The year 2022 had a significant impact on my net worth, with a reduction for the first time in 15 years. This is not uncommon for salaried workers, as annual savings from salary may not be enough to compensate for market downturns that can affect the portfolio. However, I am pleased to report that within the first month of 2023, the stock market rebounded, pushing my net worth well into the positive for the year. This demonstrates the importance of investing in strong businesses and holding them through market fluctuations.
Year 2023 Strategy
My strategy for the year is to continue filling up T-Bills, SSBs, and fixed deposits with high rates. The aim is not to beat inflation for these emergency and war chest funds, but to ensure that I do not lose much in an inflationary environment. I will also continue to maintain the dividend achievements from 2022.
I plan to rebalance my portfolio by shifting investments from weaker businesses with high portfolio allocations to stronger ones with low portfolio allocations. I will prioritize non-REIT investments to achieve a more diversified balance.
To reduce volatility risk, I will impose more stringent allocation caps for stocks that have been performing well in business and stock price. This is a lesson I learned from the market conditions in 2022.
Foreign Income Risk
I will give more thought to expanding stocks that have a majority of their income in foreign currencies, as this can increase risk. I will take steps to reduce that risk by being more cautious.
Although the Fed is slowing down rate hikes, we are not out of the woods yet. I will remain cautious while staying invested in the market.
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Note: The articles on this blog are my personal opinion and are shared for informational purposes only. Readers should seek professional help when making financial decisions and be responsible for their own choices.