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Portfolio Updates

Portfolio Review and Reflections 2021

Calvin Lo

Looking back at my investing journey in 2021, I’ve learnt so much (mostly painful lessons) and made some pretty material changes to the portfolio.

I’ve continued to gradually rotate the portfolio away from Singapore stocks to more US stocks. Since the US stocks I’ve been adding were mostly growth stocks and the Singapore stocks I’ve sold are mostly value/dividend stocks, the portfolio is now more heavily skewed towards growth.

Since the pandemic hit in early 2020, I’ve realised that our Family Portfolio was pretty sorely underexposed to long-term growth. Previously, I’ve been largely focused on value and dividend stocks. Not that I don’t think these stocks will do well. In fact, as inflation and interest rates rise, I think value and dividend stocks might outperform growth.

The main reason for the pivot was that I felt that our portfolio was too conservative and skewed towards income which we don’t need yet. I’ve been slowly changing my investing mindset towards stocks with long-term growth potential and exposure to the new digital economy.

Since I intend to hold onto these stocks for more than a decade, I actually felt that old economy stocks were at higher risk of being disrupted and declining. Not that I think they would go out of business, but I don’t just want the companies I own to survive. I want them to thrive.

My thought is that I want to be heavy into growth now for capital appreciation until we’re close to retirement. By then, we can always sell growth and put the funds into safer income-generating dividend stocks and maybe even bonds.

Over the past year, I’ve seen many Singapore companies decline steadily. I’ve realised that being Temasek-linked doesn’t mean the company is a safe bet. Yes, they may not go bankrupt and your investment may not go to zero but it can still decline pretty substantially. I’ve seen this in SingTel, Keppel, SPH, Sembcorp, SIA, and the rot may not have stopped just yet.

As long as companies stop innovating, we should be super careful as investors and watch these companies like a hawk. It’s time-consuming and takes a lot of work, but that’s what investors sign up for when investing in individual stocks. If you’re not willing to keep tabs and put in the work, best to probably consider just buying benchmark ETFs.

I’ve made good headway this year towards my goals of reducing the number of holdings and increasing exposure to benchmark ETFs. Last year, I realised the hard truth that I’m not a great stock picker. My individual stock picks taken together was severely lagging the S&P 500 index.

There were highlights of course, like DBS (SGX:D05), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) which have performed really well. However, the lowlights have really dragged down performance, like First REIT (SGX:AW9U), SingTel (SGX:Z74), SBS Transit (SGX:S61) and Alibaba (BABA), all of which I’ve gotten rid off. Good riddance!

By reducing exposure to Singapore stocks, I’ve also tried to reduce home-bias which has been very detrimental to our portfolio performance vs global benchmarks. Big countries like US and China can chart their own path, but Singapore is always affected by what’s happening elsewhere in the world. I’ve also started to add some exposure to China via the Hang Seng Tech ETF (SGX:HST), but has been performing poorly since the tech crackdown in China started.

Another painful lesson I’ve learnt this year is not to chase performance and get caught up in hype. Discipline is so important as an investor. I’ve gotten burnt by SPACs and the ARK-Cathie Woods hype. Thankfully I didn’t bite on meme stocks otherwise I’d probably have lost some teeth.

So next year, I need to be more disciplined and continue trimming away the fat in the portfolio ruthlessly. I still want to get my number of holdings down under 20. I’ll try my best to cut my losers and let my winners run, which I’m a recurring delinquent at. Read more on my 2022 market outlook here.

Without further ado, here’s our Family Portfolio as at 31st December 2021:

Here’s the pie chart view:

More information on my portfolio page here. I’m trying to figure out how to create a live update version of my portfolio holdings above. I’ll put it up in the portfolio page if I manage to figure it out. I also share in my portfolio page about the separate funds in smaller Personal Portfolio and Social Portfolio, if you’re interested to have a look. I’ll also post my usual monthly portfolio updates in a few days.

Hopefully when I come back to this post at the end of next year, I’ll have better investing results, and a leaner and meaner portfolio. If so, future self, give yourself a pat on your/my back.

Hope you had a great 2021 and here’s wishing you a fantastic year 2022 ahead in your investing/finances, health, and family/relationships. Happy New Year!!

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