After a day of respite, STI dropped 3.0% today and the loss YTD is 11.29%! My portfolio is not immune and the loss YTD has increased to 3.7%. I did not make any purchases today. I am not emotionally affected. I will just hang in there and wait patiently for an offer that I cannot refuse.
In my last post, I mentioned that the cash level in my portfolio has reduced to 40.5%. I have made a mistake in the computation as I left out one transaction, the cash level has in fact dropped to 39.5%.
What is my game plan? I will stop catching a falling knife and wait for the market to stabilize before I start my purchases again. Anyway, I have to wait for the fixed deposit to mature before I have the cash to invest. I do not want to use more of my CPF fund to invest because it is earning a higher interest than the interest rate for the fixed deposit. By looking at the STI chart, I still believe that the STI is at the bottom already. Nonetheless, I shall wait.
I believe redemption of unit trusts and fund by retail investors world-wide have forced fund managers to liquidate shares; hence, the three local banks are badly hit, which I see as an opportunity. The STI has dropped below my expectation and I have to wait for the market to find the next support level.
This is the first time I am sitting on such a large paper loss in my portfolio as I did not hold any shares during the global financial crisis in 2009 and only hold some shares in the European financial crisis in 2012.
Am I panicking? Fortunately not.
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