Now May be the time to invest ... ... If you can hold for 2 years

STI Index

OCBC Bank

DBS Bank

CapComm Trust

I took profit for these 2 counters

President Donald Trump has done it again, through his latest speech, it had resulted in DOW JONES hitting new high and thus rallying along the rest of the world indices including STI and blue chips. 

STI ETF

STI has a good run since last year, it has given me more than 5% gain (excluding the dividends). From the TA indicators, it is in the over-bought zone, I thought it will be better to take some profit first. I still keep some shares as it gives me quite decent dividend yield. An interesting thing I observed in the chart below, in Apr 2011 and May 2015, there was a huge surge in volume and few weeks later, the STI index corrected. Last week, we saw the same huge volume surge, will it happen in the next few weeks? 

DBS Bank
I have also profit take and sold off my DBS holdings, it has been the star performer for me in 2017. The decision to sell for this counter is more maths than anything else. The average dividend over 10 years is 0.614cents. Based on 30 times, anything more than $18 is considered not cheap(last week it rallied above $19). The stock price may still go up further, nobody knows. But I will leave that last part to those with a strong heart.

In 2017 and beyond, we are expecting the market to be volatile and there will be many uncertainties, guess at some point we should take some profit off the table. After all, we invest because we want to make our money work, and if we dont take profit, we are not doing justice to our $$. Just my own views.

STI performance

In the last couple of weeks, STI had a spectacular performance. At closing, it is now near to where we had started beginning of the year 2014 by just a few points below. In this post, I want to look at how did STI compare against some of the other indexes such as Indonesia, Brazil and China. Hey, isn't this the BRIC without Russia.

Below is the chart which I had done to compare these indexes, Brazil(blue), Indonesia(orange), China(green), STI(red)

Since February, Indonesia is the strongest of the group, having rebounded strongly as shown in the chart. Brazil is the next strongest, rebounded strongly after a second correction. As compared with these 3 countries, STI has not been doing that well, mostly in the range bound and had just started trending up but not much.

In the table below, it has shown clearly how each of these market has performed for the last 6 months as compared with closing on 28Mar.

What are the factors that is likely to cause this ?

Starting with Indonesia, this is an election year for them, and as mentioned in an earlier post, this has a positive effect on the Jakarta composite index based on the last 2 elections.

Brazil has got 2 major events this year, one is the coming election. For the soccer fans, it's the World Cup in June, so will the World Cup fever spread to the stock market.

So will this trend continue ... no one knows, but remember to cut loss if you are wrong.

Disclosure - I am long on EWZ and IDX.

Related post: Where to invest in Asia

Thoughts on Permanent Portfolio ...

Met up with couple of my friends to have beer in a Kopi shop, and I was thinking to myself how we have evolved over time. We used to drink at pubs when we were younger and now guess beer is much cheaper in Kopi shop and nicer place to have a decent conversation too. As usual, part of our conversation was about investing. My friend, whom has just finished reading a book 'Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School', by Andrew Hallam, was wondering how best the portfolio can be created.

I shan't be talking about how one can create the composition of the portfolio as that is already mentioned in the book and serveral blogs as well. Instead, I will share how one can buy/sell mechanically for your STI ETF portfolio.

Looking at the chart above, it does show that STI is now on the high side, at most maybe another 300 to 500 points more. So is this the right time to start or even addon to your portfolio? By using mechanical method, you rule out your emotion in your investment. Here is how:


 Below 1350 BUY
1350 to 1700 Buy 3 lots
1700 to 2000 Buy 2 lots
2000 to 2350 Buy 1 lot
2350 to 2700 Sell 1 lot
2700 to 3000 Sell 3 lots
Above 3000 SELL

So now is it the time to buy? Patience is the key