After the relentless selling over the past fortnight in both SG and US markets, my portfolio (including dividends) dips in the red for the first time this year.
Is it time to “kio” durian? (meaning to pick up a good bargain)
The sales is here but I am not in a hurry to buy. A reminder to all of us to buy the good stuff if we are buying. Paying $14 instead of $20 for a kg of Mao Shan Wang is better than paying $1 instead of $2 for a poor quality durian.
Why I am not in a hurry?
I have limited fund
One of the downside of not having an active income when I am an active investor is my bullets do not get reloaded during a bear market. Yes, I do have cash but they are meant for future expenses so I won’t touch most of them.
There is some loose change and also a bit to spare in CPF too. However, since it is limited, I do not want to rush to utilise it.
My portfolio isn’t that red yet
Five to six years ago, I decided to come out with a plan to deploy my opportunity fund when market corrects. You can read the the posts Averaging down plan and Update to plan for market correction if you are interested in my thinking then.
Obviously, they are not that relevant to me now but I can still adapt it.
I might start to buy when
- my portfolio’s value is 10% lower than previous year, AND
- the drop is triggered by market correction/crash, AND
- I have spare cash beyond my 3 years of expenses.
Year to date, SPY is 10% up and ES3 is only 2% down. My US portfolio is still 20% up and SG portfolio is 7% down. So I can afford to wait for a while for even better bargain.
It’s earning season
It is earning season now. So there is really no hurry to buy until we hear the latest update from the companies. I would like to extract as much as possible from my limited fund, by utilising it on companies that are more likely to bounce back strongly when the tide turns eventually.
TAA
Nope, I don’t mean Trent Alexander-Arnold. It wasn’t that long ago, where TINA – “There Is No Alternatives” was common term used during periods of weak performance by stocks.
However, TAA – “There Are Alternatives” now. With Singapore Saving Bonds going at 3.3%, T-bills going at 3.8%, UOB One account at 3% to 5% and others, there are plenty of alternatives! In fact, last week I just decided to open a Moomoo’s account to sign up for 5.8% guaranteed return for 30 days.
It does not mean that we should just all go for fixed income. Long term, equities should still provide a better return but there is no hurry to rush into it during this period of time.
Think Forward
While I have limited fund, such period provides an opportunity to review the portfolio. I might be doing some switching in the coming weeks. A reminder to myself is not to look at the average purchased price or be bothered by the current gain or loss.
What is important is to think forward and determine which counters are more likely to give me a bigger return in the coming years.