Finally I am back with some updates on my blog after 1 year hiatus.
However as Year 2020 is coming to an end where today is 31st December, I thought it will be good for me to record down some quick updates for the Year 2020 which I can come back and read it in future.
Year 2020 is one of the most unfortunate year for majority of us as Covid-19 started spreading throughout the world since early January. There were many series of events happening that send the financial markets various ups and down.
Year 2020 is one of the most unfortunate year for majority of us as Covid-19 started spreading throughout the world since early January. There were many series of events happening that send the financial markets various ups and down.
From 2020 market stock Market Crash in March, US-China trade war, UK Brexit, Hong Kong protest, oil crisis due to fall out from OPEC to Covid-19, all these happened within a short span of 2 month periods.
My portfolio at that period just went from record high of more than S$30k gains to $78k losses on one of the worst day ever, with more than 40% to 50% drop ever in history.
A quick glimpse of what had happened in Mach 2020:
The stock market crash of 2020 began on Monday, March 9, with history’s largest point plunge for the Dow Jones Industrial Average (DJIA) up to that date. It was followed by two more record-setting point drops on March 12 and March 16. The stock market crash included the three worst point drops in U.S. history.
The drop was caused by unbridled global fears about the spread of the coronavirus, oil price drops, and looming recession. Only two other dates in U.S. history had more unsettling one-day percentage falls. They were Black Monday on Oct. 19, 1987, with a 22.61% drop, and Dec. 12, 1914, with a 23.52% fall.
Although this dramatic 2020 market crash is still fresh in everyone’s mind, let’s take a closer look at what happened and why. That will allow us to anticipate what may happen next with the economy.
Fall From Record High
The 2020 stock market crash began on Monday, March 9. The Dow fell 2,013.76 points that day to 23,851.02. It had fallen 7.79%. What some labeled as Black Monday 2020 was, at that time, the Dow’s worst single-day point drop in U.S. market history.
On March 12, 2020, the Dow fell a record 2,352.60 points to close at 21,200.62. It was a 9.99% drop, almost a correction in a single day. It was the sixth-worst percentage drop in history.
On March 16, the Dow hit a new record. It lost 2,997.10 points to close at 20,188.52. That day’s point plummet and 12.93% freefall topped the original October 1929 Black Monday slide of 12.82% for one session.
On March 11, the Dow closed at 23,553.22, down 20.3% from the Feb. 12 high. That launched a bear market and ended the 11-year bull market that started in March 2009.
Aftermath
After the stock market crash in March, the market enters into bear market level for the next 3 weeks before a surprise mini bull rally came along and bring market back by another 20% gains.
At that point of time, my portfolio had approximately -$46k losses in terms of value with STI at the level of 2551. It recovered slightly from my worst day loss of -$78k having just registered a positive gain of SGD 30k in the year end of 2019.
I was worried on my portfolio having invested almost 90% of my net worth however I knew that this recession pains are temporary. Luckily I am able to remain calm, stay invested and refrain from panic sell off.
I managed to pick up a few gems with the lowest price allowing me to make some profits, such as picking up FCT at $1.70 and $1.80 range which you would never see such price in the good days.
My portfolio at that period just went from record high of more than S$30k gains to $78k losses on one of the worst day ever, with more than 40% to 50% drop ever in history.
A quick glimpse of what had happened in Mach 2020:
2020 Stock Market Crash
The drop was caused by unbridled global fears about the spread of the coronavirus, oil price drops, and looming recession. Only two other dates in U.S. history had more unsettling one-day percentage falls. They were Black Monday on Oct. 19, 1987, with a 22.61% drop, and Dec. 12, 1914, with a 23.52% fall.
Although this dramatic 2020 market crash is still fresh in everyone’s mind, let’s take a closer look at what happened and why. That will allow us to anticipate what may happen next with the economy.
Fall From Record High
The 2020 stock market crash began on Monday, March 9. The Dow fell 2,013.76 points that day to 23,851.02. It had fallen 7.79%. What some labeled as Black Monday 2020 was, at that time, the Dow’s worst single-day point drop in U.S. market history.
On March 12, 2020, the Dow fell a record 2,352.60 points to close at 21,200.62. It was a 9.99% drop, almost a correction in a single day. It was the sixth-worst percentage drop in history.
On March 16, the Dow hit a new record. It lost 2,997.10 points to close at 20,188.52. That day’s point plummet and 12.93% freefall topped the original October 1929 Black Monday slide of 12.82% for one session.
Prior to the 2020 crash, the Dow had just reached its record high of 29,551.42 on Feb. 12. From that peak to the March 9 low, the DJIA lost 5,700.40 points, or 19.3%. It had narrowly avoided the 20% decline that would have signalled the start of a bear market.
Aftermath
After the stock market crash in March, the market enters into bear market level for the next 3 weeks before a surprise mini bull rally came along and bring market back by another 20% gains.
At that point of time, my portfolio had approximately -$46k losses in terms of value with STI at the level of 2551. It recovered slightly from my worst day loss of -$78k having just registered a positive gain of SGD 30k in the year end of 2019.
I was worried on my portfolio having invested almost 90% of my net worth however I knew that this recession pains are temporary. Luckily I am able to remain calm, stay invested and refrain from panic sell off.
I managed to pick up a few gems with the lowest price allowing me to make some profits, such as picking up FCT at $1.70 and $1.80 range which you would never see such price in the good days.
However my war chest is limited hence I could only select a few gems to buy. I am sure whoever manage to nibble whatever stocks during that time would be sitting on a handsome gain of 30% to 50% at least. This again taught me the importance of having a readily War chest to be able to deploy to the market at any time.
My Portfolio Updates 2020 as of 31st December 2020:
1) My Portfolio reaches SGD 250,000 in capital investment in June 2020.
My Investing Journey in the Year of 2020:
1) Learning about Trading:
Trade with caution and this is not for the weak-hearted.
2) Adding Positions to my Core Stocks:
I am a big fan of Industrial Reits followed by Retail Reits and have added my positions through out the year of 2020. I have added Ascendas Reit, Mapletree Logistics, Frasers L&C Trust and others especially when they are looking for preferential offering.
This is the best time for investors to add to their position when prices drop to even lower than their preferential offering price, which makes it such a valuable opportunity to add. Looking to add more to MIT and others.
As for retail reits, I am still holding to CICT, FCT, Lendlease and Sasseur Reit which are all making good profitable gains for me. I am looking to add more positions in my selected reits once the price has drop to my targeted level which often might not happen.
3) Started to invest in U.S equities with Tiger trade (which is my favourite mobile app for U.S equities).
My Conclusion as a Long Term Investor:
Prices of these securities may endure further beating in the recession, but when market recovers and valuation re-rates, the upside potential may offset initial losses.
Series of Events happening From March 2020 till December 2020:
1) Around the world, countries are infected with Covid-19 with increase in numbers on daily basis.
2) Lock down in various countries to control the spike in Covid-19 infections including Singapore from May.
3) People are losing their jobs or having their incomes cut due to lock down.4) Companies in various countries start to ask their employees to work from home including Singapore.
5) Governments are coming out with stimulus packages and grants to support the economy and businesses.
6) Federal Reserve keeping its benchmark interest rates near to 0%. Oil crisis due to fall out of OPEC.
7) Trade war and increasing tension between China and US. US blaming China for the cause of Covid-19.
8) Biden won the US election in Nov/Dec 2020.9) A number of pharmaceutical companies releasing vaccines with 90% to 95%
efficacy around the same time.
10) Singapore managed to control the virus and Circuit Breaker Phrase 3 started on 28th December 2020. Hopefully life can start to normalise in Year 2021.
My Portfolio Updates 2020 as of 31st December 2020:
Here are my top 10 stock counters.
As of 31/12/2020:
Total Cost: SGD 292,688.67
Current Value: SGD 292,235.79
Current P&L: - SGD 452.87 (outcome is positive given we are still not out of Pandemic and my overall Portfolio loss in March was -SGD 78,000)
Current P&L including Dividends: + SGD 15,466.21
Portfolio Current Yield: 4.50%
Dividend per Annum: SGD 13,165.00
Dividend per Month: SGD 1,097.00
Milestone Achieved in Year 2020!
2) My Portfolio reaches almost SGD 300,000 in capital investment in December 2020.
3) Dividend collected in Year 2020 total up to SGD 13,165 which translates to more than SGD 1k passive income per month.
1) Learning about Trading:
Trading Medtecs a few times and managed to achieve a few times profits of several thousand when it shoot up from 0.50% to 1.98% despite it falling as fast as it goes up within the next few days. At one point of time, my profit was 5 figures however I failed to realise the profit at the highest price. Managed to sold it at the middle range of 1.65 and 1.45 before it plunge further.
2) Adding Positions to my Core Stocks:
I am a big fan of Industrial Reits followed by Retail Reits and have added my positions through out the year of 2020. I have added Ascendas Reit, Mapletree Logistics, Frasers L&C Trust and others especially when they are looking for preferential offering.
This is the best time for investors to add to their position when prices drop to even lower than their preferential offering price, which makes it such a valuable opportunity to add. Looking to add more to MIT and others.
As for retail reits, I am still holding to CICT, FCT, Lendlease and Sasseur Reit which are all making good profitable gains for me. I am looking to add more positions in my selected reits once the price has drop to my targeted level which often might not happen.
3) Started to invest in U.S equities with Tiger trade (which is my favourite mobile app for U.S equities).
I have initiated long positions in BABA, NIO, AI, LMND, PINS, TSLA, SE, PLTR and TIGR. Indeed U.S market is much more interesting compared to STI where you will see much faster growth.
I have also started to learn about trading options i.e buying calls and puts after taking a long time to understand the concept.
My Conclusion as a Long Term Investor:
While the wild sell-off and elevated volatility in Year 2020 can inflict massive stress on investor, it can create opportunities.
Investors are encouraged to stay invested and refrain from panic selling. Instead, investors should take the opportunity to rebalance and pick high quality securities at reasonable price points. These are prices at which the impact on earnings growth and valuations have been already been factored in.
Prices of these securities may endure further beating in the recession, but when market recovers and valuation re-rates, the upside potential may offset initial losses.
As such, staying invested and deploying money periodically throughout the recession is crucial to avoid missing the market rebound (which could be sharp and strong). It is also beneficial to hold on to some dry powder in case markets move lower.
Deploying money periodically will also help to remove emotional stress and achieve a realistic return over a longer period.
Investors are also encourage to maintain portfolio diversification. This not only helps to curtail portfolio risks but reduces potential huge losses in recessionary times as gains in one asset class may offset the other. Diversification has also shown to improve annualized return and reduce maximum drawdown in the longer term.
Deploying money periodically will also help to remove emotional stress and achieve a realistic return over a longer period.
Remember that Recessionary Pains are temporary in nature.
Investors should remain disciplined in a recessionary environment.Investors are also encourage to maintain portfolio diversification. This not only helps to curtail portfolio risks but reduces potential huge losses in recessionary times as gains in one asset class may offset the other. Diversification has also shown to improve annualized return and reduce maximum drawdown in the longer term.
Regards,
SG Cashflow Investor
Office Worker by Day, Investor by noon, Writer by Night.
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