Wednesday, April 22, 2015

To Sell in May or not?

question Should You Sell in May and Go Away?Should You Sell in May and Go Away?

By Lawrence Meyers, InvestorPlace Contributor

So here we are in late March, and we’re quickly approaching the dreaded summer doldrums of the stock market. Somehow, the notion came about that returns in the market are worse during the period from May through November.
The old adage, then, to “Sell in May and go away” has caught on.
Interestingly, it is less important to know if you should sell in May, but rather to understand why you are investing in the stock market and what your goals are.
Check out this academic paper, or better yet, just take a look at this chart from CXO Advisory Group:
032715 sell in may Should You Sell in May and Go Away?

As for me, I will not be going into cash but will keep invested in a very defensive portfolio of mostly high dividend-yielding REITs which are trading at prices substantially below their net asset values e.g. TWRREIT, YTLREIT and AMFIRST. This will provide reliable passive incomes, come rain or shine, while waiting for their market prices to re-rate higher towards their net asset values. At the moment, I'm not very comfortable with stock punting.

Monday, April 20, 2015

It's all about Timing!

Extreme Example

"Perhaps there is no better example of the importance of timing an investment than Bank of America Corp. 
Ask any Bank of America shareholder if he or she is happy with the investment, and you are likely to hear anything from “the worst mistake of my life!” to “the best decision I’ve ever made!”
How could a single stock produce such a wide range of reactions? Timing.
Investors that bought Bank of America a year ago are probably angry with their -3.5 percent return.
Investors that bought the stock three years ago are thrilled with their 63.3 percent gain.
Investors that bought Bank of America five years ago have lost 12.4 percent on their investment.
Investors that bought Bank of America six years ago have more than doubled their investment.
And of course, Bank of America investors that bought stock eight years ago, prior to the Financial Crisis, are down more than 68 percent.
That’s one single stock that has produced five wildly different investment outcomes based strictly on timing"
"Sometimes there is no such thing as a “good” or “bad” investment, only good or bad timing. Certain stocks, such as Apple, are better investments than others. However, buying even the best stocks at the wrong time can cost traders a lot of money.
Before buying a stock, many investors ask themselves, “Is this the right stock?” Often times the more important question investors should be asking is, “Is this the right time?” full article

Thursday, April 16, 2015

Stock Watch - AMFIRST

"AmFIRST Real Estate Investment Trust Bhd expects its asset under management to increase 18.9% to RM1.57 billion, from RM1.32 billion as at Dec 31, 2014 after its acquisition of the Penang Mydin hypermall building for RM250 million.

Am ARA REIT Managers Sdn Bhd CEO, Wong Khim Chon said the proposed acquisition will help provide stable income that will increase its asset portfolio from the retail sector from 21.5% in FY14 to 34.2%...

This transaction will be accretive at both net property income and distribution per unit levels. On an annual basis, the proposed acquisition is expected to contribute DPU of 0.34 sen per unit," said Wong.

The property is located along Jalan Baru which is the main service road connecting Bukit Mertajam and Butterworth, Penang.

The acquisition is expected to be completed by end of July and fully leased to Mydin Mohamed Holdings Bhd for 30 years with 10% increament every five years.

The acquisition which will be financed by bank borrowings which will increase its gearing to 42.8% from 32.6% in FY14." more

...I have added some AMFIRST units to my stock portfolio due to its improving property portfolio profile with the latest retail property purchase. Furthermore, AMFIRST will be announcing its next half-yearly income distribution sometime next month.