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Sunday, January 29, 2017

My Realised Capital Gains After 8 years in the market Is Near Zero

Recently, I mentally tabulated a number of my stocks that I have sold, or suspended, or privatized… And the grand total of capital gains (dividends excluded) among all these realised gains is near zero… :(


Granted, there were a number that were due to mistakes made as a newbie in the stock market. The stocks offhand that I recall:



Gains:
Saizen: ~$8k
Silverlake: ~$6k
Singtel: ~$2.2k
Darco: ~$
China Hongxing: ~$2k
Macquarie Infrastructure Trust: ~$2k
GLP: ~$3k
Singpost: ~$2k
Bread talk: ~$2k
DBS: ~$1k
Capital mall Asia: ~$2.4k
Total Gains: ~$32.6k


Losses:
Aztech: ~$10k (after privatizing at 42c, I have accepted the offer)
Berlian Laju: ~$11k (100% write off)
Cosco: ~$5k (100% write off)
Hor Kew: ~$5k (100% write off)
China SKY: ~$1k
Total Losses: ~$32k


The other counters, either I can’t remember, or the amount is too little to be significant.


It is interesting to note that the capital losses were due to stocks bought in the very early days. Cosco was my very first purchase. Subsequent purchases influenced by forums was Hor Kew, Berlian Laju and China Sky. Aztech was my personal mistake.
These are my “school fees”.


These mistakes occur because I do not have an exit strategy. I implemented techniques halfway. I was not disciplined enough. Fortunately, my later purchases have sufficient gains to buffer and cover these losses.


What's interesting for my portfolio management style is that the majority of the gains come from dividends (instead of capital gains). The remaining counters on my portfolio are positive in terms of capital gains, but they are stable enough to provide a dividend yield for the long term. In terms of dividends, I did not really calculate, but I believe to have yield about $90k in dividends over the past 6 years, despite slowing down in my wealth accumulation this year and the last 2 years.


So now, my “exit strategy” while preserving capital, is to do an “exit” with dividends.
Some examples:
1) Recently, SMRT was privatized, and while it was at a price lower than my purchase price, the dividends paid out over the time I owned it covered the difference, giving me another nett zero.


2) For Starhub and Aims AMP I Reit, my yield is ~10%, and I should have receive my principal back in about 3 years time.


This shall probably be my main strategy for portfolio management going forward, on top of being careful on purchasing shares at a bargain price. Keeping it simple.

5 comments:

  1. Were there gains not considered arising from dividends? Then again, perhaps not, if this was a trading strategy with short holding periods.

    ReplyDelete
    Replies
    1. Hi Lizardo,
      yes, there were gains not considered from dividends. I was mainly talking about capital gains.

      Dividends gains, I estimate to be about 40k~50k, most of which were used to buy more counters, business venture (1 failed), and a smaller extent on myself and family.

      That was how the portfolio continued to grow despite my current salary being just enough for spending.

      Delete
  2. thanks for sharing momo. This is my opbservation also that for local shares, dividends are the best bet over the long term.

    Maybe if US shares, capital gains.

    ReplyDelete
  3. Hi sgdividends,

    I would have to share that most of the capital losses came from the earlier part of my investing career, where my strategy was not as fixed, and there were underanalysis and overanalysis done.

    There are still unrealised capital gains in the 5 figures, but as long as it remains unrealised, I do not want to consider it as yet.

    I realised for my investing profile, dividends still allow me to sleep better. :)

    ReplyDelete
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