Portfolio Allocation (February 2020) - Brace Yourself

Stock Allocation

Portfolio Allocation

The market correction has arrived. There was no transaction for the last 3 months, cash and SSBs are building up, so it's time to take out the shopping list!

The outbreak of Covid-19 has been more than a month and the market has remain quite resilient until now. In fact for Singapore, the situation has much stabilized and crowds are starting to reappear in shopping malls, minus the tourist. When I read that STB estimates a drop of 25-30% in tourist, I thought that it was a very optimistic estimate. But the Singapore market is too small to have any influence on the world markets. What is influencing the world markets is US.

When US had the first patient with an unknown origin, the panic sets in. The market immediately reacted to the news and plunge of the cliff with the rest of world following. The first thing that came to my mind was that the virus has been around for more than a month and only now the panic starts? Do western really thinks that the virus only infects Asian people?

In Chinese, there is a saying "不见棺材不落泪". Literally, not to shed a tear until one sees the coffin. I guessed the world is really starting to panic. What if the virus could not be contained. If that is the case, we could be looking at a global recession.

Temasek Holdings has started the ball rolling by freezing wages. Followed by their respective companies which they have control in such as SATS, CapitaLand, SMRT etc. Even the ministers are taking a pay-cut. The economy is definitely not looking good. The SMEs will probably followed by either freezing or cutting wages, hoping to avoid retrenchment if possible.

Having said that, I think the bull market could have come to an end and it will be the start of the bear market. I am not a trader, so a bear market is the opportunity for me to accumulate assets. I will not do any panic buy or sell transactions, and pace my purchases over the next few months.

There is also an upcoming REIT IPO, United Hampshire US REIT which caught my attention. It looks quite attractive at first glance. But given the market condition at the moment, I will have to give it a deeper thought.

InvestingNote Profile: @SingularityTruth

Facebook Page: @SingularityTruth