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Derek (2007 Portfolio Overview and 2008 Action Plan)
By Derek  •  January 1, 2008
By: Derek Lim My 2nd year into stocks and it has been a pretty messy year. I applied for almost half the IPOs this year thinking that I can make a quick buck, tried contra, applied for rights, use my CPF to buy stocks and buying on broker's recommendation all with mixed results. I'm fortunate that I did not suffer too much a loss because 2007 has been a relatively strong year but I'm determined not to repeat the same mistakes again as I'm very sure that I will get burnt real bad one day. Lessons Learnt:
  1. Keep your portfolio simple and easily to understand. I use excel to track my portfolio and trades but my mistake is not because I did not update it but rather the manner in which I recorded the information made me confused. Imagine, I can't even deduce my initial investments let alone my full year returns.
  2. Be patient. I won't say that I buy/trade on impulse rather because of my eagerness to buy that stock, I will buy it at a premium. I bought PSC at $0.15 when the average price is only $0.11. To make me feel worse, $0.15 only occurs for that particular day in 2007 (before the share consolidation took place). It's also my biggest loss for the year.
  3. Buy and Hold. Don't get me wrong. Buy and Hold is good only if you have done your research on the stock but my mistake is to Buy and Hold blindly. I manage to apply for 1 lot of CapitalRChina and the share price ran up all the way to $3+. While I don't aim to sell it at the highest price, I held on without realizing that CapitalRChina has been overpriced. I finally sell it at $2.10, when I can stand to gain at least a cool $1K more.
  4. Not doing my own research. Yes, the classic mistake on buying stocks base on recommendations. I only start to read up on the stock only after I buy it. Reason being, I don't want to regret not buying now.
December 2007 Portfolio

portfolio-december-2007.JPG

I have sold off my PSC shares and bought Cambridge REIT. To better manage my portfolio, I have set aside a separate bank account only for investing purposes. As mention, I'm unable to put in my overall returns for the year due to my poor management but I have since resolve it and I will be able to do so for January 2008 portfolio. First REIT (Vested since 11 December, 2007) Buy Price: $0.78 Market Price (1 Jan '08): $0.77 Return on Investment: 3.16% Rate of Return: 3% There was no news regarding First REIT for the month ended December 31, 2007 Hong Leong Finance (Vested since 6 January, 2007) Buy Price: $3.92 (average) Market Price (1 Jan '08): $3.79 Return on Investment: 2.53% Rate of Return: 2.4% The Business Times ran a report on HL Finance gathering positive feedback. The Edge also publish an article on "High-yield stocks to beat inflation" and HL Finance has a yield of 6.4% making it second after UOB Kay Hian in the Top 20 highest-yielding stock with a market cap of $1 billion and above. Ascendas India Trust (Vested since 1 August, 2007) Buy Price: $1.39 Market Price (1 Jan '08): $1.28 Return on Investment: -7.73% Rate of Return: -17.5% There was no news regarding Ascendas India Trust for the month ended December 31, 2007. Cambridge REIT (Vested since 1 August, 2007) Buy Price: $0.70 Market Price (1 Jan '08): $0.71 Return on Investment: -1.20% Rate of Return: -19.8% Release news to acquire a Industrial and Warehouse property for S$14.7m which explains its surge in price on 31 Dec. Highest yield among all the REITs (source: The Edge) at 8.82% and a forward yield of 10.15% (again the highest). I'm waiting for their next dividend announcement in Jan '08. Overall, my 2007 portfolio barely broke even. It is miserable especially when STI rose 14.63% since Jan 3 2007 but this is about to change for 2008. 2008 Action Plan 2008 will be a conservative year as I expect volatility to continue on the sub-prime issues and the overheating China market. In addition, I will not be increasing my portfolio as I realize that my savings is insufficient. Hence I will be adopting a strict savings program. With the little amount of spare cash I have left, I'm looking at commodities and high yielding stocks. My target is 15% ROI for that. I did a brief calculation; base on my existing stocks' price, dividends (excluding special dividends) paid in 2006 and a 15% ROI on my excess cash, my overall portfolio will still only increase by 3%. However that is before capital appreciation and I'm pretty confident in my main stock - HL Finance. I forecast a 10% ROI on my overall portfolio for 2008. I will also be setting up a investment portfolio for my parents retirement. It will most likely be in cash or Unit Trusts as I do not have a high initial capital and I'm looking to DCA. 2008 will be my 3rd year into the investment scene and I believe will be the most difficult year thus far. Nevertheless, with due diligence, hard work and little luck, I'm sure it will turn out well and I wish the same for you.
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By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started TheFinance.sg with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.
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