New Year Resolutions

Since there is only 3 weeks left for year 2006, I figure that it is wise now to start setting my next year resolutions. For the sake of matching the theme of this blog, I will only discuss my investment resolutions here. Nevertheless, I do agree with many others that life is not just about money, there should be many other things more to achieve and do while alive.

Well, while having other personal resolutions, I think that, sincerely, all those listed here are the most direct and perhaps easiest goals for me to execute and achieve.... hahaaa. Reasons? I think I have a clear mind what to do with my investment and next year is a cautious year for me, thus I have no aggressive goal. Oh yeah, it is also because I need to put more efforts into my other more complicated personal resolutions....hehee...

So, there are only 3 main goals for my investment next year:
1) Achieve 10% nett return for equity, bond and cash that are set aside for investment
2) Maintain 4% nett return on property
3) Increase RM50k on my net worth

On my first goal, I need to boost my return as much as possible before end of 1H 2007. I reckon that when I switch from equity to bond fund in the 2nd half of the year, my expected return will likely less than 10%. In addition, the target of 10% return is including the cash that I will allocate for investment. Hence in term of actual value, I am targeting to achieve roughly RM20k yield. Unfortunately, I am not ready to share all my investment details yet. I feel more comfortable to leave some privacies on the amount of cash and other personal net worth I have at this point of time. My apologize for that. Specifically on stocks, I am targeting to gain additional RM10k by end of June '07, before cashing out from KLSE and settle to 10:90 of equity to bond ratio.

For my second goal, I need to start looking for new tenant after March next year as the current one will end in June. I cannot afford to leave vacant for more than a month with the property, unless I can find a new tenant myself and save on the additional 1 month commission to agent. My strategy is to talk to my current tenant next year and pay him some money if he can find me a new tenant as soon as his one ends. I expect that will be easier for a foreign student to get his pals to rent my place than scouting for new one myself.

On my last goal, its success is really depended on how well I can execute my first and second goals. If I managed to achieve the first 2 goals, that will only leave me roughly RM25k to grow. From my past record, it is not too difficult. With some salary increments factored in, all I need to do is maintain my current level of life style and minimize the big ticket purchases, especially purchase of those "nice-to-have" tech toys... hahahaaa.

Last but not least, along the course of making money, we must not forget to give back bits and bites to the society. Hence, it is one of my small resolutions next year to donate 2% out of my net worth growth back to the charity and people in need. Also, I would like to declare that all income generated from this blog (thanks to all my readers) will be donated out. Hopefully I will receive my first AdSense paycheck in next year and to all my fellow readers, please let me know by then your choice of charity to donate to!

Portfolio 09-Dec-2006

Week to week, my portfolio value gained 5.13% against KLCI rise of 1.71%, owing to the sharp increment of Magnum and Tanjong.

On Magnum, although I mentioned that I will consider to dispose partial of it when it reaches RM2.40 last week, it ended that I did not sell any. This is mainly because from technical point of view, the strong rise in price (passing my RM2.40 target) together with volume, in my opinion, should not be a short stint. I decided to hold it a bit longer.

Tanjong should reveal its quarterly earning in the coming week. For the past 2 quarters, Tanjong results have not been encouraging. As we approaching to the end of year 2006, I am also looking forward for the finalization of long dragging IPA issue. For these two reasons, I decided to put my bet on Tanjong and hold it until there are the announcements. Again, on the IPA matter, I strongly believe that Tanjong and others power providers will not settle on any severely disadvantage deal, base on the length of negotiation time taken.

On my bond fund, there is only a small negligible increment of 0.2-0.3% last week. It current value stands at RM51495.16, from RM50000 invested since early Sept.

Public Mutual Bond Funds (Part 2)

Public Enhanced Bond (PEBF)
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities redeemable loan stock and money market instruments. It may also invest up to 20% of its NAV in equities of defensive stocks.

Q2 2006 Investment spread:
Fixed income securities - 66.5%
Money market - 15.5%.
Equity - 18%

Comment: Obviously, this bond fund does consist of ~20% equity. In my opinion, regardless how defensive these stocks are, they will still be swung by big market when KLCI starts tumbling. In addition, I prefer to control the equity:bond ratio myself by invest into the 100% bond fund and selectively choose my own "defensive" stocks.

Public Select Bond (PSBF)
Strategy: Primarily invests in fixed income securities which has a remaining maturity of 7 years and below. It may also invest in redeemable loan stock with convertible features.

Q2 2006 Investment spread:
Fixed income securities - 39%
Money market - 61%.

Comment: In my opinion, it is a very conservative bond fund. By limiting the selection to short and medium-term bond, this fund can minimize the risk of inflation, interest rate fluctuation and probably defaulting risk. However the equation of low-risk low return cannot be altered. I think it is only suitable for investor who is very risk adverse or very pessimistic of the future economic outlook. But if that's the case, why not just put into bank's FD?

Public Mutual Bond Funds (Part 1)

Below are some information that I got from the Q2 2006, quarterly mutual fund report from Public Mutual. It is not the latest info but is sufficient to give anyone an idea on the different investment startegies applied by Public Mutual on its various bond funds.

Public Bond (PBOND)
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities and money market instrutments. It may also invest in redeemable loan stocks with convertible features to enhance overall returns.

Q2 2006 Investment spread:
Fixed income securities - 95%
Money market - 5%.

Public Islamic Bond (PIBOND)
Strategy: Invests in Islamic debt securities such as Islamic sovereign bonds, corporate debt securities and the balance in Islamic money market instrutments.

Q2 2006 Investment spread:
Fixed income securities - 70%
Money market - 30%.

Comment: Not much different in term of strategy from PBOND except bond selections are limited to those with syariah compliance. Higher % in money market tools.


Public Institutional Bond (PINBOND)
Strategy: Invests in fixed income securities such as sovereign bonds, corporate debt securities and money market instrutments. 50% bond must be minimum "AA" rating while the balance is not less than "A" credit rating.

Q2 2006 Investment spread:
Fixed income securities - 80%
Money market - 20%.

Comment: Although its name has "Institutional", but one glance on the major securities holding reveals that >25% was invested into M'sia Government Bond. Rather misleading with its name...

I will continue this in part 2 as I have too short of time to compile all at once.

Portfolio 02-Dec-2006

KLCI continues to rise 1.86% this week, hitting 1080.11 points, a 10-years high before the Asian financial crisis. With the current local and U.S. economic fundamentals, I am a bit worried on the speed of this bull. I am afraid we are going too fast over the cliff and will face with a hard crash later. As a matter of fact, it is the law of nature that what goes up will eventually come down. Hopefully for KLCI, it will be a soft landing. This is possible if there are more corrections coming in to support the current level, and both local & U.S. governments manage to improve the economy in short time. At the minimum, keeping down with inflation and for god's sake, take less corruptions!

My portfolio outperformed KLCI this week, gaining 3.42%. This is largely due to the rise of Magnum and Tanjong. Magnum has finally broken the RM2.30 level in the last minute of market closing. MPHB also reported they have gained an additional 9% of Magnum share through open market, raising its share holding on Magnum to 49% on 27-Nov. Thus, I believe that the last minute surge on Friday is due to further share acquisition in order to meet the 51% level. If the surge is sustainable next week, I will consider to dispose partial of Magnum stocks at price >RM2.40. As for Tanjong, I will still hold it, maybe until after its earning report in the coming 1-2 weeks as it is still far from my target price.

On the other hand, as bond has an opposite cycle compares to equity, both my PBOND and PIBOND only increased 0.25% in value on week to week basis. Nonetheless, I am pretty happy with the investment and so far, it has given me about 2.6% return (or ~12% p.a.) in 3 months time, much better than bank's FD. I am considering to put in more money when I start cashing out from equity. In fact, it is the best time to go into bond when share market is rocketing high.