Thursday, April 25, 2024

The Price Of A Thousand Yen

About 20 years ago, I have had heard that the average price for a typical lunch meal in Japan was between 800 and 1,000 yen, which in 2004 terms, was around SGD 12 to SGD 161. That cost, in local terms, was reserved for restaurants, not hawker centres and coffee shops where the price then (by my reckoning) was around SGD 2.50 for a meal.

Fast forward today, you could still get a decent meal in Tokyo for between 800 and 1,000 yen, which is now around SGD 7 to SGD 9. Surprisingly, these price levels are almost equivalent to mixed vegetables rice (considered Singapore’s unofficial basic food index) sold at some locations.


In a way, we could describe that we had reached Japan’s level of (price) standards, but there is a macroeconomic explanation behind.


The Lost Decade(s)


Long story short, the meteoric rise of the Japanese economy post-Second World War ended with the burst of the asset price bubble in the early 1990s, sparking what was known as the “lost decade”. However, this decade did not really last 10 years; the economic stagnation lasted well into the 2000s, 2010s and into early 2020s, thus being dubbed subsequently the “lost 20 years” and “lost 30 years”. The Great Recession of 2008/2009, the Tohoku earthquake of 2011 and COVID19 pandemic of 2020-2021 had made worse these “lost” years.


Japanese inflation rates since 1991 till 2023, for the most part, never went above 1.5% annually, and with close to half the time went into negative region2. On the other hand, Singapore’s inflation rate was at an average of about 1.73% year-on-year, with only 2 years of negative numbers, during the same period3.


With this, Singapore had overtaken Japan in terms of inflation, and coupled with the strengthening of the SGD against the Japanese Yen, that 1,000 yen now looked less expensive than before.


What Can We Learn From Here?


The term “equities will always go up over the long run” did not hold true for Japanese ones, until recently; using the Nikkei 225 index as a gauge, it did not return to its high as of Jan 1991 until around Nov 2020. To add, the highest peak achieved in Dec 1989 was not breached till just last month. 


Imagine as an investor who was all-in Japanese equities back then; he/she would not have recovered after factoring exchange rates. Hence it is important that we diversify not only among the asset classes, but also into different regions and countries, if your portfolio is sizable enough.



1 – Yearly exchange rates, Singapore Dollar per 100 units of Japanese Yen. Monetary Authority of Singapore.


2 – Japan Inflation Rate. 1960-2024. Macrotrends. (accessed 24 Apr 2024)


3 – MAS Core Inflation, 1990-2023. Monetary Authority of Singapore.

Sunday, April 21, 2024

What, Me Worry?

The phrase above came from none other than Alfred E. Neuman. In case you did not know this person, he was neither a famous investor nor a historical figure; he is a fictional character created by the now-defunct Mad Magazine, which for those who remembered, was a series of parody-laden illustrated magazines that would tickle your mind.

The significance of the phrase is obvious: the United States (US) and local markets, where most Singaporean investors were vested at, took a heavy beating over the last couple of weeks. Delayed interest rate cuts, drones and missiles flying everywhere, and a slew of other happenings big and small had provided enough bad-news juice to bring the markets down. With all these, do they warrant enough worrying on your end?

Not really for us. This is, to quote a department store’s motto: “the sale worth waiting for is now on!”.

I had said in my previous post that we had gone into some real estate investment trusts (REITs), and we did not stop there; we had added positions to Apple at USD 165, where it was near our next “buy-into” zone. Over the next few days, we would be looking over our holdings and see which had gone into the buy-into zones, provided if the markets are still on a downward trend, and probably initiate positions in them. There could be healthy companies which are being dragged down into the whole generic doom and gloom scenario.

To those who may have regretted not getting into bargains during the COVID period, or even further back in 2008/2009, this may be opportunity knocking again. The markets and the economy go through cycles, so there are Sundays and Mondays happening around.

Keep calm and stay invested.

Sunday, April 14, 2024

Going REITs Shopping Again

The markets were reeling from the latest not-so-good United States (US) consumer price index results and geopolitical jitters. With a recent capital injection and the resulting asset allocation skewness of our Bedokian Portfolio, plus a perceived delay of US interest rate cuts, it is time to go shopping again for the real estate investment trust (REIT) asset class.

Back in October 2023 I had shared on which REIT we had entered. This time round I will share what we had gone in or planning to go into, our rationale, and our average and entry prices.

REIT #1: Frasers Logistics & Commercial Trust (FLCT)

Based on the latest business update in January 20241, the gearing and interest coverage ratios were at 30.7% and 6.2 times respectively, with 76.8% of its borrowings under fixed rates, which indicated a healthy debt profile vis-à-vis other REITs of the same logistical, industrial and commercial sectors. The logistics and industrial arm of FLCT had maintained a 100% occupancy, though the (still) worrying trend of a not-so-robust occupancy rate for its commercial properties, especially for its United Kingdom (UK) properties, is there. The recent passing of UK law of allowing employees to have the legal right of working from home from the onset of employment could likely exacerbate the commercial space situation there.

Despite the downtrend, we believe that the logistics and industrial part still holds relevance in the future markets and economy, and bring about better rental reversions. We had initiated a position of SGD 1.04, with a total average price of SGD 1.07. 

REIT #2: Frasers Centrepoint Trust (FCT)

FCT need no introduction as being the king of suburban malls in the north, east and northeast. Recently in March 2024, FCT had upped its interest of Nex mall to 50%2, funded by private placements and debt financing. Accordingly, the acquisition would provide an accretive 1.5% in the distribution per unit3, and the gearing ratio would be at 37.8%(assuming divestments of Hektar REIT and Changi City Point were adjusted into the financial statements ending 30 September 2023). 

Overall, FCT’s retail malls enjoyed an occupancy rate of not less than 99%, proving the resiliency and relevance of suburban shopping malls in Singapore. Our current average price for FCT is SGD 2.05, and we are planning to enter it around the range of low to mid SGD 2.10s.

REIT #3: Nikko AM – Straits Trading Asia ex Japan REIT ETF (CFA)

OK, this is not really a REIT per se but a collection of REITs from the Asia ex-Japan region. It is part of our core-satellite strategy of having exchange traded funds (ETFs) forming the core and individual counters making up the satellite portion. When there was only three REIT ETFs back then in 2018, CFA was selected due to its diverse REIT holdings in terms of countries and sectors. We had recently bought in CFA at SGD 0.783, and our current average price is SGD 0.953.

REIT #4: Paragon REIT (Paragon)

Honestly, for this round, Paragon is more of a “want” than a “need” for this round of additions, but I will give an honourable mention in this post. Paragon's low gearing ratio, healthy occupancy rate (at least 98% across properties) and its retail profile provided a form of resilience. Recently in February 2024, after a long period of speculation, Paragon had rejected to buy Seletar Mall from its sponsor as part of its right-of-first-refusal5

While in my opinion the establishment of another foothold in the Singapore suburban mall landscape (after its foray into Clementi Mall, which to me is a good move) was gone, but with their explanation of that it is a dilutive acquisition, plus the uncertainty of the interest rate situation (their last known interest coverage ratio was about 3.5 times), prudence is key in such conditions.


If you had noticed, Reits #1, 2 and 4 were mentioned in my October 2023 post, so this was just a rehash. Frankly I had been prospecting other REITs to enter but eventually decided to just look at the present holdings and determine their current health and price to enter. It is alright to just add on to one’s existing portfolio and it is not necessarily to look for new ones to enter simply because it is a must to get it.

1 – 1QFY24 Business Updates. Frasers Logistics & Commercial Trust. 30 Jan 2024. (accessed 14 Apr 2024)

2 – Completion of the acquisition of the remaining 49.0% interest in each of Nex Partners Trust and its trustee-manager as an interested person transaction. Frasers Centrepoint Trust. 26 Mar 2024. (accessed 14 Apr 2024)

3 – Circular to unitholders in relation to the proposed acquisition of the remaining 49.0% interest in each of Nex Partners Trust and its trustee-manager as an interested person transaction, p30. Frasers Centrepoint Trust. 4 Mar 2024. (accessed 14 Apr 2024)

4 – ibid, p32

5 – Lim, Jessie. Paragon Reit rejects Cuscaden Peak Investments’ offer to buy The Seletar Mall. The Straits Times. 29 Feb 2024.  (accessed 14 Apr 2024)


Sunday, April 7, 2024

Windfall And What To Do With It (Investment Wise)?

Sometimes we may have the chance, whether known (e.g., endowment payouts, inheritances, etc.) or by luck (e.g., lotteries), of obtaining a windfall, which is the sudden drop of cash or capital onto one’s lap. It is a pleasant surprise to get one, but the main challenge comes immediately after, which is what to do with it. On a personal level and being materialistic as most humans are, the urge to splurge on things that were both wanted and needed is there, such as the fancy car one desired, a meal at a high-end restaurant, and/or giving money away for altruistic or ego reasons, or both. The examples cited are not far-fetched as I had witnessed them personally, and in some instances the windfall dried up as fast as it came, and the recipients just went back to their normal lives.

One of the etiquettes that I had learnt about personal finance is that finances are personal. Unless being requested, I would not advise in what they wanted to do with the monies and/or capital, and even if they did, it is just an advice and up to them whether to take it or not. Admittedly deep inside me, I may be lamenting on the way how the windfall recipient is spending on some deemed frivolous stuff, but I also remember that those are their monies, not mine.


Windfall Planning

Though sounded a bit absurd, I do have a “windfall planning” spreadsheet in place to guide me on what to do should it fall onto my lap. I had initiated this after seeing the aforementioned examples about people not knowing what to do windfalls and then just spend it off, mostly without thinking. Though the numbers vary, but the splitting percentages are about the same across; portions to charity, contributing to family, partial/full settling of long-term loans, etc., and of course, investment. For this post I will focus on the investment part, because gaining a windfall is one thing, holding it sensibly is another.


Deploying The Windfall For Investment

The deployment would very much depend on the stage of investment one is at. If the recipient is a total newbie, then the windfall would be better off being in a safe institution such as the government (via Singapore Savings Bonds and treasury bills) or in a bank (as a savings or fixed deposit) for the time being as he/she is learning more about investing.

If there is sufficient investing knowledge obtained, then it could be used to start a portfolio consisting of one’s preferred asset class allocation. This can be done immediately to capture the current characteristics of the asset classes as at a particular economic situation, or done gradually over a year’s time if immediate is not comfortable.      

If an investment portfolio is already in place with the set asset allocation, a windfall would bring in cash injection that would enlarge the cash portion of the portfolio (in terms of The Bedokian Portfolio). Theoretically, it would be preferred to deploy the capital immediately to rebalance back to the desired allocation levels, especially for passive investors like Bob, and to avoid cash drag. However, for an active, active-passive, or passive-active investor with some individual counters and exchange traded funds (like me), he/she could deploy quickly in the latter and keep some for the former, as the counters may not be in the “price is right” range.

Related post:

Gaining And Holding

Monday, April 1, 2024

On The Degrees Of Diversification

Apart from commodities and cash, the Bedokian way of diversification, if it is to be done, is from top to bottom: asset class, region/country and then to sector/industry. Some of you may be wondering, why the further diversification below asset class has to be in that order.



Generally, an asset class in a region or country will perform differently from another. For instance, the table below shows the stock market (i.e., mainly of equities asset class) returns of various countries between 2009 and 2023 (Figure 1):

Fig.1: International Stock Market Returns, 2009 to 2023. Source: Novel Investor ( Click to enlarge.

Looking at some years, we had the extreme case of 2015 where the Danish index gained 24.4% while the Canadian index dropped 23.6%. In the year 2018 which all indices were negative, the Finnish one was only down by 2.2% while the Austrian one suffered -27.1%.

The same goes for real estate investment trusts (REITs). According to data from NAREIT (Figure 2), for the regions of North America, developed Asia, developed Europe and emerging real estate showed different returns for the years 2021, 2022 and 2023.

Fig.2: Excerpted from REIT Performance 2023 Q3, with 2021, 2022 and 2023 YTD shown in last three columns. Source: NAREIT Quarterly REIT Performance Data ( Click to enlarge.

Bonds wise, using another matrix of different regions/countries (Figure 3), the differing results were like that of equities’ in Figure 1:

Fig.3: Fixed Income Country Returns, USD Hedged, 2009 to 2022. Source: Alliance Bernstein and Bloomberg ( Click to enlarge.

As what the heading said in Figure 3, no country wins all the time.



Why and how each region/country’s asset classes behave differently is very much impacted by the next layer of diversification, that is sector/industry. The proportions of the sectors/industries are different in the economies of various regions and countries, and this in turn drives the outcome of returns of that area. Socioeconomic, geopolitical, and regulatory factors also play a part in the overall scheme of things. Thus, Country A’s banking sector may thrive more than Country B’s; Country C’s property market is worse off than Country D’s, and Country E’s government bonds are higher yielding than Country F’s due to the former’s lower ratings.

Putting it to real life examples, Figure 4 shows the comparison between the United States (US) and China healthcare sector, with convergences and divergences throughout a 10-year period. Another reality is on REITs where US office property sector is facing a crisis whilst Singapore’s are having a better outlook, so far.

Fig.4: 10-Year Comparison between US Health Care Select Sector Index and S&P China A 300 Health Care (Sector) Index (USD). Source: S&P Global ( Click to enlarge.


Exception: Thematic Investing

The main exception to the above diversification order is thematic investing. Blending both region/country and sector/industry, exchange traded funds (ETFs) that use thematic investing tend to bundle in companies from sectors/industries that are part of the theme, regardless of their nation of origin. Using an ETF which we are vested, the iShares Global Clean Energy ETF (ICLN)1, it contains companies from the information technology, utilities, industrials, etc. sectors/industries from countries such as the US, China, Denmark, India, etc. 




The Bedokian is vested in ICLN.


1 – iShares Global Clean Energy ETF. iShares. (accessed 31 Mar 2024)

Saturday, March 30, 2024

Rate Cut, Whenth?

One of the most anticipated moments in the market would be the announcement of a rate cut by the United States (US) Federal Reserve (Fed). In the recent Fed meeting held around a week ago, they are expecting to go through three rate cuts in 2024. This news had sent the markets to a rally (at least for the US and our local Straits Times Index). While we feel some exuberance over this, we need to be cautious, too, on how the actual thing may unfold in the months to come on interest rates. Below I will describe four snippets on why we should not be too held up by excitement and exercise some prudence in our investment decisions.

Picture credit: Pexels from

#1: Markets Are Forward Looking

This is typically a given, as expectations are a major driving force in determining the market sentiment. Some of these expectations are calculated by analysts, e.g., a fall in x% in interest rates would reduce y% of interest costs of a company or industry, thus providing an additional z% of profits. Other expectations, however, are fuelled by blind optimism which are usually baseless and this may cause them to be overblown. If the super-optimistic target is not reached after reality sets in (e.g., rate cuts did not happen, see #2), then the price or index will fall hard.


#2: Rate Cuts Expected

When one expects something, the person is holding the hope that it should happen. As this is real life and not a fairy tale, the word “hope” is one of the dangerous words to use in investing, for one does not know whether it will happen or not. It is important to know that the Fed makes interest rate decisions by looking at economic data such as inflation and unemployment. A plan is made when certain conditions are met, but if during its execution something else crops up then it must be readjusted. This meant there is a possibility that the Fed may rescind on their three-cuts schedule.


#3: Cuts Are Not Drastic

Even with rate cuts imminent, it is likely not going to be reduced by a huge number each time. The Fed had mentioned that the cut, if it comes, would be on a gradual approach, so if the no-cut scenario in #2 does not happen, then it is probably a gentle step-down rather than a big drop.


#4: Effects Of Cuts Take Time

Though a rate cut signifies cheaper borrowing costs, this effect takes time to realise as some of the current debt held by companies and real estate investment trusts (REITs) were based on rates during the last couple of years. This means at least for another year or two, the companies and REITs are shouldering the high cost of borrowing until the debt could be swapped or restructured to the current lower rates. Hence, looking out for strong balance sheet and cash flow are important during one’s analysis of a security in question, like whether it can sit out comfortably in the next few years or so.


What Now?

REITs had been hammered, and treasury bills and fixed deposits were getting popular in the last two years, all thanks to a high interest rates. If you are an active investor, and if your portfolio allocation allows it, you may want to consider looking at the above two, for the former they may not stay low for long, and for the latter they may not stay high for long. For REITs, as I had highlighted in #4, it is preferable to go for the healthy ones, like with lower gearing and in a region/country/sector which is thriving come rain or shine, e.g. Singapore retail scene, provided the price is right.


Related post:

ZIRP Is An Anomaly

Wednesday, March 13, 2024

Gaining And Holding

There was an interesting point brought up during one of my group investment discussions:

If a crypto trader had earned millions back in early 2021, did he/she ever thought of exiting the volatile positions and put them in a, say, dividend portfolio to earn cashflow?


Putting the crypto context aside, this could mean other scenarios, too, like:


I had a 2,000% gain on Nvidia over the past five years, and now I want to exit and invest in a portfolio to preserve it. How to go about it?


From my anecdotal observations and readings, the above two italicized situations are very far and few between. The reason is simple: with their given risk appetite and methodology, investors/traders would stick to what they are familiar and comfortable with. A switch to investing for safety, like cashflow (e.g., dividend investing) for a trader is like a total shift of paradigm and mindset for them. Especially when the accumulation stage, i.e., raking in those millions, occurred over just a short time (five years or less), the propensity of continuing the strategy that brought in the dough would be high as the conviction of it works all the time is in their minds.


Every Day Is Not A Sunday


In a battle, both gaining and holding an objective or position is crucial. If we just keep on attacking and capture places along the way, very soon our resources are stretched, and if we are not careful, the other side would probably launch a successful counterattack which may wipe off our earlier gains. Therefore, in military strategy it is important to learn offensive and defensive tactics to minimise losses and to strengthen the overall positions.


The abovementioned can be employed in real life investing/trading as well. The first realization is that for every investible instrument out there, every day is not a Sunday; stocks, cryptos, real estate investment trusts, precious metals, etc. have their ups and downs. Though these may go up eventually over time, but we would not want to go through the heart attacks of experiencing ups and downs too often. 


While I do not encourage a full shift and I acknowledge the urge of trading is there (disclaimer: the Bedokian has a trading portfolio), a partial move of gains from the high volatility instruments to deemed safer ones would be advisable for wealth preservation. Thus, it is good to learn other forms and methodologies of investing that in a way lessen the losses, and a good one is to adopt a barbell portfolio strategy of having high risk/low risk assets in equal weights, and/or to create a conservative diversified portfolio with blue chip equities, bonds, exchange traded funds, etc.


Sunday, March 10, 2024

High-Ho Silver!(?)

Canadian Silver Maples (Picture credit: lecho0047 from

Gold had recently hit an all-time high of USD 2,190-ish due to the expectations of a cut of US interest rates coming soon. To explain further, a cut in the rates would bring down the demand of the USD, and gold, being typically seen as an USD substitute and non-yielding asset, would go up in value (see my post here for the relationship between gold and USD). 


With this, naturally its counterpart silver would be expected to go on an all-time high soon, yet the current price of the grey metal was nowhere near its two zenith points back in 1980 and 2011.


The first high was on 18 Jan 1980, when it traded around USD 49.45 per ounce (oz), and that was the result of market cornering by the Hunt brothers (article of this story under the Reference section below), so this was not due to pure economic reasons. The second high occurred on 29 Apr 2011, where silver reached close to USD 49 per oz. Depending on the news source that you read from, this rise was attributed to reasons ranging from the emerging Eurozone crisis, the silver supply chain issues, to the rising demand in its use of solar panels. In both cases, it went back to around their pre-spike price levels after a while.


Both gold and silver, though classified as precious metals, have different applications and use cases, thus giving the notion that both are the same and different simultaneously. Gold is mainly used for jewellery and investment, but it also sees some applications in the electronics field. Silver, on the other hand, has a heavy utilization on top of the ones for gold such as photovoltaic cells for solar panels, medical uses and even a component in the upcoming trend of electric vehicles.


Silver As An Investment


Three main ways of directly investing in silver would be via physical (bullion, i.e., coins and bars), securities (e.g., exchange traded funds (ETFs)) and precious metals savings accounts.


For physical bullion, the tips of investing in it would be similar to that of gold’s (see here). However, the premium for silver is higher than that of gold’s. For instance, based on online prices of a bullion dealer, a 1-oz silver bullion’s bid premium is around 15% over spot as compared to a 1-oz gold of 3% to 4% or so. Also, for a given amount to invest, the quantity of silver would be larger than gold, so storage is something to ponder about.


If going physical is not your cup of tea, then there are ETFs available, but they are listed overseas and, in my opinion, only a couple are suitable enough (e.g., SLV ETF). In the case of savings accounts, a couple of local banks provide this service.


The fundamentals of investing in silver (and gold) are very different from equities, real estate investment trusts and bonds. A popular way is to use the gold-silver ratio (see the write-up here for more information), while others use technical indicators such as lines of resistance and support, among others.


How Much Silver To Invest

According to the Bedokian Portfolio, the commodities asset class which silver belonged to stands at about 5% to 10%. There is no hard and fast rule on how much silver to invest in, so in my view it is up to the individual on allocating it with the gold and crude oil, the other two commodities for the asset class.


So now begs the question, will we see a high in silver prices like the time in 1980 and 2011? 


Only time will tell.




The Bedokian is vested in physical silver and SLV ETF.






Beattie, Andrew. Silver Thursday: How Two Wealthy Traders Cornered the Market. 1 Feb 2024. (accessed 9 Mar 2024)

Saturday, March 2, 2024

Rational Exuberance?

For those who are experienced in the markets, having that “every day is a Sunday” feeling shared by many spelt signs of a possible meltdown looming over the horizon. In other words, the deemed unrealistic feeling that things will keep going up is called “irrational exuberance”, a term made famous by the then Federal Reserve chairperson Alan Greenspan back in the mid-1990s when he was describing the internet bubble, which eventually popped.

Going by English definition, the roots of irrational are purely psychological and emotional, as opposed to rational where objectivity and fundamentals hold key. Throw in the word “exuberance” which means excitement and is already a mental state, we can see why irrational exuberance is something we need to be wary of when it reared its head in the markets.


Now back to the blog post title, are we able to have a thing called “rational exuberance”? It sounds paradoxical, as it implies getting excited while keeping a cool mind. Imagine standing next to your favourite idol and yet display a cool composure (i.e. no giggling or hands-on-the-head-with-mouth-open expression) while having a joint photo taken; to me, that is a form of rational exuberance.


Yes, you can have those moments of rational exuberance. Playing again by word meanings, we can devote our investment energy in an objective way. One example would be to calmly scout for bargains when the markets are down. Another is to average up a security when the price is going up and you can still calculate its potential of climbing further. In other words, do not be swept by the maddening crowd, but instead going enthusiastically and rationally along the right direction.

Saturday, February 17, 2024

No More CPF-SA After 55, So How?

As an investment blog, I seldom talk about the dimension of personal finance, but after hearing from the Budget 2024 about the changes to the CPF Special Account (SA) and seeing the vast number of reactions to it, I decided to pen this post on the issue. The reasons being first, it somehow affected our step-down plan; second, it touches on the topics of portfolio drawdown and the portfolio multiverse, which are chapters in my eBook; and third, a lesson on risks and diversification.

To summarize in a one-liner: from 2025 the SA would be closed for all who are 55 years and above of age, and any balance from the SA would move to the Ordinary Account (OA) after setting aside the selected retirement sum into the Retirement Account (RA), if applicable. This meant that SA “shielding” (investing the SA funds to “shield” it from being swept into RA) and the subsequent treatment of SA as a high-yielding interest account would be rendered useless.


Our Step-Down Plan


With the announcement on Friday, many people online and my friends and acquaintances were busily recalculating the retirement models on their spreadsheets, and we did the same, too. Our moment of step-down was after the age of 55, and we used the assumption of no SA shielding to keep things projectable and simple. With the new ruling, however, two parts of our model were affected: the loss of an additional 1.5% thereabouts compounded from the supposed balance in SA, and the calculation of yield/withdrawal rate of our step-down income from CPF. For the former point, after reworking the numbers, the loss from a lesser compounding effect is not that much as our runway between 55 and the step-down age is relatively short. 


For the latter point, instead of using a generic 4% yield/withdrawal rate across our portfolios (which was based on the SA’s 4%), we would have to use two sets of withdrawal rates: 2.5% for the OA portion and 4% for the rest of the portfolios. With the new numbers, our projected annual income is down by around 9.5%, and to us we are still comfortable with the new amounts.


As mentioned in this post on our step-down, a good financial plan takes a lifetime, and this SA closure thing is an example of the kind of scenarios where you need to relook at your models and figures, and adjust accordingly to fit into the changing situations.


The Importance Of Diversification

Personally, I dislike the word “riskless” and yes, risks are everywhere. The only thing that differentiates between the risks is the probability of them happening. The false security comes when one who did not experience a risk happening would assume that the item/event would never occur, and thus label it as riskless.


Why I brought in the topic of risks is the general assumption by some on CPF keeping the things they are in years to come. While it is known that the risk of CPF not paying interest is close to zero, there is another that few did not realise is policy/regulatory risk, which is the possibility of change of rules and regulations pertaining to a policy. If one remembered decades ago (for younger ones you can approach your family elders to verify), one’s CPF funds could be fully withdrawn at age 55, and OA rates were once 6.5%.


The main countermeasure to reduce (not eliminate) risks is my oft-preached act of diversification, not just on asset classes but also portfolios, hence our portfolio multiverse concept. Whilst the CPF itself is reliable in fulfilling financial obligations of safekeeping of funds and interest payments, it is good to have at least another investment portfolio funded with cash to augment the former, just in case there are further policy changes. Overall, it is not recommended to base an investment and income strategy solely on one portfolio or even asset class.


The Search For Alternatives


The caveat that I want to put here is, besides RA, there is no known financial instrument (at least to me) that offers the near-consistency and simultaneous low risk level and high yielding characteristics of SA. So, if one plans to have a higher CPF Life payout from age 65 onwards, topping up RA to the prevailing Enhanced Retirement Sum would be a prudent idea.


For those who are not eligible for CPF Life yet and/or wanted to have a higher-than 2.5% yielding cash flow, some risk would have to be taken in the form of investing in equities for growth and/or dividends, and it would be better if the investment time horizon is long. There are bonds, too, and they are currently favoured with the prevailing high interest rates, like fixed deposits. Still, everyday is not a Sunday for equities, bonds, or even real estate investment trusts (REITs) and commodities due to the phenomenon of market cycles.


Like it or not, we would need to take it upon ourselves to learn and look for other alternatives if one door is closed. If the world of investment is too daunting, then approach it passively and periodically (e.g., dollar cost averaging into index exchange traded funds). The final word here is there is no excuse for not learning, for it is one’s own financial future that he/she is responsible for.



Wednesday, February 14, 2024

Inside The Bedokian’s Portfolio: iShares FTSE China A50 ETF

Inside The Bedokian’s Portfolio is an intermittent series where I will reveal what we have in our investment portfolio, one company/bond/REIT/ETF at a time. In each post I will briefly give an overview of the counter, why I had selected it and what possibly lies ahead in its future.

For this issue, I will discuss about the Hong Kong listed iShares FTSE China A50 ETF (2823.HK).




Incepted 0n 15 Nov 2004, 2823.HK tracks the FTSE China A50 index, which consisted of A-class shares (A-Shares) from 50 of mainland China’s largest companies traded on both the Shanghai and Shenzhen Stock Exchanges. The underlying assets are denominated in Chinese Yuan (CNY) and listed under two currencies in the Hong Kong Stock Exchange, CNY and Hong Kong dollars (HKD). The ETF has around 13 billion CNY under management with a fee of 0.35%, and the dividends are distributed annually (usually paid out in December).


Why 2823.HK?


Back on 3 Oct 2022 I had mentioned about holding this ETF. As stated in that post, I had selected 2823.HK due to two reasons: the A-Share holdings and the diverse sectors it presented. 


If you had ventured into the Chinese stock market, there are a few classifications of equities, like the commonly known A-Shares (shares issued in China of Chinese companies listed in the Shanghai or Shenzhen Stock Exchanges) and H-Shares (shares of Chinese companies listed on the Hong Kong Stock Exchange), on top of others. Though technically these two classes of shares are similar, there were instances where price divergences happened between the two, even if both share types were from the same company. This characteristic could be attributed to the availability of share types to different groups of investors; H-Shares are available to foreign participants easily while A-Shares are for mainland Chinese investors/traders and a regulated small group of foreign institutional investors. For investing in a country, our style is to own the securities as direct as possible where available to capture the local investing environment, hence we went for an A-Share ETF.


For the reason of diversification of sectors, this is obvious as it plays to our investment playbook. 2823.HK contains a vast spectrum of companies in different sectors such as the distillery Kweichow Moutai (consumer staples), Bank of China (financials), Foxconn Industrial (information technology), etc., thus representing the microcosm of the Chinese economy.


For our strategy, 2823.HK is a growth and dividend play in the portfolio.


What’s Next?


Chinese equities market and economy had gone through a rough patch due to a myriad of reasons including its overleveraged property sector and weakened consumer demand. The authorities had announced further stimulus measures to bring up the economy, so there is some economic positivity over the horizon.


The current price is HKD 11.74 (as of 9 Feb 2024). This presented a good opportunity for us to average down based on our previous entry prices (see under Disclosure below) so we may add more in the coming weeks. 2823.HK currently represented less than 1% of our Bedokian Portfolio holdings.




Bought 2823.HK at:


HKD 19.29 at Jul 2021

HKD 18.17 at Jan 2022

HKD 14.20 at Oct 2022



Friday, February 9, 2024

Some REITs Are Having Lowered DPU. Should We Be Worried?

Recently a few REITs in our portfolio had reported their earnings and not all are having good news. To name a few headlines:

Paragon Reit posts 1.9% lower H2 DPU of S$0.0261


Lendlease Global Commercial Reit H1 DPU down 14.5% to S$0.0212


Aims Apac Reit’s 9M DPU down 4.1% to S$0.0699 on enlarged unit base3


Words such as “down” and “lower” do sound queasy, but if we read the news articles in detail, these were mentioned:


“Paragon Reit’s manager on Monday (Feb 5) attributed the lower overall DPU to rising interest cost.1


(Lendlease Global Commercial Reit) “The lower DPU was primarily driven by higher borrowing costs amid the higher interest rates as compared to a year ago.2


(Aims Apac Reit) “This was due to an enlarged unit base resulting from an equity fundraising in July 2023 to strengthen the…(Reit) balance sheet and support asset enhancement initiatives and future growth opportunities.3


We need to know that the REITs were reporting on past periods. While this is like a report card for them, we must understand the reasons why the distribution per unit (DPU) was lowered and we need to look into the future beyond the numbers published. 


Paragon and Lendlease REITs’ lowered DPU were attributed to high interest rates, and this was no secret as rates accelerated during the past 1.5 years or so. Even so, we see potential in these two REITs for the following two major reasons: the REITs’ crown jewels are malls that are situated along the Orchard Road shopping belt and could benefit from the rising number of tourists visiting Singapore, and; interest rates would be lowered earliest within this year (at least what the Federal Reserve announced, barring any unforeseen economic situations) so the weight of high gearing costs could be lessened.


For Aims Apac REIT’s case, the reduced DPU was due to unit dilution, but the increased capital was for future growth opportunities. Industrial properties are more resilient than office ones as the former do not suffer from the “work from home” issue. Furthermore, future asset enhancement initiatives could see increasing occupancy and tenant retention rates, which stood at 98.1% and 80.3% respectively in their latest report4, not to mention the potential positive rental reversions.


The conclusion thus would be that we would continue to hold these three REITs and may add more to our positions depending on their prices and sizing in our portfolios.




The Bedokian is vested in the mentioned REITs.




1 – Zhu, Michelle. The Business Times. 6 Feb 2024. (accessed 8 Feb 2024)


2 – Oh, Tessa. The Business Times. 1 Feb 2024. (accessed 8 Feb 2024)


3 – Tay, Vivienne. The Business Times. 31 Jan 2024. (accessed 8 Feb 2024)


4 – AIMS AA REIT 3Q FY2024 Business Update, p5. 31 Jan 2024. (accessed 8 Feb 2024)

Sunday, February 4, 2024

The S&P500: How High Can It Go?

One of the most common soundbites that I hear while listening in to the financial news channels over the years is this:

“The S&P 500 is at an all-time high today.”


And by looking at the charts, it is true; it is climbing, and its rise further accelerated since emerging from the ashes of the Global Financial Crisis of 2008/2009.


The obvious question now is: how high can it go? I believe this question has been asked many times before.


My answer to this is just four words: I do not know. As with all investment charts, high can go higher.


Digging in further, we know that the S&P500 is being hard carried by the Magnificent Seven counters of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. The potential and advent of artificial intelligence, as well as favourable earnings reports for some of them, spell further upside for the index.


But there are some talk that S&P500 is overvalued to some degrees, depending on the time frame used; using 5-, 10- and 20-year periods, the average price-to-earnings ratios for the index was 25.49, 23.83 and 24.7 respectively, lower than the current 27.131.


I had mentioned that the S&P500 is a good entry for newbies who are venturing into the United States (U.S.) market, being an index and representing the microcosm of the U.S. economy in general. However, if you are still worried on whether to go in given this perceived high, then you may want to go on a dollar-cost averaging (DCA, available for unit trusts and regular savings plan) and/or go in at a set number of shares per regular period (e.g., 100 shares of S&P500 ETF every quarter). This way you would not be worried about whether you went in on a low or a high, because the entry prices would be smoothed out, or averaged, over time.




The Bedokian is vested in the S&P500.




1 – PE Ratio (TTM) for the S&P500. Gurufocus. 2 Feb 2024. (accessed 4 Feb 2024)

Thursday, February 1, 2024

“What’s Happening?”

Whenever the price of a share goes down, the most common question asked around would be “what’s happening to this stock?”. I got asked this many times before, and most of the time, I do not know the answer. On occasions, I would be criticized for not knowing, with comments like “you are a shareholder, how would you not know?”, etc. I admit I do not monitor the market 24/7, and I am not on anyone’s alert list, so that’s that.

Curiosity is a human trait, and naturally we will want to know the answers if something happens. The main problem is, however, at that point of time, not many people know what is really going on. To find the answer, we would have to look for it (via Google or word-of-mouth), but this gets tricky when the happening is constantly evolving with old and new (and sometimes wrong) news coming in.


In the realm of investing, when the share price falls, there is something going on with the company concerned. Is it that the company missed its expected earnings? A major tenant not paying their rent? A product recall? When these questions are popping in one’s head, note that the price had already fallen.


While it is good to know what is going on for later analysis, there are probably many people who knew of the news faster than you had exited their positions, thus leaving you in what is called a bagholder situation. By then even if you knew the answer, what are you going to do about it?


This is a reason why I seldom show concern whenever a share of mine had its price dropped, because these can be avoidable if the right company is selected in the first place. If the company is fundamentally sound, such drops would likely be less catastrophic than those weaker ones. In fact, this may present a buying opportunity for averaging down. 


It is always good to take a step back and see what is going on by reading the reason(s) for the dip, conduct a quick fundamental analysis regarding its present and potential future, before making a sounder decision.