Mr Llama loves Unit Trusts. They are Actively managed by Fund Managers, and the latter takes a cut off your portfolio annually.

There are so many websites that says, "Here are what Management Fees do to your portfolio".

Yes, we get it. A simple 1.5% off your portfolio, compounded over 10 to 15 years, has a huge effect on your portfolio.

Mr Llama
Unit Trusts is still beneficial for young working adults like him.
  • Low initial sums of $1,000
  • No brokerage fees
  • Able to diversify
  • Reach to multiple Regional Markets & Asset Classes
  • If Mr Llama wishes to perform averaging or diversification with stocks, he will require a few sums of $5,000. (*$5,000 is the minimum sum to make the best out of $10 min. commission rate in Singapore)
  • With Unit Trust, he can average down, or diversify with sums of $500 to $1,000.
Cons:
  • Non-real time trading (Trades are priced on the next dealing day)
  • Expense Ratio (Annual Fees)
And so... Why does Mr Llama choose to Self-Manage his investments?

Why not go for Regular Savings Plan? Or Dollar Cost Averaging?

Or even, seek help from a Financial Advisers?

Llama Portfolio
Regular Savings plan.. Too conservative.
Dollar Cost Averaging.. Requires different amount of money every month.
Financial adviser.. Yes, if you are willing to pay a Sales Charge, and rely on what others say.

Mr Llama prefers a more hands-on approach. Hence, he has built the Llama Portfolio.
Llama Portfolio has 3 components - Dividend Yield, Trend Investments and Cash.
 Dividend Yields are made up of Unit Trusts that gives a Pay-out in Llama Portfolio.

As of now, Projected Dividends per year - $1,158 (2.895% out of $40,000)

Components:
Allianz GIF Allianz Income and Growth AM
Legg Mason WA Asian Opportunities Fund Class A SGD
Nikko AM Singapore Dividend Equity Fund
Schroder ISF Global High Yield SGD 
Allianz GIF Allianz Dynamic Asian High Yield Bond 
Eastspring Investments Asian Equity Income Fund
PARVEST MULTI-ASSET INCOME EMERGING CLASSIC 
 Phillip Singapore Real Estate Income Fund A
United Asian High Yield Bond Fund 
Templeton Global Total Return Fund A

Trend Investments
These are the 'Trades' Mr Llama has in place to capitalize on short-term up trends.

For instance, he has bought and sold off Turkey Unit Trust, and also Energy Unit Trust. Both of which, were when Borsa Istanbul Index and WTI Crude Oil Price were are their lows respectively.

This is to purely boost the yield of Llama Portfolio.

Components:
UOBAM United Singapore Growth Fund
LionGlobal Thailand Fund
LionGlobal Vietnam Fund
Schroder Asian Growth Fund
HGIF - EUROPEAN EQUITY PD SGD

Cash
Cash is a critical component of Llama Portfolio. This is the reserve in times of Market downturns. There is one thing Mr Llama will do in downturns, which is to simply invest more.

It is simple, and equivalent to why people shop during Great Singapore Sale, of Black Friday Sales.

What should you do before placing any trade?
You can read previous post on how the thought process before Investing into Vietnam Unit Trust.


1. Tell the Market Stance
He will read up Bloomberg or Yahoo! Finance to get a sense of the world events.

Generally...
If there are good news, and indexes like S&P 500 (US) or Straits Times Index (SG) are still falling. This signifies a downtrend.

If there are bad news, and indexes are rising. This signifies an uptrend.

2. Discover opportunities
What falls, will eventually rise again...
What rises, will eventually fall again...

You can identify Unit Trusts that has already fallen alot.

Just go to FSM > Best - Worst Performers.


Source: FSM > 1-month Top Losers
From the screengrab above, we can see that India Equity is in a loss position.

3. Check related Indexes - In this case, SENSEX Index since it is India Equities.
Is the Index in a General Down trend? Is a re-bound possible? If yes,when will be the re-bound?
(*In this scenario, SENSEX rebounded from 1 month low on 31st Jan to 1 month high (close to) on 1st Feb. Hence, I did not take any actions.)

4. Read up news to understand what created the loss.
When I entered into Turkey Equities, it was then, because of potential US sanctions against Turkey. And it was due to a US journalist who was retained by Turkey.

Other than that, Turkish companies had good fundamentals, with their main banks making profits better than previous financial year.

Hence, I entered into Turkey.

5. Have enough Funds to average down
Downtrend is illogical. Similar to 2008 financial crisis, stocks were dropping to irrational levels.

To some, it may signify fear. To me, it is a bargain.

So, always have enough Funds to average down in Indexes that has fallen alot, but has some fundamentals to it.

I am still not perfect at "Trading yet", especially on taking profits. I tend to take profits alittle too early. If you know of any ways to help yourself on this, let me know please!

I will be writing on How you can select dividend Unit Trusts too. Drop me a comment to let me know what kind of content you would like to see too :)


4 Comments

  1. Regarding taking profits:

    - For short term trades, maybe when weekly price cuts below 50-day moving average?

    Weekly instead of daily monitoring as it avoids too much of whipsaws.

    I know UT price is delayed hence on weekend, it is only price as of Thurs. But perhaps can just add/minus the relevant index performance of Fri to the UT price for estimate. Or just use Thurs price to decide.

    - Personally I use UTs mainly for longer terms, hence I will sell or reduce when weekly price cuts couple of % below the 200-d MA.

    Will buy or scale back in when weekly price cuts 1% or 2% above 100-d MA.

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    1. Yes! I do use Friday's Index value changes to gauge where the UT price is going ;)

      icic! technical is a good way to tell whether market is bearish or bullish. For instance, market is now in a short term bullish i guess?

      I used your method and saw that S&P 500 is cutting above 100MA. Thanks for sharing! I am really weak at Technicals.

      I will prefer to buy when the indexes are very Red though haha!

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  2. It feels great to be here. Your blog is really cool. Thanks for sharing your investment style with us. Even I am not perfect with trading. Still learning it. Hopefully I will grow better with time.

    ReplyDelete
    Replies
    1. Thank you! We are all learning from the market everyday!

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