2017 IN REVIEW



Started this blog in February this year, with the aim of encouraging more young adults to begin their investing journey. I've spoken to many young adults who believe that investing is out of their reach, when in reality, even if your capital isn't large, you can still start with a monthly dollar cost averaging strategy. I hope that by penning down my thoughts regarding my investing experience, more young adults would take the initiative to find out more about investing.


As I've gained more investing experience, I have also fine-tuned my process of identifying good companies. Generally, my investment strategy is to identify companies with a track record of stable or growing earnings, reasonable debt to equity levels (<~35%), and with decent dividend yields of at least 3-4%. These companies should also generate healthy levels of free cash flows. If these companies are sold down due to negative sentiment, rather than a deterioration of fundamentals, I would seize the opportunity to purchase them at a lower valuation.

2017 Investment Performance


I have updated my portfolio as of 30/12/2017, and you can find it here: My Portfolio

My holdings didn't change from November. For 2017, DBS is undoubtedly my top performer, with a gain of 43.3%. As the STI index performed strongly this year, my decision to purchase the STI ETF, which is the top holding in my portfolio, contributed to the strong gains as well.

A laggard would be Far East Orchard, which I felt was undervalued. This position is slightly in the red now. I've recently re-looked the financials of FEO, and realised that the way FEO accounts for their property assets probably results in them consistently trading below their net asset value. I'll do a write up if time permits. SingTel has also been weak, but as I had purchased their shares prior to ex-dividend, I'm still able to breakeven.

2018 Investment Goals


I didn't set any investment goals for 2017, so for 2018, I aim to outperform the STI by 5%. I believe that aiming to outperform the index is necessary to justify and validate the time and effort spent on researching individual companies. Otherwise, won't we be better off being a passive investor, and hold a basket of ETFs?

In the process of achieving my target, I hope to be able to identify a two-bagger. This goal is a rather ambitious one. Personally, my biggest miss of 2017 (or late 2016, before I started blogging) would be GLP. A relative of mine constantly reminds me of how we missed the opportunity to purchase GLP, because we had talked extensively about it when it was trading around $1.80. Of course, hindsight is always 20/20, and who knows, even if I had purchased GLP shares back then, I might have exited too early and missed the privatisation too.

I believe that another very crucial aspect to achieve good investment performance is to know when to cut loss. On this aspect, I feel that I'm not proficient enough yet, and is something that I'll have to learn through experience.

Personal Development


Read at least 5 books


On the personal development aspect, I hope to kickstart my reading habit again. During my two years of National Service, I had read a total of 30 books. Due to the nature of my job scope back then, I made use of any spare time I had to read. However, ever since I began my undergraduate studies, my reading momentum had slowed down considerably. Studies, co-curricular activities and school commitments take up most of my time.

My reading list isn't limited to investment related books, it includes books on behavioral psychology, marketing and a variety of biographies as well. If you're also into behavioral psychology, I'll highly recommend Daniel Kahneman's Thinking Fast and Slow.



With regard to building up a habit of reading, there's a blogger, Dan O, who writes book reviews of investment books that he has read. You can check out 'book reviews' on 10percentperannum.blogspot.sg

Learn a programming language


This is something that I've had at the back of my mind for some time, and I'll aim to complete this in 2018. With all the talk about technology replacing jobs, the finance sector is not spared. My personal opinion is that while not everyone has to be an IT expert, having some knowledge and background on programming would be definitely be advantageous.

To end off, I believe that a huge intangible benefit from starting this blog would be the increased opportunities for interactions and discussions with the investment community, from comments, emails and through InvestingNote. It's a privilege to be able to learn from many more experienced investors among us. Please do continue to reach out to me by leaving a comment or through email. A huge thank you to all readers for your support, and wishing everyone a healthy and prosperous 2018 ahead!

Cheers,
AlpacaInvestments




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2 comments:

  1. Happy 2018! Looking forward to your 2018 investment goals!

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    Replies
    1. Hi KPO,

      Congrats on achieving your targets this year! Looking forward to reading your posts too! May 2018 be a great year for us!

      Delete