Time really flies like an arrow, and we are now nearing the end of a rather tumultuous year. Here I will share my views for the past year, my opinions of the coming year and an update on Bob’s portfolio.
2023 Review
2023 was a roller coaster ride.
The biggest news for the year was the announcement by the United States (U.S.) Federal Reserve (Feds) on the maintenance of current interest rate levels and the planned three rate cuts in 2024, which sent the markets rising. The S&P500 gained +22.46% year-to-date (YTD), but the Straits Times Index, though being lifted along, suffered a slight loss of -1.11% YTD.
Before the above news came out around a fortnight ago, the after-effects of interest rate hikes in 2022 and 2023 were clearly shown with the hammering down of real estate investment trusts (REITs), especially at overseas commercial properties and specifically those from the United States suffering the greatest blow. For us, the fall of the REITs asset class had provided a good opportunity to enter good quality ones that were being dragged down collectively, such as Frasers Centrepoint Trust.
During last year’s review, I had brought up the term “recession” and was pondering whether it would happen this year. So far, the United States (U.S.) and Singapore economies were still alright for the time being, though I must stress that there is usually a delay between a market and economic cycle, and a boom in the market may mean a bust in the economy at the same time.
Finally, we look at the YTD performance of HACK, IPAY and ICLN ETFs, which represented my next big things cybersecurity, electronic payments and clean energy respectively:
HACK: +38.09%1
IPAY: +19.56%1
ICLN: -19.59%1
OK, let us go further a bit to six years and see how their performance fare from Jan 2018 to Nov 2023 using CAGR (compound annual growth rate), since it was at the end of 2017 (see here) that I had declared these three sectors to have potential:
HACK: 10.89%2
IPAY: 3.50%2
ICLN: 8.73%2
Factoring in inflation which was the talk of the town for the past two years or so, the actual CAGR for HACK, IPAY and ICLN were 6.81%2, -0.30%2 and 4.74%2 respectively. Compared to counters that experienced a surge during that period (e.g., Nvidia, Tesla, etc.), these miniscule returns were nothing compared to them. However, as I had always said, investments are on a longer runway, i.e., at least 10 years, so probably we shall see later to see if I am correct.
2024 Preview
2023 had seen some geopolitical events, especially ongoing conflicts and potential flashpoints, and these would carry on into 2024, making headlines that could affect market sentiments. As mercenary as it sounds, these are buying opportunities to go into seemingly healthy counters that may be battered down by such news.
Lastly, I should not be forgetting the current elephant-sized trend in the room, which is artificial intelligence (AI). While AI has been around for a while, Chat GPT was the catalyst to spur the developmental race among the technological giants (between browsers, chipmakers, etc.), and this race would continue to persist in 2024 (okay, I am stating the obvious here…).
Bob
As of 31 Dec 2023, Bob’s Bedokian Portfolio had grown to slightly above SGD 98K in value (excluding the cash component which is not shown) and gained a dividend amount of SGD 3,143.12 and USD 33.16. Overall, Bob’s portfolio was up 5.12% for 2023. Bob will rebalance on 2 Jan 2024 with another SGD 5,000 injection, so stay tuned to his portfolio.
Bonus Topic: Why So Many Articles In December?
If you had noticed, this is the 10th article I had written for December 2023, and the number of articles I had contributed this month would have normally covered between three- and four-months’ average worth of posts. The reason? Let’s just say I had caught the writing bug and got a lot to share with you, that’s all (grin).
Depending on the duration of the bug, I may go back to the usual frequency in January as the new year would bring new challenges, and new stuff to do in my day job.
Happy 2024!
Disclosure
The Bedokian is vested in HACK, IPAY, ICLN and Frasers Centrepoint Trust.
1 – ETFDB.com, YTD as at 29 Dec 2023 (accessed 30 Dec 2023)
2 – Portfolio Visualizer, HACK, IPAY and ICLN between 1 Jan 2018 to 30 Nov 2023 (accessed 30 Dec 2023)
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