Thumb Sucking

Well, haven’t been buying stocks for months. With the markets at multi-months / years high, I feel much inertia in analyzing and picking stocks.

My cash war chest has grown, despite the amount used for my Amazon FBA experiment (doesn’t come cheap). So for some time now, I have been looking at the war chest and thinking of how to best use it.

In summary, these are the significant factors which I can think of which contributed to the increase and decrease in my net worth so far:

Increase due to:

Delisting of a no. of stocks in my portfolio;
My existing stock portfolio has performed ok (given that markets are generally ok for the time being). Normally I see a lot more of my stock holdings in the red;
Just received my bonus from the company I am working in. It wasn’t much, probably due to the bad economy now;
Slight contributions from the interest received from invoice financing and P2P loans.

Decrease due to:

Cash outlay for experiment with Amazon FBA;
Son’s tuition & enrichment classes fee;
Red packets (to relatives and parents)

Pertaining to the war-chest: Yes, it would come in handy if I am to purchase another property for my family. I don’t think to purchase a property now makes good investment sense – well, that is at least for the near term with the ABSD still in place and property prices have not fallen much. In addition, interest rates look set to increase.

I would definitely like to make the cash work to generate some passive income, and REITs obviously comes to mind. Mind you, I don’t have a single REIT stock in my portfolio. I guess the thinking would be similar if I am thinking of buying a property for investment (but in comparison buying REITs would be at a much smaller scale).

Banks, REITs under watch as Fed hike looms (read here)
US rate hike points to more belt-tightening ahead for Asia (read here)
The right way to assess REIT value (read here)

I have been thinking about AIMS AMP CAP Industrial REIT, First REIT and Parkway Life REIT. The reasons for wanting to purchase AIMS vs First & Parkway Life REITs are dissimilar. AIMS probably due to its attractive 8.5% yield, good management, and good properties despite the seeming oversupply of logistics properties in Singapore here. While in the case of First & Parkway Life REIT, I like the defensive nature of the healthcare sector (they are in), despite the lower yield (First REIT: 6.54%, Parkway Life REIT: 4.91%).

Or, I can think like AK and look for REITs which has more overseas properties (given the llackluster performance of the property sector in Singapore). However, I am not familiar with the situation overseas ( a booming population with good potential for future economic growth?) and the US interest rate hike would probably affect REITs in most countries (although there are countries with negative interest rates).

However, I am not familiar with the situation overseas (a booming population with good potential for future economic growth?) and the US interest rate hike would probably affect REITs in most countries (although there are countries with negative interest rates.

However, I reckon, stock investment is one of the few things that you can excel in by ‘doing nothing’ when there is no need to do anything… Impatience can lead to deadly consequences.

There is also another ‘strong’ thought in mind.. and that is to sell. I have always been bad at timing the selling of my stocks. Must learn not to fall in ‘love’ with my stock holdings. When I don’t see much opportunities, this thought (of selling) always pop into my head.

It might be a good time to weed out the weaker stocks in my portfolio (eg. SIA being one of them) – with deteriorating fundamentals (which are unfortunately still in the red.. darn!). Having said that – those weaker stocks are typically cyclical stocks (eg. Golden Agri , SIA, CapitaLand)… and after many years of lackluster performance and low Price to Book values, one never know when the cycle will turn.

Perhaps I am one of the few investment bloggers that talks about selling stocks at this time.