Yes, I finally achieved the milestone! Not on a pure stock portfolio invested with cash but one that consists of both cash and CPF invested in stock, exchange traded funds and unit trusts.
The intent of this post is to celebrate this achievement, share a few key takeaways, and to encourage everyone who are in a similar journey. I am an average retail investor who have little financial background. Along the journey, I made lots of mistakes but also had a few lucky breaks. So if I can do it albeit rather slowly, I believe you can too.
Performance and Trend
While I started the journey as early as 2000, the first few years I was lost sheep and can be truly forgotten. Decided to show the data from 2004 as it is an easy reference point for me – I was 30 then and total investment was around 50k.
As seen from the graph, the journey wasn’t smooth and the portfolio size only grew faster in the later years. It took me a good 12 years to grow the portfolio to 500k but just another 5 years to double that. So hang in there if you find that your portfolio’s growth has slowed or even reversed (see years 2009-2011, 2015, 2018); the break might be just round the corner.
Some of you might be wondering how much capital I injected into the portfolio. My last check on my CPF account shows that I have returned more money than taken out. As for cash, I estimated the net injection to be around 180k. Factor in some error in my computation and memory, I would say the net capital (after subtracting the money withdrawn) in the current portfolio is no more than 200k.
Top Gainers and Losers
|Top Gainers||Top Losers|
|Best World||$137k||Raffles Education||-$17k|
|Parkwaylife REIT*||$36k||Pacific Andes||-$6k|
The table shows the top 5 gainers and losers over the years. Gain and loss are inclusive of dividend, realised and unrealised. Here are some of the takeaways.
Let winners run
Do not rush to take profit from winners. They are winning for a reason. As long as the fundamentals appear to remain in tact, stay with them. There might be instances where the unrealised gain might turn to losses (I remembered experiencing that with Valuetronics) but more often than not, they will continue to do well.
Beware of red flags and change in fundamentals
Letting winners run does not mean falling in love with them forever. Just like buy and hold does not mean not selling at all. When there is a change in fundamental or red flag and you have a relatively big position, it might be prudent to sell them. I was definitely lucky with Best World and First REIT. Best World case was unfortunate and I do hope that their China segment is sorted out and they can resume trading on the board. As for First Reit, I was with them for 11 years and I decided to sell after they announced their restructuring programme which was followed by the change in CEO.
Just have to be more right than wrong
Without leverage, the maximum loss from a position is 100%, while the maximum gain is unlimited. Fibrechem was the only counter that I lost 100%. It was definitely painful as 11k was a lot to me then. Not having too large a position does cushion the downside. Also, often I only managed to get 6 to 7 out of 10 picks right and that is sufficient for me to do relatively well. If 1 to 2 turn out to be big winners, they will drive most of the returns.
On hindsight, I could have avoided some of my losers. I cringed at some of the counters that I used to buy such as Pacific Andes and Raffles Education. There were obvious red flags but I was oblivious to them then. Hopefully, I made of less such mistakes in the future.
Am I financially independent? Unfortunately, not yet. A quarter of the above investment is in CPF which I have only access to in 8 years time! Well, if everything goes as plan, I should have the option of not drawing a regular salary in 3 to 5 years time.
Strategy wise remains largely unchanged. Invest in good companies and hold on to them for as long as possible. Singapore market for income, US market for growth and exposure to other markets (especially Asia and China) through unit trusts.
Finally, I see this milestone not as the end of the journey but the beginning of a new journey.
I like the interface of your blog. Very clean, neat, and simple.
Congrats on reaching your milestone!
Thanks. It’s a free template from the setting.
Congratulations for achieving your milestone!! Thank you for your regular sharing and wishing you all the best in your next lap of your investing journey!