Posted on August 19, 2009 - by PanzerGrenadier

Equity Investing: A Clean Slate

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I’ve recently moved from an equity heavy and cash light portfolio to a relatively cash heavy and equity light portfolio due to a possible move into property investment. However, the recent run-up in mass market private property prices makes me feel that some of the units I’m considering are over-valued relative to possible downside on rents.

Thus, I’m now taking my time to scout for possible property investments and in the meantime parking most of my funds in Maybank iSavvy that is paying 0.75% per annum for balances exceeding $50k. In the meantime, I’m doing some quick speculative punts on SGX given the volatility in some counters.

Cleaning up

To arrive at this position, I had to incur some realised losses on investments made one to two years ago. This allowed me to free up capital and at the same time, I was fortunate that selling my SPC shares to PetrolChina allowed me to essentially break even, i.e. take out my capital with minimal realised losses. My year-to-date realised investment returns are 4.61% which beats my benchmark of 2 x risk-free returns (either treasury bills or fixed deposit rates, whichever is the higher).

With fixed deposits interest rates at 1% or even lower, 2x is about 2%. In fact, my returns of 4.61% beats CPF’s 4% for MSRA (medisave, special and retirement accounts) and 2.5% on CPF ordinary balances. So far, I’ve managed to outperform CPF in growing my own monies.

What I learnt from investing my own money since 2003 is that holding power is important. The ability to hold means that you are less pressured to sell in down markets and can ride out a certain degree of volatility in the market. Read more…

Related posts:

1. Panzer’s Equity Portfolio as at 20 Nov 2009
2. To Win In Investing, Think About Losing First
3. Panzer Equity Trading Rules of Thumb