Can you believe we have already ushered into July by the time you are reading this? It’s already half a year and as usual, every month is eventful. Lately, the Dow Jones Industrial Index and S&P have continued breaking new highs. However, the technology index Nasdaq, took an abrupt plunge on 9th June 2017, causing some knee jerk reactions among the technology stocks around the globe.
In the Middle East, tensions have escalated amid an ongoing diplomatic crisis among Qatar and other Arab powers. Elsewhere, the increasingly tight UK parliamentary election and the troubles for the Trump administration and its uncertain policies have contributed more volatility to the market.
The good news though, is that Ringgit has showed signs of recovery in spite of the lower crude oil price, which is hovering in between USD$45-50 per barrel. In such mixed circumstances, should our portfolio perform better, or worse?
Here is our portfolio on 15th June 2017:
Since its inception in November 2015, we’ve gained 217% returns till 15th June 2017 which is way above the 8% gain of KLCI. We remain cautiously optimistic for the remaining year and have made a few adjustments in the portfolio:
- The bonus and share split exercise of JHM and Superlon, respectively. After the exercise, both companies have doubled their outstanding shares and halved their share prices.
- We sold 20000 shares of Pesona at 0.66 per share. That helped us focus more on the fewer companies. The proceeds of the sale are RM13200.
- We recorded the dividend of RM500 received from FPgroup (RM0.01 per share). With the sales proceed, dividend received and cash brought forward, our new cash level is now RM25125.
Instead of buying into a new company, let us take this opportunity to do some reflections this time. Here is what I have learned from my investing experiences:
- Only buy businesses that will grow, as higher share price comes from growing revenue and earnings.
- Invest in good value companies. For instance, if you know you have bought an RM2 company at RM0.90, you’re buying with joy and peace of mind.
- Only consider selling if the company’s fundamental has turned bad, or its share price has far exceeded its value.
- Always think how much you can afford to lose instead of how much money you want to make. If the downside is limited, the upside will take care of itself.
- Share investing is a marathon, not a 100 metres sprint. Running slow and steady is better than fast and unstable. The process to grow your funds 10 folds is a crucial experience. Not only you’ve earned the money, you’ve also earned the ability and confidence, which is more significant.
- Goal setting is a must. If you have a target return to achieve in mind, your stock pick and the way you operate will be different. If you’re a beginner, set a yearly return of 10% and if you have more confidence, make it 20%, or more.
- There will be a time you might run out of stocks to buy. When you have nothing to buy, don’t buy.
- Realise that you would make mistakes as its part of the game. It is not about whether you are right or wrong. It is how long you can stay when you are right and how fast you could get out when you are wrong.
Share investing is a mind game. Being reflective is a vital learning process, as it would help you discover yourself more. I encourage you to always reflect and pen down your thoughts.