Natural disasters dominated the headlines this month. On 11th March, a 9.0 magnitude earthquake hits Japan, resulting in a 10m high tsunami crashing into its eastern coasts. This brought about devastaing effects as the quake and tsunami have destroyed most of the buildings. The worst impact was the partial destruction of the nuclear reactors and the power failure which caused the crippling of the cooling system. Without proper cooling system, the reactors overheat and a few hydrogen and steam explosions occurred at the site, releasing small dosage of radioactive particles into the atmosphere. Till now, the staffs of the plant are still trying to cool the reactors externally by spraying large amounts of sea water and potable water at the reactor. Fears of a meltdown of the reactor spooked the market amidst the already jittery investors' mood. This incident caused the Japan's Nikkei to plunge more than 20% in 3 days! The other asian markets were not spared. STI plunged by about 10% in 4 days, but gradually recovered as time progresses.
Counters with exposure in Japan was most badly hit. Hence upon hearing the news, I sold part of my holdings in Mapletree Logistic Trust and Parkwaylife Reit to reduce my exposure and take the opportunity to rebalance my portfolio. Indeed after the sale, Mapletree Logistic Trust and Parkwaylife Reit dropped to further lows for the next couple of days. However I missed the chance to pick them up again at the lows as market sentiment gradually recovers 1 week after the incident. During the panic selling period, I also manged to pick up a few good counters.
Wingtai was already in my portfolio. However, the panic selling that occurred during this period brought the share price of Wingtai to further lows. I had the opportunity to average down my purchase price of Wingtai through my second purchase at a much lower price. The good news is since then, the price of Wingtai has gradually recovered and it is almost at the breakeven price for me soon. I believe that Wingtai still has the potential to rise further as although the volume of sales of the mid and high tier residences are declining, but the transacted prices are stabilizing, hence any negative impact will be rather minimal. In addition, I believe the retail arm of Wingtai will perform well due to its exposure to the mass market, and Singapore's strength in the retail sector.
Furthermore, I added CapitaMall Trust into my portfolio. Share price of CapitaMall Trust has fallen by about 15% from its recent high. I believe this is a good opportunity to invest in this blue chip Reit for stable dividends and possible capital appreciation. This is also a good diversification for my portfolio into the commercial office property sector since the divestment of Suntec Reit as there is still room for office rentals to rise in this sector. Thus I believe this investment will be worth while in the mid to long term.
ST Engineering is the other big blue chip that I grab the opportunity to invest in as it has dropped approximately 10% from its high as well. ST Engineering is a huge player in Singapore in the engineering, land, aviation and marine sector. This counter provides me with the desirable diversification that I need. The potential upside as well as its decent dividend payout is also a big attraction for me. However due to its high price, I could only invest in 2 lots, which meant a high percentage rise in share price is required to cover up the commission expenses. However, I believe ST Engineering has the potential and ability to rise more than required to bring me the desired profits due to its strong performance throughout these years and in years to come.
Throughout this period, I felt that selling away part of Mapletree Logistic Trust and Parkwaylife Reit and failing to buy back more of the shares at a lower price was a big mistake that I made. I miss the chance for Parkwaylife Reit as the price has shot up to way above my sell price. As Mapletree Logistic Trust rose and hovered around my sell price for some time, I decided to increase my holding in it when there is a slight dip in share price again.
To date, I believe my investment decisions for this month has been sound, and decent unrealised profits has been churned as the share price of all the counters that I have bought this month rose. The total unrealised profits rose approximately 27% compared to last month's, due to the rebound in share prices of all counters a week after the disaster. Although the total transaction costs for this month has been rather high, but I believe with time, my diversified portfolio will help me reap the profits that outweighs the transaction costs now.
My Current Portfolio:
Lessons learnt: Dscipline is the key issue in investing. Have a plan before you invest, and stick to the plan faithfully throughout the course of investing. In the event of a sudden downturn, do not panic sell when the fundamentals of the company is still intact. Instead, buy more if you have the funds to do so to increase ur holdings at a lower price. Share price will not go south forever.
