Friday, January 3, 2014

Strategic Investor 2013 Review

FTSE STI ended the year at 3,167.43, up 0.01% for the year.  Here is the review of my performance as a strategic investor for 2013 in term of investing and trading.

Investing
At the end of 2012, my investing portfolio stood at +68.67% (inclusive of dividend return) and it moved up to +88.27% (inclusive of dividend return) in end of 2013.  That is a gain of +19.6% (inclusive of dividend return) for the year.  A great difference as compared to the benchmark STI which just rose 0.01%.  Dividend return for 2012 and 2013 were +24.83% and +30.91%, an increase of 6.08%.  However, there was composition changed in the 2013 portfolio vs 2012 portfolio.

1. Kep REIT was added to the 2013 portfolio due to the entitlement from Kep Corp share but the contribution in term of capital and dividend gain was minimum as the quantity being held was very very small.

2. In April, realized portion of my First REIT by selling off at price $1.35, thereby recording a capital gain of 116.85% and dividend return of 41.09%, combining a total return of 157.94% gain (refer). 

Putting aside the realized gain from First REIT and just by comparing the unrealized gain for 2013 and 2012, 2012 recorded +42.48% while 2013 +42.75%, a slight increase of 0.27% (Kep REIT was included in the calculation but the contribution was too small perhaps just make a difference of 0.01%), still better than the benchmark STI.

In term of individual stock performance for 2013, excluding dividend return, of the 10 stocks (excluding Kep REIT), only 4 of them gave a positive return for 2013.

Genting SP (+20.26%)
SingPost (+17.06%)
Kep Corp (+2.35%) 
Cambridge Industrial Trust (+2.19%)
First REIT (-0.24%)
CapMallA3.8%b220112 (-0.56%)
SIA (-3%) 
MapletreeInd (-3.17%) 
SembMar (-4.78%) 
CapitaMall Trust (-19.67%)

As can be seen most of the negative return stocks were dividend stocks (S-Reits) and the main reason for the fall was due to the concern of US Fed tapering in May in which most believe S-Reits sector will be affected most.  As a whole, all the stocks except SIA were still trading above my holding price.  However, with the inclusion of dividend return, all of the stocks were positive.  On the hindsight, the decision I made to realize portion of First REIT was correct and that perhaps was the big bonus for me in 2013.

In term of annualized return (with and without dividend), the following table showed it.

StockHolding Periods (Yrs)Annualized Return Annualized Return (with dividend)
Cambridge Industrial Trust7+1.22%+5.25%
CapitaMall Trust5+10.47%+15.02%
First REIT8+7.94%+11.98%
Genting SP8+13.86%+14.05%
Kep Corp4+10.82%+14.52%
SIA5-3.08%+1.27%
SingPost6+4.71%+7.53%
MapletreeInd4+11.87%+18.37%
SembMar4+6.73%+11.96%
CapMallA3.8%b2201122+1.73%+2.81%
Portfolio5.3+4.83%+7.42%
STI+2.75%

Note: Kep REIT was not included as it was a free entitlement for being Kep Corp shareholder in which I need not foot out any capital for it, hence it is meaningless in term of annualized return.
The above figure was taken from the iStockApp software I developed to keep track of my portfolio.

It was not something fantastic about in term of return but was pleased that the portfolio was able to outperform the benchmark STI for 2013 and also in term of annualized return.

Trading
In term of trading, 2013 was a big contrast between the first half of the year and the second.  Global stock markets started off 2013 in a very positive note but soon turned sour in late May after US Fed Chairman Ben Bernanke first stated a possible of QE tapering and that caused most markets to fall in the second half of the year.  After lot of uncertainty of when US Fed will start to taper in the subsequent months which caused markets to be volatile, they finally decided to taper from January 2014 onwards, reducing the monthly bond buying program from US$85b to US$75b.  That piece of news came in middle of December and that sort of stabilize the market.  Most of my trading gain was made in the first half of the year and with second half being volatile, I was pretty cautious in trading.  Here at the statistic for the trading performance :-

Year 2013 ( January - December )
Total number of trades = 230
Total number of profit trades = 181
Total number of loss trades = 41
Total number of neutral trades = 8
Total number of trading day = 249
Average trade per day = 0.924
Hit rate = 78.70%

There wasn't any recording breaking performance for 2013 as compared with 2012 either.  Another reason for my cautiousness in trading in the second half of the year was a change in trading environment.  Officially retired in end June 2013 from being a Trading Representative, which now I can classified as being a retired full time trader, there was a change in term of trading strategy and method.  As such, the second half of the year was like a "honeymoon period" for me to adjust and try out the new method and strategy.  One big bonus for 2013 in term of trading was I never recorded a single month of nett loss (as compared previously which I could register 1 or 2 months of nett loss).  That perhaps could be due to the adoption of the new trading method and strategy.  As a whole, 2013 wasn't an impressive year for me in term of trading but the most important was I still register a nett profit for the year (in fact since 2009 till now, I have always registered nett trading profit for the year).

Looking forwards to 2014, I will be using my new trading strategy and method, I termed it as "Portfolio Trading".  I started this concept in 2010 (in a post in then CNA Forum, my username was ccloh, lot of people should know that username) but at that time I was lacking the tools to support my concept.  It was strange that despite all those commercial trading platform which charges high subscription fee for it and none that really can provide what I wanted for my "Portfolio Trading" concept.  Soon after I retired in June 2013, I have that free time and decided to develop my own trading platform, iStockApp, which I finally completed.  To most, it was just a portfolio management software coupling with some stock information and market news but it is more than that to me.  I developed those features with what I wanted as a trading platform in mind and hence every single features in that software were customized to what I need.  The detail of my "Portfolio Trading" method and how the iStockApp software could assist me I would not reveal.  This is mainly the fact that I believe that trading is very personal as it involves risk (something that each individual will have and different) and should any detail being reveal despite not being intentional, it may eventually lead to others who follow blindly.  On the other hand, fundamental and value investing concept I am willing to share as those have to analyze at every aspects of the risk before a decision was made.  In short, every decisions have to factor in calculated risks.

Cautious, Quick decision and Patience will be the key to my 2014 trading.

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