The last couple of weeks have been excellent so far in terms of the stock market.
Market rebounded up to about 20% from its low while we’re still in the midst of a pandemic lockdown.
During the rally, I’ve used the opportunity to do a big clean up to my portfolio by divesting some positions that I had last month and then have them switched over to more retail and hospitality Reits in general, especially during the selldown before the government introduced a circuit breaker for the 1 month period.
So far, the timing for the switch has worked favourably for the portfolio.
All of these positions are now in my cdp account so the strategy is to accumulate more higher dividend paying companies or Reits while the CFD account is more for short term trading. Currently, I have no open positions in the CFD.
I’ve tried to continue being majority vested in the market during the selldown as I believe the current valuation of many companies are decent. I’ve continued to keep a small amount of warchest to take further advantage should things reversed to the south but this should continue to replenish automatically from my income and also hopefully from my successful deferment of mortgage application.
For this month’s update, I have also started putting the Pre-covid price at the start of the year for my own personal inference. This price does not mean the intrinsic value of the company nor does it represents it will reach there by the end of the year, but it is a reminder to myself that I have a goal to reach an intended target within the next 2 to 3 years and being invested in companies with attractive valuations remain a viable objective.
Do I think the market will continue to re-test the low?
My answer is probably yes, but many times I’ve fallen prey to my own deduction.
And so does many people out there who’s made projections after predictions.
If the market does test its low, you can be sure that I’m likely to finish using up my remaining warchest and probably more aggressively inject more into accumulation, but it’ll likely be a steady injection through the incoming cashflow every month.
If the bear market prolongs over the next couple of years, it is actually to our advantage because we can accumulate more at a cheaper valuation so we are likely to be victorious in the mid to longer term.
This thesis will of course change should we lose our jobs during the recession and we are suddenly face with no cashflow to work with. Hence, I remained convinced that job preservation is key and for as long as I can continue to accumulate, things will look better when the eventual recovery starts.
That’s all the updates I have for now, and let’s see what the month of April has for us.
Thanks for reading.
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