocation target of 50% Singapore, 30% rest of the world, and 20% China. Recent events have prompted me to rethink this allocation, so I have made the following adjustments to my targets:
Previous Target:
– STI ETF: 10%
– SG Stocks: 20%
– S-Reits: 20%
– HSI ETF: 20%
– Global ETF: 30%

New Target:
– STI ETF: 20%
– SG Stocks: 15%
– S-Reits: 15%
– HSI ETF: 15%
– Global ETF: 35%

Reasons for the change:
– I want the portfolio to be even more passive, so I am reducing actively managed SG Stocks to 15%.
– I am increasing the weightage towards global stocks (35%) compared to China exposure via HSI (15%) to reduce single country risk.
– S-Reits have been under pressure recently due to higher rates, and I believe there is a conflict of interest when it comes to the structure of Reits. Reit managers are incentivized to grow the assets under management (AUM) of the Reit through acquisitions, which may not always benefit unitholders. Additionally, Reits are more leveraged compared to an average equity index, so mistakes can be more costly.

FIRE Musings:
Last month’s post on “what is work” was well-received. This post continues along those lines, dispelling the notion that “working” should be the default for everyone and addressing the fear of (early) retirement. I believe in reaching early retirement dreams through dividend investing. Work should not be the default because society tells us so or because there is a stigma against retiring early.

Eliminating the fear of (early) retirement:
Many people fear early retirement because it is unusual. There is also a fear of traditional retirement because jobs become identities. I think sharing the lifestyle of an early retired couple would be beneficial to those looking to achieve the same dream. It is important to celebrate someone’s desire to volunteer as part of their early retirement lifestyle instead of suggesting they fit it into their busy schedule.

Criticism of dividend stocks:
I have seen some criticism of Singaporeans preferring dividend stocks or cashflow-based investments over investing for growth. I don’t see any issue with this preference. Dividend investors would benefit from less demand for dividend stocks, as it would result in higher yields on investments. I am happy to continue promoting dividend stocks on this blog.

In summary, I would rather be unemployed with passive income of SGD 5,000 per month than be employed and earn a salary of SGD 5,000 per month. The former is almost permanent, while the latter is not.

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