I am talking about Singapore equities.
The experts would always say that we have to stay invested to reap the rewards of dividends and future appreciation of investments. This is better than not doing anything and allowing inflation to erode the value of our idle money. Well, it is not that straightforward.
Since July 2015, my Singapore equity portfolio had suffered double-digit percentage drop in value. It got worse month by month. It is now 23% down on cost of investments. To think that buying into blue chip stocks would reduce the risks of investing in equities. This was far from the truth. Such is the state of Singapore equities.
If I have not invested, the principal sum of my money is still kept intact. This argument seems right on the surface. This is accurate on the one hand. On the other hand, we do not then enjoy the dividends declared by these companies. Based on my experience, my dividend yield averaged 3.0% per annum.
So where do we stand? Is there a good time to invest in equities?
I believe that Investing is for the long term and I am not advocating punting. I started investing in Singapore stocks in 2008, nearly 9 years ago. Over these years, my total dividends received are more than adequately cover the paper loss on my current investments. When Singapore economy does recover in the future, the overall stock market would rise again in tandem. The current paper loss may be reduced in the process (provided these blue chip companies do not fold before then).
Copyright © 2016, limkimtong for Living Investment
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