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Thursday, July 2, 2015

20k Portfolio in Blue Chips SGX stocks

My perspective of a $20k blue chip stocks for retail investor. Below are a list of stocks that would construct a retail investor portfolio.

Prices of Stocks
  • STI ETF ($3.38)
  • M1 ($3.25)
4000 shares x STI ETF = $13,520
2000 shares of M1 = $6500

Total cost is = $20,020

STI ETF provides excellent diversification in the event of a single sector crash. Its top 5 holdings include 3 relatively strong Singapore banks namely DBS, OCBC and UOB.
Source: Bloomberg

Current Dividend Yield 2.75%

Over a 10 year period, the STI ETF provided a return of 9.06% including dividends and 5.89% excluding dividends

M1's recent drop in price due to news of a fourth telco had became an attractive buy with a dividend yield of 5.83%.



Source: Bloomberg

Its recent first quarter financial statements, M1 slashed off 16% of its debt. Lesser company debts keep M1's balance sheet healthy. 

19 Jun 15, chairman of M1 bought 50,000 shares at $3.23 each. This could be an indication of a slightly undervalued share value.

3 comments:

  1. Hi Lancelot,

    With the recent drop in the STI as well as M1's share price, they would make good investments that should be able to pay out a healthy return. But financials make up a large part of the STI and M1 makes up quite a large proportion of this plan, so this plan may not be very diversified. In the event of a crash in the financials sector or the introduction of a 4th telco, this portfolio would be quite badly affected,

    From,
    Just Some Thoughts

    ReplyDelete
    Replies
    1. hi there, yes i agree with your comment. But the 4th telco news create speculation. Investors should focus more on fundamentals rather than being blinded by that news. What if 4th telco back out? telcos could rally. but yet again, it will drop due to being overpriced.

      As a long term investor, it is important to know why you buy a particular stock at a certain price and commit to holding the stock.

      In m1 case, it provides a dividend yield of about 5% while the STI provides a return of 9% on average on a 10 year holding period.

      Delete
  2. if we are getting intraday SGX signals, then I don't think of investing in other segments like forex or comex.

    ReplyDelete