Friday, December 31, 2010

The Year Ahead - Review/Reflections for 2010 and Investment Strategy for 2011

2010 had been a decent year for stock market investors, though not as good as 2009. It has also been a stock-picking year and investors had been rewarded handsomely if they had picked the right stocks. Personally, for my portfolio, I had done quite ok this year. So, here is my review for 2010.

What has done well:

1. Adopt value investing strategy and overweighting undervalued stocks. I had bought in more small and mid cap value stocks this year, while also adding onto existing ones. This strategy did paid off in the 2nd half of the year as STI peaked and the market re-rated some of these value stocks. The downside of this strategy is of course, being unable to participate fully if growth stocks rallied further.

2. By avoiding IPOs and participating in rights issues, I had been adding more into existing stocks rather than introducing new ones. Rights issues are normally priced at a discount from the market, and I managed to add onto some of my core existing holdings like MapleTree Logistics Trust, Ascott REIT, First REIT etc via excess rights shares as well.

3. Minimize sell trades. I have only done one sell trade this year and that reduces turnover rate of the portfolio and in turn reduces brokerage costs.

What has not done well:

1. Only attended a few AGMs. I started the year aiming to go for more AGMs, but it didn't turn out well as I was occupied with work.

2. Less time to go through annual reports. I did not allocate more time to go through some of the annual reports this year and as a result, I didn't finish some of them. I also did not have a system to keep track of those reports that I had not finished going through, until I realized it when doing some random checks.

3. Minimize buy trades. I had a lot of buy trades in different stocks at different times throughout the year and that had got to do with limited budget and dividend payouts at different times. I might want to reduce these small buy trades to save further on brokerages.

Investment strategy for 2011 - I do not like to predict where the market will move. Rather, I would like to position my portfolio accordingly so that it can adopt to different market conditions. I had been positioning my portfolio defensively since the 2nd half of 2010 and will continue to do so in 2011. I suspect 2011 will also be another stock-picking year whereby stock selection will play an important role. I will continue to overweight companies that are undervalued, delivered good cash flows and reward shareholders consistently. Rights issues had been one of the strategy that I adopted in 2010 and I will continue to apply for excess rights shares on selected issues in 2011. I may also want to add onto some of my STI component stocks in the portfolio if opportunity presents itself.

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Blogger Singapore Stock Picker said...

All the best for 2011 ghchua! I would think that the most helpful post was the one on scrip dividends.

unlike you, I do not have the time to attend AGMs but hope to bump into you by sheer chance soon

5:07 PM  
Blogger Everlearning said...

Thanks for sharing your approach towards stock investments. Like you, I shun IPOs. I would prefer to invest in companies that have proven themselves credible and sustainable in the market for some time.

What has kept me long enough to stay invested could be due to visiting your blog and a few others. I have learnt and hopefully to learn a little more from you again.

6:26 PM  
Blogger ghchua said...

Dear all,

Thanks for all your best wishes. I guess as a long term investor, we shouldn't try to be affected by market noises from time to time. Rather, we should focus on our investment plan and try to follow through the plan.

We learn from our mistakes so don't be afraid to make them. It is only through our experience that we can be a better investor and the returns will come automatically.

Try to focus on the process and not on returns.

9:11 PM  
Blogger ZhuKoLiang said...


wana ask a noob question..

i receive FCOT's EGM letter. can both myself and my sister attend the EGM together?

if yes, what is the proper procedure? How do i sign the proxy form?


10:46 AM  
Blogger ghchua said...

Hi newbie_george,

I guess what you can do is to assign 50% proxy to your sister and both of you appear at the EGM together. Some companies will allow non-shareholders to go in as observer but they are not allowed to vote on resolutions.

6:06 PM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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