How are you managing your portfolio now? SGXcafe will do it for you intelligently.
Sign up for free now!

Subscribe to RSS feed My investment strategy

Updated: 26 Jun 2016 By evankoh posted on 15 Mar 2015  -  3,931 views


I generally prefer a buy and hold approach. It is because I view shares of companies as entitlement to profits, and profits of good companies would only increase over time even if their short-term share price fluctuates. Also, capital gain is not recurring income whereas dividend gain is, and the latter is important to me since I am investing to retire.

Of course, the question would be how to differentiate "good" companies from "bad" companies. Here, I would like to hypothesize that in a capitalist economy, a company with strong capital can attract good talent, invest in better technology, etc. would statistically have a better chance of being a "good" company. For any statistics to work, it would need sufficient samples. That is, investing a little in numerous potentially "good" companies is statistically better than investing a lot in a few potentially "good" companies.

Having a portfolio that consists of many companies across many industries in different countries is also great for reducing systematic risk. I use Beta to measure the systematic risk my portfolio has. I try to keep the Beta of my portfolio close to 0. In the short term, a portfolio with Beta close to 0 is less sensitive to market movement and hence has smaller portfolio value fluctuation.

In summary, my strategy is simple. Build a portfolio of Beta close to 0 consisting of well-capitalized companies across industries and countries. I prefer to buy stocks when their RSI indicator is low (close to 35) because it is an indication that they are currently undervalued. I rarely sell stocks after I buy them. I also have a tendency to purchase stocks that are paying good dividends now because that is an indication of good cash flow.

What about you? Care to share your investment approach?


Like
1 likes
0 comments



Next Article > < Previous Article
How "unlucky" can you get from ... How to use SGXcafe?



List All Articles Other articles by evankoh

Introducing the New Wall
As mentioned in the first article of 2017, one of SGXcafe's focus is to improve mobile engagement. So here we are, with our first baby step. I was never a fan of how SGXcafe's home page was as it did not allow users to easily catch up on the latest happenings since their last visit, and the format was not mobile-friendly. Hence we are introducing a Wall that is inspired by Facebook's feed where all ...

Coming Back Soon: Dividend Information and More
It has been two weeks since my last update. I am happy to share that most administrative issues with SGX and third party data providers have been handled. Next on the list would be to tackle the technical issues of integrating data that I have licensed into SGXcafe. I have already started integrating dividend information, since this is something numerous users have been asking me about. At this point ...

Frequently Asked Questions
I regularly receive questions related to SGXcafe and often the same questions are asked over and over again, hence I think it is time to consolidate them in one place. This article will serve as a placeholder for FAQ and I will update this article as I receive more questions. How do I use SGXcafe? While I constantly add new features to SGXcafe, they will be centered around two themes: Helping you manage ...