I have shown that fundamental value investing (FVI) has worked very well for mid to long-term for me with the evidences I have been providing with established records in i3investors in the links below,
In my last article, “Review of Second Stock Picks Service as on August 31, 2017” in the link below,
I have also shown that using FVI approach, my first stock pick service in Bursa with a portfolio of 14 stocks returned an average return of 35% over a seventeen months period, compared to the return of the broad market of 6% during the same period.
Following that, my second stock pick service with a portfolio of 12 stocks selected also using the fundamental approach had yielded a total return of average as well as median return of 28% over a period of 10 months, compared to the return of the broad KLCI of 9.2% by a wide margin. The portfolio of stocks selected also out-performed the broader FBM Emas Index of 12.9%, and even the Small-cap index of +13.1%, also by very wide margins.
You can see the consistency of the return on investment using the FVI from my own experience in Bursa. More importantly, FVI also works well in other markets such as SGX and HKSE.
Here are the evidences from our own experience in the last one year.
Investing in SGX and HKSE using FVI
We started our first stock pick service in SGX and HKSE exactly a year agoas a mean of assisting my course participants to diversify their investments in the unfamiliar overseas markets of Singapore and Hong Kong. Remember, diversity reduces adversity. Diversification is the only free lunch in investing.
For the last one year since 27th August 2016, a total of 12 stocks, two in HKSE and ten in SGX were selected progressively, with detailed analysis carried out with comprehensive reports published in the website for our participants.
The stocks selected and their returns are tabulated in Table 1 in the appendix.
Return of stock picks as on 31st August 2017
After 12 months have passed as on 31st August 2017, the average return of the portfolio of 12 stocks selected was 34.5% as shown in Table 1 in the Appendix. If ignoring the last three stocks which were picked just recently and have not have had enough time to perform, the average return of the 8 stocks would have been about 50%.
The average return of the 12 stocks in the portfolio of 34.5% still out-performed the 13.9% and 21.3% of the broad index of SGX and HKSE respectively during the same period by wide margins.
It makes a lot of sense to diversify our investment overseas for those who have accumulated substantial wealth. Remember, diversification, including geographical diversification, provides the only free lunch in investing. More importantly, geographical diversification provides more investment opportunities with wider choice of businesses to invest in.
There have been some requests for a new foreign stock pick service. We are contemplating to commence a new foreign stock pick service. If you are interested, you may contact me at the address below,
K C Chong
Table 1: Return of foreign stock picks