Sandy Chin, an avid reader of NextInsight, sent us this article to share her ideas and experience of investing. She also hopes to provoke other investors to comment and share their views.

CPF portfolio statement as at end May 2012. Except for GSH, the stocks were bought many years ago - perhaps as far back as 10 years ago.

A YEAR HAS passed since I shared a story on my CPF investment portfolio: INVESTOR: How my stocks bought with CPF savings have done

A year ago it stood at $89,178 (see screenshot below). Recently, the bank statement said it is $93,830 (see above).

That doesn't include dividends of nearly $4,000 paid by SingTel, ST Engineering and ComfortDelgro.

Inclusive of dividends, my gain was 9.7% over the past year. The Straits Times Index was down about 12%, so my small portfolio outperformed it by about 22% percentage points!

Hey, not bad, I thought.

I have identified two key boosters:

> The dividends. Never underestimate the power of dividends in investment returns. (Investors know this and will gladly chase stocks for their yields. Bosses of S-chips can only do their stock prices a favour if they give dividends).

Otherwise, people won't be investing in them, since capital gains are elusive because of the economic slowdown.

> A stock called GSH. This one had died on me for several years. Now, it is up and about because of a great effort by management and shareholder Sam Goi to revive it. Thank you!

Lesson: Sometimes we just get lucky -- a business does turn around.

In the first place, I was unlucky though. The stock crashed after the former CEO of GSH (used to be known as JEL Corp) was caught for being part of a scheme that cooked the books, and he went to jail for that.

CPF portfolio statement as at end-June 2011

I have held these stocks for many years - exactly how many I cannot be sure. Let's say it's been 10 years on average, though one of them, GSH, was just a couple of years.

They were high-growth stocks once, but I doubt they continue to be so. They are now dividend plays.

Assuming a $4,000 payout every year, the yield is 8% (ie, 4K divided by 49.8K of capital), which is enough reason for me to just leave a good thing alone.

My checks showed that the total dividends paid to me for the last 3 years amounted to $12,000.

For conservative calculation, let's take four years (instead of 10 years) of dividends totalling $16,000.

Then my capital gain and dividends can be rounded up to $110,000 (ie, $94,000 + $16,000).

CAGR (compounded annual growth rate) assuming a 10-year period works out to be 8.25%.

This looks a little disappointing but it certainly beats the 2.5% p.a. that the CPF ordinary account pays.

In truth, a CAGR of 8.25% is enough to lead to a good result. The outperformance of about 6 percentage points a year really can grow your money much faster.

You see, if I had left the $49,808 in the CPF, the value now would be $63,758 only.

It's about $46,242 lower than my current position!

Isn't that a big difference?

Please feel free to comment as I would like to learn too from you.