Sometime i wonder if being too diversified is a bad thing? The biggest fear is not being able to react quickly enough to a global crisis like the one we experienced not too long ago. In the event of a market crash, i hope to reduce all exposure to US, Japan and HK and 50% of SG. Meanwhile it would be unwise to take advantage of the wonderful opportunity presented to us living in Singapore, the opportunity to play almost any market in the world. What is your exposure level to world markets?
I also analysed my investments in terms of sectors, the graph is below. I usually pay more attention to sectors because of the fact that certain sectors perform better during certain times of the year and during market cycles. You will notice that my exposure to commodities sector is minimal and i would keep it under 10%. I realise my exposure to REITs is 30% but i am not worried because they are mainly hospitality REITs for example Ascott and FarEast. I would be worried if REITs which are overvalued, for example FIRST REIT, K-REIT or CMA. All in all, I am gearing towards defensive stocks more hence my exposure to Consumer and Life Insurance sector. Which sectors should i get out of by end of this year? Definitely Oil & Gas, Commodities, Utilities and Manufacturing.
One thing about being too diversify is lack of focus or you grown too tired to manage effectively. Exposing to 2 Markets should be more than enough i feel. I am down to SGX stocks now as is a pain to track and feel the oversea markets. I have a little gold and some foreign currencies.
ReplyDeleteSimilar to you, i have large segment in Reit too. My concern is when economy is down there maybe much more fund raising needs by reits which i need to cough out. The other is i do not have complete feel how large an impact to rising rates environment. The recent sell down seems oversold.
Hi Cory,
DeleteAgreed. my biggest fear is losing focus since i made a conscious decision to pick stocks individually rather than pay fund managers.(thats a separate issue)
To me personally, many counters in SGX are close to their fair value or even overpriced for some. Thats why i decided to put some into selective chinese stocks which are below value.
The recent pullback in REITs was good for some, unfortunately Sabana, Cache and Ascott didnt come down enough for me to put more in. Actually REITs are still OK i feel, as long as returns are above 5%, you're right in saying that once interest rates start rising, there will be calls for fund raising by these REITs.
You mentioned you are holding GOLD, did you picked it up below $1300? Careful cos it has lost 20% YTD and might still go below 1200 to find proper support. Check out the supporting line at the link below:
http://hiddeninvestor.blogspot.sg/2013/07/gold-support-line.html
Abt 1% in gold @1400 in USD. A Counter to remind me to focus in all my investment. :(
ReplyDeleteYes, I like to take ownership of my investments down to stock picking except maybe CPF.
Just a small feedback. Is pretty hard for other bloggers to write comment here due to the authentications.
Thanks for the feedback. I'll take a look into the settings to make it easier to comment.
DeleteNice Post in Stocks Related issues.
ReplyDeleteYou are correct. There are some good articles there. Thnks
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