Sixty One Percent Invested, Thirty Nine Percent Cash

Sixty One Percent

The below quote was taken from Boustead’s chairman message in their annual report 2016. It got me into deep thoughts whether I am using my cash in the right way to invest.

“Investing for long periods in cash is not desirable. But in the short run cash is like an option over every asset class, with no expiration date and no strike price. Cash provides the option to sweep up a bargain when it becomes available and this must have some value above the fact it earns almost nothing. If the purpose of an investment portfolio is to grow as well as protect the wealth you’ve accumulated over the years, doesn’t it make sense, if you can afford it, to also hold an option?”

– Roger Montgomery

When analyzing companies, we sometimes look at the free cash flow. Hogging plenty of cash means the company is cash rich but may also means the management has no direction or strategy where to invest to grow the company.

Personally, I felt the free cash flow model can apply to individuals as well. If you have followed my blog since last year, you will have realize I have been making purchases every month. This has left me little cash on hand when opportunity arises.

After reading the quote from Boustead’s chairman message, I calculated my invested amount versus my cash on hand. I am 61% invested and have 39% cash on hand. Personally, I feel having 39% cash is too little when opportunity arises. Since the market is also expensive now, I hope to accumulate more cash for the next opportunity.

What do you think is the ideal ratio for investment versus cash on hand?

Why I Subscribe to Fifth Person Alpha Lab


If you are a follower of the The Fifth Person, you may like this. Recently, The Fifth Person has launched a website called Alpha Lab. This is the second website they have launched on top of the current Dividend Machines.

Basically, Alpha Lab consist of stock analysis and researches done by co-founders Victor and Rusmin. Most of us own a full time job whereby we hardly find time to perform our own stock analysis and research. In depth research can take weeks and months. With Alpha Lab, you simply submit a company and if selected, Alpha Lab will do the analysis for you and publish on their website to share with readers.

I am impressed by the excellent and in depth analysis into companies done by Victor Chng and Rusmin who are both co-founders of The Fifth Person. The Dividend Machines course I attend last year have totally changed my investment journey as I sold off fraudulent companies off my previous stock portfolio and focus on dividend yielding companies.

I still consider myself a novice to stock analysis and this is a small investment I take to improve my knowledge. I have recently subscribed to Alpha Labs and will like to share the promotion with all of you. Alpha Labs is offering a 12 month membership for SGD497 instead of the usual USD 497. Promotion ends 12th August 2016.

Disclaimer: This is not a sponsored post and the author did not receive any rewards or benefits in any way.

My Dividend Yield of Starhill Global REIT

Starhill Global REIT Logo

Previously, I done my Personal Analysis of Starhill Global REIT. On 29th July 2016, Starhill Global REIT announced a distribution per unit of 1.29 cents for its 4th quarter. Although the distribution per unit remains flat as compared to 4Q2015, the annualized distribution per unit totals up to 5.18 cents.

In my previous post, I have expected a dividend yield of at least 6.47%. Based on my purchase entry price of 79 cents, this translates to a annualized dividend yield of (5.18/79) x 100 = 6.56%.

PeriodDistribution per unit (cents)Payment Date
4Q FY15/16 – 1 Apr to 30 Jun 161.2929 Aug 16
3Q FY15/16 – 1 Jan to 31 Mar 161.2630 May 16
2Q FY15/16 – 1 Oct to 31 Dec 151.3229 Feb 16
1Q FY15/16 – 1 Jul to 30 Sep 151.3127 Nov 15