Adjustment to the STI ETF plan.

Maybank Kim Eng recently made revisions to its Monthly Investment Plan.  This directly impacted my ongoing monthly DCA of the STI ETF. Essentially, to clear off the odd lots accumulated throughout the DCA, I will need to liquidate my odd lots before 31 Dec 19. I was hoping that the market recover to a normalised / inflated level before the end of this year so that I can liquidate a portion of that counter for a modest profit. 

DCA of the STI ETF is designed for the know nothing investor whom does not wish to time the maket, but wish to gain diversified exposure to equities at a low cost. Essentially, it grants a diversified exposure of the 30 largest companies in Singapore with a skew towards financials. As long as you believe that Singapore will continue to grow and be prosperous over the long term, and the underlying companies will cement their hold in Asia and participate in the ASEAN growth story, it is relatively cheap compared to its future prospects. That was my orignial thesis when I started out my DCA plan 2 years ago.

Although I believe I had matured in my analysis of investments since 2 years ago, I was still reluctant in letting go of this plan. (This can hardly be said for most ILP and endownment plans). Investing in the present economic climate requires significant stomach for volatility. 


 

When people were chasing for returns just a month ago, I can participate passively without incurring FOMO. 

When the market is collasping below our feet presently, I have easy access to cheap equities without being scared out of wits. 


It is the gut and not just the brain that determines your success in investing. People way smarter and more well equipped with resources than me will still face volatility and short term losses just like any other investor. DCA works pretty well when you recognise you cant be bothered with minute short term fluctuations and believe in your investment thesis for the long run. Accumulating in tranches will be equally feasible as long as you can stay disciplined and not be scared out of the market when the next crash occurs. 

Nonetheless, as I mature as a investor, I could revisit the DCA option to gain exposure to foreign indexes / asset class low cost ETFs. Circumstances change people and I hope I will continue to make sound and good decisions moving forward.

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