The Market has been in the mode where sell down happens very quickly while the climb back up is over a long period of time. Therefore it seems that is usually good that we have opportunity funds or so called War Chest when such event happens. Alternatively, what I do is to reduce my holdings on non-core stakes this week regardless of profit/losses so that I could re-deploy them later. Cash is King as said. I would think about 30% of Non-Fixed portfolio probably.
This time round, Reits are slightly harder hit as you can see from the chart on the dive for reason I think is due to past weeks relatively directionless market. Many of this business are earning good money just lesser due to Covid rebates or lockdown. So in that perspectives, correction could happen but that should be relatively mute compared to businesses that are in long term downtrend. So technically speaking, we should buy more as it goes lower. Just watch the bullets and pace to do it.
Considering we have been working from home for months, robin hood and robo-investing are aplenty dabbling in the stock markets. Property curbs not helping. In all historical crashes my feel is that the market has new players who are not adverse to risk finally meet their fear inflection point who are not in tune of what recession actually means. With a bigger influx this time round driving up DJIA and Bitcoins as we can see in US Markets. With Covid Salary support package reducing, we could see more retrenchment locally. And this could mean a longer trend of poor job prospects.
In YTD performance, the portfolio recovered very well to parity in Mid-Oct but the last few days of volatility basically pulls it back down very quickly to -4.2%. This starts with almost 1K drops in DJIA. ( Pelosi not helping ). Even though the portfolio outperform STI ETF by more than 20%. (STI YTD is -24.7% YTD), there is no celebration budget out from it. The bleeding is fast and furious even though is more a cashflow in nature till we start getting out of market. This is despite the portfolio has about 21% bond allocation. ( Excluding SSB ).
The stop gap measure is to do a major shake up of the portfolio eliminating non-core stakes such as Koufu, Ascendas-i Trust, and even MNACT which I was just building up... %@^%$(*. The final nail is the just released last Quarter result doesn't look pleasing as seems like the impact is worst than expected. So after deducting all the costs, is kopi money ytd for it.
Another major change in the portfolio is to clear-off STI ETF in my nominee account as banks stake in the portfolio are sizeable enough today. This will help improve the yield further when I re-invest the money. One other shake-up is to reduce Aims Apac Reit by half (2nd Tier). In YTD perspective, is cut loss but risk lowered significantly for the portfolio. Feel comfortable about it since the DPU is no longer in significant advantage over say some of the core and larger reits can provide.
The goal is to protect capital, maximise dividend, risk adjusted.