For many, the year 2020 was one to forget – no thanks to the Covid-19 outbreak in Singapore, where the condition worsened shortly after the Chinese New Year festive period, to a point where the number of new cases spiked to more than 1,000 daily (most of them coming from the workers’ dormitory.) In order to stem the further community spread of the pandemic, the Singapore government imposed a 2-month ‘circuit breaker’ period (between 07 April 2020 and 01 June 2020.)
Originally dubbed as a ‘healthcare crisis’, it doubled up as a ‘economic crisis’ as a result, with many businesses (both big and small) suffering huge losses and having to wind up, leading to an increase in the unemployment figures in the country. The stock market took a heavy beating as well, with Singapore’s benchmark Straits Times Index tumbled to a a low of 2,208 points in the middle of March – a 38.8% drop from its high of 3,607 points recorded in mid-May 2018.
Fast forward to this very moment (where I am penning this post), the pandemic has very much been under control here in Singapore. This has been made possible due to the mandatory wearing of masks whenever we head out of our homes, along with the strict adherence to the safe distancing measures. Most recently (on 14 December), the Prime Minister have also announced that Singapore will be moving into Phase 3 of the safe transition from 28 December. Among the relaxation of rules include the increase in the number of people allowed to gather – from groups of 5 (in Phase 2) to groups of 8 (in Phase 3.) While this is good news for all (especially those with big families), but we need to bear in mind that our battle against the pandemic is far from over (just look at how countries like Malaysia, Hong Kong, and South Korea are currently battling another wave of new cases.) Therefore, we need to continue to take the necessary steps to keep the virus out of the country (by continuing to don masks properly, and practicing safe distancing at all times) if we do not want to see a second wave of pandemic (and another round of ‘circuit breaker’ measures being imposed) in Singapore.
In my post today, I will be sharing with you my personal review of the year 2020 (both as an investor as well as a trader), along with my outlook and plans for the year 2021 ahead…
A Review of the Year 2020
My Investing Journey:
This is the first economic crisis I have encountered since becoming a full-time retail investor. While it wasn’t easy (especially the part where I had to be mentally strong and not succumb to fears and sell off all the companies I have in my long-term investment portfolio when their share prices fell to multi-year lows), I am proud of myself for being able to continue to stay invested in the companies throughout.
Not only that, I’ve even made decisions to add a number of companies to my investment portfolio when the stock market was at its trough (the companies were Frasers Centrepoint Trust, Mapletree Commercial Trust, as well as SPH REIT) which paid off pretty handsomely. Currently, these 3 additions of mine contributed a huge bulk of capital appreciation when their unit prices recovered.
Also, in October, I’ve added 2 more Mapletree REITs to my long-term investment portfolio (in Mapletree Industrial Trust and Mapletree Logistics Trust) when they were trading at prices with yields more than 4.0% (this is one of my requirement when adding companies to my long-term investment portfolio, where the yield must be above the interest rates of CPF’s Special Account of 4.0%.)
Apart from that, I have also averaged down on CapitaLand Integrated Commercial Trust (an enlarged REIT formed from the merger of CapitaLand Mall Trust and CapitaLand Commercial Trust) when its unit price fell by 15.9% from my initial invested price (of $2.32 down to my average down price of $1.95.) The reason why I made this move was because I believed strongly in the growth potential of the enlarged REIT (which is now the largest Singapore-listed REIT) in the years to come.
My Trading Journey:
I must say that on the whole, this wasn’t a very good year as far as my shorter-term trading journey is concerned, as I suffered pretty heavy losses from some of my trades as a result of not stopping out promptly (while the eventual losses I suffered when I exited those trades were painful to bear, but looking back, I was glad I made the eventual decision to do so as their share prices fell even further thereafter.)
It was also from this ‘expensive’ lesson of mine that I always emphasise the importance of pre-setting your stop-loss target prior to entering every single trade (there’s no hard and fuss rule as to how you should set your stop-loss target, as different people have different comfort levels – for instance, suffering a $100 loss in a trade is OK to some, but not OK to others; as such, the stop-loss target you set must be one you’re comfortable with.) Not just that, you should also diligently exit trade whenever your stop-loss target hits – doing so can save you from suffering heavy losses should the share price sink further down below your stop-loss target.
Another major move I’ve made as far as shorter-term trading is concerned was my entry into the US market in July this year (the US market in general rebounded quickly from its trough in mid-March due to the technological companies, which benefitted immensely as a majority of people around the world working from home and making use of technology to conduct meetings and discussions with their co-workers as a result of the pandemic.) While there were some learning curve when I first started off (particularly due to the market’s fast moving nature, and I ended up in a net loss position in my first month trading in the US market), but after making some changes to my strategy, I’ve have managed to recover my losses and successfully reverse from being in a net loss position into a net profit position in the subsequent months. In fact, the amount of profits I have made was much more than the short-term trades I’ve made in the Singapore market (for privacy reasons, I will not be revealing the exact figures. Appreciate your understanding on that.)
My Outlook and Plans for the Year 2021 Ahead
Barring a second wave of the pandemic happening in Singapore, I am of the opinion that next year will be a better one (compared to this year.) However, the recovery will likely be a slow one, as many countries around the world are still struggling with containing the pandemic.
No doubt there are a couple of vaccines approved for use, but time (and lots of it) is required to produce, transport, and administer to each and every individual in all the countries.
A lot of you will probably ask for my take on dividend payouts by companies for the year 2021 ahead (as dividends this year for most companies were cut – for the case of banks, they acted on the advise of the Monetary Authority of Singapore to cut their dividend payout to 60.0% of their total payout in FY2019; Many REITs withheld a portion of distributable income for contingency purposes.) My personal take for dividend payouts for the year ahead is this – for the banks, I don’t think they will resume their normal dividend payout (but it’s likely to be an improved one compared to this year; however, should the economy stage a faster-than-expected recovery to pre-Covid levels, the 3 banks may declare a special dividend at the end of FY2021 to reward shareholders for their patience) For the REITs, I foresee many of them (especially those in the retail as well as in the hospitality industry, which were severely battered by the ongoing pandemic) continuing to withhold a certain amount of distributable income (although it is likely that the amount will be lesser than the amount they have withheld this year) as long as the pandemic is still ongoing, in case it suddenly turn for the worse, and another round of ‘circuit breaker’ measures had to be re-implemented.
Finally, in terms of the share price movements of individual companies I have in my long-term investment portfolio in the calendar year ahead, it will largely depend on the extent of recovery, alongside global state of affairs such as geopolitical tensions, etc.
With regard to my long-term investment portfolio, I am looking to continue to build on it further in the year ahead, by adding companies in my ‘shopping list’ at the right prices. Some of the companies I have in my ‘shopping list’ include CapitaLand Retail China Trust, Koufu, PropNex, Sasseur REIT, SGX, along with Sheng Shiong. I have done an in-depth analysis (and writeup) about each of the companies in the past, except for PropNex (which I will be doing after the company releases its full-year results for FY2020 somewhere around mid-January to February next year.)
Moving on to my shorter-term trading plans, my focus in 2021 will be on the US market, as well as in the Hong Kong stock market (I am currently studying the share price movements of individual companies and will make my move at an opportune time.)
Finally, at the request of many of my site readers, I am also looking at publishing a step-by-step book for individuals who are new to investing to guide them through the steps necessary to make their first investment in the Singapore stock market – in fact, I am currently in the midst of hand-drafting the contents (which is why I have not been posting anything of late as I was pre-occupied with the draft of my upcoming book.) Hopefully, I will be able to complete everything and have the book published by this time next year. I will be sharing more details about it in the coming months ahead.
With that, I have come to the end of my review of my personal investing and trading journey for the year 2020. Here’s wishing you and your family a very Merry Christmas and a healthy and prosperous year of the bull in 2021 ahead!
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