"Sell in May and go away!" This is the first May in my investment horizon and I got to have a taste of the true meaning of this phrase fast and hard. Eurozone crisis has hit the stock market real hard this month and the negative effects of China tightening measures just worsen the situation.
In no time, STI got beaten down from 3,000 level to 2,700. Of course my counters were not spared in any way. The counter that got the worse hit is FSL Trust. Soon after the purchase at 61 cents per share, counter-party risk came to light and 2 vessels were defaulted. This caused the price to plunge due to worries on its future earnings and distribution per unit. Soon the share price dropped to 51 cents, where I added the my holdings to average down as I believe its management's capability to ride through this problem and continue its shipping sector recovery story. However, due to the persisting eurozone fears, share price continue to tumble. This time, I stopped myself from further averaging down due to the increased holding in this counter, but I will hold on to this for dividend play.
Another badly beaten counter is Rotary. Due to the pessimistic market sentiment, despite posting good profits for the quarter, its share price still plunged from the panic selling. I will continue to hold on to this counter as fundamentals of the company have not changed, and will possibly average down if I have excess funds. As of now will take a wait-and-see approach.
All other counters were also not spared, as seen from the table below. Overall profits have plunged into the unforeseen territory. Although fear filled the air, I took the opportunity to increase my portfolio to diversify into other sectors.
This month I bought a few lots of Noble and UOB Kayhian to diversify into the commodity and finance sector. Noble is a giant in the commodity sector and its past earnings have been positively encouraging. Being a great blue chip and upon reaching a more affordable price level after share issue and dividend payments, this dilution effect post a great opportunity to enter this blue chip. In addition, similarly after dividend payment, the share price of UOB Kayhian also plunged by almost 10%. This allowed me to buy into this counter to diversify into the finance sector. UOB Kayhian has a strong balance sheet, and after the release of its most recent earning report, my confidence in this counter remains strong. It seems like I have bought them slightly too early, as soon after the purchase, share prices plunged another 10% or so. Nevertheless, its quite impossible for me to time the market, so I will just hold on to these counters and ride out this volatile period staying vested.
Consequently, due to the worries of the market, as well as the lacklustre 1st quarter earnings report, I have reduced my holdings in Healthway. This will help to free up some cash for me to ride through this volatile period, and at the same time, not erasing the entire opportunity to stay vested in this growing healthcare company.
All in all, I will hold on to all my current holdings and ride out this volatile and uncertain period, and if opportunity arise, add on and average down the buying price of some strong counters. At the mean time, staying vested and looking forward to dividend payments by my dividend counters proved to be an encouragement despite the red.
In no time, STI got beaten down from 3,000 level to 2,700. Of course my counters were not spared in any way. The counter that got the worse hit is FSL Trust. Soon after the purchase at 61 cents per share, counter-party risk came to light and 2 vessels were defaulted. This caused the price to plunge due to worries on its future earnings and distribution per unit. Soon the share price dropped to 51 cents, where I added the my holdings to average down as I believe its management's capability to ride through this problem and continue its shipping sector recovery story. However, due to the persisting eurozone fears, share price continue to tumble. This time, I stopped myself from further averaging down due to the increased holding in this counter, but I will hold on to this for dividend play.
Another badly beaten counter is Rotary. Due to the pessimistic market sentiment, despite posting good profits for the quarter, its share price still plunged from the panic selling. I will continue to hold on to this counter as fundamentals of the company have not changed, and will possibly average down if I have excess funds. As of now will take a wait-and-see approach.
All other counters were also not spared, as seen from the table below. Overall profits have plunged into the unforeseen territory. Although fear filled the air, I took the opportunity to increase my portfolio to diversify into other sectors.
This month I bought a few lots of Noble and UOB Kayhian to diversify into the commodity and finance sector. Noble is a giant in the commodity sector and its past earnings have been positively encouraging. Being a great blue chip and upon reaching a more affordable price level after share issue and dividend payments, this dilution effect post a great opportunity to enter this blue chip. In addition, similarly after dividend payment, the share price of UOB Kayhian also plunged by almost 10%. This allowed me to buy into this counter to diversify into the finance sector. UOB Kayhian has a strong balance sheet, and after the release of its most recent earning report, my confidence in this counter remains strong. It seems like I have bought them slightly too early, as soon after the purchase, share prices plunged another 10% or so. Nevertheless, its quite impossible for me to time the market, so I will just hold on to these counters and ride out this volatile period staying vested.
Consequently, due to the worries of the market, as well as the lacklustre 1st quarter earnings report, I have reduced my holdings in Healthway. This will help to free up some cash for me to ride through this volatile period, and at the same time, not erasing the entire opportunity to stay vested in this growing healthcare company.
All in all, I will hold on to all my current holdings and ride out this volatile and uncertain period, and if opportunity arise, add on and average down the buying price of some strong counters. At the mean time, staying vested and looking forward to dividend payments by my dividend counters proved to be an encouragement despite the red.
My Current Portfolio:
Lessons learnt: Do not time the markets, buy into strong counters with a plan at hand, and stick to the plan at all times. Buying is easy but selling is often hindered by emotions both fear and greed. Stick to the plan and sell when target prices are reached or when fundamentals of the company changed. Discipline pays.
