My son wants to sleep more at my place after the divorce

On the night of Sat 10 July 2021, my ex-wife made a video call to our son when he was staying over at my place for the weekend. During the video call, my son told my ex-wife that he wanted to sleep every day at my place. Knowing she might be volatile, I told my son that he could not do so as I do not have access to him every day. I did not have an audio recording of that call, just a screen recording with no audio. Thanks Android for the privacy concerns. I wish I could fulfill my son's wish. For now, both parents have to cooperate on raising him up well and emotionally stable. I miss him badly.

The wife wants a divorce and threatened me!

My wife recently proposed to divorce me. It felt like the world crumbled on me. We just talked. I wanted to salvage the marriage and family. I found a counselling agency and contacted them for help. I enquired about Caucasian counsellors which my wife wanted. Although our aims are not aligned, I have to do something to rescue the family. When we were talking about what could happen to our child, I was shocked when my wife threatened me. If she had to leave without taking the child, she will kill me and then kill herself. She looked dead serious. What should I do? Give in to all her demands or hold on to my marriage vows? Was that a real threat that I should protect against??

Distribution of Dividends through the Year

Following the mid-year update on my portfolio, I now examine the schedule of dividend payments (inclusive of SRS) of my portfolio appended in Table 1 below

Table 1: Dividend Schedule (Month)

Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Singtel GREK ETF (Greece)	Sabana REIT	Tai Sin		Hotel Grand Central Keppel Corp Sabana REIT ST Engineering	OCBC Raffles Medical EWP ETF (Spain)		Keppel Corp Raffles Medical Sabana REIT Singtel	OCBC ST Engineering		Sabana REIT Tai Sin	EWP ETF

The idea is to pay myself every month over and above the monthly salary. As it stands, April, July and October are barren months. I will have to find companies paying out dividends in those months e.g. Ascott REIT (Apr), SGX (Oct). It can be tough finding good companies paying in July. Evident from Table 1 is the fact that certain months are lean and need beefing up with current candidates in the portfolio.

However, the key things to find such companies are that they must be able to pay out dividends every year (good track record) and increase dividends in the long run. These are of course not the only metrics that I use to value a company.

Mid-Year Review of Portfolio

This is a mid-year review of my portfolio.

I am still cash-heavy with 57.18% in cash and cash equivalent. For most situations, time in the market would be better than timing the market. However, there are times when valuations get lofty and it would be better not to add on to the portfolio but to conserve cash for the opportunities ahead. See attached chart below. It is to be noted that the equity component can be broken down into - Cash, Supplementary Retirement Savings (SRS), and Central Provident Fund (CPF) Ordinary Account (OA) - of which the cash equity portfolio will be illustrated later.

It was suggested that the bull market in the S&P 500 ended in 2015 to hit 2134.7 points with five primary waves up. Subsequently, the S&P 500 entered a primary ABC bear market. The February 2016 low at 1810.1 points looks to be a Primary A with a possibility of an irregular Primary B. A maximum upside of 2335 (1.618 x Primary A) may result. That is coming soon. If this scenario holds, the STI should follow accordingly. However, should the S&P 500 exceed this upside, it looks to be an extended leg up. This will likely mean that the NYSE scenario of a Primary V is dominant. With roughly 4% to go, the scenario should be revealed soon.

If the market turns downwards after failing to break upwards, for the overseas market, I am looking at investing in Alphabet Class A (GOOGL) and International Business Machines Corporation (IBM). Both GOOGL and IBM are listed on NASDAQ. For the local STI market, I would be disciplined and stick to the trigger points to add on to current positions. If I can find a new company listed on SGX that is worth investing, I may initiate a new position.

Appended below is the composition of my cash equity portfolio which forms one of the three equity components of my overall portfolio above.

Saizen used to form a sizeable part of my portfolio as it rewarded with a good dividend yield and was undervalued. Alas, Saizen sold all its properties to Lone Star Funds. There was a return of capital which bumped up the yield received on my portfolio in 2016. However, that means that I have to find something equivalent to replace the loss of Saizen - a good yielding company that conducts its business primarily overseas yet still listed on SGX. The hunt is still on-going and I may need to hunt further afield. Even if it is found, I will have to nibble slowly unless there is a big movement in the market that allows me to add at prices with a bigger margin of safety.

Personal Insurance Review (2016)

I received S$476.89 rebates for my SAF Aviva Group Term Life Insurance for the period from 1 Oct 2014 to 30 Sep 2015. This would be refunded to me by 30 June 2016.

My coverage is as per the table below.

Description	Sum Assured (S$)	Premium (S$)	Payment Type	Frequency
Term Insurance
Aviva SAF Group Term Life	800,000	102.40	Cash	Monthly
Aviva SAF Living Care	300,000	30	Cash	Monthly
Aviva SAF Living Care Plus	100,000	10	Cash	Monthly
Hospitalisation Insurance
NTUC Enhanced Incomeshield Basic	As charged	347.15	CPF	Annually
NTUC Enhanced Incomeshield Basic Plus Rider	As charged	111.87	CPF	Annually
Whole Life Insurance
Prudential Prulife Limited Pay	100,000	2948	Cash	Annually
NTUC Vivolife	100,000	4,009.45	Cash	Annually
Endowment
NTUC Foundation Policy	10,000	16.90	Cash	Monthly
NTUC Foundation Policy	50,000	92	Cash	Monthly
Prudential Prucash	20,000	136.69	Cash	Monthly
Great Eastern Flexi 5 years	100,000	Paid up	--	--
Others
NTUC Dependants' Protection Scheme	51,000	48	CPF	Annually

Based on the annual premiums of S$1,708.80 paid for the term insurance, the rebates represented a 27.9% discount. Without accounting for wage growth, a payout upon death of S$1.231m would cover my family adequately. As term insurance represents value-for-money and there is going to be an added commitment, I would be increasing the term life coverage to S$1m. Just for another S$25.60 increase in premiums.

I am still undecided about increasing the coverage for the Living Care Plus policy to the maximum of S$200k. This is because I am still rather "young" at age 37. Based on the Screen for Life program by Health Promotion Board in Singapore, at the age of 40, I would need to test for obesity, high blood pressure, diabetes and high blood cholesterol. All these are already covered in my annual health check. Nothing mentioned about screening for cancer. Early cancer is covered under this policy. The definition of early cancer is "...confined to the cells in which it originated and has not yet resulted in the invasion and/or destruction of surrounding tissues". Given that, I would need to do cancer screening tests periodically. These cancer tests are not covered in my annual health check.

It is sobering reviewing the list of top cancers afflicting both men and women in Singapore. As I am of Chinese ethnicity, the top cancers are are colorectal, lung, prostate and liver. The fifth top cancer, Lymphoid Neoplasms, is not included in my list as it is not covered under the said policy.

Singapore Cancer Society offers, without charge, the Faecal Immunochemical Test (FIT). The FIT helps to detect early signs of colorectal cancer. This is the number one cancer in Singapore. People of Chinese ethnicity have a higher risk of this cancer. Though this is recommended annually for people of age 50 and above, checks performed at a younger age and at a periodic basis is beneficial too.

I have periodic (every 5 years??) chest X-rays to check for abnormalities as part of my annual health check. I am not a chronic smoker and I try to steer clear of second hand smoke. However, a sizeable portion of lung cancer sufferers are not smokers therefore I would have to pay attention to warning signs e.g. persistent cough. These warning signs are covered under a questionnaire I have to complete as part of the annual health check. Thus, I assess that lung cancer is covered for now.

Too early for prostate cancer screening. There are also risks from over-diagnosis!

I have reduced my instances of drinking and the amount too. This is to preclude alcoholic liver disease which my paternal grandfather suffered from. I am not a chronic hepatitis B/C sufferer. I am surprised to discover that fungus in badly preserved food (especially grains) is a cause albeit a rare one. My annual health check questionnaire also covers the early symptoms. Therefore, I think I am sufficiently covered and do not need to do an ultrasound/CT scan. Perhaps I should schedule an ultrasound scan in Jan 2017 to coincide with my annual health check.

I am glad that I have gone beyond reviewing the numbers as part of my annual insurance review. It pays to be informed. Based on my personal experience, if you can, apply for this Aviva term life insurance for yourself and your dependants. It would be money well spent.

Cash Equity Portfolio

My Equity Portfolio built using cash. Speculative positions are in the Greece and Spain Exchange Traded Funds (ETFs).

I am 50% in cash and will continue to build the war chest as far as possible because there will be big expenses as I relocate to the UK for the next year.

Investment lessons from Operations Research

The exams for the first quarter concluded on 11 June. The first quarter was packed with many things to learn. One particularly useful tool I picked up was from Operations Research.

I created Excel worksheets to - 1) evaluate and rank stocks, and 2) create an optimal portfolio based on the selected stocks. The techniques used were the Ratings Approach from Analytic Hierarchy Process (AHP) in the stock screening process and Mean Variance Optimisation using the Markowitz Model to create optimal portfolios.

For the stock screener, the 4 main criteria of assessment were - 1) business model, 2) management, 3) financials, and 4) valuation. Each criteria has sub-criteria composed of either qualitative or quantitative metrics. Using pairwise comparison, I assigned weights to each criteria. It is to be noted that the weights will change depending on the type of investor that is using the tool. Under the ratings approach, to account for the different contributions to each criteria from each rating, I expressed the ratings in the ideal mode.

In the process of creating the tool, I read up on several books (it is always good to have time to read) and incorporated several pieces of knowledge e.g. Piotroski F-Score under an augmented financials assessment matrix. The end result - a useful tool that is applicable to firms in different industries.

One could avoid value traps if diligent research was done in the process of populating the forms in the stock screener. With this screener to assign ratings to stocks, following the investment principles closely will make me a better investor in selecting stocks as candidates for my portfolio.

After the stock selection phase, I moved into the creation of a portfolio that will provide the investor with opportunity (high return) and protection (dependable return). Mean Variance Optimization (MVO) was first proposed by Markowitz to guide the construction of an efficient portfolio. The objective of MVO is to form a portfolio of assets so as to maximize expected returns for any risk level or minimize risk for a given level of return. Three inputs are required for MVO – (1) historical returns on each investment (ri), (2) covariance (Covij) between the investments, and (3) standard deviation of returns on each investment (σi). The main assumption in MVO is that returns are Normally Distributed which can be applied to traditional stocks.

My portfolio analysis started with analyzing the past performance of the individual stocks selected by the AHP screener. Non-Linear Programming (Markowitz Model) was used to separate the efficient from the inefficient portfolios and to portray the combinations of likely return and uncertainty. Thereafter, I can select the combination that best suited my needs. I used the Solver Model in Excel to model the Portfolio Risk Equation and construct the efficient frontier. Thereafter, I assumed a risk adverse investor scenario and created sample utility function curves based on the Constant Absolute Risk Aversion (CARA) function. This was used to find suitable portfolios to recommend to the class.

As the optimiser model is concerned with risk, it may miss out on stocks with the growth potential. As more stocks (SGX has 700+ stocks) are added to the database for analysis and back-testing done year-on-year, the weights and even composition of the criteria can be enhanced to obtain clearer results. These refinements can even be tweaked for industry specific ranking. Whilst not claiming to be clairvoyant, the disciplined application of this AHP stock screener can sieve out the good buys.

Results are not out for my project. However, I think I have done well enough to get an A for the project. Interestingly, my professor's PHD supervisor at Stanford, Prof. David Luenberger, wrote the book "Investment Science". I will have to find time to read more.