To The Moon

If I’ve to describe my 2022 portfolio in one word, it’ll have to be “boring”. The core and largest composition of my portfolio is in the banking sector and primarily in our local banking giant $DBS GROUP HOLDINGS LTD(D05.SI)$ , followed by $OVERSEA-CHINESE BANKING CORP(O39.SI)$  and lastly $UNITED OVERSEAS BANK LIMITED(U11.SI)$ , that have returned 6.5%, 11.8% and 18.5% year to date respectively including dividends.

I’ve been holding DBS for the longest time, gradually increasing my stake whenever the stock was on sale, such as when investors were rushing for exits during the onset of COVID-19 pandemic.

As our local banking trio has proven to be resilient in an otherwise volatile market this year, they have been a saving grace for my overall portfolio and helped it to stay afloat in a falling tide.

I do not foresee any major shift in my investment plan for the upcoming year, as I continue to like our local banking trio for their strong fundamentals, robust balance sheets and competent managements, and will maintain my holdings or even increase them next year should the market makes irresistible offers to me. Barring a deep recession, I believe their net interest margins should benefit from rising interest rates, that track the Fed’s rate hikes to rein in a stubbornly high inflation.

My boring investment philosophy was learnt in a hard way, after a stock speculation that lost me almost S$500K literally overnight, at a time when my newborn was barely 1 month old and my former company was retrenching. The stock was suspended from trading after an accounting fraud was uncovered, and eventually delisted.

Even though the loss constituted only a fraction of my overall portfolio, it was the equivalence of a typical 5-bedroom HDB flat or a small private apartment then, so it still aches me whenever I think of it. Greed had crept onto me when I tried to amass wealth rapidly via speculation, putting my principle of value investing aside. I simply jumped onto the bandwagon based on market rumours without any due diligence.

I was moody for weeks if not months, and my only happy moments then were carrying my newborn in my arms when I tried to put him to sleep.

What pulled me through was the constant reminder to myself that I have already been very fortunate with a caring mother, a loving wife and adorable kids, and the fact that the loss was well within my means without having to resort to borrowing. It helps that I've been a strong proponent of delayed gratification and the only debt I had ever taken was a study loan that I applied before winning a sponsorship and which I promptly repaid upon graduation before interests started to kick in.

I learnt the importance of delayed gratification, time value of money and compounding of returns very early in my life, as my father abandoned the family when I was still schooling; my childhood memories were filled with my mother struggling to make ends meet for the family and raising my sister and me up single-handedly and painstakingly.

I vividly remember when I was still a toddler when my mother almost threw me out of the window of our rented flat before jumping down herself out of desperation, had her friend not stopped her and snatched me away in time.

Anyway, fast forward to today, I’ve since progressed well. By saving and plowing my savings through value investments and dollar-cost averaging into blue chips and other income-producing assets, I’ve managed to achieve financial independence since my thirties. I look forward to an early retirement with rental and passive incomes from my savings and investments, as nothing beats spending more time with my aging mother and my kids in their formative years, and rekindling emotional intimacy with my lovely wife who has always been there for me through my ups and downs :)

Since that investment setback, I’ve learnt to never fall prey to temptation of quick riches and would always perform all due diligence before parting with my money. Most importantly, even if all else has failed you, remember that your family will always be there for you.

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