Aboi's Updates For March 2014

KING'S BRIDGE FINALLY OPENS FOR TRAFFIC JAM

Najib opens second Penang bridge, naming it after the King

KLSE TECH REVIEW

Here's the link for the previous month's market sense: Aboi's Updates for February 2014

For those who find it hard to follow I suggest reading through my previous posting on how I am using technical indicators as a trend seeker.

1. First Attempt on Tech Analysis Part 1
2. First Attempt on Tech Analysis Part 2

Recap my last month's commentary. 
[1] recent sell off looks to be supported, I suspect money from weak holdings are transferring hands towards more resilient fundamentally backed counters as blue chips are keeping Bursa steady - Local fund institutions are supporting our market even as foreigners are parring down their stake here. [2] I think February will be a month where Bursa trade sideways as companies continue to release their 2013 earnings report. - It HAS and will continue to do so for March. Emerging markets will continue to Lao Sai especially true for riskier markets, not so worried-some for Malaysia as it is a defensive market. My risk evaluation still stands firm. For the year 2014, the main risks are likely to be on the sharp sell in US bond yields backed by news on Fed tapering or much stronger US economy growth.

I created 3 supports namely 1800 (profit taking), 1780 (minor correction) and 1750 (major correction) with only one resistance at 1850. The reason is simply: All tech indicators show that there is no support for a bull run in March. Volume is flattish, MACD showing crossover imminent while RSI has already passed the bull peak and will repeat the cycle again. Boring month for March.


Second, my portfolio managed to grow! 
This time by around ~RM7000 even during the period when Bursa is trading sideways. This showcases the strength of having a portfolio that is fully diversified! That's the primary reason my portfolio underwent a drastic change exactly a year ago. See my previous post My portfolio is NO LONGER purely equities. For the month of Feb this is what happened:-
[1] Supermax and Genting declined in stock value.
[2] Freight supported this decline as it rose backed by good earnings for year 2013.
[3] iCap traded sideways as usual.
[4] Boustead REIT went private. Profited ~65% inclusive of cumulative dividends.
[5] All mutual funds listed gained in value. AmDynamic Bond is back to black! (faster than I initially expected->middle 2014). This is good news indeed.
The bad from [1] & [3] is offset-ed by [2]. [4] and [5] and in this month's case the good far outweighs the bad leading to an increase of portfolio value. A clear example of the benefit of diversification.

Following some comments by readers, I will list my coming plans for 2014 (please NOTE that KEEP IN VIEW is not my final decision):-
[1] Invest roughly 25% of cash balance in Aberdeen's Islamic World Equity Fund. CONFIRMED and I will do so via cost averaging method until June. 
[2] Invest in a new mREIT holding: Time To Revisit mREITS in 2014 KEEP IN VIEW, waiting for opportunity when yields are right.
[3] Invest another fund, diversify further into small cap-medium cap companies where I have no exposure. KEEP IN VIEW, yet to do any research.
[4] Possible buy of gold commodity: A fool and his gold are soon parted KEEP IN VIEW, my opinion is that gold will see resistance at $1340.
[5] Par my remaining cash balance to 10% level. This will be done using my already 4 year old endowment fund with a projected 4% return p.a to better reflect my portfolio composition, currently the cash is sitting ducks with absolutely no returns. CONFIRMED but I have not decided how to integrate it into my portfolio.

As usual AMP Capital has a really good compressed weekly information (freely available, no sign ups) on weekly global market & global economic updates. It is usually updated every Monday afternoon so go read it when you have the time.

PORTFOLIO REVIEW

Portfolio composition. Equities 50%, Mixed Assets 15%, REITs 10%, Bonds 5% and Cash 20%.
Targets for returns p.a. Equities type 12%, Mixed Assets 8%, REITs 6%, Bonds 5% and Cash 3.75%.

Notes
*Boustead REIT went private for RM1.94 with special dividend of RM0.16 per unit. It will be removed from the portfolio next month.

Comments
#1 Portfolio target for the fourth portfolio year @ RM140k for April 2014 has already EXCEEDED. Portfolio target for the fifth portfolio year @ RM152k for April 2015. The TWRR (time weighted annual return rate is now at 12.39% vs my target of 8.80%).


Disclaimer: The reports, analysis and recommendations in this blog are solely my personal views. I do not link to any investment body or company. As such, I will not be responsible of any of your investment decision. Consult your investment adviser or come to your own conclusions before making any investment decision.