Done with the review, its time to set targets and develop action plan for 2018.
First, let me share my “crystal ball” of 2018.
I think the various stock markets will retreat from the current heights, probably by 10-20%. The decline is not due to major market shocks but rather a lack of new stimulus to boost the companies’ returns. Unlike 2017 which had several uncertainties and hopes, eg the US tax reform, the first year of Donald Trump, the China-US relationship under D.Trump, the reaction of US to North Korea, China Mr Xi and his consolidation of power during the important Communist Party Congress, Brexit negotiation, the elections in Netherlands, France and Germany etc, in comparison 2018 has fewer of that (at least at this point in time). The fact the world was able to clear all these uncertainties in 2017 peacefully and satisfactorily was one major reason for the market exuberance seen.
Furthermore, 2018 will see rising interest rate. We will also get more details of how Brexit is going to take place and how the Middle East issues are going to pan out. I also think that China will see a slower growth rate than 7%. Oil price is likely to stay at $50/bbl.
So, with this in the background, I am aiming to achieve the following targets for the various portfolios:
(1) Income Portfolio = To achieve 5.00% dividend yields and <5.00% loss in capital value invested
(2) Index/Permanent Portfolio = To achieve 3.25% dividend yield and no loss in capital value
(3) Growth/Value Portfolio = To achieve 5% return in dividend + capital value gain
(4) Singapore Saving Bond = To reach 100% of the maximum investment allowed
In order to achieve these targets, the following is my action plan for this year:
(1) Income Portfolio = Minimal selling and selective buying of undervalued companies to maintain 5% dividend yield. Reinvest dividends into income portfolio. Performance to be reviewed monthly.
(2) Index/Permanent Portfolio = Add new investments to this portfolio to reach desired ratio between bonds/equities/gold/REITs by end of January. To maintain monthly purchase of ABD SG Bond and STI ETF. Performance to be reviewed quarterly.
(3) Growth/Value Portfolio = To optimise the portfolio by timely purchase and sales of companies to maximise returns. Performance to reviewed fortnightly.
(4) Singapore Saving Bond = To continue regular purchase of SSB until maximum investment allowed. Then to re-optimise by redeeming lower interest rate SSB for higher rate.
(5) Read one investment/financial related book a month
(6) Attend at least two seminar/workshops/learning event to learn of other investment methods and tools
(7) Contribute at least two blog posts a month
(8) Increase interactions with other financial bloggers by providing constructive feedback/comment to their posts/blogs and replying in a time manner to comments posted on my blog
(9) Achieve sufficient readership on my blog to offset the cost.
I am determined to achieve these targets and will share my progress on the blog regularly.
As always, any comments from you to my targets and action plan are most welcome.
Wishing everyone a safe, prosperous and Happy New Year!