Portfolio Updates

Portfolio Update October 2022 – Markets Up But Portfolio Lags

Calvin Lo

Stocks ended October in the green although the performance was pretty uneven among sectors. Value stocks outperformed, as shown by DJIA up +14% MoM vs S&P 500 up +8% and Nasdaq 100 only up +4%.

Hopefully the US Fed doesn’t kill the party when they announce their rate decision later today. The market is widely expecting 75 bps increase but are more concerned about guidance, i.e. whether the Fed sounds hawkish or dovish. US jobs report (JOLTS) came in higher than expected so my hopes aren’t high that the Fed will turn more dovish.

My strategy for now would be to continue DCA into core ETFs with half the amount of monthly contributions to investments and let the remainder just accumulate in cash. As inflation stays high and interest rates rise, I’ll be looking for more safe ways to get better returns on idle cash. Currently, the main vehicle I’m using are Singapore Savings Bonds (SSB), which I’ve been writing about more frequently.

On SSB, I was allotted $10k of Nov issuance @ 3.21% against the $20k applied. Concurrently, I’ve redeemed $10k from July issuance @ 2.71% to prepare for this month’s Dec issuance @ 3.47% since interest rates are expected to continue rising.

On CPF, I’ve transferred $20k from OA to SA to earn higher interest rate. SA balance stands at $106k so I still have some ways to go to hit FRS $192k. Every year, FRS increases by ~$7k so I probably won’t get there so soon. Anyway, we also don’t plan to upgrade HDB anytime soon so might as well make the CPF monies work harder.

This bear market has been long and painful, but stocks are really starting to look super attractive. Whether the US officially announces a recession in late 2022 or early 2023, I think is less consequential now since sentiment is already so negative. If you have a long term horizon and willing to stomach more downside/volatility, the coming weeks and months might be a good time to consider deploying more of your war chest.

See my previous posts on SSB:

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

Family Portfolio

  • Value as at end October: S$161K
  • October performance: +2.1% vs SPX +7.6% vs NDX +3.4%
  • YTD performance: -20.1% vs SPX -19.6% vs NDX -31.3%
  • All-time performance (since Aug 2016): -8.2% (-6.1% including dividends)
  • October dividends: S$125 (+510% yoy)
  • Bought: VT, QQQ, ARKK, HST, PLTR, TSLA
  • Sold: None
Family Portfolio as at 2nd November 2022

I’m pretty disappointed at the gap in underperformance vs benchmarks, even against the Nasdaq 100. Many of our stocks didn’t perform as well as the broader market especially vs value stocks. Chinese tech stocks also took a huge beating this month with the Hang Seng Tech index falling 17.3% MoM. Ouch!

I added to existing positions in Palantir (PLTR) and Tesla (TSLA) mirroring my Personal Portfolio, since I felt that these 2 stocks were being undervalued by the market despite their growth.

Palantir announced its expansion of Federal Cloud Service with DoD IL6 Accreditation (Secret Region), joining only Amazon AWS and Microsoft at that clearance level. Overall revenue growth reported at last earnings report was slowing but thereafter some impressive government contracts and renewals were announced. The commercial segment was still growing strongly and seems to be gaining momentum. We shall find out more when Palantir reports on 7th Nov.

Tesla reported impressive numbers at their earnings report released on 19th Oct. Financials looked stronger than ever but the stock still got hammered due to demand concerns as deliveries fell short of expectations and far below production numbers. I’m still very much bullish on Tesla especially after AI Day 2, showcasing Tesla’s capabilities in AI, robotics, and semiconductor tech.

S-REITs got absolutely crushed with higher interest rates expectations, and was trending close to 5 year lows based on the iEdge S-REIT Leaders Index. I might dump more cash into Syfe REIT+ to take advantage of the lower prices. REIT+ last updated that its dividend yield is now estimated to be ~6.2%. Wow. Although that said, the last T-bill yielded 4.19%.

I’ve pared cash down slightly to 15% from 19% last month. I’ll be continuing to find opportunities to deploy cash and reduce that to 10% gradually over the coming months.

No change to automated purchases of S$2K through FSMOne into 4 ETFs – VT, QQQ, ARKK and HST. Scheduled transfers for Syfe Equity100 and REIT+ portfolios at $200/month each will also continue.

See my previous posts on FSMOne: Automating Your Investments With FSMOne and FSMOne RSP Update.

See my reviews of Syfe REIT+ and Syfe Core Equity100.

Personal Portfolio

  • Value as at end October: S$33.6K
  • October performance: -11.7%
  • YTD performance: -25.8%
  • All-time performance (since July 2020): +4.8%
  • Bought: TSLA, PLTR
  • Sold: None
Personal Portfolio as at 2nd November 2022

No more selling of Tesla (TSLA) stock this month, only buying. TSLA fell -14% in Oct, so that was painful and explains the portfolio performance of -11%. I won’t repeat my bullish thesis for Tesla since I’ve explained it above and on my TSLA investment thesis page.

See my investment thesis on TSLA here.

I’m still holding onto SQQQ, though not advisable as a long term holding. I still expect a high possibility of increased volatility and further market declines especially if inflation doesn’t cool and/or if the job market collapses. So, I’m preparing for that using a small position in SQQQ as a hedge.

Did you make any moves in October?

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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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