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Hyflux and Sound Global.

Thursday, December 1, 2011

Regular readers know that I invested heavily in Hyflux Water Trust during the last crisis. I was drawn towards its very high distribution yield of some 17% and zero gearing at one stage as well as its very stable businesses. The Trust helped to grow my wealth significantly.


I continue to like the water business and believe that the world will continue to need solutions to water problems. In an earlier blog post, I said I would like to become an investor in Sound Global (the former E-pure) once again. Of course, I would also be interested in Hyflux. It is just a matter of finding an entry price I would be comfortable with.

If we look at Hyflux's chart, the downtrend is definitely intact. What interests me is the higher low on the MACD as its price formed a lower low. Yes, we have a positive divergence which is a reversal signal. What got me even more interested is that the white hammer formed yesterday was confirmed today as price opened and closed higher on the back of much greater volume.


I certainly do not know if Hyflux's share price has bottomed. It might be bottoming but we cannot call a bottom until it has formed. However, I might initiate a long position as a hedge and will not add to this initial position unless a clearer picture is seen.

Sound Global, on the other hand, is exhibiting more strength although it has come up against a significant resistance, it would seem.



As its downtrend is arguably intact, I am wary about initiating a long position when price looks like it could be testing the immediate resistance. So, for Sound Global, I will wait a bit more.

How did AK71 overcome his losses and grow his portfolio?

Wednesday, November 30, 2011

I get quite a few comments in my blog and some comments require more detailed replies than others. I have decided that for more detailed replies, I should put them up as blog posts from now. This one is in reply to Ray's comment here.

Hi Ray,

Actually, when I finally fully divested from CitySpring, I did not lose money.

See: CitySpring Infrastructure Trust: Thoughts on divestment.

I was also spared the subsequent rights issue.

See: CitySpring Infrastructure Trust: Rights issue.

Up till now, for me, the trusts which I count as heavy losses are MPSF and FSL Trust. For REITs, I lost on FCOT (the former Allco REIT) and Saizen REIT but these were not heavy losses if I take into consideration dividends received and trading gains, if any. I would consider 5 figure losses as heavy losses. That's just me.

All other REITs I am vested in are in the black. Many, like AIMS AMP Capital Industrial REIT, were in the red but recognising the improving fundamentals, I used the weakness in the last crisis to add to my investments. Such decisions have been rewarding and I am likely to repeat such decisions if history should repeat itself.

The value of my stocks investment portfolio practically doubled as we emerged from the last crisis. Many investments were divested as I moved most of my funds into high yielding REITs resulting in what I have now.

The divested investments were growth stocks mostly. The one which was not was Hyflux Water Trust and that was privatised. So, it was a forced divestment but at a premium of 150% to my purchase price, I couldn't complain.

See: Hyflux Water Trust: Privatisation.

Overall for me, in the last three years, trading gains outweigh trading losses 3 to 1 but in the last one year, all the gains to my portfolio of stocks were from the hefty dividends received as circumstances did not and still do not favour long investors. Honestly, I booked some paper losses trying to trade the market in recent months. The decision to focus more on investing for income, however, paid off.

Dr. Marc Faber said the last crisis was a once in a lifetime opportunity to make a lot of money in the stock market. Is it likely to be repeated in the near future? I do not know and, hence, my current strategy of being partially invested.

Generally, how did I grow and manage my wealth? I have shared my thoughts here in my blog but I have left out the specifics because I care about my privacy and I believe it to be extremely unlikely that two unrelated persons would have the exact same path anyway. For anyone who might be interested, the relevant blog posts are in the right sidebar under the headings of "Passive Income Journey" and "Wealth Creation".


There are many roads to wealth creation and each of us should choose our own path. Some well known bloggers like Musicwhiz and Createwealth do not invest in properties, for example, and they are doing well following their own paths.

Personally, I invested in properties and their recent divestments gave me some handsome gains which are now in my warchest awaiting deployment.

Know what we want. Know ourselves and what we can deal with given our circumstances. Finally, strategise and work towards a target.

It is the toughest at the beginning and this I can say for sure. However, whichever school we decide to follow, it gets easier with time. So, do not lose heart. There is no short cut but do not cut short your journey towards financial freedom.


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