This month has been a cautious month, as well as an action-packed month for me. Looming spending cuts in the U.S, which is slated to start on 1st March 2013, is making me feeling uneasy about the markets, especially when DOW seems to be nearing its historical highs during this period.
Hence, I made many selling decisions this month, with optimism that DOW is going higher and the STI following the trend, but at the meantime, the possibility of any pending correction occurring anytime soon.
Noble is one counter that I was feeling uneasy about. With the pending cuts in U.S., it might bring hindrance to growth. Other than financials, the first to be hit will be commodities if any negativities set in. Being one of the biggest commodities trader, Noble is definitely under scrutiny. To prevent any sleepless nights, I decided to sell Noble shares at breakeven price for now. If the situation becomes clearer, I may buy back Noble's shares, but for now, perhaps it is better for me to keep a distance.
In addition, as share price of Singpost and Far East Hospitality Trust regained their 52-week highest closing, I made the decision to sell 3 lots of Singpost to bring my average holding price to below $1.00 per share, as well as selling 8 lots of Far East Hospitality Trust to bring my average holding price to near its IPO price. I did this so that the lower average prices of my two current strongest counters will bring about a safe buffering range in case any corrections occur, and I can purchase more lots later with the partial liquidation now.
Furthermore, the poor earnings report by FJ Benjamin for the quarter triggered many analysts downgrade of the counter, causing me to liquidate 50% of my holdings as well, as the share price plunge over the next couple of days. FJ Benjamin is beginning to be the latest drag of my portfolio. However, being a good retail brand, I believe as the economy continues to recover, FJ Benjamin will benefit from it. Hence if the share price continues to drop to its support pricing, I will buy more to further average down my holding cost per share.
Overall, the total profits of my portfolio increased by approximately 9%, brought about mainly by the dividends collected by my strong counters. March 2013 will be the month to look out for, as the effects of the spending cuts would most probably only be felt after the cuts set in.
Consequently, if the trend this year is going to follow last year, then March will be the last month in the first half of 2013 that I will see positive gains in my overall portfolio, and the big correction will come in April till May. I am currently ready to buy strong bluechips in the event of a correction as the recent liquidations meant I am holding on to a large percentage of cash.
My Current Portfolio:
Lessons learnt: Hold on to winners and sell only losers. If I have held on to past winners like Mapletree Logistic Trust, Parkwaylife Reit, CapitaMall Trust, Breadtalk, Wingtai and ST Engineering, my portfolio would have been much more impressive!
