The Straits Times Index (STI) was up 10.2% since the start of 2017 on the last trading day of April.
However not all 30 component stocks of the STI were doing well.
|Hongkong Land (USD)||6.33||7.71||21.8%|
|Jardine Matheson (USD)||55.25||64.53||16.8%|
|HPH Trust (USD)||0.435||0.405||-6.9%|
|SPDR STI ETF||2.94||3.2||8.8%|
Stocks like StarHub, Wilmar Intl, SPH, HPH Trust and Golden Agri-Res were negative. Even dividend stock like Singtel could only manage to increase by 2.5%.
At the top were stocks like Yangzijiang Shipbuilding (+41.1%), Global Logistics (+30.9%). These stocks were in the spotlight because they are merger and acquisition potential by suitors.
This time round the property developer counters like City Development, CapitaLand, Hong Kong Land, and UOL were ramping up and playing catch-up with better property outlook in the current economy.
Picking winners require lucks. It would be speculative to know which stocks would be take-over targets. The property counters got a boost because the Singapore government relaxed some property cooling measures on 10 March. Who would know that this is coming when the Ministry of National Development had been saying it was not time to relax the measures yet?
Even when the STI had gone up 10.2%, it was just the composite figure of all 30 stocks. Individual stock painted a different story. One can still be owning stocks that were not winners. That is the reality of investing in specific stock.
One recommendation is to buy into STI ETF, which is a basket of stocks that make up the STI. The SPDR STI ETF was up 8.8%. You spread the risk of picking losers and not picking the winners.
Copyright © 2017, limkimtong for Living Investment
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