Dear Readers
At the beginning of this month, I was
reading a book by Tony Robbins, titled Unshakeable, for a second time. I
was drawn to his investment approach that investors, not speculators,
should remain invested, at all times, regardless of any bullish or
bearish undertone in the stock market. Simply put, any form of market
timing, is abandoned. Tony observes that after every market setback, the
market picks itself up and makes a complete turnaround; exceeding its
own performance, even before the setback.
To put things into perspective, during
the period between mid-September 2017 and mid-December 2017, the KLCI
was retreating. It was gradually dropping from 1790 points to 1713
points. During that time, many investors experienced a substantial drop
or stagnation in the value of their portfolio.
Eventually, the market flipped in the
opposite direction and set sail (imagine where the sail was actually a
rocket booster) towards and beyond the 1800-point psychological
resistance. Now, KLCI is sitting comfortably above 1850 points.
If you had cashed out when KLCI was in
retreat (for fear of losing), you would have not been able to profit
from KLCI’s advancement, later on. On the other hand, if you had the
grit to overcome the anxiety and the fear of loss, you would have given
yourself a pat in the back and some change in your pocket.
If there was only one lesson which I
could take home from the book, that lesson would be that the stock
market has an enduring legacy of breaking hopes and dreams of investors
because you are your own worst enemy. You buy when stocks are at
record high (for fear of missing out) and sell when they are low (for
fear of losing) where in fact you should buy when the prices are low,
and sell when the prices are high. I know, I know, easier said that
done.
Hopefully some good pointers, albeit obvious, from Tony would lend some courage to you:
- You will never be able to consistently predict the ups and downs of the market.
- The stock market will rise over time because the economy expands with population growth, and with it, productivity and efficiency will increase due to the advancement of technology.
- A bear market will always be followed by a bull market.
- It is better to stay invested, at all times, then to be at the sidelines.
- Diversify your investments.
Even if you do not have the slightest
idea on how to pick stocks, but had stuck to the above rules and
invested in all of the 30 blue chip stocks, so as to mimic the
performance of KLCI, and had held them for the entirety of 2017, as the
KLCI rose from 1636 points to 1796 points, you would have made a sweet
9.7% gain. And had you continued holding your blue chip basket, you
would have made a gain of 13%, at the time of writing. Of course those
gains are hypothetical because the index does not move in exact tandem
with the underlying stocks, but you get what I mean.
So if you hadn’t gotten a trading account, register one now. I recommend giving Rakuten Trade or Hong Leong Investment Bank a go; both have reasonably low brokerage fees and good customer service.
Remember, your inaction is the only thing that is putting your future at risk. Start now! Your future self will thank you.
As for my portfolio:| COUNTER | COMPOSITION (%) | AVERAGE PRICE | LAST PRICE | GAIN/LOST (%) |
| 3A | 5.65 | 1.18 | 1.02 | (13.45) |
| AIRASIA | 32.79 | 2.80 | 4.29 | 53.32 |
| CIMB | 22.96 | 5.77 | 7.06 | 22.26 |
| DNEX-WD | 7.77 | 0.23 | 0.20 | (11.36) |
| EKOVEST | 12.62 | 1.16 | 1.03 | (11.52) |
| EVERGREEN | 5.08 | 0.84 | 0.60 | (28.54) |
| SIME | 6.04 | 2.80 | 2.96 | 5.46 |
I’ve added SIME to the portfolio is a
means of diversification. SIME has a broad reach into the automotive
industry, heavy machinery industry, healthcare and logistics (without
the sluggish plantation and property divisions). One counter, offering
so much diversification, is much appreciated. Overall, the portfolio’s
total gain is at 35.40%. That means it has gained 13.50% since the last update.
Links
If you would like to see the progression of my portfolio, check out my previous months’ portfolio update HERE.
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https://bursagoinglong.wordpress.com/2018/01/25/january-2018-portfolio-report/
