December Dividend/interest received is about SGD $5.2k and this brings my 2022 annual dividend/interest income to $91K. 2022 investment income received increased by 23% compared to 2021. From my annual Dividend/Interest Income chart in the last 10 years, it can be seen that my return has been languishing at low 10-15k annually prior to 2016 but I have increased my investment income by almost 6 times in the last 7 years since I took up dividend investment around mid 2016. My cumulative dividend/interest since 2016 has hit around 406k. However, it was not plain sailing with dividend investment in the last 7 years. When a crisis hit the financial market, the quality of your stock matter the most. I was hit badly with realized loss on some lousy reits and MLP in 2020 and that really eat into the dividend I have earned throughout the years.
2022 was a brutal year for investors as almost all major markets suffered the worst downturn since 2008. However, I have suffered less realized loss compared to 2020. This is due to more diversified portfolio where most counters weighting is between 0.5-5%. After cleaning up my portfolio in 2020 by getting rid of low quality reits and MLP, my 2022 portfolio has been more resilient and only suffered ytd -6% despite investing in some of the worst markets like HKSE and LSE. If I include my annual dividend and realized gain of $8.7k, my ytd portfolio performance is only a small -0.1 % in 2022. The dividend collected really help along the way in a bear market. In 2022, my dividend/interest earned has hit record every month from Apr to Oct.
In 2022, I continue to inject a record $181k into equities. I also added $61k SSB and USD100k into US T-bills and short term Investment grade Corporate bonds. Cost of portfolio has increased to 1.67 millions. The SSB and IG bonds shall sort of cushion my new equities investments if the bear market continue into 2023. Those bond investments will also help to optimize the yield of existing cash holding which has been sitting at low yield bank and money market accounts.
In 2022, we see sharp decline in both equities and bonds markets. However, the sharp increase phase in rate hike is almost done which will bring rate to around 4+ to 5%. I believe government and IG bonds price will stabilize but stocks will remain under pressure as long as rate stay high. My view is that bond rate will probably peak in 2023 and I am hoping to lock in to the higher interest rate bonds with 3-7 years maturity.
With the new investment, I am projecting dividend/interest income to increase to 98k in 2023. However, I am also expecting dividend cut on some of my counters in 2023 as well. Overall strategy in 2023 is to stay offensive by expanding dividend-bearing equities holdings while staying defensive with government and short term IG Corporate bonds investment which will reduce overall volatility in my portfolio.
2017 to 2022 Monthly Dividend/Interest earned from Investment Portfolio :
Dividends received in Dec2022 from Foreign Investment (Stocks): USD $1632
Interest received in Dec2022 from Foreign Investment (bonds): USD $1106
Interest received in Dec2022 from banks interest/FD/others in US: USD $899
Realized gain/loss in USD: $0
Dividends received in Dec2022 from SGX: SGD $1249
Interest received in Dec2022 from banks interest/FD/others in Spore: SGD $209
SGX Realized gain/loss SGD: $0
Total dividend and interest from my investment portfolio + bank/money market/retirement account + trading gain/loss generated in Dec2022 : SGD$6369
Dec2022 Dividend earned from investment account only: SGD $4946
Counters from my investment portfolio contributing to monthly Dividend/Interest in Dec2022:
Hi, I see that you have some HK dividend stocks which pay a slightly than higher average yield compared to SG div stocks, how do you deal with the potential depreciation of hkd/sgd? For past 5 years, the depre was approx +/- 2% each year for the pair, but based on the 1mth chart, hkd has depreciated almost 3% from the highs. Will it affect your allocation if it comes to a point where fx risk becomes too big of an issue?
ReplyDeleteYes, I am aware of the currency fluctuation. However, I think most companies with global business will be hit with currency risk. Even any listed Spore companies that do business overseas will face the risk of SGD getting too strong and erode their profit when repatriated. It is difficult to invest in SGX listed companies that rely solely on Spore business. I am willing to take a risk with HKSE companies as their growth with China will increase profitability and mitigate the currency loss.
DeleteHi, Just found your blog. Think we are around the same age. Thanks for sharing all the details. It provides me some perspective on what i need to be doing. You mentioned that your cost of portfolio is around 1.6m . What is the make up of this portfolio ? Stock, Bonds , Reits ?
ReplyDeleteAlso, why do you do so much bonds ? We have CPF .
Just trying to gain some perspective. Your portfolio and sharing is truly amazing !
My own portfolio and dividend is far from you. I have probably at least 50% lesser than you. And mine is combined with spouse.
So think we have to work harder ! ha ha...
Thanks for reading. Yes, I have invested Stock, Bonds , Reits. I published all the counters from my investment portfolio that contribute to my monthly Dividend/Interest income in a table. You can check them out in all my monthly blogs for the year. I am an independent contractor working overseas, therefore I don't have much CPF. This is one of the reason why I invest in US bonds because my income is mainly in USD.
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