After publishing the article entitled “Breaking through RM 10,000.00 Profit for the First Time in 2017” in 16th July 2017, you and I might be waiting for the next profit breaking. Well, honestly, the next profit breakthrough of RM 20,000.00 has already taken place about a month ago. It is now at a profit level of RM 21, 868.45. The reason why only now I am writing this is because I didn’t believe there was truly new level of profit breakthrough within such a short time (within 2-3 months, compare to 7 months for the first 10K breakthrough previously) .
I thought there might be something wrong with my record. I was doing portfolio revamping during these period of time. So I double checked, triple checked again and again. At one time, I saw the record was even higher than the current figure. I thought I shall wait until that higher breakthrough, only then I shall release this good news.
As I doubted and made rigorous doubled checking, that profit figure was always higher then RM 20,000.00. So I decided to accept it. When I reflected back, the reason why the profit can have increased so drastically within such a short period of time, I have discovered there are a few factors, let me explain in detail;
- After I published the previous breakthrough article, I made a slight adjustment in my portfolio strategy to be a little bit more aggressive (from 50:50 to 58: 42).
- After the new portfolio ran for a while, global market met with 2 small tremors.
First, it was the dissolution of the financial advisory board by Trump on August 10th. And the second was the North Korea nuclear threat event in August 17th. The first tremor did not affect me in anyway, however the second one was a little bit more threatening as nuclear war could break out any time. So I did a freaking response in my portfolio by closing all equity funds down. However, on the second day, things seemed like everything subsided. So I was able to seize bottom fishing with the 42% of my reserved defensive funds.
- Before the rampant portfolio revamp, I saw my profit level was already reaching RM 16,000.00. The revamp, however, did not do any harm to my total investment neither. Because when you analyze China market represented by Shanghai Composite Index, it did not have any response to neither of the 2 global market tremors.
So my revamped portfolio was merely a profit taking exercise back then.
- After the 2 small tremor events, I took opportunity to streamlining my diversification choices. I trimmed away non China related funds, like India, Malaysia and even lesser Emerging markets in certain degree. So my current portfolio is heavily weighted on China and China related areas like Greater China or Dinasti Funds. Then both China market and US market have risen decently since after then (refer Picture A & Picture B).
- As we analyze China market alone, the picture of the sudden profit rise is much clearer. China market has a better run up during the month between August and October 2017 than the first half of the year 2017 though it spent 7 months. The first 7 months run up is relatively a flat slope (refer Picture C).
This analysis makes better sense since my portfolio heavily related to China market.
- Profit level of my total funds have risen more than RM 7,000.00 even after revamp exercise (refer Picture D).
No wonder, profit level has broken through RM 20,000.00 level.
Currently, annual growth rate has entered into double digit, but not reaching my desire/objective level of 20% yet as of this moment. However, some of the portfolios were great inspiration to me for streamlining exercise. They have reached a profit level between 22-25% annual rate of return individually. They were less diversified themselves alone. It means if we know what we are doing, we can avoid being too much diversified (avoid being dragged down too much). That’s the reason behind the recent portfolio trimming exercise.
We still have remaining 2 more months to go before ending the year for 2017. I’m not sure whether the intended investment objective of reaching 20% can be made. But somehow, I did my best to learn and let the time yields its result. If not, there are still plenty of opportunity where we can still catch up and improve later on in our investment future.
Happy investing through Unit Trust!
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