S&P 500 might have shed 1.9%, erasing its gains for January and 2021 to date and the last one week being its worst since October 2020.
However, January 2021 has on a whole started with lots of hope in all markets (with vaccination started in many countries) and ended with plenty of exuberance in the US market (especially with game waging on GAMESTOP. Exciting to see and read but sadly I am sure someone will get terribly hurt in the end).
COVID situation remains difficult though and Singapore is also feeling the “heat”. But I hold the hope that the situation will get better in the course of the year.
While S&P 500 was down, the other 2 markets that I have significant exposure to had gained. Singapore STI rose 1.2% while Hong Kong Hang Seng index, buoyed by the Chinese investors, rose 4.0%.
SINGAPORE STI
My largest equity exposure is in Singapore, so it is nice to see STI outperforming the S&P 500 for a change but I know it wouldn’t last. There was just not enough strength to support STI.
In the middle of Jan, it managed to break the 3000 points psychological barrier and I was hoping it could build on this momentum to go higher.
However, that was not to be. It struggled to hold on to the 3000 points level for a week before crumbling under pressure to close at 2902 points yesterday.
DIVERSIFICATION
This further convinced me that I should speed up my efforts to diversify away from the Singapore market.
My current target was to increase my US and Hong Kong equities holding to 28% of my total equity portfolio by end 2021.
As of end Jan, it is standing at 23%, a 5% gap and it is even lower than the 23.5% when it ended 2020. The reason is because I had taken the opportunity to sell quite a bit of Hong Kong shares (alongside sale of Singapore shares) while maintaining my US holding.
On an overall basis, I have reduced my total equity portfolio value by 3% in Jan.
So, it is a SELL month for me – particularly DBS.
DIVIDENDS
Jan and Feb are my favorite dividend months. For many local blue chips, it is this period when they will announce their year end dividends.
Although the dividend for this year is likely to be smaller, it is still a good feeling knowing that passive income will be coming into my bank while having a nice coffee at my favorite cafe.
It can’t get better than this!
Dividend announcement so far has provided 0.6% yield on my portfolio. My dividend yield target for this year is 4.5% (about 1.1% per quarter).
SUMMING UP
January 2021 had been a pretty good month.
I rode on the strength of the SG and HK markets to take some profits off. This has strengthened my warchest. Now it is to have the patience to wait for the right opportunity to open it.
Dividend declared so far has also been within expectation.
For Feb, I hope the rally will continue and allow me to take some more profits and further strengthen my warchest.
But if it doesn’t and a major disruption appears in the market, I would gladly open my warchest and accumulate some quality stocks, in preparation for an early retirement (either forced or volunteer).
Stay safe folks and have a great investment week ahead.
Regards,
Warriortan
Invest For Yourself 