Jan 4, 2024

Cory Diary : Year 2023 Equity Learning Part 2

This is an update on the 2nd part of Equity Performance in Year 2023. The first part is the result. Link here. The Year 2023 XIRR return is 14.6%. For a portfolio that has 50% Reits (fluctuates between 40% to 70%) allocation, the dynamism is quite high (See below chart) . The key learning is how to manage drawdown, and profit from it.

Manage Risk

Reits are investor instrument for cashflow and have sturdy business that protects our investments. Therefore thoughts I have is that we need to minimize and careful when we select Reits denominated in foreign currency or majority returns in foreign rental income. In situation we cannot avoid, we hope to see careful hedging of foreign income and their loan by the Reits if is not natural hedge. 

Hedging for loan rates are a must with size varying to their business situation. Finally, investment sizing or allocation will be key to reduce the risk. With this I will probably add another lens to my current portfolio an adjust accordingly.

How to Profit

Assumingly, we have strong business in the stocks we hold, we could invest each time in bit size when there is draw down, and come out of top later. See picture above on the volatility. Is easy to say but normally hard to execute. To do that, I need to ensure we have warchest, strong reits, not to huge allocation on any single reit to allow upsize and hopefully strong sponsor in such counter. Make sense ?

Cory Diary

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

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