test4

Friday, January 29, 2010

Strategies for managing my expected downturn

Ok, I'm expecting a 3 waves down for Primary 2, given that Primary 1 has completed at 2947.

So what are my strategies? I'm not one to short or do day trades since I still have office work to look after.

1) I will be conserving cash from salaries and dividends to prepare to load nice stocks.

2) Looking to exit certain trading stocks if possible. Do not be greedy. Lesson learned from LC Dev recently, where I went from $400 paper profit to $600 in paper losses now because I was too greedy not to take profit.

3) Maintain lookout for nice dividend stocks. On my radar are the following at the moment:
i) SingPost
ii) MapleTree Logistics
iii) CapComm
iv) Starhub
v) SPH
vi) UOB Kay Hian
vii) CitySpring
viii) SP Ausnet
ix) Kepland
x) K-REIT

4) If market is really too low, I will look into the possibilities of using DBS Share Financing to finance further purchases. My active income + dividend income should be able to repay the Share Financing in good time... DBS Share Financing allows borrowing of money to buy stocks using the value of stocks in my CDP as a collateral. I could go up to 200% leverage, but I think I will at most go up to around 100%.... High dividend and stringent stock selection will have to be employed here....


Million dollar question is, will I be right that the market has reached a multi-month top at 2947? We will have to see...

2 comments:

  1. Hi JW,

    Was quite alarmed when I read about your plan to use the DBS Share Financing thing. My strong advice: Never borrow to purchase shares or to trade.

    Regards,
    Musicwhiz

    ReplyDelete
  2. Hi MusicWhiz,

    thanks for your concern. It's just an option, but it won't be an option that's easily employed, although the maths work out right so far.

    I will definitely conserve cash and dividends. :)

    ReplyDelete

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