Sunday, May 20, 2018

Looking to go into cash

In my post at the start of the year I said:

I expect the market to top in the coming 6 months before we see a correction and a short down trend. While the newspaper headlines suggest that the local economy is doing well, I think these are false indicator. Expect a bumpy ride in the second half of 2018.

Since early 2016, there market has been on a non-stop uptrend and pretty much everyone is a stock market genius. Except me.

As May comes to close to the end, I am currenly holding on to four companies, namely, Colex, F&N, Delfi and Hong Leong Finance. To show my skin in the game, I will be looking to sell at least two of the companies, leaving me mostly in cash. Delfi is the company that has brought me most pain. I have recently bought it at lows, but it has gone below the lows. There is also no market for the stock. F&N is also another stock that is in the red but at a more tolerable level.  Currently, Colex is in the black, more so than Hong Leong Finance. The big but is that the bid-ask spread for Colex is too big. I will take more than a hair cut if I were to clear them.

The odd thing about this bull market is that aside from the Trump factor, no one really knows what is driving it. This is because most of the macro-economic indicators are not so positive, forwards and backwards. Perhaps my fingers are not as close to the pulse of the market as I should be, or maybe I am not reading enough financial news. Nevertheless, I will be switching my investments to mostly cash soon, in line with my predictions. Overall, I am still in the black but given that I am nine years in the market, the performance has been poor. Better a poor performance than suffer massive blowout!

4 comments:

  1. Your post resonant with me. I can understand how you feel.

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    1. I feel fine. I hope you do too. As long as you don't blow up your investments, conservative is still a good strategy. not the best.

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  2. I suspect there'll be a significant correction of -20% sometime in the next 12-18 months. However I don't think there'll be a full blown global recession ... more of a reevaluation of asset prices. Similar to second half of 2015 to early 2016.

    I won't be surprised if global markets may go up a long way from here. The whole world is moving towards normalizing of monetary & economic policies. Next big recession may still be a few years away. In the meantime markets will be climbing walls of worries.

    You can consider to DCA 50% of your portfolio into STI etf over the next 2 years, while leaving the other 50% for your discretionary stock picks.

    If there's a significant correction along the way, look for basing patterns & then accelerate your DCA as well as buying blue chips on the cheap.

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    Replies
    1. -20% over the next 12 to 18 months is not a long. good to know you have a plan. a plan that is adaptive will help in the stock market

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