Matching up to the Index - STI ETF

With the bull run of the stock market last year, many have shown their positive results of their portfolio and I started investing at around May 2017. However, my portfolio in 2017 did not match up to the STI ETF as seen below.

With the current down spiraling price of Design Studio, my portfolio has taken a hit.
What I hope to do is to increase my holdings of the STI ETF since I haven't been able to beat it. Currently, my portfolio has about 200 ES3 (SPDR STI ETF) in my CDP and 316 G3B (NikkoAM STI ETF) from POSB RSP. I am planning to increase ES3 to a larger proportion of my portfolio.

Savings plan - Yes or No

Savings/Endowment plans, what are they? Do they help in growing your wealth? To my mum, YES IT DOES. My mum is an ardent fan of savings and endowment plans because she has been purchasing them throughout her life. She told me that the feeling or saving each month sucks but when after a few years and you are able to have a substantial amount being returned to you, you will feel damn SHIOK. My mum spent her first lump sum savings on an overseas trip with my aunt as they purchased the plan together.

In my mum's generation, not many were aware of being financially savvy, she mostly listened to her friend who was a financial advisor and would recommend her products to buy. So during 2015, I started my gap year after finishing my polytechnic studies hence my mum knew about my salary and wanted to cultivate a savings culture in me. My cousin who became a full-time financial consultant recommended me an endowment plan however, I failed the checkup that was required as I have a pre-existing condition. My mum was upset and found NTUC income providing a plan with no prior checks required, the plan that I eventually signed up for was NTUC's RevoSecure.

At that time, I havent got into investing yet and so just followed my mum's instructions to sign up for the plan. However, when I went back to my studies in mid 2016, the burden of paying the premiums were rather heavy and I knew that this was not going to provide a satisfactory return. I discussed with my mum about it and she said just to continue so I did just that to not make her upset. In the end, I found that she just wanted me to start saving and that if anytime I faced difficulty in paying the premiums, she would definitely help me.

Over the past one year, I think it is also good to have a savings plan because if I did not have one, I would have placed all these money into the stock market. Maybe I would have profit more but I understand now why my mum wanted me to get one. It is kinda like a forced savings and the surrender value would prevent you from surrendering early. Also because I have started giving tuition part-time from Sep 2017, so my income can cover this payment and my expenses with minimal savings monthly so as of now, I am coping well with this savings plan.

So the premium is $319.20 each month and it is a pay 5 years, hold 10 years plan. I started in 2015 when I was 21 so it will be paid out when I am 31 which will be 2025. WOW, what have I gotten myself into! Locking all my money in this. So below shows the breakdown of the premiums I pay and the 'expected' returns.

My savings plan

Currently, I am paying the monthly premiums of $319.80 I have taken notice that the yearly premiums are lower in value than the monthly premiums so I might change to yearly premiums.

As you can see from the second table which is mainly about the surrender value, it is not worth to surrender it until the maturity date. If I were to surrender it now which will be year 2, I would only get back a guaranteed of $3600 when I would have paid $7380. So I guess I will pay it until I am 26 years old and just let it sit until I become 31 years old in year 2026.

Design Studio - Drastic drop in price

On 15th Feb 2018, I read a message on Investing Note about design studio earnings reporting a significant loss for 4Q2017 and this will affect their performance for FY2017. It was Chinese New Year Eve and today when the market opened, the price dropped rapidly and even breaking the 52 week low. As of now, the 52 week low is at $0.455 so the news of a significant loss for 4Q2017 and in turn affecting FY2017 performance has taken a hit on it's share price.

Snip of the announcement by Design Studio taken from SGX. So we can only know the significant loss that it has made for 4Q2017 on or before 28th Feb 2018. I am currently holding on to 1800 shares of Design Studio bought at a price of $0.538 inclusive of fees. So currently sitting on a loss.

They previously reported for their 3Q2017 a decrease of revenue 9%. We shall see how it all pans out for them and for me. Do comment or share with me any suggestions or feedback.

Investing with Angbao Money

I have read on various post showing that investing the money from angbaos collected during the new year for your child can benefit them in the long run due to the power of compounding. I will be showing how if I were to save my angbao money and invest them from the beginning, how much I would have earned. Since I am 23 years old this year, moving backwards would mean that I started receiving angbao on 1996 as I was born on Mar 1995 which is after CNY during 1995.

Assuming an average yearly angbao amount of $300 in total and having invested them in a RSP, this is what it will look like:

 

 

With what has been calculated above, the total amount that I would have gotten would be $7407.15 (Current value estimated) plus dividends of $856.36 with an input of $6592.98.

That would mean a profit of about 25% of the capital placed inclusive of unrealised profits + dividends. This is a pretty profitable investment and I believe that it can be continued. 

This is really a rough guide as I haven't included fees but this is a good way to spend your angbao money and I wouldn't mind trying it out for my child next time! Here's wishing everyone 新年快乐 and HUAT ah!