Saturday, December 31, 2016

2016 Returns

2016 Returns

My stock portfolio returns this year is +19%, beating STI returns (excl dividends) of 0% and the STI returns (incl dividends) of 5%  (based on STI ETF as at Nov 2016)

The returns are largely due to 2 stocks: China Aviation Oil (CAO) and 800 Super. (I am still holding 800 Super in my portfolio, but I no longer hold CAO. I may buy CAO again if the price drops.)

What I aim to do in 2017

As mentioned earlier, I aim to inject funds into my stock portfolio such that my stock-to-cash ratio will be 60-65% in 2017, as the opportunity cost of cash -- i.e. returns if invested in stocks -- is significant.

In 2016, I have steered my portfolio towards GARP (Growth at Reasonable Price) stocks. Hopefully, I can continue to find GARP stocks to buy in 2017. It is quite difficult to find stocks with quality and growth at reasonable price. 

If possible, I should set aside a portion (maybe 5%-10%) of my portfolio towards buying stocks which had fallen a lot, market is very pessimistic about, but the problems are temporary and the stock has a chance of recovery. Thereafter, when I had bought the stock, I should die-die hold the stock for 2 years regardless how low the stock fall. This is something I may do, if I can identify such stock in 2017. 

Monday, December 26, 2016

Some Thoughts on 2016

2016 is a good year for investing; ditto for 2017

STI was quite negative in 2015 and dropped more in the first 2 months of 2016. If one has bought heavily at the start of year, one would have make a fair bit in 2016. I would say that 2016 is relatively good return year.

2017 is an unknown. US interest rate may rise more rapidly in 2017. Oil price may recover or remain stagnant, while Singapore Oil & Gas stocks may remain unchanged. The property prices in Singapore may slide further due to higher interest rate and slow Singapore economy. I guess that the above possibilities are know. How much they are priced into the current stock prices is an unknown to me.

Buy when the market is most pessimistic, but I was unable to do it

In 2016, there are two points where I wanted to buy Oil & Gas stocks.

The first time was when Keppel fell to below $5. I did not buy, as I was waiting for $4.

The second time was when Ezion fell to $0.25. I did not buy, as I did not want to take the risk in betting that Ezion will not face caskflow problems.

In both cases, the market was quite pessimistic on Oil & Gas stocks, but I was not able to take advantage of it.

Maybe, I need to set aside some portion of my portfolio for such situations and just buy the stocks when I start considering the purchase. Then I will hold such stocks for 6 mths to a year or until they rose to a certain point.

Stock-to-Cash Proportion

Currently, I am 57% stocks and 43% Cash/CPF.

I aim to up the stock proportion to 60-65% stocks in 2017, as the opportunity cost of cash -- i.e. returns if invested in stocks -- is significant.

Unwillingness to take certain risks

Sometime ago, the blogger of "A Path to Financial Freedom" explained why he bought CDL Hospitality Trust. He felt that the bad news had been factored into the share price. And while the revpar (average revenue per room) will be low in 2017, it should recover in 2018 or thereafter.

I can understand the blogger's reasoning but I did not follow to buy the stock. This is because I am not sure if the revpar will recover; I am not sure if the visitor arrivals to Singapore will continue to grow. And will more visitors to Singapore choose the less expensive option of staying in Malaysia and travel to Singapore for day tour?

This tells me that I looked for more certainty in my stocks. Not sure if this is a good thing, as the returns are lower when you desire more certainty.