2020 Review

 2020 Review

My stock portfolio return is 3.6% this year, beating STI. However, my portfolio returns pale compared to return of other markets like US and world index like VWRA.

Year	% Returns	STI (Incl Dividends)	Remarks
2019	8.4%	9%
2020	3.6%	-8.6%	Covid 19 in 2020, the 3.6% has accounted for the sums added to my equity portfolio in 2020

 

The poor return can be due to a few reasons:

1)      My portfolio does not have much of internet stocks like Tencent, Alphabet etc. It comprise mainly of dividend stocks, Singapore banks i.e. old sector stocks. This is because I always find the PER of internet stocks too high for me

2)      Around 50% of my portfolio is in SG stocks and SG market returns are probably not as good as the world’s for the past decade.

As the stock market decline this year due to Covid-19, I have pumped cash into my equity to take advantage of lower market prices. The added amounts to my equity portfolio are around 23% of the 2019 starting portfolio value

 

My net asset (comprising equities, bonds, cash including CPF) rose by 10.6% in 2020. The increase is mainly due to my wages.

In terms of allocation, around 66% of my assets are in equities. The allocation for cash and bonds dropped as I divert the amounts to equities mainly during Mar-Apr 2020. I sold some Singapore Savings Bonds (SSB) for this. On hindsight, given the super low interest rates now, I should have used more cash instead and sell less SSB.

 

	2019 Allocation	2020 Allocation
Equities %	57.1%	65.6%
CPF %	23.3%	23.0%
Cash %	12.1%	8.9%
Bonds %	7.5%	2.4%

 

The cash allocation % is relatively high at 9% due to my wages and I did not divert a lot of cash to equities and bonds in 2H 2020.

 

Nonetheless, I had wanted to increase my stock allocation to 65%. The current 66% is close to my desired allocation %.