Happy New Year!
We have come to the year 2013, it's time to review our portfolio and plan for the coming year. US stock is performing well in the end of Dec 2012 and at beginning of 2013. Ample of hot money stay sideline last few months started to reposition their holdings, that's why most of the stock markets Index broke the highest record and it could be the start of another bull run cycle.
Back to Malaysia, Bursa reach the all time high record with Index 1690 points. Actually, many retail investors sell their holding because fear of General Election, anyway, seem foreign fund now is not afraid of this event anymore, as they need to park their fund some where.
Create a written Investment Plan if you buy for long term
In the past, I witness some investors sold their “blue chips” stocks and buy a small company's stocks (penny stocks). Many times, they just bought any stock base on rumours. I think the biggest problem faced by them was without a written investment plan. The reason to sell the Investment Grade should be, you have found a better investment option or the company's business started to go down (profit down). Never sell because of the stocks go up in price, or you expect some event going to happen (for example General Election).
Why we need an Investment Plan
If you have written down the Investment Plan, every buy / sell decision will make you think twice if the decision is base on “follow the others” or “follow your plan”. (I believe investment is not how well you do it, but how less you create a mistake) Write down the reason buy / sell a stock so that you keep track the record and create an investment lesson, as there's no better teacher than experience. Believe me, human is forgetful, if you don't write down your plan and review, few months later you tend to forgot and will repeat the same mistake! During the market swings (up or down when people become greedy or fear), it's these written down principles that will help as a guide post. Further, write down the points make one think more clearly and be more intelligent and less emotional. Unwritten investment belief tend to change without direction.
If you ask me what's my investment plan? Mine is simple, I want to create portfolio with consistent / stable income by investing into excellence business that has an expanding value, provide income and adjust for inflation. Then I will come out with action items to list down those potential companies. Anytime when the market correction occur, it's the opportunity for me!
Tips for next few weeks?
Again, as always, I don't really like to tell this, however, most investors still want to ask me if I have any tips... Well, if you want to trade for short term, then can try YTLPower. This stock will become active for next few weeks until Malakoff come with IPO. Don't chase high, buy at the pivot point. (similar to last month, when I write about SPSetia, noticed some investors not making money because of chasing high) SPSetia still good buy if fall near to RM3.00.
That's all for now, Happy Investing!
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