Newbie's Blog: Strategies for the year ahead 2

Jo Tan
2022-12-25

As this year ends, I am struggling (yes, struggling) to reflect on what to do on the year ahead. I'm a middle class guy (not born with a silver spoon or anything) with a mortgage loan but a stable job (just middle level). Of course, I'm always thinking about investing because like almost everyone, I want to break out of the rat race. Although this is my 3rd article under this topic, I'm constantly thinking about how I can improve my strategy for new year, yet reinforcing some principles so that I have some guidelines to invest by. In my situation, se of the primary things intend to do are:

1. Having a mortgage to pay and a family to feed, prior to investing, it is important for me to allocate a certain amount for savings. I have to take into account the higher cost of living next year, especially for basic food items and transport (I take a BMW, bus-MRT-walk). I have decreased my frequency of private hire transport as I want to save more to invest more. As taxes are rising next year (by 1%), I will also spend less in restaurants, save for special occasions like CNY, etc. This may mean eating at home more.

Oh yes, I also have to prepare for higher interest rates on my mortgage, which could mean a little less for investing.

2. With the basic set aside, comes investing. Like what I learnt mid last year, I intend to continue holding my stocks for the long term. I sold off some of my stocks this year so as to take advantage of the fall in stocks. I know, I know, that I shouldnt time the market but I sense the fall coming. This has worked for some of my portfolio. Now, as I buy them back, I am also waiting for the correct entry price. This will allow me to hold them for the longer term and prepare for any fluctuations (psychologically, I mean, when it drops).

3. I also plan to DCA a bit more and to time the market less. Look at next year, while the frequency of rate hikes will still be periodic, instead of selling off my stocks, I feel it is better to accumulate them when the prices fall. I anticipate that the market could improve towards the end of the year but again, this is only a forecast. Likewise, I only plan to buy in small lots. While this may cost me more in admin costs, I find this better to weather again large drops. You can see that I would rather adopt a slow but steady pace as opposed to an "All-in" mindset.

4. Buy red, not green. I am learning to hold off the temptation to buy when a stock is rising and purchase it only when I think it's low enough. Of course, this is only if I think that the stock has room to grow. I have in mind $Grab Holdings(GRAB)$  of course. $Tesla Motors(TSLA)$  keeps tempting me but I have certain reservations you can read about in my earlier articles. This strategy will be used in conjunction with my DCA strategy so I can always continue lowering my average. However, to be honest, I have not learnt to differentiate when a stock price is actually growing, so I can there will be a point of time I will not be able to always lower (point of note for me to learn).

5. Change is constant and we need to learn to adapt. This is an oxymoron because I'm learning to hold on to stocks for the long term. Related to point 1, I have learnt that investing in stocks requires a long term perspective over the years. This may mean being steadfast in holding on but adapting by choosing different stocks when macro conditions change. This year was an eye opener when covid struck and the war hit but this all means that it's important to choose when to buy and what type of stocks to buy (this year has been a good year to buy defensive stocks like $DBS GROUP HOLDINGS LTD(D05.SI)$ , I feel). Therefore, be steadfast but adaptable and ready for change!

6. Lastly, to continue learning. I honestly hope I will be able to control my risks so as not to be disappointed if my fundamentals are wrong. This year, I almost quit once when I lost a lot of money in June-July ($800 in Tesla, sigh). Investing is a journey and you can only learn along the way and if you apply. I keep telling myself I shouldn't quit (even if I'm down 3k today), otherwise it would not be worth it. This means only investing in what I can lose and being ready to cut loss when it is necessary. Again, this is something I am continuously learning.

In summary, I hope to be able to give a review next year end again to see if my strategy needs tweaking. Thank you for reading!

@TigerStars  @TigerEvents  @MillionaireTiger  @CaptainTiger    

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Comments

  • Ericdao
    2022-12-25
    Ericdao
    Grab is definitely a buy for long term. DBS good too. Tesla is the same like alibaba. Never invest what makes u loss most, bcos u will likely to loss much more. Cheap can always be cheaper. Tesla position will be eroded, Elon know.
  • MadAndy
    2022-12-25
    MadAndy
    learn to value the company and not just the stock. Given a company, you should be able to look at its accounts and projections and come up with a value of your own. If the stock is cheaper than your value then buy it in confidence.
  • LMSunshine
    2022-12-26
    LMSunshine
    Actually I think you made a good move to ⏱ the market and sell. Unrealised profit is not a profit until we sell😉
    • Jo TanReplyLMSunshine
      yes I will think about that
    • LMSunshineReplyJo Tan
      Maybe have a think of what’s the profit margin that you’re content with? Many times I held and I lost profit too😅 From profit become loss
    • Jo Tan
      yes but I lost profit as well. I am rethinking my strategy to hold instead. I feel I went against my own strategy.
  • WS_long
    2022-12-28
    WS_long
    U r still fine?
  • Lionel8383
    2022-12-26
    Lionel8383
    What i learnt is to be more stringent on companies you choose for longs. ROE and ROIC numbers are important, i realised if you dont stick to it, you get a haircut.
  • Last one standing
    2022-12-26
    Last one standing
    Ermm are you trying to trade or invest? Looking at how you try to save money from food and transport only to be willing to lose it in the stock market, I suggest you just focus on buying SG banks and at most US ETF like QQQ or SPY. Don’t aim for single stocks & pray they fly to the moon. The current macroeconomics is totally different from 2020-2021. Don’t expect things will change so soon. Life is unpredictable, better to buy the safest stocks, sleep in peace, collect the dividends, reinvest them and spend some money to pamper yourself and family once a while.
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