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Portfolio Update – 22nd Feb 2020 Beginning of a Correction?

Updated: 4 days ago


This week, we almost hit $5,000 in overall returns, however it seems that we will have to wait till next week to hit that benchmark. It was supposed to be a fairly inactive week, until Friday’s sudden dip which I will discuss below. We also saw Virgin Galactic (SPCE) take off and very quickly seems to be making its way back to Earth. This week, the USD also strengthened against the Singapore Dollar (SGD) which provided support to my portfolio from dipping too much, we will take a look at what this means for me.



Portfolio

My holdings this week remain the same as last week, with no new additions. We have week on week increase in profits of 11.9%, and the P/L almost hit $5,000 on Thursday. The biggest movers for me this week were Tesla (TSLA) which crossed the $900 mark this week and it seems to have found some support in that region. TSLA was at exactly $800 at the same time last week, so I definitely feel some relief because when I had bought it at $700, I had some apprehensions about its short-term movements. Nonetheless, I am quite bullish on TSLA and I am intending to hold on to it for the long term. Microsoft (MSFT) on the other hand has moved in the opposite direction. The price has dipped under $180 which I had thought would be a level MSFT would be stable at. However, as mentioned in my post last week about Microsoft, the drop in price could be an opportunity to load up on it because I think it is still undervalued.

There are 2 other stocks in my portfolio which I think deserves a mention. The first is the stock I just bought last week – Exact Sciences Corp (EXAS). I have written a detailed post on it last week and I still stand by my view that it should go back to about $120 which it was at about a few months back. This week it has already reached $98, almost 5% increase since I bought it. I was hoping the rise would be slower so I would get an opportunity to buy more, but you can’t complain when the price rises. I added EXAS with the intention of unloading it at $120, so it looks like that opportunity might be just around the corner. The other stock worth looking at is Innovative Industrial Properties (IIPR). This price of IIPR has increased 45% since I purchased it in October last year. On top of the appreciation in price, it also gives a dividend with a yield of 5+% every year. The performance of IIPR has put me in a dilemma because I am not sure if it is now too expensive to purchase more. This is one of the stocks I really regret not purchasing more of. I will be doing a deeper analysis on IIPR this week to understand if I should buy more.



Portfolio Value

We almost touched $5,000 in profit on Thursday, and I was quite certain I would get there on Friday however, the whole market saw a sharp dip. S&P500 fell by 35 points on Friday which caught everyone by surprise. Next week will show whether it was just a dip or the beginning of a market correction. If prices dip, it could be an opportunity to evaluate my portfolio and load up on some of the stocks I mentioned above.


S&P500 last week



Dividends

I also received my dividends from Abbvie (ABBV) this week which totalled to about $50 USD or $34 SGD. Currently my dividend yield for ABBV is about 5.83% which I think is phenomenal. But it should also be noted that I bought ABBV when it was at about $70 and $80 which is why the yield looks excellent right now. If I had bought it only this week at $93 then the same yield would turn out to be just 5%. This is a good lesson for me when investing in dividend stocks – load up on it when the price is low to get a better yield.

This brings by February dividend to over $60 with Parkwaylife REIT (C2PU) dividends also due next week. I am eagerly awaiting for my $100 dividend month, which should come soon as I intend to keep funding my dividend portfolio more.




Exchange Rate Exposure

Going back to more local factors, the SGD has weakened against the USD. A couple of months back, I was converting my funds for investing at a rate of 1 USD = 1.35 to 1.37 SGD. This week that number has gone up to 1.4 SGD. This will impact my portfolio in 2 ways:


  1. Current USD investments + dividends will be valued higher. This is especially applicable to my Stashaway which has about $10,000 invested in it and the holding are all in USD. However, this is not really such a big deal for me because I am not thinking of cashing out or converting my investments back to SGD anytime soon. However, it will temporarily inflate my portfolio P/L and make it look better than it actually is

  2. Future investments will be more expensive (about 2-3% more). Anything new that I buy in the US market will obviously be more expensive now because my home bank account is in SGD and I will be affected by the weaker currency. Therefore, I will have to be extra careful next week, maybe its time to take a closer look at the Singapore market again. I will continue my monthly Stashaway deposits as I believe it should balance out overseas

Basically what this means for me is that I should start taking into account the exchange rate exposure of my portfolio and find ways to mitigate that. I am thinking next time the rates move in my favour, I should change a large sum to USD and keep it in my foreign currency account so that I can continue funding my account the next time this happens.


USD to SGD Exchange rates



Virgin Galactic (SPCE) heading back down?

Also, Virgin Galactic’s amazing run came to an end this week as it fell sharply after a high of $38. I have intentionally stayed away from this stock because there is literally no concrete information about this company to do an analysis on. Feel free to read my post on Virgin Galactic.


So that has been my update for this week. Next week should be exciting because I have no idea which way the markets will go. Will it continue going down since we have been due a correction for a while now? Or will it ignore last Friday’s dip and continue looking ahead.

Disclaimer: This post should not be interpreted as investment advice as I am not a professional financial consultant. The objective of this blog is to share my experiences with others and receive feedback. I will provide links to my information sources to the best of my abilities, but the reader is responsible for their own due diligence


Source of S&P500 and SPCE chart: Yahoo! Finance




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