Friday, August 18, 2017

Claiming your SkillsFuture Credit

As requested by Sy in my previous post, here are the steps I took to claim my SkillsFuture Credit.

Depending on who your course provider is and how they handle claims (either you pay first and they reimburse you later or the government pays the training provider directly), your experience in claiming the SkillsFuture Credit may vary. In my case, the prevailing arrangement is that the government pays the training provider directly.

For my course, there is both a tuition fee component as well as an "other fees" component. It is explicitly stated by my training provider that the SkillsFuture Credit could only be used to pay for the tuition fee component. I would have to settle payment for the "other fees" component on my own (Fortunately, I am able to use my PSEA to offset the "other fees" component).

First, I had to use my training provider's e-payment system to declare the amount of SkillsFuture Credit I am going to use. After declaring the amount on the e-payment system, I was given a receipt of the course fees.

Next, I proceeded to the SkillsFuture Credit Claim website to submit a claim application. You will end up on a similar looking website.

Click on "LOGIN" (circled in green above). Once that is done, you will be directed to your SingPass Login page (as shown below).

Provide the necessary SingPass ID and password. Following which, you have to undergo another round of security (two-factor authentication). Once that is done, you will end up on the SkillsFuture Credit Claim website (see below).

Select "Submit a Claim" and you will end up at the following screen (see below).

First, you have to select a course.

A pop-up window will appear on your screen (see above).  You are required to put in the course commencement date, course title, and training provider and search for the course in their database. Once found, select the course and click "Done."

You will be brought back to the "Submit A Claim"  page. Under "Fees Payable by You (incl. GST)" and "Amount of Credit to Claim", I put in the same amount, as instructed by my training provider. Do note that I keyed in only the tuition fees amount; "other fees" are not claimable under SkillsFuture.

Once that is done, I uploaded my receipt of the course fees as it is the only documentation I have from my training provider. Finally, I submitted my claim application.

Head back to the Account Summary page, and most likely you will observe that your claim has been approved, annnddddd it's done!

Friday, August 4, 2017

Small issue with SkillsFuture Credit Claim

I have just received my course fee payment letter today. In 2 weeks' time, I'll be done with my 1-year academic programme. Following which, I have already applied and secured a place for yet another 1-year academic programme which I need to make payment for.

This time round, I intend to use the SkillsFuture Credit to make payment, since it makes more sense to use it earlier compared to the PSEA account or other free resources (see here). Previously, I avoided using the SkillsFuture Credit for payment as I had to pay out of my own pocket first before being reimbursed by the government.

Based on anecdotal evidence I hear from friends, there have been some changes to the SkillsFuture Credit claim system. Instead of paying out of my own pocket first, I can now notify both SkillsFuture and the training provider on their respective systems. Both parties will liaise with one another, without requiring further input on my part.

What I did not know was that claims on the SkillsFuture website could only be made within 60 days from the course commencement date. Being someone who likes to settle stuff early, my claim got rejected (my course starts in more than 2 months' time). Supposedly, at this juncture, my training provider will be chasing payment from SkillsFuture while SkillsFuture would indicate that no such training claim has been made. <Facepalm>

Once I'm done with my course, I will share my experiences on taking these 1-year academic programmes: Are they worth it? Do employers recognize them? How useful are the skills taught?, etc.

Tuesday, August 1, 2017

Is your family on the same page?

My mum knows what I am going to do in a market crash. I am going to empty my bank accounts in all their entirety and dump it into the stock market. This is not news to her. I have shared with her plenty of times my plan of action. However, I think it didn't register in her head until recently when she clarified what do I mean when I say I am going to empty my bank accounts.

Is it a figure of speech or is it a literal statement?

When she realized it was the latter, she became momentarily concerned. Am I out of my mind?

To allay her fears, I shared that it is for this purpose that we have an emergency fund in place. Of course, the larger the emergency fund, the greater the peace of mind it provides. Only extra cash, above and beyond the emergency fund, is allowed to be used in market crashes. The emergency fund is to be used only for the purpose it was designed for.

My mum and I share an interesting arrangement as to our emergency fund. Yes, we both contribute to and tap on the same fund. While she has been the major contributor for a long time, I have since began taking a more active role in contributing. Currently, our emergency fund stands at around $11000. For two people, it is indeed underwhelming. Psychologically, she is more comfortable if the figure is around $20000 instead. Hence, I will be redirecting more of my work income into the fund from now on.

To further mitigate her fears, I reminded her of our collection of pet rocks. Last I checked, our pet rocks are worth around the $20000 comfort figure. So all is not too bad.

It is for this reason why I don't include emergency funds as part of my net worth. First, it is shared. Second, it makes no sense to delude myself into thinking that I have a higher net worth than what I really have. My personal understanding of an emergency fund is a fund that is deployed to serve a defensive function. It is not chump change which I can use for any of my whims and fancies.

So what constitutes an emergency, since we are into definitions? We reached some pretty common agreements as to what constitutes an emergency:

- Accidents
- Hospitalization
- Emergency medical treatment
- Urgent home repairs
- Job loss

Note: we have insurance. We are referring to cash-on-hand to deal with any exigencies before the insurance companies pay up.

Thursday, July 20, 2017

Q2 2017 Portfolio Update

It's midway through July and here I am typing out my Q2 2017 Portfolio Update. I have the necessary data but I was too lazy to slice and dice the data and organize it into a coherent post. Guess I'll be doing it today.

I'm using Kyith's Stock Portfolio Tracker and dividends received are presented in a yearly format. In my last quarter update, I had to manually slice and dice the data in order to present the same information in a quarterly format. I spent yesterday night writing a R script to automate that process. Now quarterly updates will be that much more simpler.

Here are the outputs of my R scripts (history of dividends received by Year/Quarter in SGD and USD, respectively):

Moving forward, I foresee a huge drop in the dividends received. I did some thinking in end April/early May as to how I would react to a market correction. Previously, I was convinced that come hell or high water, I would just average down on every single counter that I own. It was at that point that I realized I need a huge boatload of cash to really make it viable.

Let's assume the following fictitious scenario. Say you have 1000 shares of counter A, which trades for $1. Come recession, counter A drops 50% to $0.50. You add another 1000 shares at $0.50 to "average down." What gives? You effectively double your position size in said counter and the average price is just midway between both purchase prices. To tilt the average price towards the recession price, you need to pump in even more cash, with increasing amounts of cash yielding a decreasing impact on the average price. This is a simplistic scenario, but it made me confront an ugly truth. Do I even have cash in the sidelines that equals my portfolio size waiting to be deployed? Nope.

So, I began selling a portion of my portfolio. Am I right? I haven't the faintest idea. 

In the following cases, returns are computed using Excel's XIRR function.

Complete divestment
Counter: STI ETF
Holding Period: 21 Months
Returns: 4.87%
Thoughts: This is me being "desperate" to deploy my cash and to "make my money work hard for me." I entered the STI ETF at a high, and averaged down once when it hit the bottom. This is the end result. Compare this to the next case.....

Counter: Nikko AM STI ETF
Holding Period: 26 Months
Returns: 9.60%
Thoughts: Interesting eh? This is me using the POSB Invest Saver to DCA into the Nikko AM STI ETF. The difference in returns compared to the above is huuuugggeeee!

Counter: Hong Leong Finance
Holding Period: 14 Months
Returns: 10.87%
Thoughts: I lucked out on this one. I've been eyeing this counter while it was languishing at its 52-week low. Instead of buying it, I was happily chasing REITs at that point in time (higher yield mah!). It was only when the stock price shot up that I panicked and entered at a much higher price. This news also helped me to exit the counter with a profit. I just hope I won't make the same mistake of chasing a stock up again.

Counter: United Industrial Corporation
Holding Period: 4 Months
Returns: 28.33%
Thoughts: Meant to be an asset play, but I'm not sure how well do asset plays fare during recessions. With a minuscule yield, it's better to re-enter at a lower price than to average down.

Counter: iFast Corporation
Holding Period: 10 Months
Returns: -2.41%
Thoughts: I entered this counter when it dipped below its IPO price. That was when it was at its 52-week low. Then, it hit another 52-week low, and then another, and another. As such counters are hit hard during corrections, I cautiously averaged down with a token sum. The big guns are supposed to be fired in market corrections, not as and when the stock price goes down. When its fortune finally reversed, I vacillated as to the price of divestment. I could have waited until it broke even, but I found it more comfortable to have cash back in hand first. This brings me to......

Counter: T Rowe Price
Holding Period: 2 Months
Returns: -1.73%
Thoughts: In corrections, mutual fund companies are hit quite hard. This is further exacerbated by the outflow of money from mutual funds to passive ETFs. Still, the firm is doing quite well (relative to its peers). This sale shows my priorities. In a correction, I would allocate my money to higher-yielding S-REITs; "patching the wall" on T Rowe Price is the least of my concerns.

Counter: Mandarin Oriental International
Holding Period: 2 Months
Returns: 31%
Thoughts: This news probably bumped up the price. And also, I'm playing it cautious by taking profits and having more cash on hand. Last I checked, the hospitality industry doesn't fare that well in recessions.

Counter: OUE Commercial REIT
Holding Period: 21 Months
Returns: 8.79%
Thoughts: This is the very first hand-picked stock I purchased. Back then, when I was more uninformed, I relied more heavily on the discount to book value. It's sheer dumb luck that it turned out well.

Partial Divestments
Counter: Accordia Golf Trust
Sold 2/3 of my stake

Counter: Croesus Retail Trust
Sold 2/3 of my stake (this was before the announcement of the potential privatization by Blackstone)

Counter: Sheng Siong Group
Sold 1/2 of my stake

Counter: Lippo Malls Indonesia Retail Trust
Sold 30% of my stake

Counter: AIMS AMP Capital Industrial REIT
Sold 50% of my stake
Thoughts: Phew! At one point, this counter took up a whooping 20% of my portfolio. With its reduced size, I am now less jittery.

Counter: Frasers Centrepoint Limited
Sold 50% of my stake

All counters which were partially divested were sold at a profit (inclusive of capital gains + dividends received).

The Bleeding ones
J.M. Smucker and Hormel Foods are bleeding, but this is no cause for concern.

QAF and Raffles Medical Group are bleeding because of poor self-control on my part. That's what I get when I can't wait for a better entry price and try to nibble on them.

Vicom and Neratel are the two longer-term underperformers in my portfolio.

That's all for now. It's time to busy myself with my career, school, personal development, and other hobbies while I build my war chest. That way, I won't be too upset having killed the golden goose.

Tuesday, July 18, 2017

Using to assess the state of US retail REITs

Retail REITs are an interesting bunch. Besides analyzing the REIT's financial statements, unitholders and potential unitholders could also consider heading down to the properties to observe first-hand how the REIT is faring.

Is the mall thriving? How is the traffic like? How is the ambiance?

For the Singaporean investor interested in some of the retail S-REITs, getting answers to such questions is fairly straightforward:

Vested in CapitaLand Mall Trust? You could visit Plaza Singapura (and many others).

What about Frasers Centrepoint Trust? Head down to Causeway Point (and many others).

Starhill Global? Go to Wisma Atria and Ngee Ann City lah!

SPH REIT? Your pick. Either Paragon or Clementi Mall (or both, if you are that keen).

Things, however, are not that straightforward if you are considering retail REITs whose properties are situated on foreign grounds. Though you may have access to their financial statements and annual reports, one glaring disadvantage is that you are not able to get a feel on the ground. It is possible to analyze the REIT on quantitative grounds, but their qualitative aspects are that which elude you.

This uncertainty is further exacerbated by the current narrative of the "death of retail." According to the financial talking heads, the rise of Amazon is the death knell of the retail sector (and their landlords). US retail stocks and retail REITs have been bashed badly, with some firms about to belly up.

So, where can you get your hands on the qualitative data? 

At that website, you can find commentaries by people who visit these "dead malls" in the US. If you manage to find some REIT-owned properties reflected there, you might wanna consider incorporating the findings to your analysis.

Let's use Simon Property Group as an example. Simon Property Group is a blue-chip, high-end retail REIT with properties that are not geographically limited to the US. Even in this trying economic times, Simon Property Group still managed to increase their dividend payout (see here). In addition, in the Q&A section of their Q1 2017 earnings call, the CEO seemed pretty confident about the business.

Meanwhile, over at the DeadMalls site, there were a few entries that made mention of Simon Property Group. As the majority of these entries made a passing remark on Simon Property Group (e.g. somewhere in the history of the mall, Simon Property Group owned the mall), I disregarded them. Almost all of the remaining entries concerned mall divestment. The only noteworthy finding is that Simon Property Group defaulted on the loan of its St. Louis Centre property, which was then bought at bargain price by another individual.

Hope this helps. Have fun juxtaposing the quantitative and the qualitative data together.