Musings about Life and Investments

  While we are likely to have a very strong climb in equities for the next 1 to 2 years, we are unlikely to see the kind of strong rally we saw from April 2020 to now. We are likely to see a correction of 10 – 15% in 2021. The MSCI world has outstripped the 50 days moving average and in most cases is likely to snap back with a correction to the 150 days MA. I cannot predict when it will happen, but I surely will reduce leverage now, hold more dry powder and get ready to buy on a correction.   The stock market is NOT a CASINO. It is a supermarket of prices that is updated daily.  The luxury and important goods and services which you wish to purchase are usually either at a huge discount or over-priced. Our decision is usually to DO NOTHING, BUY, or SELL.   Below is an example of 3 things you can do.   Scenario 1, buy and hold an index or fund to replicate global equities. If there is a 15% correction, followed by a 30% rebound, your 2021 performance will be +10.5...

  Below is the overall performance of my funds. For CPF, I put everything into funds. I refuse to buy SGD stocks because you should see the performance of MSCI Singapore below. In the last 1 year, the performance was down 5.9%. it is only this year that the performance went up slightly but it is still down. If I had used my CPF and cash to buy SGX listed companies I would have done at best 5% even with superior stock picking.   Look at the other indices. MSCI world is up 16.1%, S&P500 is up 18.0%, China is up 38.6%, Europe up 6.2%, MSCI Asia ex Japan up 28.2%. NASDAQ was of course the best performer with 44.7%. So the growth is NOT in Singapore. It is either in the US or Asia, mainly China. Even the best companies from Singapore are listed in NASDAQ, e.g. SEA Ltd. We have become the “forgotten man” or “sick Man” of Asia in terms of stock markets.       The average performance of my funds are 25.8%. this is unrealised return and doesn’t include realised gains...

  It has been a wild ride and we have seen the S&P500 fall 36% from Feb to Mar 23 2020, before a massive wave of liquidity pushed tech stocks up. S&P500 ended 2020 up around 16%. Several observations I’ve made.   In Nov 2020, as soon as the news of an FDA approved vaccine emerged, old economy stocks recovered strongly. Travel-related, e.g. Carnival Cruise, airlines, hotels all recovered. The mining and energy sector recovered strongly. For this reason,  I’ve added Blackrock World Mining  into my portfolio but it is not reflected in my portfolio yet (I’ve only recently added). I’ve attached the factsheet above. The AUDSGD shot up from 0.92 to 1.03 within 2 months! I think the mining sector has been in the doldrums for so long, that it is under-invested. We could see a surge in metal prices, especially those related to batteries, electric vehicles like Lithium. I’ve added a mining fund to have exposure in the sector because I’ve decided not to stock pick. In De...