Year 2013 "passive" income from portfolio.

2013 ends with a net passive income of $250,000 (rounded off). My New Year Resolution! To find another few revenue streams of ACTIVE income like a job or a business. I am constantly amazed at how much BUSINESS people (Small business owners) are making PER MONTH. And this post is a reminder of where I am at year 2013 and I hope I can achieve what they earned in a year 2014 end?

My Favourite Technical Analysis Website

My favourite technical analysis website is Barton's Global Market Trends.

His technical analysis is simple and no nonsense approach and he does not gives wishy-washy statements about pricing going up or down. He has his conviction and will point you to one direction only. 

All the major indices, commodities, currencies of interest to the retail investors are available at a glance with his thoughts. You can see from the chart the major support and resistance, the reversion to the mean and from there make an educated guess of which one is likely to be bottoming and which one is toppish.

For my own use, I like to buy stocks in countries that are in the long-term bottoming range on the rebound up to the reversion to the mean. Those at the resistance end, I think you can consider taking profits and switching to those at the bottoming phase. While those sitting on the reversion to the mean probably indicates the market is fairly valued and waiting for the euphoria phase if it comes. For example, I've been in Australia and Singapore equities in early 2012. Added the China 2823.HK ETF to my portfolio in December last year and thinking whether to add Euro Stoxx50 and Nikkei ETFs this month. Reasons for using ETFs on the 3 markets are I have not much access and knowledge there , so an index ETF allows me to go in and out quickly should the need arises and I do not have to do much research on the individual companies there to be invested in the market. Singapore and Australia are the only two places I've lived in and I can say most companies there ring a bell to me and I've a rudimentary knowledge of the investing environment here and there.

It's not an advertorial for him but I find it useful enough to recommend to all. Of course, I give a little token of appreciation thru' his paypal account.

Food for Thoughts : 2013 is Stock market year.

From Prof. Chan's newsletter..

The aftermath of 2008 global financial tsunami has been far reaching; post crisis impact is
still with us today. US launched QE1, QE2 and QE3 by printing currency notes, but US economy
has yet to recover; unemployment rate remains high, and real estate market is still at its ebb. The
problem of European national debts seems to have resolved, as European Central Bank has decided
to print unlimited amount of currency notes to buy national debts of Euro zone, on condition that
countries receiving the aid must tighten up their public expenditure, an exercise that could lead to
economic recession in Europe. The 3rd large economy, Japan is even worse. They change prime
minister every year. Why? It is beacause nobody can solve the country’s economic problems. Now
that Libeeral Democratic Party is running the country again, it has decided to wantonly print
currency notes to rescue the economy. China was the most prudent country in 2012, not dared to
print currency notes to stimulate the economy due to experiencing high inflation rate in 2011, and
had to squeeze the money supply then. In the last month of 2012 Chinese market however, after
prolonged bearish trend certainly turned around rapidly. Investors are now fancying China might
print curreny notes again to stiumulate the economy.
               
               In short, it seems 2013 is the year in which whole world woud be printing curreny notes.
               In theory, abundant cash will lead to inflation we are concerned with. But the US printed
currency notes consequent to the quantitative easing monetary policy are retained in the financial
circle without benefiting the real economy to create employment. With high unemployment rate,
people will not dare to spend monies, and without spending, there will be no inflation. Inflation
equates to prices of consumable goods for which if no increase in consumption, prices will not go
up. The monies retained in the financial circle thus become hot monies moving the markets.
             
Therefore, the reason Singapore market certainly surged upward in the last momth of
2012 is because QE3 monies became hot monies flowing to Singapore. 
               After prolong negotiations, the US fiscal cliff issue was at last settled on the last day of
2012. We can optimistically look forward to this year’s markets. But rising markets do not mean
the economy is better. The US and European economies do not seem to have recovered yet. 

Why I need to be less bearish now

Qualitative Factors :-

News of Job cuts from the finance sectors. Recession News coming out from all authoritative sources like the IMF, global governments. The scary event of a Greece default which is getting nearer by the day. And what does the market do? When market reacts with ease to bad news, you can be sure it is discounted into the stock price.

The most worrying thing de-railing this "recovery" will be the Greece default. But you can see the actions of the European Union and ECB, it is just putting up a front. They have been saying tough stuff but their actions... they are all trying to prevent a liquidity freeze and breakdown in confidence of the system. They have done "quantitative easing" thru' the LTRO programme. They have started to call for a relaxation of stiff banking rules that might increase capital and liquidity risks to the banks. They have been playing tough on Greece saying Greece must agreed to this and that and time and again..they have relented and relax the terms.

So, I believe market have discounted all these news. They believe Greece will get its bailout money again no matter the rhetoric.

Update : FED 0% rate to stay till 2014 means more money coming into ASIA. The government might not stop inflow into the stock market and investments into businesses, but they will turn on more counter-measures to deal with the property market.

Quantitative Factors :-

From a valuation perspective, it is cheap now. Probably 1 sd away from the mean according to the reports. However, I do think the market is not as cheap as it was in 2009 because the stock prices of stocks in my watchlist are still way above my own estimated valuation. This was not the case during 2009.

Further, a lot of stocks seems to be in a bottoming process according to my noob skills (round bottom or spike bottom).

And I have my own major trend tracking chart I devised.. hehe....
 
 

  If I want to be safer, I would only buy when the curve reaches a turning point up. But right now, if I want to catch the bottom, I might buy now as it is already below the -200 zone and co-incides with major data points in 2001, 2003 and 2009.




If I already have a comfortable allocation to equities, maybe I won't consider adding now.
That said, do remember that I am increasing my allocation in a position of 0%. So, I could be doing it slowly whenever a dip occurs.