Net Worth, Yield and Diversification – Gain and Losses

I started this year with the ambitions to achieve the following:

  1. Increase Net Worth
  2. Maintain Passive Income Yield
  3. Reduce Debt
  4. Improve Diversification of Portfolio
  5. Reduce Trading and Focus on Invest
  6. More Self Learning and Improvement
  7. Do More Exercise
  8. Reduce Weight

Reflecting on what I have done and achieved this year, I realised the results was a mixed bag – I succeeded on some but also failed badly on several.

From the angle of achieving financial freedom, I failed to increase my net worth after a year of intense investment efforts.

This is extremely disappointing to say the least.

With STI submerged underwater for almost the whole year and losing 13% at the end and having most of my holdings in Singapore stocks, perhaps it should not have come as a surprise. However, when I tallied up the numbers and saw the drop in net worth, I couldn’t help feeling crestfallen.

Passive income yield came close to target.

Good efforts in passive income yield is my consolation.

Despite COVID, I was still able to get reasonable amount of dividends. I hope as things improve in the new year, the dividend distribution will also increase. It should then help me reach my target of 5.0%.

The other bright spot this year is that I used the COVID triggered crisis to “high-grade” my portfolio.

I got rid of several lousy stocks and accumulated quality companies at a reasonable shares price. I believe the portfolio is now stronger and more resilient. It should be more capable to generate sustainable dividend income in years to come.

Debt reduced and Diversification Improved

I managed to reduce my debt this year successfully.

The COVID event and the uncertainty around my active job made me more nervous to maintain high level of debt. Hence, I started a strong drive to reduce my liabilities.

Some of you may feel that I am rather silly as the interest rate is low. I don’t disagree but with so much uncertainty around, I feel I need to up the security level in order to sleep more soundly and be responsible to my family.

I also reduced the risk of my portfolio by further diversifying my portfolio.

  1. My overseas holdings in US and HK increased (reduce Singapore country risk)
  2. The % of the value of my Top10 holding over total portfolio has dropped (reduce company concentration risk)
  3. The value of my index portfolio has increased at the expense of my equity portfolio. (reduce my trading risk)

This is a trend that I wish to continue in 2021

For those things that I felt that I have control over, I failed miserably.

I did not reduce the number of trading transactions this year. Perhaps I could use COVID as an excuse but I think it is a weak one. I did not exercise enough control of my trading habits.

I also did not exercise as much as I should and thus did not lose weight. OMG – can I blame it on WFH? I really should buck up here.

Last but not least, I wanted to improve myself in terms of my character, spiritual and personality. I wanted to learn something new and become wiser but I don’t think I have succeeded. I will have to try harder in 2021.

Folks, this sums up my blog journey for 2020

Regretfully, I did not make a major step forward in my FIRE aspiration.

But I think I have used the opportunity this year to make my portfolio more resilient and futureproof in providing passive income for me. Hence, I hope it would bear fruits in the coming years. Only time will tell.

On the personal front, I disappointed my own self. I should and need to do better in the new year. I need to have more disciplined.

The other thing I would need myself to improve this new year is adaptability.

I expect significant changes in my job and my company. The impact to me is unknown yet but it could be very great. I need to be mentally prepared that by the end of 2021, my employment status and conditions could be very different. I am telling myself to be mentally ready but can one really be ready for it when it comes?

As I thought about the plan for the new year, what came to my mind is

HARP – Healthy/Happiness, Adaptable, Resilient and Profitable

They should be the themes for me in the new year.

Wishing everyone a Happy New Year.

Photo by Karolina Grabowska on Pexels.com

Regards,

Warriortan

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