Trading around the core

I hope you have caught the rally train with STI in the last few weeks.

A fortnight ago, I wrote that I was holding out the optimism that the rally in STI would continue, after it rose 7% from the trough clocked on 30th Oct. I wasn’t sure that the rally could sustain especially with all the challenges around us.

Boy oh boy, since then, STI has gained another 12%. It is now on the cusp of being declared to be in a bull run (i.e. 20% rise from the trough). Who would have thought of that just a month ago?

DBS rose from $20.35 to $25.60 today, even Singtel has a spectacular run from $2 to $2.50 in the same period! I hope you have benefited from it.

I had but not the 20% gain like STI.

This is because I had been selling a portion of my portfolio into the strength of the rally in the last 2 weeks. However, I am conscious that while I was doing all these, I would not want to lose the core of my portfolio. By that, I mean that I kept my top 10 holding largely unchanged. The selling was done “across the board”.

The table below shows the comparison between 9 Sep and 24 Nov 2020.

Ireit was the major change as I managed to accumulate and build a large position following their recent right issue. Hong Kong Land managed to squeeze into the Top-10 but it has always been close to the Top-10 anyway. I trimmed more of the banks (esp DBS) as I felt that they had run very much ahead of the rest.

But almost everyone is still there !

1Suntec ReitSingtel
2DBSOUE Commercial Reit
3SingtelSuntec Reit
5OUE Commercial ReitUOB
6UOBIreit (New)
7MapleTree Commercial ReitDBS
8Manulife ReitMapleTree Commercial Reit
9 Olam Manulife Reit
10Ascendas ReitHong Kong Land (New)

Interestingly my portfolio value has not reduced significantly because of my selling action. This is because the shares price has increased in the process and that boosted the value of my “core”.

What I have definitely gained through all these is the topping up of cash into my warchest. That is one great thing as I now have a chance to pounce on any opportunity that would arise.

I would not hesitate to confess that I do not know how STI would move in the coming days/weeks and I would not bet against it either.

What I can do is to prepare myself for the situation and take my opportunity as it surfaces … If STI continues to climb, I would continue this “trimming” action. However, if the trend reverses, I would consider deploying my warchest when the share price drops to an attractive level again.

By the way, just to complete the story, despite the recent rally, I have not touched my index portfolio.

STI ETF is my #2 holding in my index portfolio and I have not sold/trimmed any of it. That also helps me mentally as I know that if STI continues to rally, I would not lose out totally too. I have tried to confine my trading activities to the individual stocks but keeping my index portfolio steady and on a constant growth trajectory year on year.

I plan to rely on my index portfolio for passive income when I am no longer in active employment.

Finger crossed that my plans will work out.

Thanks and have a great remaining of the investment week.



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