Reconstituting the Portfolio in the midst of Covid-19 Crisis

The stock market crash of 2020 began on Monday, March 9.  Now two weeks on, how is this investor doing?

Pretty much alright, I guess.  The portfolio has plunged some 20% but with a long horizon in mind, there is nothing very much to fret about for now.  The recovery might come in 6 months, or a year or even 2 years, but the portfolio will be here to take advantage of the recovery.

I took this opportunity to review my portfolio.  I think this stock market crisis period is a good time to do so, to kind of reconstitute, reconfigure everything:

1. Do I have poor-performing counters in my portfolio?

2. Are there some dead weights that I need to cut?  

3. Has the current stock market crash revealed the mistakes that I’ve made in stock selection?  

4. Are there good counters that I missed that I should add now to my portfolio given their depressed prices?

5. Is there anything that I can do to fix my current portfolio so that I can benefit tremendously when the market recovers?

Honestly, I should have done this exercise before the market started to crash.  It was a mistake that I acknowledge now to myself … take profit, remove non-performing and risky counters, rebalance, whatever, I really should have reviewed my portfolio earlier.

There again, nobody really knew then on March 9 what was going to happen and what the present is like today.  So time to suck it up, do a review, and plod on.

Anyway, here’s my humble revamped portfolio:

There are 5 parts to my portfolio:

1. The Forever Portfolio, which consists only of SG stocks

2. The USA Portfolio

3. The China/HK Portfolio

4. Corona Portfolio

5. The Demoted Portfolio

[those highlighted in yellow are counters that I do not possess now, but look forward to buying during this period; those highlighted in blue are counters that I now possess but wish to dispose of as soon as their prices recover].

Forever, USA & CHINA/HK portfolios

Why did I choose these counters for my Forever portfolio?  In general, they are:

1. Dividend plays.

2. Big/mid Cap, good moat/defensive (DBS, Vicom, Netlink NBN etc)

3. Cash rich (Fuyu, Valuetronics, etc)

4. Excellent management (Mapletree, Capitaland, etc)

To diversify, I chose one to a few from each different categories: financial services, consumer services, IT/data/telecom, engineering/industrials, healthcare, retail reits, industrial/logistics reits, and commercial reits.

Inclusive of the counters from my US and China/HK portfolio, it does look like I have a lot of reits.  Why, I like reits … for these reasons:

1. Easy to understand business model … rental income, rental period, quality and mix of tenants, gearing, interest rate, oversupply problems, etc

2. Usually possesses good return potential (5-7% dividend yield), as well as growth.

3. Offers pretty stable quarterly income as quarter-to-quarter profits of well-managed reits do not fluctuate much.

4. The hallmark of a true-blue Singaporean is a love for properties and rentals (ok, I’m being a little farcical here, LOL), and I’m as Singaporean as it comes.

I intend to have reits occupy no more than 60% of the total portfolio value. 

So, non-reit counters will be 5% each; reit counters will be 4% each (total counters 23).  As I get more confident with investing and more familiar with each of these counters, I will trim the portfolio down to 20, and then eventually 15.

Corona Portfolio

These counters were bought mainly to capture capital gain upon the Covid-19 crisis abating.  There is a good chance of me averaging down on these counters since many of their prices have fallen even more following the current market crash.   Nevertheless, I give priority to those existing and selected counters in my Forever portfolio.

Demoted Portfolio

There are altogether 9 counters that I wish to eliminate from my current portfolio.  All of them are pretty decent stocks and offer dividend yields above 5% (except China Life).  However, they are not as solid as those in my current Forever portfolio selection (for example, ParkwayLife vs First).   In addition, it will take a lot of time to monitor more than 30 stocks in a portfolio, so a reduction is necessary.  They have to go to make way for those newly selected ones.  I guess I have less love for them than those highlighted in my Forever portfolio.

The really bad one in this demoted portfolio is definitely Eagle Hospitality Trust.  That it is still in my portfolio is one big mistake of mine.  Bummer.  I did not set a stop-loss order on it.  Eagle HTrust right now has very questionable fundamentals (reducing revenue, weak balance sheet, low interest coverage, etc), and a very bad reputation.  Nobody in the right frame of mind, I think, will touch this stock, not even with a 10-foot pole.  Oh well, I still have it and the only consolation is it only occupies 0.98% of my current portfolio size.

I will continue to hold on to these demoted stocks and wait for price recovery.  In the meantime, I just collect dividends on them.

It does look like a global recession is on its way, if it is not already here.* In view of that, there will be more depressed prices of my favourite stocks to look forward to.

Stay the course! Press on!

“Stay the course. No matter what happens, stick to your program.”

John Bogle


In March, using remaining salary from last month, I bought more DBS shares at $18.17. Not quite as bottom as $17++, but no one can catch the bottom. So I’m happy with what I paid. The next target price for DBS: $15/16.



A Rookie Investor, the Market Meltdown and the Plan Forward

I am a rookie investor.

My investing experience has not been more than 1.5 years, and hence I consider myself still somewhat a rookie.

As a rookie, seeing the recent market upheaval has been pretty eye-opening. Wow, this is what a market meltdown looks like! Stock markets around the world have had a turbulent week last week, with some of the worst losses recorded in over 30 years. It was absolutely horrid!

However, was I fazed when the meltdown happened? Was I tempted to sell out my positions, some of them at least if not all of them? Had I wanted to get into a 100% cash position?


Well, even though I was staring at a 6.5% paper loss, I was feeling pretty nonchalant about the market crash. I was quite surprised by my own stoic disposition. Shouldn’t I have been gripped by fear and panic? Truth be told, it hasn’t really been an emotional roller coaster ride to me.

I guess what undergirded my state of mind was this Persian adage, “this too shall pass.”

Much has been written on the various incidents of market crashes and how the market eventually recovered. The turmoil in the market might last a while, might even lead to a recession, but at the end of it, there is a recovery. Market crashes do not last forever. The Asian Financial Crisis that was triggered in July 1997 lasted 2 years. The Global Financial Crisis also lasted 2 years, from 2007 to 2008. Even the worst worldwide economic depression, the Great Depression, eventually ended after having lasted 10 long years. So yes, this too shall pass.

What matters now is holding power. How long can I hold on to my investments without selling them? Long enough to survive this market crisis, I believe.

I have my emergency funds. I’m still drawing a healthy salary. I’m still able to support myself and my family every month. I still plan on taking my family on a holiday trip once the coronavirus situation dies down, and have been setting aside money for that goal. I don’t need to liquidate my investments to make ends meet. It is still business as usual for me. I am still on the merry-go-round. I have holding power.

I am good.

I plan on sitting tight and trust that my portfolio will ride out the storm. I am going to take this time to reassess my portfolio, and see if I can further deploy cash to take advantage of depressed stock prices in the market.

With the STI having dropped about 21%, many stocks are on sale. Many of them like the bank stocks are just so mouth-watering now. And I’m thankful that just last month, one of my endowment plans matured and I have this extra amount of money to add to my war chest. More money facilitates more shopping … yippee!

This is my very first encounter of a huge earthquake-sized wobble in the market, and I have made plans to take advantage of this current market turmoil to add new positions or average down my existing ones.

Market dips are when fortunes can be made, I know that. Since the start of this meltdown last week, I have made one purchase … I averaged down on my existing DBS holdings.

Then I stopped. And started thinking.

… Stock prices are depressed now, but could the prices get depressed even more?

… I have my war chest ready, but should I spend it all at once or in batches? If in batches, how many and over what length of time?

… Bank stocks (DBS, OCBE, UOB) are so far down from the peak, should I load them up now?

After much reading and deliberating, I decided to refine my plan.

I have a feeling Singapore is going into a recession and there will be better bargains further down the road:

1. During the 3rd quarter last year, Singapore’s economy avoided a technical recession after growing by only 0.6%, compared to the previous three months. This was before the coronavirus hit Singapore. Now that businesses (trade and tourism) are suffering because of Covid-19, the already weakened Singapore economy will only go down further. Will the government’s 2nd package of measures help companies with their costs and cash-flow, and keep them afloat through the storm?

2. In his remarks to the media on February 15 at Changi Airport , Mr Lee said that Singapore was bracing for a “significant” hit in the next couple of quarters because the outbreak was intense. Interesting use of the word “significant’ there. Mr Lee added further, “I can’t say whether we will have a recession or not. It’s possible, but definitely our economy will take a hit,” Mr Lee neither confirmed nor denied the possibility of a recession hitting Singapore, but in his own words, “it’s possible”.

3. In his address to the nation last Friday, Mr Lee elucidated, “[t]he situation is especially serious for some sectors – hotels, aviation, hospitality, and freelancers in the gig economy. But nobody has been spared. Everyone feels the impact, to different degrees … We will remain in this high risk state for some time to come.” Mr Lee has painted a somewhat grave picture of Singapore’s economy and has pledged help to those “who are retrenched and unemployed, as well as their families, an extra helping hand to see through this difficult period.”

4. Judging from the slide of the STI, there is definitely a lot of fear in the market, and institutions and investors are reacting to it. Hence, the drop of the STI from its peak of 3,407.02 on April 29, 2019 to 2,510.88 on March 13, 2020. A headline in the Straits times on March 12 screamed, “Asian stock markets fall into bear territory; STI in bear grip for first time since 2016.” And then there were other news on Australia, Japan, and Thailand heading towards a possible recession. A free-falling market might not always be a good predictor of a recession, but might it be different this time? A global pandemic plus the Saudi-Russian oil war can be a very lethal combination.

5. Election appears to be coming considering the announcement of new electoral boundaries last week. The PAP has a good record of performing well during times of recession. It may be early days yet but the fact that new changes are made to electoral boundaries does signal that an election might be coming. A recession provides an opportune time for the PAP to score big in an election, in my opinion. Might a recession be the big elephant in the room that nobody is pointing out?

So having given thought to the above, I hit the pause button. I may be wrong. But I remain persuaded … for now.

So this is what I intend to do, going forward:

1. Time in the market: Regardless of how the market moves, I will continue to RSP my investments in MoneyOwl and Syfe. Amidst the uncertainty, I still want to stay vested.

2. Timing the market (1): I will continue to buy the dips with my monthly income. Say OCBC shares go down to $8, or even $7, I will snap up some. Just nibble, not bite. If I am unsure, I shall just refrain from putting money into the market. If more good deals appear within the month, I will tap into 20% of my war chest to facilitate the purchases.

“If you believe markets are a screaming buy today — more than they were last week, or even more than they were last October — you are inherently market timing. Which is fine, but should at least be recognized. A call to ‘buy the dip’ is inherently a market timing call and should be recognized as such. If investors are going to make such a call, we believe it is important for them to consider where they believe the market is mis-pricing future expectations: yield, growth, or risk appetite.”

Corey Hoffstein, Newfound Research LLC

3. Timing the market (2): If the market recovers from the cessation of the virus situation, then I will use the remaining 80% of the war chest to buy on the rebound. If the turbulent market leads to a recession and the government admits to this on a national level, I will then use the remaining 80% of the war chest to buy as described below:

“For situations where share prices are low due to a weaker economic cycle it is best to invest over a six to 12 month period. The initial investment should be 50% of capital, with 10% each subsequently over the intended period for the last 50%. The timing of the initial investment of 50% is crucial. Based on my experience it is best to buy on the day following the national government’s admission that the economy is in a recession and gives a negative GDP forecast for the rest of the year. When this announcement is one that makes the front page of the national daily, then almost all the bad news has been discounted by the market.”

Chua Soon Hock, Lessons From A Super Investor – A Personal Friend Of TTI*

Suffice it to say that this plan is not set in stone. I intend to maintain the plan with some level of flexibility for changes depending on what goes on in the real world.**

We are in some really interesting times, methinks. I intend to embrace this bear, be it little or big, and turn this crisis into an opportunity.

* (

** (

My Forever Portfolio. Averaging down DBS


Price: S$21.75
P/B: 1.2

The talk of the town these days, as I gather from interactions on the social platform InvestingNote, seems to be very much about DBS Bank (or just DBS in everyday references).

  • What do you think is a good entry price for buying DBS?
  • I think [DBS] is getting [more] attractive and sweeter [with] each [passing] day…
  • Dbs, wait[ing] to “jiak” (eat) more …

I can understand the interest in buying DBS bank shares these recent days when bank stocks in general are snared by Covid-19, Fed’s interest rate cut, and a possible crude oil price war. I too am very interested in buying DBS bank shares because it is an excellent
company to own, the current downward pressure on its share price notwithstanding.

Taking advantage of this current sell-down of bank stocks, I decided to average down on DBS shares (current average is about S$24).


DBS is a multinational banking and financial services corporation that has operations in Singapore, Hong Kong, the rest of Greater China, South and Southeast Asia, and internationally. It operates through consumer banking/wealth management, institutional banking, treasury markets, and other segments that offer trading and Islamic banking services.


DBS, headquartered in Singapore, operates approximately 280 branches across 18 markets and has a market share of 59 billion.

It is the largest bank in South East Asia by assets and among the larger banks in Asia, with total assets of S$579 billion as at 31 Dec 2019.

It is at the forefront of leveraging digital technology to shape the future of banking, and has been named “World’s Best Digital Bank” by Euromoney.

It has also been recognised for its leadership in the region, having been conferred “Asia’s Best Bank” by The Banker and Euromoney, and “Asian Bank of the Year” by IFR Asia.

DBS has also been named “Safest Bank in Asia” by Global Finance for eight consecutive years from 2009 to 2016.

Results and Ratios

In the fourth quarter report (31 December 2019), DBS reported the following:

1. Income increased 10% year on year to S$14.5bn.

2. Net profit increased 14% year on year to S$6.39bn.

3. Group Net Interest Margin (NIM) improved from 1.85% (2018) to 1.89 (2019).

4. NPL rate remained unchanged at 1.5%.

5. Cost-income ratio improved one percentage point to 43%.

6. The liquidity coverage ratio was at 139% and the net stable funding ratio was at 110%. The Common Equity Tier 1 ratio was at 14.1% while the leverage ratio was at 7.0%, all comfortably above regulatory requirements.

7. ROE was at a new high of 13.2%, reflecting improved profitability and quality of franchise.

8. Dividend increased 10% to $1.32 annualised.

Why did I average down on DBS?

Simply because I believe the 3 local banks (DBS, OCBC, and UOB) are the bedrock of Singapore’s economic success. I just can’t see it any other way.

The 3 local banks make up almost 36% of the Straits Times Index, with DBS being the largest constituent of the STI (15.2%, with OCBC at number 2 at 11%). SPDR Straits Times Index ETF has a combined 40% exposure to DBS, OCBC and UOB.

You know what, should any thing unfortunate happen to DBS, I’m very sure the Government will step in to help it out. Buying DBS shares to me is a fail-safe investment. I can go to sleep every night with the assurance that when I wake up the next day, DBS is going to be there still.

DBS has a very capable CEO in Piyush Gupta. Under his leadership since 2009, DBS has been on a growth path, and registered a record net profit of $6.39 billion for the fiscal year 2019, up 14 percent year-on-year. Should this downturn eventually morph into a nightmare like the Asian financial crisis of 2017/18, I cannot think of a better CEO than Piyush Gupta to lead DBS forward.


The share price of DBS took a slow beating when Covid-19 spread within
Singapore and in the region. DBS has been bracing for Covid-19 impact and is doing its best to cushion the blow. Hopefully the coronavirus situation eventually goes away come summer, and should that happen, DBS expects a full year revenue impact of around 1-2%.

Right now, this negative impact on revenue basically comes from 2 main loan areas, namely, manufacturing supply chain and customer services.

Manufacturing supply chain, while facing liquidity inadequacy and reduced capacity operation in these short term of 3-4 months, is expected to make a turn for the better because demand for their goods is still intact. DBS is therefore not too concerned about these loan accounts.

Of greater concern to DBS are loan accounts from the service industry, such as tourism, hotels, retail, and aviation. Many service companies have seen demand displaced and revenue lost if not substantially reduced. DBS’s exposure here amounts to some S$20 billion. DBS reckons 90% of these loan accounts made to such large corporations
such as Genting and SIA to be relatively secure. The remaining 10% (about S$2 billion) of these accounts are under pressure and therefore at risk.

So NLPs are expected to rise as many of these virus-impacted businesses have their cashflow disrupted.

To mitigate the impact brought on by the outbreak of Covid-19, DBS has implemented “split teams” and “work from home” to ensure minimal service disruption. This was made possible because of the bank’s digital capabilities.

DBS has also started liquidity relief for its customers. It is providing a 6-month moratorium on principal repayment for customers with good credit records (SME property loans in Singapore and Hong Kong; and mortgage loans for retail customers in Singapore).

As new cases of coronavirus infection slow in China, the country is gradually getting back to work. So the million dollar question is, is the impact of Covid-19 on global supply chain over? Depending on who you ask, the answer varies.

While workers are slowly returning to work, it will still take a while, probably a very long while, for China to return to its pre-coronavirus production capacity.

China’s purchasing managers’ index, a measure of China’s manufacturing and service sector activity, plunged to 35.7 in February from January’s 50 (numbers below 50 indicate activity contracting). All eyes will be watching China’s PMI index very closely, and so will I be watching.

In the meantime, the market remains jittery, and stock prices remain volatile. Such is the new normal for now, and it’s time to look out for good stock bargains, and DBS to me is one.

The emergency Fed rate cut

Fearing the US economy would fall into a recession due to the coronavirus, the Fed pushed through an emergency rate cut of half a percentage point on 3/3/2020. This bold attempt to give the US economy a jolt is however a blow to financial stocks.

Rate cuts only mean one thing for banks: lower spreads and lower margins. When the Fed cuts rates, banks’ revenues from the interest rates they charge on loans will in turn get squeezed, thus leading to an overall hit on their NIM. With the expectation that the Fed will cut interest further to zero (even more pressure on bank margins), bank stocks began to trend down even further.

At close on 9/3/2020, DBS ended at S$21.15, slumping 8.04 per cent given its greater sensitivity to lower rates relative to its peers.

For now, DBS has a decent dividend yield 5.8%, its financial position is solid, and its management is stellar. Besides, the plunging share price now is indicative of a capital gain on a future rebound. All 3 local banks recovered spectacularly after each crisis.

How do I average down on DBS?

There are some whom I’ve interacted with on InvestingNote who are waiting for the bottom or close to the bottom before buying DBS. Apparently S$18 is the magic figure.

I see the logic in this. After all, who doesn’t want to buy something precious at the cheapest price possible? But the thing is, nobody really knows when the bottom will occur.

In my opinion, only 2 persons can “buy” at the bottom and “sell” at the top. One is God Almighty, and He possesses all power and knowledge to actually do just that, hypothetically speaking. The other is a liar who can only talk about buying at the bottom and selling at the top, but never actually doing so. Luck may have helped once in a while but never all the time.

Since I’m not divine or a spinner of yarns, I can’t possible buy at the bottom or even think or say that I can buy at the bottom.

Therefore, I decided to embark on averaging down on DBS. Presently, I don’t think it is wise to devour the entire position on DBS with just one huge bite seeing that there is the possibility of DBS’s share price trending lower.

Instead of averaging down with the same amount each time, I plan on buying a little first, and gradually increasing the lot size as the share price decreases … first a bullet, next a bazooka, then a missile, if you get my drift.

I’ve bought DBS at $21. The next price is $19, then $17, and so on and so forth.

When do I stop? I seriously don’t know … probably when the money runs out, or when DBS has rebounded from whatever bottom it is going to be.

[I have my eyes fastened on OCBC and UOB as well, and looking for a good price to enter new positions on these 2 bank stocks.]

Buy, sell or hold? I think it’s okay to do some buying, because things are cheaper. But there’s no logical argument for spending all your cash, given that we have no idea how negative future events will be. What I would do is figure out how much you’ll want to have invested by the time the bottom is reached – whenever that is – and spend part of it today. Stocks may turn around and head north, and you’ll be glad you bought some. Or they may continue down, in which case you’ll have money left (and hopefully the nerve) to buy more. That’s life for people who accept that they don’t know what the future holds.

But no one can tell you this is the time to buy. Nobody knows.

Howard Marks. Latest memo from Howard Marks: Nobody Knows II; March, 9, 2020.

Disclaimer: I am only an amateur investor and nothing you read here on my blog constitutes financial advice.  I write here to detail my investments, strategies, and analyses.  Feel free to read at your own risk.  Should you need financial advice, consult a licensed financial advisor.