Making returns from passive stock portfolio

I am a passive investor. Holding a few value and safe stocks for the long term (Apple, Genting Singapore, The Hour Glass). I seldom sell.  

I am wondering if there is a way I can 'monetise' value from this passive portfolio? Lending stocks? 

Grafetful for any ideas.

(26-02-2019, 07:58 AM)Choon Wrote: I am a passive investor. Holding a few value and safe stocks for the long term (Apple, Genting Singapore, The Hour Glass). I seldom sell.  

I am wondering if there is a way I can 'monetise' value from this passive portfolio? Lending stocks? 

Grafetful for any ideas.

. 1 sell to realize capital gain
. 2 loan out your shares 
. 3 dividend opt for cash rather than script if allowed
. 4 re-invest your dividend for higher returns than just saving / fixed deposit interest and higher than the dividend pay out
. 5 eat well (healthy food) - critically sick or death no need to monetize

(26-02-2019, 07:58 AM)Choon Wrote: I am a passive investor. Holding a few value and safe stocks for the long term (Apple, Genting Singapore, The Hour Glass). I seldom sell.  

I am wondering if there is a way I can 'monetise' value from this passive portfolio? Lending stocks? 

Grafetful for any ideas.

hi Choon,
Here is an article that talks about some considerations if you want to loan out your shares. Probably some VBs who has experience could comment more, or you could check more with your broker on some of the considerations bought up in the article (eg. risk of default, custodian fees, ability to attend AGM etc).

https://dollarsandsense.sg/heres-can-len...r-returns/

My 2 cents is that the best way to "monetize value" from passive portfolio is to be able to free oneself up from the noise and allocate time to do other things - example: to improve knowledge/gain wisdom with that additional time. That adds more "value" to me personally than anything else and if the execution is done correctly, eventually the "monetization" will follow.

While asset allocation matters on a portfolio basis, bringing this 1 level up - time allocation matters on an individual basis.

(26-02-2019, 07:58 AM)Choon Wrote: I am a passive investor. Holding a few value and safe stocks for the long term (Apple, Genting Singapore, The Hour Glass). I seldom sell.  

I am wondering if there is a way I can 'monetise' value from this passive portfolio? Lending stocks? 

Grafetful for any ideas.

There is no free lunch. Monetizing your holdings will likely mean you take on *additional risk*. I'm just free associating here just for kicks.

Here're the theoretical possibilties:

1. Securities Lending (almost riskless). You've already thought of it.

2. Borrow secured money against your shares (say 30% of value). Invest in something with a higher return to earn carry. 

3. For US stocks, you may be able to do a covered call with your broker (if your broker is a US one). This means you sell a call option on your stock with a strike at say 10% above current value for say 3 mths. This means you earn the premium if nothing happens in the 3 months or are forced to sell the stock if it runs up 10% in 3 months. 

4. Not sure if you can do a similar thing with your SG holdings as #3, but wealth managers do offer equity linked notes to their clients. The underlying derivative has to be backed (hedged) somehow. You may be able to earn an "enhanced interest" (aka premium) by packaging your equity + a derivative and embed into a note. Of course, the bank will take a cut. If you are a PB client, you might want to call your relationship manager.

(26-02-2019, 02:59 PM)tanjm Wrote:

(26-02-2019, 07:58 AM)Choon Wrote: I am a passive investor. Holding a few value and safe stocks for the long term (Apple, Genting Singapore, The Hour Glass). I seldom sell.  

I am wondering if there is a way I can 'monetise' value from this passive portfolio? Lending stocks? 

Grafetful for any ideas.

There is no free lunch. Monetizing your holdings will likely mean you take on *additional risk*. I'm just free associating here just for kicks.

Here're the theoretical possibilties:

1. Securities Lending (almost riskless). You've already thought of it.

2. Borrow secured money against your shares (say 30% of value). Invest in something with a higher return to earn carry. 

3. For US stocks, you may be able to do a covered call with your broker (if your broker is a US one). This means you sell a call option on your stock with a strike at say 10% above current value for say 3 mths. This means you earn the premium if nothing happens in the 3 months or are forced to sell the stock if it runs up 10% in 3 months. 

4. Not sure if you can do a similar thing with your SG holdings as #3, but wealth managers do offer equity linked notes to their clients. The underlying derivative has to be backed (hedged) somehow. You may be able to earn an "enhanced interest" (aka premium) by packaging your equity + a derivative and embed into a note. Of course, the bank will take a cut. If you are a PB client, you might want to call your relationship manager.

Thanks much all for your generous sharing