Hello everyone! It’s the end of yet another month, and hopefully February has been great for everyone!
As with our monthly updates, here are what we’ve done in February 2021 with regards to our personal finance.
Position Added: Ether, Binancecoin, Polkadot, Chainlink, NVIDIA, PayPal, CPFSA
Take Profit / Cut Loss: Amazon, Centurion, Powermatic, Lendlease, Hong Kong Land, Mapletree Industrial Trust
Position Added: Ether, Binancecoin, Polkadot, Chainlink, Tesla
Take Profit / Cut Lost: Salesforce, Iqiyi, Centurion, Lendlease, Hong Kong Land, Amazon
As we’ve previously updated, February was the month where we finally bid goodbye to SGX and we sold off the last of our Singapore stocks.
For both Mrs Budget and myself, we sold off Centurion, Lendlease, Hong Kong Land, Powermatic, and Mapletree Industrial Trust, and used the proceeds to fund our crypto purchase.
Our initial thought was that we will wait for the share price of the Singapore stocks to recover first before selling. However, the opportunity cost of that proved to be very big as the crypto space was blowing up at the start of the year.
With the fresh funds from our SG stocks, we used it to average up on Ethereum, as well as initiating new positions in Binancecoin, Polkadot and Chainlink, all of which we have previously mentioned in our crypto portfolio update.
|Bitcoin||Main digital currency with public ledger & max supply of 21 million coins||US$27,400|
|Ethereum||Blockchain w smart contract functionality||US$881|
|BinanceCoin||Main Utility token of Binance, the world’s largest crypto exchange||US$93.51|
|Polkadot||Connects different blockchains together – enabling it to “speak” to each other.||US$30.50|
|Chainlink||Connects blockchains to real world data||US$31.15|
While the crypto prices have came down a bit, we have made about 40+% in capital gain in just one month using the proceeds from the SG stocks we have divested. Our conviction for the future of crypto is much higher than the conviction we have in the Singapore stocks, and hence we have sold off the last of our Singapore stocks.
In February too, we also took the opportunity to divest our position in Amazon and rotated them into other high growth stocks such as NVIDIA, PayPal and Tesla.
Unfortunately, shortly after we made that decision, the market saw a huge correction, wiping out all our gains in January and February. Almost half of our open positions in US stocks are in the red now.
So overall this month, we have been rotating our portfolio from Singapore stocks towards US and crypto.
Other than stocks and crypto related transactions, Mr Budget also took the opportunity to top up his CPFSA using some cash proceeds from his SG stock divestments.
Net Worth Updates
While the stock market and the crypto market saw quite a big correction over the past 2 weeks, our net worth still continued to increase as the gain from the crypto market cushioned the US market correction for us.
Our combined net worth is now at $1,100,000, including CPF but excluding our property and mortgage. This is up from S$1,070,000 last month, a change of +S$30,000.
This is a lower than expected gain due to the US stock market correction – for our US stock portfolio, we saw a loss of -S$25,000, wiping all of our gain since January. This was offset by the gain in crypto market where we gained +S$50,000. The rest of the gains are from employment and CPF.
So we are quite thankful that we manage to get into the crypto market early, and we think there are still more room for massive growth in the crypto market.
At one point, before the US and crypto correction, our net worth was up +S$150,000 this month, mostly contributed by the crypto market! So the correction was quite painfully felt by us, and also a constant reminder that our net worth is just a number and it is just a paper gain for now and may be subjected to market fluctuation.
March 2021 Outlook
For March, we are following closely the development in the US market. There are a lot of stocks which has fallen below our initial purchase price such as Palantir and Unity, along with other attractive counters on our watchlist which has fallen a fair bit: SKILLZ, PayPal, BNGO, NIO, ADA.
Here’s our rough plan:
If the market continues to drop another 5-10%, we will consider initiating new positions (half positions).
If the market drops a further 10-20%, we will initiate full positions.
If the market move sideways, we wont be adding any positions.
If the market moves upwards, we wont be adding any positions.
Our cash in hand is still relatively low and as much as we want to deploy our funds now, unfortunately we have topped up our CPF as well as made a recent big personal purchase, and hence we are limited in cash right now.
If we had unlimited cash, we would have averaged down further on Tesla, Palantir, Unity and PayPal today.
Generally, we are slightly worried about the US stock market now as the interest rates and yield continue to increase, therefore negatively impact growth stocks. We constantly remind ourselves that this is only temporary, and if we zoom out our timeframe and look at the 5 years outlook, the overall movement will still be an upwards movement.
More Thoughts On The Crypto Market
We are not that worried about the crypto market correction because the prices of crypto has been blowing up and the correction relative to the price upwards momentum is still quite healthy. Recently too, JP Morgan says that investors can put 1% of their portfolio in bitcoin, therefore “acknowledging” crypto as a long term asset class, while Twitter CFO also came out to say that they are considering adding bitcoin into their balance sheet.
I think we are still seeing strong interest from institutions, therefore providing good price support to bitcoin. Is crypto price going to crash? I really dont think so yet – how can it crash now when institutions are just starting to buy crypto? For bitcoin price to crash, all of these institutions and crypto ETFs will need to sell all their holdings. I really dont think that will happen in just few weeks after they started their crypto journey.
If it does happen, something is really wrong.
In terms of funds inflow and outflow, in the past 5 months, institutions have been buying up crypto, while retailers are the ones that are selling.
Here are some other news that may be interesting: