Strategy for 2017

It will be the first day of trading tomorrow and nobody in the world has any idea where the market will go. After a year studying and researching companies, I surmise that the stock market and the economy are largely uncoupled. Hence, there is simply no point extrapolating market growth (or shrinkage!) from the economy indicators.

I started investing trading in late 2015 and give it up after a couple of months, only to start investing at the prelude of the correction period of Jan-Feb 2016. I saw one of my holdings go as much as 40% in the red. I had many walks around the reflexology paths (one of the free amenities that I am god-damn grateful for) confronting my inner self doubts.

I went for a few low-cost talks, and had a fairly expensive course about investing. I finished reading a few books that shaped my ideas about my investing. I still have no idea how to use derivatives, such as warrants and options, and I intend to keep it that way. I was tempted to short the banks with CFD, got myself an account, but pull out in the end.

I guess that is because I am extremely risk adverse.

***

I ended 2016 with a disappointing 0.75% gain, including closed positions and dividends. According to my report in SGXCafe, I have a time-weighted return of 6.89% so far, and have 2.03% in XIRR. Along the way, I participated in a couple arbitrage deals, namely SMRT and ARA Asset Management (which I hope will come to fruit by April). I made a couple of mistakes in selling stocks way too early based on charts, and tried to time market reversion on the telcos way too early (again!).

These mistakes will prove educational in the near future.

The investment strategy for 2017 will not be too different from 2016. I will remain focus on investing in cheap stocks by book value, while ensuring that dividends are sustainable, debts are low and management have OPMI's (outsiders, passive, and minority investors) welfare in mind. That is all is to it. I resolve to have an open, but independent, mind to the markets. It is about time to stop focusing on just the Singapore Stock Exchange. Value investing is about looking globally for opportunities, and having just local stocks is myopic.

Good luck to everyone for the next 52 weeks.