2020 Bear Market Strategy

This colourful bear reminds us that there are ample opportunities amidst the market turmoil. Am sure we all would love to emerge with that smile on our faces after the dust has settled!

While we love our real estate, we are firm believers in diversification, so here are some "alternative asset" (read: non- real estate) food for thought:

Choices, choices, choices?

Stock picking or index investing: which index? which industries to focus on?

Investment universe: SG or non-SG. This is linked to my view on FX risks. Also affects my choice of stock broker

How to time market entry i.e. what are the buy signals (monetary bazooka/ fiscal bazooka)
[side note - quoting from a news article - we will know we have reached the bottom when there is massive undervaluation across the main asset classes *wink]

Average up or average down? Is the distinction relevant since the precise bottom is difficult to ascertain?

How much cash to retain

Whether to employ leverage

The Current Approach

Below is deemed appropriate given my risk appetite, liquidity position and age.

Strategic asset allocation
65% equity 35% bond and cash
(above excludes real estate since this is (a) typically leveraged (b) important enough to monitor separately)

Update on 6 Apr 2020
(stating the obvious/reminder to self)

• Focus on oversold stocks (semi conductors, real estate)
• Focus on resilient stocks (consumer staples, healthcare, communication services - demand is independent of economic cycles)
• Focus on longer term beneficiaries (remote working, telemedicine, cloud computing etc.)

Stock Picking Watch List

a) Banks

• OCBC (vested)
• DBS (vested)

b) REITS (to consider geographic exposure and tenant profile)

• Mapletree North Asia (vested)
• Ascendas REIT (looks fully valued)
• Parkway Life
• Mapletree Commercial
• Fraser Centrepoint
• Ascott Residence Trust (vested)
• Suntec REIT (vested)
• SREITs consider DBS view (GSS anyone?) here

c) Hospitality (full or partial exposure)

• SATS (vested)
• Guocoland (vested)

d) Other perceived undervalued

• Netlink NBN
• YZJ SGD (vested)
• Comfortdelgro (vested)
• Capitaland (vested)
• ST Engineering (vested)
• Wilmar (vested - UPDATE: realised in mid-May)

ETF Watch List

• STI ETF (vested)
• IWDA (vested)

Trading List
(volatile and adequate trading volume and income yield)

• AIMS APAC
• Accordia Golf Trust

Considered but ruled out (based on current market price) due to risk appetite mismatch

• First REIT
• RDSB

What you can do

Do you have a strategy? What is your strategy in this volatile market and how are you executing? Will you get enough returns for the risk you are taking on? What is your investment horizon?

Remember: Price is what you pay, value is what you get!