Tea with FunShine: Crystal Ball Predictions.

Diary of an Investor
Funshine's Crystal Ball Predictions

I lost count of how many hours have I invested into reading or watching articles on the subprime crises or more commonly referred to the Bear followed by the the Leman Brothers collapse or 07/08 financial crisis.

If I was to estimate at least 20 to 30 hours watching the video version of such movies related to it or documentaries. Lost count of how many articles I read relating to it.

I just watched the movie, the Big Shot. And is reflecting on the current market conditions. One of my friends bought bonds last year and lost some money. Sounds familiar.

My portfolio due to my experience and believes has always consisted of:
20% Cash/FD/Bonds
20% Precious Metal/Oil
60% Stocks of which:
35% Dividend Stocks
20% Growth Stocks
05% Trading Stocks

I have stuck with this portfolio mix since 2012 July.

I started investing in Oct 2011, the returns has fluctuate per year from positive 17% to negative 15%. Average out to around 5-7% returns per year only. 7% is considered an average investor. So in a way, I am merely average. However, if I remove Precious Metal/Oil from the mix, the returns is a lot more juicy since I start buying Gold from 1700 to 1500 to 1450 to 1320 to 1250 and most recently trading it.

My financial period is from July to June. Think I will stick on to the current portfolio allocation till end June 2016.

On 1st July 2016, I should be changing the portfolio allocation which I have not done so since 2011 to:
25% Cash
05% FD, 3 months rolling
20% Precious Metal/Oil
30% Dividend Stocks
15% Growth Stocks
05% Trading

Looking at the crystal balls this is my market predictions, of cos I am no different from the weather man.

My next five years forecast, FY16/17 to FY20/21:

2016 to 2018:
STI should bounce back to 3200-3400.
If it hit 3600 sell 30% of all stocks.
If it hit 3800 sell 50% of all remaining stocks and rotate the money to rolling 3 months FD.

2016 Sept to Early 2018:
Market will be very volatile
Cash is King and Key
Stick to the portfolio mix and react appropriately.

Mid 2018:
Time to consider buying a property

End 2018 to Mid 2019:
Acquisition of a property

2019 to 2021:
Market should recover.
Back to buying dividend generating stock

FY16/17:
25% Cash
05% FD, 3 months rolling
20% Precious Metal/Oil
30% Dividend Stocks
15% Growth Stocks
05% Trading

FY17/18 to 18/19:
20% Cash
12% Precious Metal/Oil
08% Property(Hold Cash if no Opp)
60% Stocks of which:
40% Dividend Stocks
15% Growth Stocks
05% Trading Stocks

FY19/20 to 20/21:
20% Cash
10% Precious Metal/Oil
10% Property
60% Stocks of which:
45% Dividend Stocks
10% Growth Stocks
05% Trading Stocks

My savings and emergency fund does not form my portfolio. My SRS is considered as the portfolio under cash but CPF is not included.

SRS and CPF(SA) are considered as war chests.
SRS is open when STI ETF give a 4% yield.
CPF(SA) is open when STI ETF give a 5% yield.

I am turning 36 in July. May draw out some savings to give myself a present, either to upgrade myself or buy into a friend's company.

Once April ends, my 6 months break from work will end. Meanwhile, I am going to apply for a subject in Master of Gerontology which will starts in July. I am also taking M5, M9 and M9A in April if I choose to switch from Social Service to Financial Advisor.

Market will be very bad. Not wise to be a Financial Advisor during this climate. Study first, think later. End April will have time to think about it as I will be in reservist.

Meanwhile, glad to have visited Facebook, Google and Apple in Silicon Valley. Glad to have seen the economy of Canada too as part of my cash holding may be in Canadian dollar if it is still so low.

On my flight back to Singapore from San Fransisco one week holiday after being in Canada, Toronto and Edmonton for nearly two months.

Can't wait to eat a good bowl of BCM, Mee Pok dry with lots of lard.

Diary of an Investor
Funshine's Crystal Ball Predictions
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AK's comment:

"It is important for all of us to have a plan, our own plan, so that we know what to do in different scenarios and not freeze into inaction when action is required. It has to be our own plan, one that we are comfortable and familiar with, one that allows us to sleep well at night."

Related posts:
1. Have a plan, your own plan.

2. Revisiting AK's plan with Charlie Munger.

Climb stairs and learn to be better investors?

Although somewhat tardy, I still reply to emails, messages and comments from readers even as I blog less frequently in recent months. So, since I blog less often, what have I been up to?

I have been paying more attention to my diet and I have also been spending more time on other hobbies such as gardening. Something else I have been doing is to engage in more physical exercise.

Almost daily, I would be doing some form of physical exercise, taking a break only once or twice a week. One physical exercise I have engaged in since the start of the Chinese New Year is stair climbing.

Why stair climbing?

I was looking for a cardio vascular exercise that would better strengthen muscles, burn more calories and which has lower impact on the knees compared to jogging. Stair climbing is all of these.

Stair climbing has another advantage. It saves time.

Most of us live in high rise buildings in Singapore. So, we have easy access to stairs. We don't have to spend time travelling to a gym to work out. 

Oh, yes, we save on paying for a gym membership too. Sorry, I couldn't resist saying this.

Today, I am inspired to blog about stair climbing because of an email I received from a reader and one of the sentences towards the end was:

"I will work to be as successful as you are although I feel that it would be an impossible task..."

I decided to tell him a story about stair climbing.

When I first started to climb stairs on the first day of Chinese New Year, I climbed 54 floors and almost died. OK, I exaggerate but it really did feel like I was on the brink of death. It took me a rather long time to complete and I took a step at a time.

After a few days, I took two steps per stride which is more effective in strengthening the muscles because it creates a bigger mechanical disadvantage, making the exercise more demanding. I was able to climb 54 floors taking two steps per stride before long.

I gradually pushed myself to complete 90 floors, taking 1 step at a time for the last 36 floors. Then, I pushed myself to take two steps per stride for all 90 floors. It was obvious that I was growing physically stronger.

However, just like how share prices don't move up in a straight line, there were days when I just felt less energetic. On those days, I would cut myself some slack and climb only 54 floors. On some days, I would feel more energetic and climb 108 floors. 

Today, I felt really good and climbed 126 floors, taking 2 steps per stride. This is the first time I have ever climbed 126 floors since I started stair climbing.

What is the message here? 

When the conditions are right, we should do more. When the conditions are not in our favour, we should do less.

If I did not push myself to climb 126 floors today although I felt good, I would not grow stronger. However, in a bid to grow stronger, if I tried to push myself to do more when I really should be doing less, I could end up hurting myself.

Regular readers would know that this is not just a blog post about physical exercise. There is a message for investors embedded somewhere.

All of us have different circumstances and we have to be pragmatic. External conditions are also ever changing. 

Sometimes, we should invest more. Sometimes, we should invest less. The important thing is to stay the course. Don't stray and don't stop.

What we should stop doing is comparing and want to be as successful as someone else. What we should do is to ensure that we are better off financially, year after year. 

It is about being as successful as our circumstances and external conditions would allow and this is definitely not an impossible task.

Be a successful investor but you don't have to be as successful as AK or anyone else.

Other blog posts on what AK has been up to:
1. Investing or gardening, be ready for war.
2. Being fallible in dieting and investing.
3. Who make the best investors for income?