Cory Diary : Part 2 on Base Lining

I just read a thread and decided to think aloud.

Here's the background.

Someone bought Sabana and now sitting at a loss. Advisor came and said this.

If you have buy at a low last year around 90. Is ok to hold on. However those who buy at high, meaning lately, chance of return is remote.

Saying it another way.

Since you have capital gain when you enter at 90, is ok to lose those gains. Those who got recently be prepared for further loss if continue to hold.

Hello ? Hello !!

To hold or not should not have dependency on price entered at different times.
This is why I need to base line my portfolio to avoid falling into the feel "rich" gap.

Cory

8th Feb 2014

Cory Diary : Base Lining my Stock Investments

What do i mean by that ?

The goal of investment is to be able to generate more and more cash. We do not want to go up and down equally or similarly. In the long run, is useless and time wasted. And worst, loses all your capital.

In summary, base lining my profits/losses is resetting my Capital in a regular manner. A fresh start and perspective into my portfolio. And re-evaluating all my holdings.

For example I have 100K capital. Earned 30K by the end of year. In the new year, I have 130K capital. Zero out my profits/losses in every counters. Doing so i am basically treating 130K as my own money from my "saving" account as though is a fresh fund. I do this annually.

Upon doing that, I am resetting my stock initial investment cost to the price of the new year in a new page. And then i re-start to re-evaluate my holdings at this cost level which then kickoff a re-balancing of my portfolio.

This put my thought into a more balance approach with no baggage. To know whether we have execute this mental method successfully, you would have forgotten your initial buy price of prior years like me do.

Ok ! You can call me absent minded. :P


Cory
1st Feb 2014

2013 Portfolio Review

2013 Measure
SG Stock XIRR figure for the year ended up 11.74%.Compared to STI which is -0.85% (2 Jan'13-2 Jan'14) excluding dividends, performing above after taking into account STI 2-3% dividends.

Annualized Performance since 2007 will be 11.6%.
Dividends received this year $28, 940.

Did well in expanding my dividends and performing above STI. Another key area is the punch (Invest amount) approximately doubled. Net Worth reached a new milestone despite spending is up significantly.

Another area i am happy with is that Reits did not do significant damage to my portfolio. Looks like trading them helps to negate their impacts this year. They will remain a key segment for re-balancing my portfolio for a long time.

Portfolio details
Reit returns flat after consideration of capital loss. In the aspect, on the bright side, they will be position to be better in 2014.
Fixed return continues to maintain good stability.
Growth and SME stocks see large rises.

2014 Focus
Still under invest last year despite some step-up in absolute amount added, my wish is to add more counters and depth for specific counters. However i will continue to exercise caution steps.
Goal : 20% more

Dividends wise, with tapering reduction, contribution from Reit can be lesser. Higher business cost may also means lesser distribution. Goal: Maintain 2013 at minimum.

To reduce impact from any single stock, number of counter has to increase but this will tax my mental bandwidth. Therefore stock selection has an angle of less risk priority.

Re-balancing of my portfolio still required and needs to be watched closely.


Cory
1st Jan 2014