Mid-May update

Hi friends,

At the beginning of the month of May, or in my previous update post, I have predicted that the stock market would be falling soon. During these two weeks, even with an increase in the amount of unemployment in the US, the stock market has continued to defy expectations and climbed even higher.

In view of that, I have decided to withdraw the profits that I have made during this period as I foresee that there can be another fall coming. Not to worry, as I will still continue to DCA into it. I am doing this as I want to lower my entry price if the stock market is going in the direction that I am predicting.

But yes, do not take what I am saying as the truth. I do not have a magical crystal ball that tells me when and what stocks to buy. I am just following what my knowledge is telling me; that the stock market and the economy are highly related and hence, a fall should be coming soon.

I wrote the above last week. Turns out, I was right. 

Let's talk about the changes that happened:

1. I started my internship at an urban farming start-up
2. My university has approved my Covid-19 support grant application, and loan me $1000 to tide me through this period (thank God)
3. I got rejected for a part-time internship with Unilever
4. The stock market rally ran out of steam and there was a market drop of around 4-5% and rebound 3% a few days later
5. Stashaway changed the portfolio approach. 

Let me elaborate on point 4 and 5:

Point 4:
Ever since the 30+% drop 19th Feb to Mid March, there was a rally of 30% gain from Mid March to Mid May, bringing a loss of 13.48% from the all-time-high.  But suddenly, the rally seemed to have run out of steam and we can see that the index has started to go sideways. Now everyone is saying that a second drop is coming (Which I agree). 

I have managed to take out 80% of my stocks portfolio one day before the drop occurred and transferred them to a money market fund (All part of my plan). I also plan to continue DCA-ing. It is somewhat kinda surprising that the day I pulled out is the day that the dropped occurred. So yes, I was lucky. Please do not follow my example. '

Point 5:

Stashaway has changed its portfolio allocation:
1. Equities (US) 39% - Small Cap, Healthcare, Consumer
2. Equities (International) 33% - Asia ex-Japan, Emerging Market, China (tech)
3. Real Estate 7% Global ex-US REITs
4. Commodities (Gold) 20%
5. Cash (SGD) 1%

This is causing me a bit of an annoyance as I still wanted to be invested in the US large-cap equities. I guess I will have to maintain a large-cap exposure through another platform. But yes, other than that, I will continue my relationship with Stashaway, for those interested, you can look for me for a referral to get $10,000 free management for 6 months together. 

So my investing direction has changed:

1. I will be investing $600 into Stashaway monthly, while using another platform (Kristal), I will be investing around $200-300 into the S&P 500. (I believe that we will be falling further)

2. I will still be trying to time the market for the SG Reits ETF. I already have a target price which I will be entering. 

With that, 
I end today's topic. 

Stay vested, Stay frugal my friends,
Dionysius