Financial Freedom: July 2012

Stock Portfolio Update (July 2012)

It has been a long time since I did an update of my stock holdings and I thought it was timely to do so after I just bought some Sabana REIT today. This is the list of my current holdings:

Ascott Residence Trust
Cambridge Industrial
Suntec REIT
Sabana REIT
AIMSAMP REIT
Fortune REIT
Capitaland
Innotek
China Aviation Oil
Unifood
Kingboard
Pacific Andes
Citigroup (US)
Armour Residential REIT (US)
Gamco Global Gold & Natural Resources Trust (US)

Breadtalk and Sheng Shiong

Recently, I wrote about investing in things I use - Mapletree Commerical Trust and Breadtalk. The idea was really to look out for investment opportunities based on the goods and services that I come across in Singapore. If one thinks about it, there are probably many goods and services that I use or come across during my daily life. And that probably should get me thinking on whether this presents itself as a good investment opportunity.

Breadtalk

I frequent Breadtalk and Toastbox quite often. So it is not surprising that I am pretty well acquainted with their business. While you won't be able to find a toast box located side by side with Breadtalk all the time, most store outlets now usually have both Breadtalk and Toastbox located together. In terms of crowds, Toastbox is always crowded. It should be profitable. Each Toastbox outlet probably only hires 4 to 5 staff. And the number of people ordering takeaways also seem to be quite a lot. For Breadtalk, it is just a bakery but the morning crowds usually throng the place. I like Breadtalk's business from how I view it. At least the Singapore side of the story. I remember seeing Breadtalk shops in Malaysia that looked quite empty.

Sheng Shiong

Well, perhaps this is a stock that I better start putting in my shortlist. Sheng Shiong is Singapore's third largest(?) supermarket store. It has stores located at many neighborhoods all around Singapore and caters to the heartlanders.

Most Sheng Shiong supermarkets that I go to are always crowded. That is a general observation and so their business should be good though I recognise that profit margins for retail outlets always tend to be lower. It is a competitive business afterall.

If Sheng Shiong commits to paying 90% of its profit after tax as dividends, the stock will probably be quite attractive. This is however unlikely as it probably looks to expand in Singapore and the region. Nevertheless, its dividend yield at 90% payout is a very attractive 6%.

Investing in Silver

Silver is a metal that has been known and used since the beginning of the civilization. Its use increased remarkably for the past 200 years in various fields that had contributed to the development of our society. The reason for its vast use is because it is the best conductor of electricity and heat, smooth reflector of light and has various health benefits. Silver is an important industrial material combined with both strength and softness and the ability to get stretched. It is wear resistant, has a high tensile strength, reflects light and reduces friction. It has great unique properties.

This strategic metal has infinite uses. The silver alloys are used to manufacture the disposable and rechargeable batteries. More than millions of silver zinc oxide batteries are manufactured worldwide annually, that include very small batteries for cameras, watches and other electronic devices. The high purity silver for electroplating steel bearings have great load carrying strength and capacity for heavy duty work. The bearings coated with silver provide great durability and safety in jet engines. The use of silver solders helps to join materials and makes leak tight, smooth and corrosion free joints. The silver alloys are used in refrigeration, air conditioners, power distribution, aerospace and automobiles. Silver membrane switches are used in most keyboards of laptop and desktop computers. Due to their durability and wide use, the market of silver-contact membrane switch is a multi billion industry in America.

The Silver demand hit about 880 million ounces last year, and the worldwide mining production contributed only 670 million ounces creating a deficit of 210 million ounce. A lot of people are unaware that the silver is the most used commodity in industry after oil. One of the best investments at this point of time is Silver. If you are looking for a profitable investment then you might want to consider investing in Silver.

If you are thinking of investing in silver, then the Silver bullion produced in America is a good option with the American Silver Eagle of one ounce. This coin is known all around the world and traded in various countries. They can be bought in a combination of 20 stacks or in a Monster box of 500 pieces. The second option will be 100% silver bars that are made in various sizes, designs and weights ranging from bars of 1 ounce, 5 ounce and 10 ounce. The two popular silver refiners producing bars in different sizes are Johnson-Matthey and Englehard.

You might also be interested in reading the recent article on Investing in Gold or How Silver is Made.

[This article is a guest post. Investors should carry out their due diligence prior to making any investment decisions]

Anchor Point and FCT

I visit Anchor Point from time to time and have always wondered whether I should be investing in Frasers Centrepoint Trust. OCBC recently maintained a buy rating on FCT. On one hand, I am tempted to buy but on the other, I am a little skeptical since many of FCT's assets are in suburban areas. Having witnessed the shoppers and traffic flow at Anchor Point, I am not so certain whether tenants there are profitable or not. Have also seen the bookshop change hands a few times over the past years. The crowd on weekends are good but nothing fantastic.

Will probably just continue to monitor this before making any decision. Not vested yet.

3 Monthly Dividend Stocks I Am Watching Right Now

There are 3 Monthly Dividend Stocks that I am watching right now. The reason I am watching them is simply because I am bullish on resources and also because I like the fact that this stocks pay monthly dividends. Of course, the stocks listed here are highly risky and might not be suitable for many investors.

1. Gamco Global Gold and Natural Resources Trust (GGN)

Well, GGN used to be called "Gabelli..." and then there was a name change to "Gamco...". But GGN's dividend history since 2005 has been pretty neat to me. To invest in this stock, you need access to the US market which should be readily available through most of the brokerages in Singapore. Do note that there is a withholding tax of 30% for foreign investors so that means you have to deduct whatever dividends you are supposed to receive by 30%. Do add in another few dollars for the processing/admin charges and you will realise that you actually need a sizeable investment for the yield to justify itself since there are so many REITs listed in Singapore that might give a better yield. Nevertheless, as I am bullish on resources (especially Gold), I am thus thinking of accumulating more of this stock.

2. Armour Residential REIT

If the above stock is risky, Armour Residential REIT I believe falls into the "super don't ever touch it " kind of risky. It is frankly speaking not a REIT like one would expect it to be. It is a mortgage REIT so there are many risks involved associated with interest rates and stuff. Still, it pays out a neat dividend.

3. Enerplus Resources

After divesting my canroys when there were all the tax changes and stuff, I am starting to zoom in again on "energy plays". Enerplus Resources is one of those stocks that still pays monthly dividends. It is an independent North American energy company with a diversified asset base of oil and gas properties across a variety of resource plays. The monthly dividends for this are still good though they seem to have reduced recently.

[Note: This post should not be read as an invitation/recommendation/advice to invest in the stocks listed above. The writer is vested in both GGN and Armour Residential REIT.]

GGN - Gamco Global Gold Trust Dividend History

GGN's (Gamco Global Gold & Natural Resources Trusts) dividend history is listed below. They have been paying stable dividends over the past few years. Though of course, past history is not indicative of future performance. Vested.

Ex Dividend Date Dividends

Jun 13, 2012

$0.14
May 14, 2012

$0.14

Apr 12, 2012

$0.14
Mar 14, 2012

$0.14
Feb 10, 2012

$0.14
Jan 12, 2012

$0.14
Dec 09, 2011

$0.14
Nov 10, 2011

$0.14
Oct 13, 2011

$0.14
Sep 14, 2011

$0.14
Aug 15, 2011

$0.14
Jul 13, 2011

$0.14
Jun 14, 2011

$0.14
May 12, 2011

$0.14
Apr 12, 2011

$0.14
Mar 15, 2011

$0.14
Feb 09, 2011

$0.14
Jan 12, 2011

$0.14
Dec 10, 2010

$0.14
Nov 10, 2010

$0.14
Oct 13, 2010

$0.14
Sep 14, 2010

$0.14
Aug 13, 2010

$0.14
Jul 14, 2010

$0.14
Jun 14, 2010

$0.14
May 13, 2010

$0.14
Apr 14, 2010

$0.14
Mar 15, 2010

$0.14
Feb 09, 2010

$0.14
Jan 12, 2010

$0.14
Dec 10, 2009

$0.14
Nov 10, 2009

$0.14
Oct 14, 2009

$0.14
Sep 14, 2009

$0.14
Aug 13, 2009

$0.14
Jul 15, 2009

$0.14
Jun 12, 2009

$0.14
May 12, 2009

$0.14
Apr 14, 2009

$0.14
Mar 13, 2009

$0.14
Feb 10, 2009

$0.14
Jan 13, 2009

$0.14
Dec 10, 2008

$0.14
Nov 10, 2008

$0.14
Oct 15, 2008

$0.14
Sep 12, 2008

$0.14
Aug 13, 2008

$0.14
Jul 15, 2008

$0.14
Jun 12, 2008

$0.14
May 13, 2008

$0.14
Apr 14, 2008

$0.14
Mar 13, 2008

$0.14
Feb 12, 2008

$0.14
Jan 14, 2008

$0.14
Dec 27, 2007

$0.25
Dec 10, 2007

$0.14
Nov 13, 2007

$0.14
Oct 15, 2007

$0.14
Sep 12, 2007

$0.14
Aug 15, 2007

$0.14
Jul 13, 2007

$0.14
Jun 13, 2007

$0.14
May 14, 2007

$0.14
Apr 12, 2007

$0.14
Mar 14, 2007

$0.14
Feb 09, 2007

$0.14
Jan 12, 2007

$0.14
Dec 27, 2006

$0.06
Dec 11, 2006

$0.14
Nov 13, 2006

$0.14
Oct 13, 2006

$0.14
Sep 13, 2006

$0.14
Aug 15, 2006

$0.14
Jul 13, 2006

$0.14
Jun 14, 2006

$0.14
May 12, 2006

$0.14
Apr 11, 2006

$0.14
Mar 15, 2006

$0.14
Feb 09, 2006

$0.14
Jan 12, 2006

$0.14
Dec 28, 2005

$0.18
Dec 13, 2005

$0.14
Nov 10, 2005

$0.14
Oct 13, 2005

$0.14
Sep 14, 2005

$0.14
Aug 15, 2005

$0.14
Jul 13, 2005

$0.14
Jun 14, 2005

$0.14

Crossed 300,000 Pageviews

Phew! This blog has crossed 300,000 pageviews. While other blogs easily cross that mark in a matter of months, it has taken this blog a solid few years to cross that mark. Or either that, Google must have tweaked something to reset my pageviews to zero when I started to notice my pageviews this year. Anyway, it has taken only less than half a year in the year 2012 to climb from 200,000 pageviews to 250,000 pageviews to finally over 300,000 pageviews.

I guess the next challenge will be to cross the half a million pageviews mark. At the rate things are going, I should cross that mark mid-2013. That will be amazing for me just as a personal achievement.

SAF Group Term Life Insurance Gives Rebates

Just received a letter not long ago from Aviva. It is basically a cash rebate of over $120 for my term insurance coverage under the SAF Group Term Life Plan. I really do enjoy getting this rebates as it reminds me again that this is probably one of the cheapest term insurance plans available to most Singaporeans.

Considering that my monthly premium is around $50, it means that I have gotten almost 2 months of free coverage! Insurance is a cost at the end of the day and where possible, it is always best to keep the cost as low as possible.

Query from Reader - $20K to Invest

I don't usually do this but I got a query from a reader recently asking me what safe instruments one could invest in that will provide a better return than fixed deposits (FD). Based on the sketchy information provided, here are the following facts that I got from the very brief email:

$20K cash
"Invest on something safe"
Earn more than FD (which I assume stands for fixed deposits).

Firstly, I think the reader must ask himself whether the $20K in cash is really spare cash. Has he/she set up an emergency fund of 6 months expenditure (or for the kiasu ones - 6 months income). Without questioning too much, I assume that he/she has already set aside money for an emergency fund and this is really SPARE cash to invest.

Secondly, I deduce that the reader is probably risk adverse. Capital protection is probably key to him/her. Stocks with their high volatility are perhaps not suited for everyone (even though I strongly recommend it to most people).

One of the few options I can think of is to invest in SGS bonds. That will give a better return than FD. However, at the same time, the returns from bonds are not spectacular at all (at least to me). Personally, I don't invest much in bonds (not directly anyway).

Any thoughts from other readers?

One Stock that Pays Monthly Dividends

Have been holding on to this stock that pays monthly dividends for a few months now. The stock is Gamco Global Gold & Natural Resources Trust (GGN). It pays a dividend of US$0.14 every month and is currently trading at US$13.69. After accounting for withholding tax rate of 30% (since I am not a US citizen), the dividends is slightly less. There are of course exchange rate fluctuations to account for too.

I just bought another 200 shares recently bringing my total holdings to 500 shares.

GGN is a close ended fund (CEF). The fund's objective is as follows:

The GAMCO Global Gold, Natural Resources & Income Trust by Gabelli is a non-diversified, closed-end management investment company that seeks to provide a high level of current income. The Fund's secondary investment objective is to seek capital appreciation consistent with the Fund's strategy and its primary objective.

Under normal market conditions, the Fund will attempt to achieve its objectives by investing at least 80% of its assets in equity securities of companies principally engaged in the gold industry and the natural resources industries. The Fund will invest at least 25% of its assets in the equity securities of companies principally engaged in the exploration, mining, fabrication, processing, distribution or trading of gold or the financing, managing, controlling or operating of companies engaged in "gold-related" activities. In addition, the Fund will invest at least 25% of its assets in the equity securities of companies principally engaged in the exploration, production or distribution of natural resources, such as gas, oil, paper, food and agriculture, forestry products, metals and minerals as well as related transportation companies and equipment manufacturers

The dividends declaration for July, August and September 2012 also remains at US$0.14.

The distribution for July 2012 will be payable on July 24, 2012 to common shareholders of record on July 17, 2012.
The distribution for August 2012 will be payable on August 24, 2012 to common shareholders of record on August 17, 2012.
The distribution for September 2012 will be payable on September 21, 2012 to common shareholders of record on September 14, 2012.

Financial Freedom