I feel that I may be better off if I have not invested, is it?

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

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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2 Responses to I feel that I may be better off if I have not invested, is it?

  1. BlackCat says:

    If you started in 2008, you will know how much stocks can go up. And how much they can go down….The most important thing is to have a plan that you can stick with. Good luck!

  2. Focus more on the total returns, rather than dividend yields, if not it can be a left pocket in, right pocket out situation like what you have experienced.

    Evaluate stocks on an individual business basic, rather than blue chips, non blue chips, or companies that give dividends or not.

    Over the long run, if you have not beaten STI returns, it might be a better choice for you to start afresh and re-evaluate your method of investing.

    Investing in blue chips does not reduce the risk of investing in equities.

    In my short years of investing and screening for stocks so far, i have not come across any blue chips that is value for money with a good margin of safety. To many, it can be the comfort zone that many craved for, but it might not be so.

    Index investing can be a good choice depending on your risk appetite.

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