Taking Stock of 2018

Leaving 2018 and entering 2019, time for a quick roundup of my 2018 and my little wishes for the new year ahead.

Work

This year is my company's 2nd year of operation. 

Results so far are a tremendous improvement over last year in terms of revenue, profits and scale of projects secured.

Although revenue is still about $75,000 shy of the target I set for myself, I have two more months to 'chiong' before end of my financial year. Hopefully I can close the FY even more beautifully.

In terms of business offerings, I have added the Design, Installation and Maintenance of Solar Photovoltaic (PV) system to my products and services recently.

This is actually synergistic to the other portion of my business which is environmental engineering, particularly in pollution control systems.

As I mentioned before, one of my investment guidelines is to ride along with the macro trend.

I believe Solar PV system is the way to move forward especially in a country like Singapore. Hence I made a deliberate effort to take up a course in this field and graduated from it recently.

This also means I have achieved my aim of adding a new capability to the company by this year.

Moving forward, my focus continues to be growing the business and if possible purchase an office space as part of my recurring income plan.

Other Incomes

Previously I have set a target of achieving S$7,832.88 for my side and passive incomes in 2018.

Actual passive income achieved for 2018: S$6,069.08

Actual side income achieved for 2018: S$3,042.86

Result achieved for 2018: S$9,111.94 (Target met)

For 2019 I am going to target another 20% growth in my dividend income as I will probably be drawing down a portion of my portfolio for some expenses.

For the side income in 2019, there is actually a much higher room for growth. I am in the midst of discussing a venture which if materialised, will contribute a significant amount to this category.

However I do not want to count my chickens before they hatch. Hence targets for 2019...

Targeted passive income for 2019: S$7,200

Targeted side income for 2019: S$3,000

Equities and REITs

My holdings as of 31/12/2018:

With the exception of M1, all the counters in my portfolio closed at a lower price this year end compared to last's.

In 2018, I've added another 5,000 shares of CapitaLand, added another 4,000 shares of Netlink Trust and bought 4,000 shares of Mapletree NAC Trust. Total capital injection is $25,820.

Excluding the capital injection, my portfolio value returned -13.7% compared to last year. A loss of more than $15k.

I really ought to read more, learn more and relook into my investment style especially in the technical analysis to time my entries better.

What a humbling experience. It shows how much of a fool I am in the stock market.

In summary,

1) Yield of Portfolio 2018: 4.30%

2) Cumulative Yield of Portfolio: 8.10%

Similarly, wifey's portfolio also dropped in value ($41,431.98) compared to last year ($41,919.78) if capital injection is excluded.

 

Personal

Baby M who arrived on Father's day 2018, never fails to bring a smile to our face. She is making lots of funny sounds and lots of movement nowadays.

Really a different kind of joy.

Our biggest wish is for her to grow up happily and healthily.

I always believe we should not forget to help others if we can.

Though my investment portfolio performed less than admirably, I donated $550 to a selection of charities in 2018. This is on top of my monthly Giro donations to Community Chest and NKF.

Thanks to giving.sg, it is so convenient nowadays to make donations and volunteering.

Last but not least, I wish everyone a happy new year ahead. Good health and good wealth!

Pennies are Better than Blue Chips for Trading?

I am not so much of a trader for 2 reasons.

1. I'm a lousy chart reader.
2. I'm investing for an income portfolio.

However when opportunity strikes I would enter some small positions here and there for hopefully, some quick bucks. The holding period for my trading positions usually range from 5 days to 6 months though I am often not nimble enough when the trend moves against me.

Anyway through my poor and amateurish trading eyes, I noticed that the price of blue chips usually move within a tight range and is usually more influenced by the big boys.

Sometimes the big boys choose to sell or buy a particular blue chip contrary to the news in the market.

Take for example CapitaLand. Despite a slew of positive news recently, its share price has been inching down last month (though thankfully it has recovered slightly since last week).

I took a look at the top institutional sells then and if I remember correctly CapitaLand was among the most heavily sold counter amongst the big boys.

On the other hand, price of pennies are more easily influenced by retail traders / speculators who are in turn, often influenced by market news.

Big boys usually shun the pennies since there is often not enough volume on the other side of their trades to effect their transactions anyway.

This means that the pennies have higher volatility and the share prices have potential for greater swings than that of blue chips. Profit-taking opportunities are higher too.

Having said that, I also noticed technical analysis is sometimes not applicable to pennies due to for example, fast price swing on piece of news before the charts can capture.

Of course this might be due to my own inadequacies in TA.

For pennies, the risks are higher. But the potential rewards are correspondingly higher too.

Last but not least, a gentle reminder which I always keeps in mind: Only buy what you can afford to lose.

Fundamental Analysis and Technical Analysis

I'm more of a fundamental analysis person when it comes to stock investing.

There are many discussions about fundamental analysis (FA) and technical analysis (TA), advantages and disadvantages of one over the other, blah, blah, blah.

However as I tend to hold my stocks over a longer horizon, I feel a good analysis on the fundamentals of the company coupled with a look at the macro factors is an approach which works well for me so far.

5 of the most common factors that I use to screen my stocks are:

a) Dividend Yield
b) Net Profit
c) Gearing
d) P/E Ratio
e) P/B Ratio

In some cases I also look at the following:

a) 5 Year Dividend Growth Rate
b) Sales (TTM) vs Preceding Year
c) ROE

Nevertheless one cannot discount the importance of a good TA.

Many a times I find myself selling too early despite having a good entry price. Reading the charts will help judge a good exit price.

Another case in point. In a bull run like the one we are facing now, some stock prices are rising faster than you anticipated. Using TA can help you to do some quick trades and in the process, hopefully earn some quick bucks.

Conversely in a bear market, take advantage of a well-applied FA to grab solid counters at attractive prices for some long term holdings.

All in all, personally I feel FA is good for stock investment over a mid to long horizon and TA is useful when it comes to short term trading.

What do you think?