The year 2014 has come to an end. Our local stock market remained subdued throughout the year. STI gained 6% only with relatively tepid volume in that year. My portfolio of local stocks was up 8.68% in 2014 after taking dividends into account. The performance is somewhat comparable to the index. Overall, my annualized return since 2010 was 9.20%.
In the past one and a half year, I have liquidated nearly half of my local portfolio. 70% of that was put into cash while the remaining was deposited in an Interactive Brokers account. I started trading the US market in the beginning of 2014. By focusing and leveraging on fundamentally stable and large capitalization companies, I am able to boost my overall return for the year 2014. My cumulative return in the US market was 59.42%. If not for the knee jerk reaction after the release of Viekira Pak drug by AbbVie in the last few days of the year, my return could have been more than 100%. As of the latest date, I have recovered almost all of the loss in cumulated profits though.
The US market remains the best market to trade and invest despite the odd trading hours. The reasons are multiple folds. Some of the important reasons are liquidity, a wide variety of stocks to choose from and the availability of super low cost brokers. Transferring and withdrawing of money from IB is very fast and convenient too. And the most important reason why I prefer the US market is because there are so many big companies there that are enjoying good economies of scale. They can generate billions of dollars of cash annually. Instead of paying dividends, US companies tend to do share buybacks regularly. Over the years, earnings per share can grow substantially.
|Annualized Return = 9.20%|
|Stock||Mode||Unrealized P/L (SGD)|
|CHINA MILK *||CASH||-100.00%|
|FAR EAST HOSPITALITY||CASH||-17.40%|