Sleep well at night with a plan.

Today's selling in the stock market here has not affected all counters in equal measure. In fact, for the vast majority of my portfolio, the selling has not been a big thing.

When there is strong selling down in the market, I am more interested in buying but not indiscriminately, mind you. I have a plan and I am sticking to it like glue.

Regular readers might remember me saying that I would like to accumulate the following counters if they should hit their next support levels:

1. AIMS AMP Capital Industrial REIT @ 19.5c/unit
2. Sabana REIT @ 83c/unit
3. First REIT @ 71.5c/unit

So, did I buy anything today? Nope.

Some people have advised me, with good intentions I am sure, to wait longer and I could perhaps get these at even lower prices. Indeed, what they think could happen just might. Really.

However, remembering how no one can time the market bottom, I have decided to pace myself as I buy at supports. I am more an investor than a trader, after all. I invest in these REITs for income and with distribution yields of 8+% to 10+%, everything remaining equal, they are pretty good investments.

In the last bear market, many who were expecting the market to bottom at 1200 points were sorely disappointed and quite a few missed the ride up. Those who bought at 1400 points or higher anyway were amply rewarded over the next one year and more.

This time round, I see many people are once again predicting where the bottom might be over the next few months. I won't go there.

So, what is my plan in a nutshell?

I might still indulge in some counter trend trading if the technicals look promising and I will continue to invest for income, adding at critical supports. I will continue to be invested in the stock market but keep a warchest for future acquisitions at bargain prices if they should present themselves.

This way, if the stock market reversed to move higher, I would not bang my head against the wall. Of course, if the stock market should move lower instead, I would have the resources to add to my long positions.

My plan is good for me but it might not be good for you. In fact, I am very sure that it is not good for everybody. Take stock of your own situation and decide what is best for you.

What is best for anyone, however, I believe, is usually a strategy that will allow the person to sleep well at night. That is priceless.

STI drops 3.2% to 2,733.63 at closing
Friday, 19 August 2011

© 2011 - The Edge Singapore

Another bloodbath?

At this very moment, stock markets in Europe and the U.S.A. are down between 3+% to 6+%! Will Asian markets be drenched in another bloodbath tomorrow? Buckle up because it seems like it would be a rough ride.

What am I going to do? Stick to my plan. What else?

If some of the counters I am eyeing should fall to my target prices, I will collect more. I am pacing myself as there is no way of knowing how much worse this will get.

Being invested for income, having regular dividends and income distributions will provide me with reliable cashflow during leaner times as I wait for the recovery which is bound to take place one day.

Stay invested in Asia. This is where all the growth is and will continue to be.

Read: DJIA falls below 11,000.