Lessons learned on investing in Singapore equities

Right timing to market had been difficult to achieve.

M1 and StarHub

I started to look at M1 and StarHub at the start of 2015. I knew back then that both paid consistent dividends and their dividend yields were good compared to other stocks. I was prepared to pay the prevalent prices of these stocks back then not knowing that prices were to drop from late 2015.

Average cost of purchase for M1 was $3.68. Now it was trading at $2.47 (-32.8%).

Cost of purchase for StarHub was $4.23. Now it was trading at $3.31 (-21.7%).

Dividend yield in 2015 for M1 (based on cost of purchase) was 3.8% and for StarHub it was 4.7%. Dividend yields were good.

My timing was off on these investments. In July 2015, IDA stated in media briefing on the release of spectrum for a fourth telco to enter the mobile market to compete with Singtel, M1 and StarHub. Investors started to sell down both M1 and StarHub ever since.

My second lesson learned was investing in Oil & Marine sector. I went in to accumulate SembCorp Marine in 2015 as its share prices were declining. I already owned this stock bought in 2013 and 2014.

SembCorp Marine

Purchases made:
Apr 2013 at $4.30
Aug 2014 at $3.98
Jul 2015 at $2.63
Aug 2015 at $2.35

Currently, it was trading at $1.67. That is a drop of 50% from my average costs.

Oil prices started to decline from US$100 per barrel from mid-2014 to about US$40 now. This impacted global production of oil and SembCorp Marine was dragged down by cancellation of rig orders and bankruptcy/poor performance of some oil producing companies.

It was greed that I went in to accumulate stocks in July and August 2015. It was dollar cost averaging I was after. But it was a wrong move.

Was I able to see these events happening at the time of purchase of these stocks? I went for brand names and historical performances to make my decisions. I was blind-sided and did not foresee the macro-events impacting these two sectors.

I learned.

Disclaimer: The author disclaimed liabilities on use of this post by readers for investment decisions. Use them with caution.

Copyright © 2016, 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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One Response to Lessons learned on investing in Singapore equities

  1. smk says:

    what did you learn really?
    – brand names and historical performances?
    – not forecasting macro events?

    maybe, what you must have learnt is that dollar cost averaging is really for people who
    1. long time horizon – 20 year olds retiring in 30-40 years time
    2. mid term uptrending markets
    3. active income is so much higher than investing capital growth that time spent on investing is counter productive towards wealth growth. so they don’t really bother even if the stocks they bought are going down a bit in the mid term.

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