KLSE TECH REVIEW
Here's the link for my last month's market sense: Aboi's Updates for October 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.
Recap - October's commentary.
" Bursa did breach my support 1 @ 1860 and thus I've moved it to 1840. I shall define trading sideways as in +2% to -2% of total index points to make it really measurable. The most forthcoming event would be the tabling of Budget 2015 on October 10th. Until then we wouldn't know the winners and losers of the economic sectors so expect it to trade sideways in the next 10 days." - What an spectacular month. Not only did Bursa breached any imaginable support line all the way to less than 1800, it also bounced back extremely quickly above my same support line of 1840. Now it is trading at 1854. This is largely due to the US market correction. I think it would be difficult for Bursa to hit 2000 by year's end, more likely 1900. Budget 2015 was disappointing. It lacks substance and destined to be the same old thing. Construction sector stands to gain again from the budget as it always does due to a slew of government initiated infrastructure projects. You may read more from my previous post: Budget 2015: Same Old Thing. I will set a new resistance of 1875 and support line of 1840 for the month of November.
Key economic news and market update from AMP Capital's economic update (FoC, updated every Friday):
1. US Federal Reserve's long anticipated ending of its Quantitative Easing program (print money to buy bonds).
2. This QE is being replaced by Japan where its Bank of Japan has announced a new EQ program of around ¥80 trillion annually. ECB will help fill the rest.
3. US midterm elections is due in November, Republicans will likely increase their House majority and get a small minority in the Senate. Will this mean more divided government because the president is a democrat?
4. Reserve Bank of Australia will likely maintain the interest rate at 2.5% and not raise interest rates until 2015.
Portfolio - Marginal losses but recovering
The market correction has obviously hit my portfolio, nevertheless I did not perform any panic selling nor did I do any day trading. Holding on to fundamentals, the securities across all of my investments are recovering and almost back to pre-correction levels. In fact some holdings have been better - Supermax & Genting. Also worth mentioning is how quickly AmDynamic Bond is catching up as seen from the NAV returns (2.66% a month ago, it is now 3.38%). Thus I am changing it from a HOLD rating to BUY. You may read my response to questions from other readers: About Bonds - What? Buy, Sell or Hold?
In October I've taken a look into how to adjust my portfolio position. You may read about it in my previous post The Balancing Act. Due to BoJ's aggressive QE stimulus program, my remaining plans for 2014 would be to [1] possible purchase of gold commodity [2] small initial investment into a PRS fund (Asia Pacific exposure - non-Malaysia). I will blog about these within this month. I still have Padini, and MREITs analysis. I will try to accommodate.
PORTFOLIO REVIEW
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Portfolio target composition. Equities 65%, Bonds 25% and Supplementary 10%.
Targets for returns p.a. Equities 12%, Bonds 5% and Supplementary 3.5%.
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Notes
-Change AmDynamic Bond from HOLD to BUY.
-Change AmDynamic Bond from HOLD to BUY.
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 9.16% (down 0.34% from Oct'14) vs my target of 9.40%).
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.
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