My Portfolio Review: Investing Strategy from 28 Feb 18 onwards

Recently, I have mentioned that I have sold off all of my holdings in Thai Beverage. The reason being that I was sustaining a capital loss of 10% and it is challenging my risk tolerance. I also sold off all my holdings in Starhill Global Reit to cut my losses though the capital loss was relatively less severe than Thai Beverage – about 6%. But unlike Thai Beverage, I made a positive ROI for Starhill Global Reit after factoring in the dividends I collected over the years. So the next question is, “What am I going to do with the remaining funds I have?”

That is actually a good question. Stock prices in the Singapore market have been near its historic high – meaning it is not a good time to buy stock now. Reits’ valuation are also relatively high. And higher risk instruments like forex and options trading are out of the question due to my relatively conservative risk appetite. Which leaves to one sector unturned – bonds.

I checked the price of Singapore’s local bond index fund: the ABF Singapore Bond Index Fund. Price seemed to be at a 52-week low. At this time of writing, one unit is trading at $1.123/unit. Okay, but can it go even lower? With the Fed gradually raising interest rates, bond price should go down in theory, causing its yield to increase. It seems that there is also risk of the fund falling in value if I put my remaining funds into this index fund. Hmm… where can I get moderate returns for my money without exposing myself to too much risk?

Maybe the rainbow unicorn lies in Singapore Savings Bonds (SSB). They provide interest returns comparable to government bonds without the interest rate risk. The interest earned is not enough to counter inflation over the long term but I guess it is the only ideal place to park my excess funds without risk of losing my capital. After all, it gives better returns than that in a bank fixed deposit where you can’t touch the money during its locked-in period. With SSB, you can redeem your funds before maturity without any penalty. Maybe I can temporarily put my money there and wait for some ideal opportunity to invest when the time comes (like when the stock market crashes or corrects).

So, that’s the tentative plan I have  for myself as of now: put the remaining funds in SSBs and wait for an opportune time to enter the market. Guess I have to learn to be patient to wait for a chance to invest…

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