Q4, 2020 End of Year Report - What a shitty year it has been! Or isit?
What a Year 2020 has been, to say it sucks is an understatement. The disruption, lockdown, salary cuts, job losses. On the other spectrum we have booming eCommerce, logistic industries, etc. etc. In the Investment land, this year has been a black swan event where the US market experience the shortest and sharpest Bear market in History with the sharp plunge back in March, before the Bull took over and the Strong rally continues well into the end of the year.
As mentioned in December Report, I close the year with +30.1% as compared to +32.7% S&P500 (measured from the time i started investing). I did not use the actual YTD of the index (+16.26%) because that would give me unfair advantage, and hey I could use the challenge. Although I ended up losing by 2.6% 😅.
The US Market in 2020
All the 3 major US indexes, S&P500, Dow Jones, and Nasdaq closes the year at a NEW ALL TIME HIGH.
Nasdaq which is tech heavy and has 40% weightage in Big Pandemic stocks winner like MAGAF (Microsoft, Apple, Google, Amazon, Facebook) lead the charge at a whooping +47% YTD.
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| Nasdaq 100 Top 10 Companies by weightage(%) as of end 2020 |
The More Broad-based S&P500 which has about 20% components in MAGAF also benefitted from the Tech run while the other stocks lags behind (In case you have been living under a rock, Tesla has recently joined the S&P500 index with approximately 1.6% component as of end 2020).
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| S&P500 Top 10 companies by Weightage(%) as of end 2020 |
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| DJIA Top 10 companies by Weightage(%) as of end 2020 |
The Other Markets in 2020
Not all country experience such strong rebound, other markets like Singapore has been lagging. The other 2 markets that I pay attention to is Singapore (-11.76%) and Indonesia (-4.85%).
Indonesia has started its recovery run, but with the Covid Case constantly hitting record high, things are starting to look risky, and correction might be on the horizon.
Indonesia has started its recovery run, but with the Covid Case constantly hitting record high, things are starting to look risky, and correction might be on the horizon.
Singapore has somewhat recovered economically with Covid cases under control, but the market has started to stagnate the past few months.
| S&P500, IHSG(Blue), STI(Orange) |
2020 YTD Performance of different investing strategies/ asset
As detailed HERE, Aren't you curious which strategies end up on top for 2020. Will my self-managed portfolio came out on top again? Here's the result:
*TWR= Time Weighted Return method to better reflect the investment performance while accommodating for cash flow in/out without skewing the returns. Go and google if you want to learn more. Feel free to message me if you want a copy of my monitoring tools in excel. Simple ROI is just (Current Net Liquidating value/ Money invested)
1. Portfolio
My self-managed portfolio comes out on top! Validating that all my effort did not go to waste! Overall pretty happy with the result, but as my teacher said the market is so bullish that "A blind one legged monkey would have made money." 😅
I am seeing fellow investors achieving 50++% and even saw someone with 90+% gain! Which makes my performance lousy in comparison. That said I am a bit doubtful I can achieve close to this in 2021. I guess we will see.
2. ETF DCA
My Blind dollar cost averaging method has also given a decent return. So far supporting that this is a good concept, but you have to bear in mind that the market has been very bullish, hence giving good returns. Also, it is unlikely that you can beat the index with this method, but this is still a good method for people with limited funds like me, force ourselves to save regularly. I will be continuing this and I am currently in the process of setting up another account to try and simulate buying into index funds with me trying to 'Time' the market.
3. Robo investor
The pretty well diversified robo investing by Stashaway has also done decently. So this is not a bad way to invest if you are too lazy to manage, but do note they charge a fee. I have since stopped Topping up money into this account, and will probably just let it run for 2021. Might consider to close after that.
4. SGX (Dividend Investing)
The return has taken into account dividends received and I'd say the return is not bad for 9 Months worth of investment, definitely better than letting BANK have your money or putting into Fixed deposit. But Honestly this was a disappointment. I could've done a lot better and I only have myself to blame. I made a purchase that was purely speculative, hand itchy and I deviated from my plan, didn't do much research and simply buy because it seemed Cheap. Has been beaten down for quite awhile, and I thought there is limited downside. Oh BOY WAS I WRONG.
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| Why u no stick to plan!! |
| The Culprit: FIRST REIT |
I was right for awhile, the stock is hovering around 40 cents, and with a dividend yield of around 10% seems pretty attractive. THEN the company announce rights issue at proposed price of 20 cents (while the stock price is aroun 40 cents), this sends the share price plunging down 40%. 😠My position is currently at -49%, and I am very lucky my other dividend stocks are a good buy, hence I still managed to close with a profit.
I currently holds position in UOB, OCBC, Cromweil Reit, and Capitaland China mall.
5. CPF
CPF.... I got nothing to say here, wouldn't want the Singapore Govt to deport me back to Indonesia. Let's just say I wouldn't be doing any voluntary top up to my CPF in the near future, or ever. At least they do allow to start investing part of it into selected funds once there is a certain minimum amount in the account. I'd have to start researching on one of the better funds once I achieve the account minimum.
Well, I am not saying CPF is entirely a bad thing (it is your money but you have no control over it, cannot even touch it until you retire), It is a good initiative by the govt to FORCE financially ignorant Singaporeans to save and be able to survive after retirement. And after all, it is a ZERO RISK investment with 2.5 - 4% return p.a. But for you readers, there are so much other better investments out there, so go educate yourself!
**BITCOIN**
Last Quarter I did mention that I would be starting to Dollar Cost Average into Bitcoin, I did... and...
I had to remove Bitcoin from my comparison chart because With TWR of +151% and ROI of 116%... it causes my chart to look like this...
Times like this I wish I am crazy enough to just YOLO all my money into Bitcoin 😂. Sadly Bitcoin makes up the least of my investment at the moment. I have just about 500 USD invested before bitcoin start flying up. It is now $30k at the time of writing this post. I will still continue dollar cost averaging into this, a lot of people seems convinced that cryptocurrency is the future, but I don't think I would be able to sleep peacefully having too much money invested into crypto.
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| Current composition of Investments to date |
CONCLUSION
With about 9 months worth of data, it is quite evident that the best way to make money is just to throw your whole live savings into BITCOIN and then hope for the best!
I am KIDDING please don't do that. Crypto is too volatile, high risk high return, for me will be max 10% of my whole investment.
Having the right education and investment plan will definitely give you the best result compared to other investment methods. My number 1 strategy is to BUY GREAT COMPANIES AT GREAT PRICES and then hold for the long term. Of course easier said then done, the key is to know what makes a great company and how much would be a good price for that company? Learn this and the knowledge will carry you far in your investment journey!
What's Next?
I think 2021 will still be volatile and I am cautiously Bullish. With the S&P500 hitting all time high and being over-extended far from the Moving average, a correction would probably come in the near future before it can climb higher.
There will be no change to my current strategies, and I am quite sure it would be difficult to match this year's return. My target stays at about 12% p.a. Only when I can consistently achieve positive returns for few years, then I'd be confident in my investment approach.
To my fellow investors, congrats if you get more than 16%! cause you have beaten the market. Remain focused, manage your risk, and don't be greedy. Stick to your investment plan!
Oh and if any of you actually lose money in your investment this year....
That's it for 2020! It's been quite a journey and i still have a long way to go for my BMW. Wishing everyone many many more Positive returns! Hope I have managed to ferry some financial sense to you!
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| Happy new year! and I sincerely hope 2021 will be less shitty than 2020! |
Remember Ferry is not a licenced financial advisor so do your own due diligence! Provided data are purely based on historical records and may not guarantee future results. Follow my methods at your own Risk!
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