Portfolio Update - 31 August 2015

August has been a bad month for share investors. Weakness in Chinese economy growth caused the Chinese stock market to slump. Of course the extreme volatility of Chinese stock market was also caused by the over-leveraging of the investors which has pushed the share prices to an insane height previously. The crash of Chinese stock market in turn affected the other markets, Singapore included.
On 24 August (which incidentally is my birthday), STI dropped 127 points on a single day! Many thought that the market is going to crash big time and were getting nervous. Fortunately STI recovered back to 2950 level by the end of the week. However the rally lag strength, and the index  dropped more than 1% today to close at 2921.44. For the whole month, STI droped 281.06 points, or 8.78%, making this the worst month in the past few years.

My portfolio value sank in tandem with STI. As at 31 August, its value decreased by 8.08% compared to end July. YTD portfolio value has decreased 11.26%. Unless stock market has a great rally towards the end of the year, the return of share investment this year is foreseen to be negative, even if dividends are taken into consideration. (I put this as a record here, it does NOT mean that I am overly concerned about the decline).

This month, I topped up shares of  Tai Sin Electric, Stamford Land, Ascendas-HT, CapitaR China Tr and STE. I am using the opportunity to increase these holdings to improve dividend income further. Total fund invested this month was S$31,425.00.

Dividend wise, August has always been a good month for dividends. This year is no exception. The total passive income received in August amounts to S$17,970.00, majority are from shares.

Below are my top 30 holdings as at 31 August 2015. There were not much changes as price drop was across the board. STE move up due to topping up, while Lippo Mall Tr replaces  SingShipping.

1.       ComfortDelGro
2.       SPH
3.       DBS
4.       OCBC Bank
5.       Ausnet Services
6.       ST Engineering
7.       Kep Inf Tr fKa CIT
8.       Metro
9.       Sembcorp Ind
10.   Frasers Comm Tr
11.   Starhub
12.   SGX
13.   AIMSAMP Cap Reit
14.   CapitaLand
15.   Keppel Corp
16.   OUE
17.   SATS
18.   Nikko AM STI ETF 100
19.   CapitaComm Tr
20.   Ascendas Reit
21.   YZJ Shipbldg SGD
22.   United Engineers
23.   Global Inv
24.   Nam Lee Metal
25.   Sing Inv & Fin
26.   SingTel
27.   CWT
28.   Mapletree Log Tr
29.   SIA
30.   Lippo Malls Tr

Scrips Dividend Scheme

Many high yield shares and trust (esp. REITs) offer scrip dividend scheme to the shareholders, i.e. shareholders can opt to receive shares instead of cash for their dividend. The advantage of the scheme is that shareholders can buy additional unit without paying commissions. The disadvantage is that he will have odd lot which is not easy to liquidate. To encourage shareholders to opt for scrip, companies will normally offer a small price discount to the shareholders.

I have been subscribing to scrip dividend schemes, as I normally hold my shares for very long period and don't mind to hold odd lots.

As August is the month when many companies pay dividend, I now have several "option forms" in my hand. Now with the share prices plunging last few days, a problem surfaces: Shares prices are now a few cents below the prices offered in the dividend scheme. I make me look "silly" if I opt to receive shares, since I can buy them cheaper from the market. Of course if one takes the commissions into consideration, the shares offered by scrip dividend scheme could still be "cheaper". Question is, will the share price continue to head south?

I will observe the market movement in the next few days and decide if I will subscribe to the scheme or receive cash.

Terminating Life Policies

I held a few life protection policies from various insurance companies, which I bought more than 25 years ago. At that time, I was convinced that I needed the policies as I just started working and was supporting my parents financially. If anything should happen to me, at least I would leave a sum of money for my parents. After I got married, I thought these policies would be good to protect my young family.

More than 20 years have gone by since then. With the passing of my parents, and graduation of my children, I think these life policies have served their purpose. Therefore I called on NTUC Income today to terminate the life protection policy. I also called my AIA agent to terminate my life policies with them.

I believe that we need different policies at different stage of life. At this stage, my need will be a good H&S policy.