"About the only certainty in the stock market is that, over the long haul, overperformance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis (see footnote below) to the question.
Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. We're using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range.
The regression trendline drawn through the data clarifies the secular pattern of variance from the trend — those multi-year periods when the market trades above and below trend. That regression slope, incidentally, represents an annualized growth rate of 1.88%."
Every dog has his day !STI rebounded strongly in 1st Qtr 2021 and outperformed most of the regional index.
With sectors rotation from growth (TECH ) to value stocks, STI can finally and proudly rebut those calling it as "Sick" Times Index. But since this is just 1st Qtr of 2021 and hope the momentum would continue throughout the year.
For longer perspective, STI still moving below long term mean level and almost unchanged as of 11 years ago on 1 Apr 2011 at around 3172. If you are investing STI ETF for the past 11 years , your returns may be just the dividend yield of around 3+%, barely beat the inflation , may be.
Hopefully those cyclical and value stocks like Big 3 banks / Jardine C&C /HK Land / YZJ/ Wilmar/ Keppel Corp/SembCorp Ind etc will be able to help to lift the index to higher level in coming quarters , of course the companies will need to show better earning results with improving economic situation.
Overall FTSE ST REIT index is quite stable and moving along the mean level. I guess the hot topic for property and REIT last month was the privatization of property arm from Capital Land and separate it to a new entity to concentrate on asset management and holding of some REITs + hospitality asset.
Below is a more detail and better explanation on the whole restructuring process from FinancialHorse.com:
I actually quite like the idea of CLIM which is similar to ARA Asset Management before it been privatized in 2017 where I made almost 30% overall including dividend in investing in ARA Asset Management. I guess the idea of separating the property development and asset management is what market ( or overall SG Inventors) wanted.
I think most of us ( SG investors) like to invest for income / dividend , the new CLIM will have assets like REITs which generate stable and recurring income and also a property management where the fees / income is more stable and predictable. Temasek just take out the property development units which the revenue/profit is more bumpy and given what the market wanted to have it i.e the CLIM type of biz model.
Although we know that the dividend yield for CLIM will be lower than REITs but as mentioned by the CFO, there will be "growth" factor in this company with some of the mature assets can be recycled into REITs and also hopefully the NAV for some of their PE fund will increase eventually.
Hence, I did some small adjustment to my portfolio in reducing % of my ARA LOGOS and split the fund into Capital Land & Ascendas Ind REIT. I have been eying and targeting REITs with DC biz for quite some times but since the valuation is high and I just wait for the opportunity to come. With recent pull backed on some of the DC biz REITs by almost -20% , I have decided to switch.
STE and Mrs. have already registered with MOH for our Covid-19 vaccination and I hope more and more peoples will get their vaccine soon when more vaccination centres to be opened by mid-April.
A Rollercoaster Ride I know, Uncle was really late to have this 2023 performance review as we are already in February 2024 😊 . Pai-seh, I was busy with a family trip to Korea followed by a Cruise Trip onboard RCL. Also, during the school holidays, we went a few times short trips to Malaysia and back to my hometown. My younger daughter got her O Level result followed by searching and applying for JC. That’s why I have been delaying this update and dragging my feet to write this blog post. I think most of us had the same feeling that 2023 was a challenging yet dynamic period for investors, marked by a series of unpredictable events that significantly affected our returns. I have seen my portfolio up by more than 10% in the early part of the year and it dropped by more than -8 % at one time and recovered slightly better at the end of the year with +2.3% (including dividend). As an investor, navigating through such a volatile market requires adaptability, patience, resilience, and
GameStop the Market: Big Bets on Stock Make Wall Street Look Like a ‘Casino’ <source:casino.org> The biggest bets made over the past couple days haven’t been placed in a casino on the Las Vegas Strip. Instead, the action’s taken place on Wall Street, as a group of stock traders on Reddit have aimed at hedge fund traders, who have made high-stakes wagers that businesses like GameStop and AMC Entertainment would stumble . The Stock Market is a Fun Casino <source:ritholtz.com> The stock market works as if people were investing money in companies; some indirect mechanism ties the secondary trading of stock to the allocation of capital. 1 And of course in the limit companies can raise money by selling stock. So buying stock is like investing money in a company in exchange for partial ownership of its projects, and the amount you should pay for a stock is basically the discounted present value of the company’s cash flows from its business. The mech
As a value investor, we focus on investing in stocks or any other assets that we believe are undervalued relative to their intrinsic or fundamental value. This approach to investing is often associated with the principles of gurus like Benjamin Graham and Warren Buffett . We often use fundamental analysis with a margin of safety, looking at ratios or figures like PE, PB, EPS Growth, Cash flow, etc . We emphasize investing in the long term, avoiding speculation, and having a diversified portfolio. We also understand that value investing requires patience and discipline. Investors may need to wait for the market to recognize the true value of their investments, which can take time, and recognize the ultimate force of “ reversion to mean”. It's important to note that value investing is a well-established investment strategy, but it is not without risks. It can take time for undervalued assets to appreciate and realize their value, and there is always the possibility that the mark
Time flies, and as we find ourselves in the midst of 2023, it is remarkable to reflect upon the passage of time and experience that has unfolded. I’m sure we all have different experiences in the 1st half of 2023 in terms of portfolio management and performance. For me, the last two quarters were like YOYO and my portfolio was performing well till March ( up by almost 11%) with the hope China “re-opening and recovery “But, as time passes, the strength of the recovery is getting weaker month by month and now everyone is hoping for more “ stimulus policies” to boost the economy, with declining economic indicators like retail sales, property sales, high unemployment among youth, slower export due to weak demand from developed countries, lower PPI and almost flat or zero CPI figure. All this has made my portfolio up and down huge, dropping to -2% at one point, and rebounding slightly to 4.68% now, with hopes of more policy support from the government. If you are invested in the US or J
Higher For Longer The Federal Reserve held interest rates steady in the recent FOMC meeting, while also indicating it still expects one more hike before the end of the year and fewer cuts than previously indicated next year. In addition to holding rates at relatively high levels, the Fed is continuing to reduce its bond holdings through the so-called QT , a process that has cut the central bank balance sheet by some $815 billion since June 2022 . The Fed is allowing up to $95 billion in proceeds from maturing bonds to roll off each month, rather than reinvesting them. The “ dot plot ” chart from the latest FOMC meeting showed a much higher and longer rate till 2026 and this has “spooked” the market, causing some reactions and pulling down of market indexes last week. “Chair Powell and the Fed sent an unambiguously hawkish higher-for-longer message at today’s FOMC meeting,” wrote Citigroup economist Andrew Hollenhorst. “The Fed is projecting inflation to steadily cool, while