Review of 2021

This will be a long post as I reflect on the following:

- CPF Interests

- 2021 Investment Results (YOY)

- 2021 Achievements Reflection

- CPF Interests

First off with the good news, our trustworthy CPF continued to deliver compounding interests along with another year of good employment. A total of $14,376.31 interests is credited, this is $1,508.46 higher than 2020's interest of $12,867.85 from government.

At age 37+, hopefully another 23-28 years employment (assuming lifelong employment at same or similar work till 65 retirement), hopefully the CPF balance could break the million dollar mark while cost of living do not rise too much when I retire then. With the combined balance of $411k, continued contributions & compounding interests, it should double within the next 18years (rule of 72 divide by 4% interests).

- 2021 Investment Results (YOY)

Next, on to the bad news, my investments (paper loss) did badly in 2H2021.

A total mark to market loss of $36,137.63 is booked, this comprised of $15k which was realized mainly from my exit of hospitality counters (Duty Free International & OUE Com Reit) early in the year, the rest of $21k loss are unrealized in US Options (based on Think or Swim's Net Liq.balance) which fluctuates wildly $10k+ each day depending on my Alibaba's price (if rise $22 from $118, I would breakeven my paper loss).

I continued to struggle with the psyche of managing options risk & its not an easy issue.

Eg. When you sold put, one's hope is that it may expire worthless.

Eventually, one would experience greed & tried selling naked weekly puts & start maximizing your available balance's leverage, the money came in fast during 1H2021 when weeks after weeks of options expired worthless, and I piled on new puts selling. Until when the price move against me (SI, TSLA, BABA etc.), even a 30-50% available balance (ie. $100k against a $200k portfolio) is insufficient as price went below your strike & deep ITM, every dollar drop is mark to market of $100 per option. If one have weekly puts sold, at some point, it would be impossible to roll down & out for a credit unless one roll more than 1 year out which would results with huge balance tied up in slow time (theta) decay.

Also, psyche wise, it mess up my past years of trading rules. If I hold stocks & it moved against me say 3-5% of cut loss rules, then I would cut loss for trading. Of course, I still mixed up with investing rules occasionally (I never really learn at times), like my OUE Com REIT & Duty Free that I cut loss too late. Anyway back to options, because of the desire to hold puts until expiry to avoid cost of buying back to close, when price pattern reverse, most traders of stocks would take profit but for options it messed up my psyche & the wishful thinking that the puts sold would expire worthless before price come down to the strike. Reality is one can identify turning points easily but one can never identify how low it might go, until it finish its falling trend. 

Even a fundamentally strong counter like BABA could be down for years (since 2019), as my TOS screenshot showed, my BABA shares (assigned at average of $192.50) & deep ITM puts sold took up the bulk paper loss of USD45k which literally vaporised my profits clocked 1H2021. I had to "deleverage" down & closed some BABA Puts then.

Lessons learnt: risk management is really personal emotions & character management; stick to cash secured or defined risks trade (like Diagonals, spreads) & never allow puts assignment risk to exceed 2x of cash holding. Very often, strikes that seem far at entry can come close or deep ITM... as the saying goes... the market can remains irrational longer than you can remain solvent. Having the ability to hold is an important risk pillar to support the whole investing / trading business.

- 2021 Achievements Reflection

Despite the poor investment returns, which turned my 9 years of track record to negative. I managed to achieve my financial goals set for 2021 (the first version, not the revised July 2021) where my 3 pillars (liquid assets, CPF/SRS retirement and HDB residence) each about $300+k, totalling over $1mil. Of course, in Singapore's Asset Rich Cash Poor structure, the home HDB residence is a depreciating asset as it would eventually become worthless at end of its 99years lease. However, any assets that has worth, consider good if it could generate income, but also not too bad if it could avoid expenses. Imagine if one do not have own shelter over its head, one would need to incur rental expenses each month to rent, that will definitely be a huge drag on one's financial journey to freedom.

Out of these 3 pillars, my liquid assets which include my savings, investments & retained earnings (from work & training) grew much slower than previous years (primarily due to investment realized & paper losses). My CPF & SRS retirement asset grew the most at $50k year on year which comes naturally from employment's contribution & interests. Although notably, the HDB residence also grew quite abit based on SRX appraised value though I expect it to stagnate in 2022 due to rising interests rate. 

To conclude, my focus for coming year will be on family building & trying for babies. As the "head of the household" (pardon my masculine tone to the ladies), I need to plan finances & grow them no longer for my self but for my family & future children's future education & maybe retirement (if I deposit their money to their CPF SA... Mmmm... still thinking).

Lastly, health is our greatest asset of all times, the fact that we survived the Covid-19 endemic 2nd year, we are the luckiest winners to continue to be alive and enjoy life's ups & downs.

Happy New Year 2022 & may all your goals come true, take care & stay safe!

Comparison of Integrated Shield Plans (Singapore Nov 2021)

Recently, I have entered into a sort of family planning stage where my spouse & I thought of having baby in the coming year & we thought of getting Integrated Shield Plans. Its definitely not easy to compare across all the different plans, many insurers also hyped certain wordings like "lifetime coverage" to make it as though its exclusive when its a common feature across all insurers.

I spent hours and hours reading through various sites which provided good tips but none is conclusive of which is good or detailed why its good. The insurers also avoid price competition by having different features, pricing which makes comparison really difficult across the board.

Eventually & kudos to MOH our paternal government which lists a comparison of integrated Shield Plans across the 7 insurers (link here)in a pdf format, which I converted into excel & use color formatting to help me visually see which plans have the best "features" and the average premium costs across lifespan.

You can refer to the source excel here 

The dark green color showed the top feature / benefit in that row.

Lighter green implies comparable but lesser benefit or with restrictions.

Dark red implies lack of or absence, lighter red indicates certain restrictions.

The overall idea is to have an overview visually which plan give the best or most benefits & I ranked the first or second for each table. Do note there's some bias in me, for example, I value "inpatient palliative care" highly after my late Dad's been "chased" out of his restructured hospital palliative ward as stage 4 cancer patient to hospice care which do not have any medishield coverage & the costs are easily $4-5k+/month. Fortunately (or unfortunately) his condition deteriorated in his last few days & thus no longer conducive to move out to the planned hospice thus he managed to stay on & passed away. Thus for me, this is a vital benefit that I valued should I ever face the same situation.

Next benefit that I valued are the pre- and post- hospitalization treatment, which I want it to be as long as possible, as quoted by this Today article in April 2021 "complex diseases such as inflammatory bowel disease or gastroesophageal reflux disease, long-term follow up is important, as most of these conditions would not be resolved within three months of the time of diagnosis".

As I am in my late 30s, the final table which I inserted as excel formula to calculate the average across the premiums for each age groups. I also simplified the figures by taking the upper figure of the range for prudent estimate. The final results that I chose is probably GE's SupremeHealth P Plus based on the cost versus benefits (most greened benefits) though the final purchase depends on the level of exclusions as I do have a mild condition that's non-life threatening and in fact no medication needed at all with no functional impacts in any way, but have a potential to lead to cancer if the viral load somehow take a turn for the worst despite being dormant for past 25 years since its discovery. The Today's article highlighted earlier had many good tips that you should ask before purchasing any ISP; I will be asking them when I fix an appointment with my friend's agents. This will be my first time sitting down in a serious discussion with a Financial Planner / Insurance Agent. I do think its prudent from risk management perspective to divert say 5-10% of my annual income into various insurance plans (ISP, pregnancy, critical illnesses, accident, disability, children's education) etc. After all, like the options premiums that I earned, the cost is a necessary protection to my "downsides" in life & my family, provided the protections are comprehensive & trustworthy enough to rely on. Otherwise, I might as well rely on the standard government mandated ones & myself in building my rainy day funds.

Reversal of Fortunes, Investing in my Education & Community Support

Reversal of Fortunes

What a big change in the past 2months, I remembered updating my yearly resolution plans when I realized all my financial goals for 2021 were hit, setting new targets of repeating the gains which led to "performance stress" where I begun to oversell to max out the limit (ie.utilized nearly every available dollars balance in my ThinkOrSwim platform).

Initially, my portfolio started with about 10 different counters which I sold put options on, then the series of China clampdowns drove down prices so fast that the usual tactical maneuvers of rolling over results in double & double & double down, before I know it, my put options losses ballooned to 3-4x. Over the past month, I closed off other counters which results in risk concentrations over 2 specific counters, BIDU (Baidu) and BABA (Alibaba) to raise available dollars for roll overs. Until the deltas hit .90+ so much so that, towards expiry, I cannot even roll them over without taking debits as the time value (of even 3months+) are not enough to cover the ITM losses. My paper profit of almost USD70k late July reversed into losses (currently $2-3k losses YTD that hit my capital), a reversal of +USD70k to -USD3k! Ouch!! 😭

Most of the losses were taken when I closed my BIDU put options sold & reduced my exposure to BABA.

I took assignment of 200 BABA shares at strike of USD220 when the price closed at USD157.96 on 21 August 2021.

This experience forced me to research & explore other tactical maneuvers to reduce losses, other than simply taking the losses, I also sold calls at expiry price to reduce the losses (2x premiums from put sold & new call sold), hopefully as price recover, the premiums from puts roll over & call sold at or above put's strike I will be able to gradually recover my account.

This reversal of fortunes also reminded me to be humble & always remember the risk management & diversification rules as well as setting cut loss of 1% limit & avoid rolling over more than once to avoid becoming "married" to the position & suffer huge losses with a prolonged downtrend like many of the Chinese tech shares.

Investing in my Education & Community Support

Adam Khoo & his team launched a new "Beat the Market" sale, as shared in my earlier post, knowing the techniques is only at most 1/3 of the winning share, the critical part of risk management if not monitored can easily reversed the fortunes like what I did. Also, I am lacking of social support of other options traders to discuss & exchange ideas, hopefully with the investing into my own education, am purchasing bundle 5: Ultimate Profits (promo price until 1 Sept 2021 https://btm.piranhaprofits.com/sale), I know I can make the money many folds back. With the community support, hopefully I can avoid drawdowns like what I been through the past 2months.

God bless & may the trends be with you! 🙏🍀

1H 2021 Investment Results

Haven't been active in posting as I was in a sort of discovery journey on options trading, mainly selling putting options, experimenting various options strategies such as the wheel & going through hours of Adam Khoo's videos on Options Ironshell & Ironstriker...

I will talk abit on my personal review of the 2 options courses in general as well as my 1H2021 results thus far.

Review on Adam Khoo (or rather Bang's) Options Ironshell & Ironstriker courses

Firstly, the videos I watched was shared by someone & wasn't the latest (I think its 2019 version) so there's probably some changes / updates since. However, based on Adam Khoo's free & open sharing on his youtube , the changes are minor (eg. Bull Bang / Protective Bullish Synthetic to Collar Synthetic Strategy, the only one I noticed) but the rest are largely the same. Well strategies are like principles, such as Value investing, Swing trading etc. these strategies remains the same past decades, abit of tweaks here & there, depending on individuals' style. With that set, here's my review.

The courses comprised of useful tools (excels - linking TD Think or Swim platform to color code options with rich / poor premiums, portfolio plan, tracking table etc.), power slides (for those who prefer hardcopy to read) and hundreds of hours of step by step videos with examples of trades. I personally learnt alot and find it absolutely enriching.

In terms of takeaway, which you I will attribute a good part of credits to AK, my return had breakthrough to a whole new level I never thought I can achieve. However, those strategies that I like & use to achieve these returns, are actually the most simplistic & basics which almost every options trader are well aware but different level of appreciation & mastery. My strategies thus far are mostly selling put options with occasional bull put spread or hedging on VIX, I experimented abit on diagonal (lease to rent - buy long dated call (lease), sell short dated call (rent); but my most preferred are still selling puts - simple but abit of arts (like what to sell). On this, I combined by usual trading methodologies of catching bottoms or pullbacks with a search on high Implied Volatility (IV) stocks to sell put options on. In addition, the "ah ha" moment was when I struggled to cut loss on stocks that went against me (eg. TSLA which fell from peak of $850 to low of $550 & SI which fell from $170 to $80), both caused me quite abit of drawdowns which I managed to recover from. As I read from various groups' comments, I learned more from others such as diversification over various counters, rather than selling 6-10puts with weekly expiry consecutively in upcoming 45days and so on.

In conclusion, the cost of the courses are definitely worthwhile to invest in, but it takes alot of dedication to research, learn, test & also adapt (carefully) to suit one's style. However, the materials are already out there, at least those that led me to my profits; much of the other strategies are not so comfortable to me at this stage, maybe because I still haven't master them or I dont like the number of legs needed to execute. You can actually learn almost 70% of the materials just from his videos on youtube (yes all his videos added up already cover more than 70% of his strategies taught), but the most valuable part which cannot be bought is the community (AK or Bang's Telegram group - like minded peers' money making ideas & sharing). So, even though I already have the videos, I will be keeping a lookout for AK / Bang next Black Friday sale, will take some profits & invest to learn continuously to practice & trade skillfully over time.

1H 2021 Investment Returns

My return for 1H2021 is 18.9% or USD 34k out of invested capital of USD 181k (rounded to nearest k). Adding back the 100 VRTX share assigned, the return is about USD57k or 30%.

The chart above illustrates the deposits of capital & drawdowns.

I opened my TD Account on 26 August 2020, was experimenting around & gotten my first assignment of KR which I took loss as it fell despite a positive earning report then (8 Sep 2020).

There were some drawdowns related to BABA which was affected by China government's clamp down, but gradually my appreciation of the strategy & risk management increased & I pumped in capital (marked by major blue bars for the horizontal increase in balance). At the end of 2020, I was net equal to the capital I put in then, thus instead of removing 2020 transactions I continued the entries in Excel & included it in the chart.

The slow gradient increase over time are the premiums sold which some I covered but mostly at profits, still there's some drawdowns which is only part of the investing journey. On the right edge, I was assigned 100shares of VRTX which I held & sold call option on it.

Overall, 1H2021 that is, the return in USD has been quite impressive for my standards, I hope to be able to keep up my rational & wise judgements to generate more returns consistently overtime.

Hope you enjoy this & may the trends be with you...

CPF Interest 2021

Its that time of the year again, where everywhere i browse i see bloggers sharing how much CPF interest they got...

So, i decide to share mine as well, but abit of demographic info.would probably give more context as undoubtedly readers will be comparing this to theirs individual situations, which is likely to be different from mine.

I'm aged 36 this year, attached but not married yet; no housing obligation as i took over my late Dad's 3 room flat with 62years lease (but likely plan to BTO this yeat). So please note the balance is only possible due to 1) early cash top up to SA, 2) transfer of OA to SA several years ago & 3) no mortgage debt.

Needless to say, 4% from SA balance of $215k contributed to the bulk of the $12k interest. This put my trading to shame as neither my cash capital (including my personal saving) nor my returns could beat CPF returns in the past 8 years.

Maybe ETFs n long term holding instead of trying to time the market, is the way to go for 2021.

Before ending this post, one should be reminded of their greatest assets, that is HEALTH!

When we are in our active years, our expenses are low. I cant remember if the $699.40 outgoing from Medisave was it purely for Medishield Life premium alone or does it include any medical expenses in 2020. In any cases, the fact you are reading this means your have survived Covid19. Being alive is the greatest gift because it means there's still chance to make changes if you want to.

All the best to 2021!

2020 Review

 2020 has come to an end and hopefully with it all the woes & tough times we've had.

So how did this year went for me?

My Realized Profit was $10,326.60 or about 5.7% gain from an initial trading capital of $180k at the start of 2020. While this realized profit may seem impressive, I am "struck" with a paper unrealized loss of $13.7k for my SG portfolio below:

A Quick review of my current SG Holdings:

Duty Free International

This trade was first entered over its large capital distribution announced late 2019, I tried to average down only to be struck with a outsized holding of it compounded by Covid19 pandemic. This company had since survived the custom claim which appeal court has ruled in favour, but its worries are still not over with the lockdown of international borders. It has since closed some outlets to conserve cash, its Duty Free edge is also blunted by the Online Shopping's discounts thus its prospects will only return when international travellers return to Malaysia again. I have taken some losses but kept the bulk of holdings, fortunately it has recovered in its price like the other hospitality, airline stocks where it rose from the bottom of about $0.078 to $0.096. I am hopeful this once dividend cash cow still stand a chance with Covid19 vaccines started distribution, based on past new cases waves cycles, by February 2021 the cases should have fallen by then, and maybe by July 2021 the air travel could rose to its pre-covid volume of 50% for its operation to be profitable again.

Hongkong Land USD

This counter was a value trap that I got in when I saw a "financial guru" highlighting this company's deep discount against its NAV, this guru actually advocated a sort of "arbitrage" system by leveraging portfolio upto 200% using margin account / CFD, his system of buy 2x what your cash can afford and earn the spread of say REITs / Div stocks 4-7% minus CFD / margin of 2-3% interests rate. But mid way into March 2020, he announced he de-leveraged down his system as the prices fall likely had force him to raise cash to top up short fall.

Ok I go too far, anyway some of his points are still valid, this counter has been paying annual dividend of USD22c without fail, even during 2008 subprime crisis. So even though I am still deep in paper loss, this is held in my SRS and I intend to hold it for longer term, after all SRS withdrawal is at aged 62 only, so why not hold it till then?

OUE Commercial REIT

During the first "dead cat bounce" I actually traded some counters & made a small profit at the early stages of Covid19, I rotated my cash into this & had since got struck in it. There's also some worries over its Lippo sponsor, as can be seen from the dramatic fall of First REIT. During a seminar back in June 2020, the REIT manager assured of the triple lease arrangement & how they converted hotel to target quarantined individuals, but then the cluster at Mandarin Orchard Hotel which thus far found no lapse in its safety protocols. Still, it may take some time & effort to attract back customers again. Its DPU has been cut almost half in 2020, but this should recover in 2021. Other operations such as its office holdings still relatively resilient though in the near term of 2 years its unlikely to see growth of DPU beyond its pre-covid19 peak.

Nikko AM STI ETF

I have always been trading short terms, and seldom hold an counter beyond 1 year unless like those above when I am forced convert to a long term holder (more like prayer to recover cost). Still, I have become a half convert to Financial Independence Retire Early (FIRE) movement and several of them used a dividend sort of ETFs holding to diversify risk while riding on a region /country / sector / theme growth. My first purchase was through the new Tiger brokerage, which no doubt its cheap at 0.08%, there were hidden fees like interest financing charge when you withdraw your supposed "withdrawal amount available" because your proceed has not been cleared (ie. within D+3). My second purchase was through DBS Vickers Cash top up which charge me 0.12% and deposited into my CDP, this way I get to receive & participate in all the corporate actions. Increasingly brokerages are charging fees for custodian accounts after some cut the commission to 0.12% to try & match, but then cut back on other perks such as money market fund rate / interest rate while charges all sorts of handling fees for receiving of dividend to voting in corporate actions or submission of proxy forms. The brokerage industry is likely to get squeezed by cheaper foreign brokerages like Tiger, TD Ameritrade & Interactive Brokers; dont be surprised if we see some of them merged or closed in 2021.

Conclusion of SG holdings

All in all, I believe the paper loss of $13.7k should reduce by half in 2021, most (if not all) of the counters above should survive & rise back in the year ahead. I probably move into a more passive approach in 2021, as my past 8years of trading results have shown, sometimes the simpler way of buy & hold index funds actually deliver much better returns. 

If you like to see my detailed transactions in 2020, you can click the png.file below.

My past 8 years or trading results comparison

Lastly, I have diverted SG80k to TD Ameritrade to try out some options strategies in Q4, though there has been some setbacks associated with the wild swings of Alibaba (BABA) ADR. Currently its breakeven with several options due to expire in Jan 2021, as such I will not be sharing much on this for now.

For 2021 ahead

I have completed my Master of Counselling studies this year 2020, so I should have more time though I might devote them to my family & work. In any cases, on the investment front, I am aiming to:

1) Move into ETF passive holding (possibly 50:50 split between ETF dividend style & trading)

2) Generate options income & minor options trade in US

Wish all my readers a better tomorrow in Year 2021! Happy New Year

Disguised Charges by SG Brokerages

Recently brokerages in Singapore has become more competitive after the entry of Tiger Brokers charging 0.08%++ and US low costs brokerages like TD Ameritrade at 0% commission for US and Interactive Brokers at 0% commission for US, 0.08% for SGX. This has driven down brokerage commission charges by several local brokerages such as POEMS to 0.08% SGX and USD 6.88 flat and LimTan to 0.12%-0.18% for SGX and USD 0.07% (not really that competitive actually but it gives NTUC Linkpoints).

However, what drove me to write this post is the disguised charges by SG brokerages that used to be dormant & has started taken effect. These are charges that applied to custodian shares accounts (most of the lower commission charges require you to use custodian accounts where your shares are held in trust with your brokerages, this assure the brokerages that you will have to sell your shares through that particular custodian brokerage where your shares were held).

Most of these disguised charges were previously "waived until further notice" but has started to taken effect in recent months since August 2020.

Examples:

POEMS charge $10.70 for "Cash Offer, Rights Issue, Privatisation Exercise, Merger & Exchange, Cash In Lieu, Liquidation, Redemption of Warrant, Loan Stock or Bonds, Capital Distribution, Tender Sales, Warrant Conversion" which is quite a heavy cost that comes with basically any action that you take as a shareholder, whether its receiving dividend or choosing between scrip or cash dividends. The brokerage now has squeezed itself in between to take a unfair cut out of it, this is regardless if you receive a $10 or $5000 dividend. By the way if its $5,000, POEMS "1% on net dividend subject to min of S$1.07 and capped at S$53.50 (inclusive of GST) + Foreign broker fees and taxes (if applicable)" would ensure it takes 1% at $50, capped at S$53.50.

This compares to other brokerages, like LimTan's Schedule of Charges.pdf 

One can see how ridiculous the brokerage market has become with its charges, the way they take a cut out of our hard earned investments without being a shareholder, I wonder about the "fiduciary duty" that these firms supposed to have. Worse (probably as usual), this happens in stealth, meaning there was never a formal letter or email with any exit options given, these brokerages just happily charged your account's cash away and give you the balance. Had there been a formal announcement & exit option, such as if you wish to avoid these charges, we can transfer them back to your CDP for free? (no? in your dream world maybe).

In any cases, one need to take stocks of your portfolio, if its short term trading, perhaps the lowered commission fees might be worthwhile to use custodian accounts and try to sell / exit before any corporate action's ex-date. But if you are like me or most retail investors who held shares since start of 2020, you probably have some shares "struck" in your portfolio where their market price is lower than your cost price. Most people might think well the company is good, it gives dividend, so lets hold it... 

Yup... until the brokerages come in & take a cut, without telling you (oh its there at our website you see, oh my mother also said one should be act with integrity & communicate transparently too... didn't your mom taught you that?).

If you find yourself not wanting to be "slaughtered" like some fat hog (I'm skinny with little money btw); there's one option left, that is to submit a formal request to your brokerage to transfer your shares in custodian back to your CDP account where its safe & sound (no charges whatsoever of the disguised fees above). You will need to ensure you negotiate hard, SGX CDP charges only one time $5.35 when you in custodian & you in CDP are essentially same or related. https://www.sgx.com/securities/depository

Be careful, not to be led astray & suffer more cuts with other fees; until they cut you, then you realize it.