Friday, November 03, 2017

Financial Review - October, 2017

October was another positive month for the portfolio with positive movements in Hong Kong, emerging markets and precious metals offsetting declines in New Zealand sharemarket and the NZD producing a 0.95 percent increase in net assets.

For the year, the portfolio is up 17.22 percent. The adjusted change from when I retired in September 2013 is a 24.71 percent increase. Hong Kong liquidity stands at 27.58 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased. I  purchased a few additional shares in CNOOC (HK:883), GDI (HK:270) and took the dividend reinvestment option on my shares in K Wah (HK:173);

2. my AU/NZ equities were mixed with Australia being marginally ahead and New Zealand slumping sharply on a combination of another earnings downgrade from Fletcher Building (NZX: FBU) and the election resulting in the centre-left government being replaced by an unstable far-left coalition;

3.my equity ETFs were up slightly (India, Hong Kong and China) in line with the local markets;

4. my position in silver rose and my small position in platinum recovered slightly;

5. all tenants are paying on time and all properties are let. Unusually, there were no repairs at all in October ;

6. the AUD and NZD were were down against the USD/HKD. The NZD in particular slumped following the political pole-vault to the left;

7. my position in bonds remains modest. I have a margin facility in place and my carry trade is doing its thing and generating a small amount of additional income;

8. expenses were low.

My HK cash position fell during the month. I currently hold 27.5 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.97% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.

I would like to make some additional investments but am struggling to find good value in the markets I follow. With expectations of further rises in interest rates muted, I remain tempted by the carry trade and would do one or two more should the right offers be available. I am currently having a look at Singapore REITS and some of the smaller investments in the portfolio with a view to either exiting or adding to my positions - too many very small investments are taking up a disproportionate amount of time to monitor.

7 comments:

Hank said...

For your public equity investments, do you provide a writeup on reasons for the purchase/sale?

Share Investor said...

Be patient grasshopper.

Mark said...

Loving your rolling commentary. Do you prefer Silver and Platinum over Gold?

Mark, Founder of Accent Loans

traineeinvestor said...

@ Hank - I don't usually provide a write up for my investment analysis - usually just a one liner (like I did with PGW, SFH and GRR with the November review. Partly this is because I'm lazy and in part because I'm not an investment professional

@ Share Investor - sadly, patience is not one of my virtues. Like your blog but the way.

@ Mark – I purchased silver initially because of its history of being more volatile than gold, That proved to be right but, unfortunately, I failed to sell during the big spike a few years ago. Platinum was purchased over gold because of its growing industrial use + the convergence of platinum and palladium prices. Given the subsequent decisions by some EU countries to move to all electric vehicles I am reconsidering this investment

Thanks all for dropping by and commenting.

Darren Rickard said...

Traineeinvestor, Love your blog.

Hank said...

Do you know of some good blogs that focus on discussing HK stocks (not forums)?

traineeinvestor said...

@ Darren - Thanks for the comment. Your's has been a valuable resource for me.

@ Hank - The only HK based finance blogger I know of is bean counter at http://myinvestmentblog.blogspot.hk. He's very disciplined and doing great but his investments are mostly low-cost funds and real estate. I'm not aware of anyone who blogs about HK listed stocks.