Taking profits and STI

The Straits Times Index (STI) declined 0.74% today to end at 3,284 points. The year-to-date increase of the index was 3.7%. Since the start of 2013, the STI only broke 3,300 points level on eleven days. The highest it had ever reached was 3,321 on 3 April 2013.

The global economy has not recovered sufficiently based on recent release of Gross Domestic Products (GDP) numbers of some countries that did not meet expectations. China is one such case. Singapore went into contraction for first quarter of 2013.

For STI to move higher than 3,300 level and sustain above it will require significant improvement in Singapore economy vis-à-vis the global economy. This does not appear likely in this economic climate.

Selling some equities

At the start of March 2013, I started to sell some equities on certain days to capitalise on higher prices of these counters and locked in some profits. I sold 35% of my total equity holdings and gains realised is 8.1% on cost. This return is better than dividend yields of most companies. It is also higher than 3.7% increase in STI.

I am still invested in equities and will remain so for the rest of the year.

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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