Disappointing Result


As I have shared in the article a half year ago, I was surprised to find out my portfolio has gained RM15,000 so fast. It was a happy moment because I was able to take back what was lost in the previous year even with an addition of RM 5,000. In that writing I said that I was expecting to aim a low yearly return in 2019, possibly targeting a profit more than the fix deposit from the bank or slightly higher than investment mammoths such as the EPF. 

But after some time, not sure with what reason, deep down my heart, I was expecting more. As a result, I was greatly disappointed when I saw my final annual result merely hitting at 6.54% profit as concluded last week.

Year End Evaluation

As I looked back to the previous article, I realized that my heart has been diverted and deceived. The year 2019 was not a good investment year because of the threat of trade war and deteriorating economic outlook all over the world except the US. 

The reason for the fast profit of my portfolio for the first half of the year was due to two main factors. These factors were the fast rise in gold prices and the rare fast bull run of the Malaysia bond fund. However, when we entered the second half of the year, gold prices retrieved, the Malaysia bond market stagnated. Consequently, only slightly more than RM4500 added to the profit by the second half of the year. 

(Chart A) Malaysia stock market index has made a loss of more than 5% for the year 2019.

When I compare my mutual fund portfolio with Malaysia Bursa market index performance in 2019, Bursa Malaysia was at a loss of more than 5% (Chart A). When I read other stock investment blogger who are investing only in Malaysia market, they have experienced paper losses for the year too. To this realization, I felt a little bit of relief. Probably, such a single digit investment profit for a bad investment year is not that bad after all.

Wrong Expectation

Part of my disappointment was possibly come from the erroneous expectation. Throughout this year, the best market performance is none other than the US market. All major US market indexes has run up more than 20% for 2019. The US funds available in the Fundsupermart platform have all run up beautifully reflecting the US market indexes (Table A).  But my portfolio was only able to take hold a small portion of it.

(Table A) Mutual Funds that invested into US markets are posted positive return beautifully.

By looking at the individual portfolio, I realized that one of the portfolios that has invested in the US market has gained an annual profit return of 9.5% by itself. It shows that if I were to focus more on the US market last year, the overall result could have been better.  But realistically, with the unending trade war problem as the theme of the year and the report of other global economies contracting, who dares to invest more of your hard-earned monies?

If I were to go back to my initial objective of beating investment mammoths as I have shared previously, I think I have almost reached there. Of course, this rate of profit is much higher than fixed deposit rate at the bank. Furthermore, the investment experience gained at this period of time is much valuable than the money can count. With this background and experience, I hope the year 2020 investment will yield a better result than this.

I hope you all have a better result than mine. Nevertheless, let’s learn together and grow our wealth together!

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Disclaimer

The view and opinion expressed are personal views of the author and are subject to change based on market and other conditions.  This write up does not constitute sole advice for investment decision. Investors are advised to do further reading and research to conclude individual decision.

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