Portfolio Updates

Portfolio Update May 2023 – Powered Higher By Growth Stocks, Nvidia, Tesla, Palantir

Calvin Lo

What a difference a month makes. After a flattish and uninspiring April, May was a blast especially for tech stocks and consequently the portfolio. Markets seemed to have put the banking crisis behind the rear view mirror and are focusing on the promise of the Artificial Intelligence revolution.

During the earnings season last month, almost every company that mentions the magic words “A.I.” seems to pump afterwards. This kind of excitement was absent the entire 2022.

Fortunately, both our portfolios are heavy on tech, so May has been a bumper month. We’ve been in bear market so long I can’t remember the last time the portfolio had such a green month. Naturally, the tech-heavy Nasdaq also performed well ahead of the S&P 500 which was dragged down by practically everything else.

The A.I. wave which has been building over the past half a year since the unveiling of ChatGPT culminated in fantastic, almost surreal guidance from Nvidia (NVDA) at their quarterly earnings release. That super optimistic guidance propelled the stock higher, dragging practically the entire tech sector up with it, including Big Tech.

The market seems to have forgotten about the Fed, the inverted yield curve, and the risk of recession that comes with. With the Fed signalling a pause at the next FOMC in June, markets seem to be focusing elsewhere for the next catalyst.

On the fixed income front, SSB yields and fixed deposit rates have been falling. Only T-bill yields seem to be holding up pretty well for now. T-bills look attractive at cut-off yields ~3.8%, so I might bid for some up at upcoming auctions.

Read my latest update on fixed income Fixed Income Tracker Update (May 2023) – FD Rates Falling, T-bills and Cash Funds Resilient.

See also my Fixed Income Tracker and SSB tracker.

Last month, I spent quite a bit of time reflecting on dividend investing. I’m increasingly concerned about over-emphasis on dividends while disregarding total returns (dividends + capital gains/losses). I’ve been tweeting most of my thoughts on that, but I do intend to consolidate my thoughts in blog posts as well. I might also focus a bit on overall portfolio performance tracking as a better alternative to merely dividend tracking.

Read also: How Dividend Investing Can Potentially Wreck Your Portfolio

See my Portfolio page for more details on my portfolio value, holdings, and strategy.

Family Portfolio

  • Value as at end May: S$187K
  • May performance: +7.1% vs SPX +0.6% vs NDX +8.4%
  • YTD performance: +19.1% vs SPX +9.7% vs NDX +32.0%
  • All-time performance (since Aug 2016): +0.5% (+2.6% including dividends)
  • May dividends: S$27 (+31%)
  • Bought: VT, QQQ, ARKK, SGX:HST, LSE:VWRD, SE, PLTR, TLT, SQ, SCHD
  • Sold: AAPL, NVDA, MSFT
Family Portfolio as at 1 June 2023

May has been one of the more active months in a while in terms of trades for me. Besides the usual RSP into VT, QQQ, ARKK and SGX:HST, I’ve also started to manually DCA into LSE:VWRD. With no automatic RSP options for VWRD yet, I’ve stuck to VT and supplement with manual trades of VWRD. Once I’m satisfied that VWRD is the better option, I might do a one-time swap of VT to VWRD and bite the bullet on the transaction costs. Also, I’ve added to my existing position in SCHD as prices fell.

Read: VT vs VWRD – Vanguard World ETF Comparison

Read also: Automating Your Investments With FSMOne

The major new purchase I’ve made last month was the iShares 20 Plus Year Treasury Bond ETF (TLT). After long term bonds have gotten clobbered by rising interest rates and the Fed signalling a potential pause, I thought it might be a good time to get back into Treasuries. However, I’m in TLT for the capital gains primarily and hedge against recession secondarily. TLT yields only 2.7% before taxes, so after 30% withholding tax I’m only getting 1.9% net yield, so it’s not a dividend play.

In addition, better clarity around Fed rate policy gave me confidence to start re-accumulating growth stocks again. Although I’ve definitely missed the bottom, I felt that the risk of further downside was limited after having fallen by so much.

Last month, I nibbled into Sea (SE), Palantir (PLTR) and Block (SQ). SE got whacked after earnings which disappointed.

  • Sea CEO Forrest Li might’ve shot himself in the foot by announcing the pay raise the week prior, which raised expectations for great results.
  • Palantir was in consolidation phase, so I thought to pick up some PLTR shares prior to earnings before a potential breakout, which eventually did happen in a big way. Unfortunately, I didn’t buy much.
  • Lastly, I bought SQ shares after earnings release which showed that Block was performing fine, and gave me back a bit of confidence after being slightly shaken by the Hindenburg short seller report issued back in March.

I’ve also trimmed a few of my bigger positions in Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT).

  • I felt that NVDA was a bit overheated, so I took some profits. However, the stock has so far proved me wrong and has continued to power higher.
  • As for AAPL and MSFT, both had moved considerably higher as well, outperforming the broader market. However, these sales were also to reduce our funds in Tiger Brokers in light of potential regulatory action by the Chinese government. I plan to redeploy the funds back into index funds through SC Online Trading platform instead.

Read my thoughts on Nvidia: Nvidia Surging Higher – Take Profits or Ride the A.I. Wave?

Syfe managed portfolios is currently valued at $8.5k with total returns of -$118 (as at 5th June 2023). No change to regular monthly contributions of $200 into each of the Core Equity100 and REIT+ portfolios, but I did pump an additional $2k into REIT+ last month. A bit ill-timed because REITs subsequently declined so now I’m down on REIT+ but up on Core Equity100. I’m also toying with the idea of starting a position in Income+ for similar reasons I’ve bought TLT, to get more diversified exposure to bonds.

Read my reviews of Syfe Income+, Syfe REIT+, and Syfe Core Equity100.

Personal Portfolio

  • Value as at end May: S$50.5K
  • May performance: +65.2%
  • YTD performance: +64.5%
  • All-time performance (since July 2020): +18.6%
  • Bought: TSLA, PLTR
  • Sold: PLTR
Personal Portfolio as at 1 June 2023

Both Tesla (TSLA) and Palantir (PLTR) were up massively last month after taking a beating in April, so this portfolio took off quite a bit. TSLA was up +26% and PLTR was up a crazy +89% in May! Gigantic move. Needless to say this portfolio finally has a really good month, but not without its ups and downs.

Both Tesla and Palantir shares seem to be benefitting from the overall bullishness on A.I. and of course with the backdrop of Fed potentially pausing on rate hikes.

Palantir in particular has really gotten a lot of attention especially after launching its new Artificial Intelligence Platform (AIP). Strange how the move didn’t come immediately after AIP launch or Palantir reporting its first quarter of GAAP profit in Q4 2022. Suddenly overnight, ongoing concerns around government revenue growth and stock-based compensation (SBC) seem to have evaporated. I can never understand markets, why bother.

Not cutting SQQQ just yet, despite Nasdaq going into a bull market, but I’m definitely not adding. Just allowing for the edge case of a technical recession (which hasn’t come yet) potentially sparking a market correction.

After the run up in PLTR shares, I’ve been trimming bit by bit and will continue to do so if prices race higher. That said, I’m not selling any from the Family portfolio and just from this Personal portfolio, to scratch the itch. If prices pull back temporarily which I’m expecting, I’ll buy back in.

As for TSLA stock, I’m still DCA-ing but slowly as share price moves towards the $220 mark. Of course, I’d rather have picked up more shares around $150-180 but hindsight is 20/20 eh. Not sure where TSLA share price will move, but at current valuations I’m still a buyer.

Read my investment thesis on TSLA here.

How did your portfolio perform in May and what are your plans for June?

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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.

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