Aboi's Updates For June 2014

KLSE TECH REVIEW

Here's the link for my last market sense: Aboi's Updates for April 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 April's commentary. 
[1]  However I see no fundamental reason why the index would go higher at this month of the year though my end of year Bursa target is still 2000 (assuming no financial crisis). For the month of April I've created two resistance lines @ 1850 (can be breached anytime) and 1880 (though it is highly unlikely). Indeed. It did NOT breached 1880 and we had a mini bear until mid month until it came back hovering lower than 1870.

Unfortunately I did not post an article about May so let's talk about June. I've created two resistance lines @ 1890 and 1900 (though both not likely). Two supports line namely 1870 (profit taking) and 1850 (pullback). However indicators looked weird. RSI and volume shows no clear signs but RSI do suggest a crossover maybe imminent while MACD shows bearish more likely to outweigh the bull. Volume is a huge surprise. I did not follow more recent news but something is brewing, smart money is planning for a move. The volume coupled with lower closing shows an up thrust which to me is a sign of weakness. It would suggest to me to conclude that the sell in May trend (Sell in May and Go Away) is becoming sell in June - opportunity to accumulate some positions coming?. No change to my end of year Bursa target of 2000 (assuming no financial crisis).

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.


Second, my portfolio reversed May losses
Added a small figure of RM400 but reversed the losses incurred during May of roughly RM4500 so that's good. Once you get into fundamentals of stocks and have good holdings, you will learn to ignore emotional swings like me :). Supermax finally corrected after it's great bull rush, however it's still a SOLID BUY. Last checked, Supermax is heading for more exports overseas! Icap managed to add some value after months of trading sideways. All mutual funds performing well and nicely. Kenanga gave a handsome income distribution. I also increased my position in Aberdeen's World Fund. Read my post Aboi To Finally Invest In Aberdeen Islamic World Equity Fund about exposure into developed markets: US, Europe and Japan.

PORTFOLIO REVIEW

Portfolio composition. Equities 50%, Mixed Assets 15%, REITs 10%, Bonds 5% and Cash 20%.

Targets for returns p.a. Equities 12%, Mixed Assets 8%, REITs 6%, Bonds 5% and Cash 3.75%.

Notes
**Changed Supermax from HOLD to BUY, lower than fair value.
**Changed Genting from BUY to HOLD, recent aggressive expansion impacts future cash flow.
**Changed AmDynamic Bond from BUY to HOLD, impeding interest rate hike does not bode well for bonds.

**Kenanga Growth Fund gross income declaration of RM0.06/unit. (announced but not yet received; this causes initial drop in net asset value; if reinvested: 483 new units or RM479 in cash)
**Added another RM2500 into Aberdeen World Fund.
**Added AIA endowment fund as part of cash management. To date since obtaining it in 2011 has performed on par with fixed deposit interest rates or ~3.50% to 4.00%. Total returns depicted is less due to early years higher charges. I swapped this with my cash holdings so I can personally use the cash.

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 10.90% vs my target of 8.80%).


Updated 'My Plan' for 2014
***Please NOTE that KEEP IN VIEW is not the 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. Added more positions in April. Last will wait for end of June.
[2] Invest in a new mREIT: Time To Revisit mREITS in 2014 KEEP IN VIEW, waiting for opportunity when yields are right. Still monitoring.
[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: Speaking Of Recent Gold Demand Trends KEEP IN VIEW, my opinion is that gold will see resistance at $1340. Gold is experiencing correction now, very promising. As expected gold is correcting. Be patient and wait.
[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. Will do this for May update. Integrated.
[6] Taking a look (not invest) at Padini holdings. CONFIRMED and expect a post within this week. I promise to have one in June.
[7] Put some cash into Fixed Deposit.  CONFIRMED. Pushed to end of year due to opportunities that maybe coming.


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.