Investment Moats Portfolio Update July 2012

Market have been choppy for the past two months but merciful to the portfolio. One keynote is that many yield stocks have moved up much that uncovering good yields for their perceived risks becomes difficult.

Low savings rate make keeping cash difficult. While it enables an investor to take advantage of mispriced opportunities in market downturns, a non direction market and 5% inflation per year essentially results in 50% of the money losing purchasing power.

I made the decision to shift some cash into M1 and SPH. I took profit on LMIR, Keppel Corp and Yangzijiang. Hindsight I should have collected more of M1 and SPH.

I set a few criteria for lower risk yield instruments:

• historically lower volatility. This enables the investor to shift to cash during initial phase of big drawdowns
• a yield of 6%
• stable, predictable cash flow with business defensive in downturns
• not at excessive valuations

I probably hit SIA Engineering, Singtel, Starhub, CM Pacific, M1 and SPH in the screen but eliminate Singtel for its lower 5% yield.

Although M1 is yielding 5.8%, its close to my target and the fact that it meets the other criteria.

SPH at 15 times earnings look pricey. However, its price have reached close to the bottom of its 2 year price movement.

I wasn’t able to get more of CM Pacific but we will see.

Top balance off the low growth, I added some STI ETF.

Current List of SGX Listed Stocks

Current List of International Stocks

Singapore Dividend Portfolio Yield on Cost: 7.43%
Singapore Growth Portfolio Yield on Cost:  4.06%
International Dividend Portfolio Yield on Cost: 5.42%

You can always follow my portfolio over here at my Stock Portfolio Tracker. Its pretty neat to track stocks based on transactions that you intend to hold for long time. And its free.