How do you react to a 35% drawdown?

 As I've mentioned previously, my 2020 return for my IBKR account was -1.0%. But this hides the fact that the max drawdown to my IBKR portfolio was about -35%. In other words, it lost more than 1/3 of its value. When that happened, an investor can:

• Buy more as its the sale worth waiting for.
• Hold and hope the price recovers
• Sell everything and put cash in a Milo tin.

My reaction was to buy more in order to average down as this was definitely a sale worth waiting for. On a one-year basis, my return is back to positive thanks to the recent rally. More importantly, a largely flat portfolio performance meant that my 2018 and 2019 gains were protected.

My China holdings are with FSMOne, and in 2020, China performed pretty well.

So overall, I'm happy to see that I didn't suffer huge losses and that I can continue to grow my dividends in 2021.

Dividends Jan 2021

Westpac Dividend was cancelled this month. But compared to 2020, I am collecting a little bit more dividends. My target is for dividends collected this year to fully recover to 2019 levels.

How to Average Up

 

Averaging Up- My Weakness

One of my investing 'weaknesses' was a reluctance to buy more if the price is more than my average price, so during the last GFC, I didn't continue buying as as the STI rose toward 3,000

 This time, I'm looking at making money and not just keeping my average price down. So when 3,000 looked likely, I started buying more in the 2.80-2.85 region even though it caused my average buying price to go up... because as long as less than $3, its still a profit!

 Of course, now that its more than $3, I've stopped buying. In 2020, I picked up 27.3k of ES3. Could have bought more, but decided to deploy to foreign ETFs instead.

 if you buy $100k at $2.89, its still better than the guy who only buy 3,000 shares at $2.70. since he was using CPF, he should have gone all in!

STI

STI has dropped below 3,000 again. I decided to start topping up my holdings of Sembcorp and Comfort Delgro last year and the market promptly responded by going down. In a sense, thats better for me as I still prefer to average down, even while I am learning how to average up... Now that Sembcorp is more of a utilities company without the Sembmarine overhang, I am actually more confident about adding to my holdings. As for Comfort Delgro, I still believe that 'disruption' by Grab is overstated. 

FTSE100

Last Friday, FTSE100 went below 6500. I believe that FTSE 6500 is a 'buy' but I helped a family member transfer money to SRS to buy Lionglobal AllSeasons fund instead. Today FTSE is up nearly 1% but still below 6,500 so I will be adding at this level