Thursday, May 23, 2013

2013 Portfolio Component Change (23 May)

Today saw very strong and sudden market-wide sell-off, due to some comments from US Ferderal Reserves that suggested that the cental bank may be stopping QE. Frankly, I'm not really concerned with the reason for the sell-off. The news and analysts will always try to associate any sell-off with some current events occurring (something which I acquired from my technical training), such as some financial crisis, tension from potential conflicts between countries, some viruses breakouts, profit-taking, etc. What really caught my attention about this sell-off, however, is the strong intensity and wide scope of the selling pressure. This provides indication that the market is deeply concerned on the event, as well as fears triggered by expectations on current market over-valuation.

Even big shots with strong fundamentals were not spared. StarHub dropped 4.27% (one of the biggest 1-day dropped I've seen since its loss of EPL to SingTel some years ago). SingTel lost 2.22%. ComfortDelGro declined 11.69% (aggravated by news that Singapore Labour Foundation was selling its stake in ComfortDelGro), SPH dropped 1.79%. All the REITs within my radar were also affected (Sabana Reit -4.46%, Saizen Reit -2.08%, First Reit -3.21%, AIMSAMPI Reit -5.19%, PLife Reit -2.54%)

I have divested my Sheng Siong holdings today at $0.655 with more than 5% gain from my entry price $0.62 (not because I'm bearish on the company), but to:
1. Reduce my market exposure
2. Prepare my warchest to take advantage of the cheaper valuations, in the event of further down-side.

I will be looking to add on more positions for higher dividend yields after the dusts are settled.

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