Thursday, January 2, 2014

New year resolutions and investment strategies for 2014

A new year a new beginning. Its the first day of 2014. Everyone would be busy at work, school etc. I took leave on this first day to really think and pen my thoughts down for the new year ahead.

I will also be penning down some investment strategies that I would be embarking on for this year.

New year resolutions for 2014

1)  Full time Work
I've been in my current company for 3 years and 3 months. Even though I'll be switching career sometime in the near future, I feel that I should still use my time in my current company to learn and contribute as much as I can. I hope to increase my communication skills and interact with more top level management in my company and also my vendors and contractors. This would enhance even my email writing skills to write in a professional manner.

There will definitely be more projects that I'll be tasked to take this year. I've been given ample opportunities by my managers and director to perform in the company. I hope to deliver my work in quality as what I've always done. There's always a tenancy to be complacent and errors could be made in the process. Its good to maintain a habit to check, double check and triple check.

2) Part time studies
I'm left with only 8 months to graduation. I hope to maintain my above average results and continue to study hard for all my exams. I'll be taking advance macroeconomics for my next semester and it's expected to be a tough module. I'll have to widen my reading outside pf textbook as this module is famous for asking outside textbook questions for the exam.

3) Getting out of my comfort zone
This is a year where I'll be making a very major decision. After I graduate, I'll be sourcing for career opportunities related to my degree. I hope to get into a career related to economics or finance. I've been looking out for possible jobs available since last year. I'll start preparing and apply for those jobs once I graduate. I should also brush up on my interview skills.

4) Health
I feel that having a habit of exercising is important. Jogging is a basic form of exercising. I hope to maintain the habit of jogging at least once a week. Also, eating habits are important too. Eating less oily and fried food will be beneficial in the long run.

5) Family and Friends
This is something we have to constantly remind ourselves to cater time for those people we love. In the midst of my busyness, i will still cater time for my friends and family members.

6) Financial Goals
My goal is to save up an extra capital of 22k for the year 2014. Investment wise, i hope to achieve a passive income from dividends of $1500 for this year. This would mean a stock portfolio of about $30k. I'll elaborate more on my strategies below.

Investment strategies for 2014

The Singapore market has been relatively flat for the year of 2013. Money has been flowing back to the US and Europe region as their economy slowly recovers. Singapore's economy has been stagnant also thus reflecting it in the stock market. Even though Singapore's stock market may be flat, there are some companies which will still benefit from the economic recovery elsewhere.

Focus area for 2014
I'll be cautious on Singapore's property market and stocks that deal with properties This includes REITS which have huge exposure to Singapore's property market. My focus area will be on the shipping, construction and healthcare sector this year. I've wrote on the shipping sector extensively in my previous few blog posts. They are set to benefit from the improved global economic conditions as demand for goods goes up. Dry bulk shipping stocks have more than doubled in the year 2013 while Singapore shipping stocks are still lagging behind.

Construction sector is the next big thing in Singapore. With plans for the new MRT lines, expansion of our existing expressways, plans to build the new Changi Airport terminal 4 and the iconic building Jewel @ Changi, new marina bay CBD. You can see many huge projects are in place.

Healthcare sector is a new focus i have. I'll be researching on more healthcare related stocks and see which ones are suitable for investing for this year. Singapore has an ageing population and people need more of these services. Parkway life Reit has some of the top private hospitals in Singapore. This include Mount Elizabeth hospital and Gleneagles hospital. I'll be watching closely on this and accumulate when the price is right.

I'm also planning to add telecom related stocks to my portfolio. Having been in this industry for the past 3 years, i've the chance to deal with most of the telecommunication companies in Singapore. This gave me a chance to understand the business model and the prospects it has. The telecommunication industry is a stable industry and will be a good investment for income. Their profits have been rather consistent with very minimal risk.

The Japanese economy is of interest to me. I've allocate a portion of my capital for investing into Japanese related stocks believing that their economy will recover as the Yen falls and exports increases. As Japan gets out of its deflationary economy, prices will stop dropping and even start to rise. Their property market will surely benefit from this change. Croesus retail trust and Saizen reit both own significant numbers of properties in Japan. Rental income will also set to rise for these 2 trust. I feel they are a good investment to take advantage of the Japan's economic recovery and also a good investment for income.

I'll be mixing my portfolio with growth and high yield stocks. One is for capital appreciation while the other is for income. I'll also still be trading some stocks for the short term while focusing on long term investment. A portion of my capital is allocated to my CFD account for short term trading. The profits gained from this trading account will be channelled back to my investment account for buying good companies.

This is my focus for the time being. As the year goes along, situation might change. Till then, i'll change and plan accordingly.

Here's wishing you success to your life and investments for the year of 2014.

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  1. Hi SGYI, i noticed that you are planning to add 22k of investment capital into your account. It seems to be above your usual savings rate. May I know how are you planning to increase your current savings rate?

    1. Hi Nate,

      I got a pretty decent pay raise last year. So I'll be able to save more this year. Plus there will be another round of increment middle of this year. I may be able to save even more. The main thing will depend on my bonus. It should be equivalent to last year. This savings rate excludes dividends or capital gains from stocks.

  2. Interesting focus area for investments. Although personally I think that the shipping has still over supply. But I'm also looking into it. Same as for Japan. Although currency is low. But I'm expecting the JPY to recover eventually so most likely if can catch that ship before it sails will be good I think.

    1. Hi Earlyretirementsg,

      I have no idea when the ship will sail. So i catch it first at the dock before it sails away :)

      I'm investing for the long term so it doesn't really matter to me.

  3. Hi,

    When you mentioned shipping industry. Are you referring towards a specific area like shipping of goods or just in general the shipping industry which would include building of osv

    1. Hi Daa Mahk,

      I'm referring to the general shipping industry. OSVs included.

  4. Hi SGYI

    You mentioned that you are going to switch to a career of banking and economics once you graduate. May I know which field are you currently working at?

    I am currently working as an accountant and we may be a field closer once you switch to your desired role.

    By Constructions sector, do you mean in terms of Tat Hong alike or SATS or aviation alike that have close projects related to the Changi Airport?

    1. Hi B,

      I'm currently in the telecoms industry. We'll certainly be a field closer once I switch industry.

      By construction sector, I mean those that provide materials or even involve in the actual construction projects. I'm actually vested in Yongnam which they have recently won the contract to provide structural steelworks for the construction of the new marina bay CBD. I'll be looking closely on those that are involved in the building of the new MRT lines and also the expansion of changi airport as well. These projects will likely last for the next 10 years especially the mrt projects which is until 2030.

  5. Hi,

    To save a capital of 22K for 2014, that would means saving an average of about $1800 ++ per month. Remember i read before that you are still a diploma holder, even with bonus, saving 22K would be no small feat.

    You will playing "great defense" in your personal finance. That will be great. An additional dollar save will go into investment portfolio which can goes a long way if we take into consideration compounding.

    Like you, i am also working on maximizing my saving to build my investment funds. :)

    1. Hi Solace,

      Yes, saving up 22k is not easy with my current pay. But if I keep my expenses the same as last year, I would be able to achieve it easily. This means I still can continue my current lifestyle and also can go for an overseas trip just like last year. Not much change or sacrifice is needed for me to achieve that goal.

      I feel that I'm at a age where I need to maximize my savings. At least before I get married. This is a time when I can keep my expenses really low and accumulate my capital. Once I have more capital, the compounding effect of investments will be greater too.

      Let's build up our investment funds together. May 2014 be a great year!