The Great Stuffs:
- Expenses: Compared to year 2009, expenses decreased 2.3% despite the ever increasing inflation. This is a great achievement!
- Savings: Compared to year 2009, savings increased 25% over the year of 2010. Again, this is great achievement despite the meagre increment and higher inflation in the year 2010.
- Investments: A superb year in investments overall (especially local stocks/funds), thanks to the great rally of stock markets for most part of the year 2010.
- Overseas Investments: Returns have been relatively flat or slightly negative, mainly due to currency appreciation of Ringgit that diminished most of the returns of foreign funds which are usually dominated in USD.
- Over cautious: I have been too pessimistic over the stock market rally for the past year, and too profit far too early. I should have also allocate more money for stocks rather than bonds.
I expect year 2011 to be much more volatile with higher downside risks, mainly due to the long running rally over the past year. With this investment perspective, I would make changes to my investment portfolio as follow:
- Focus on local investments: This is due to the more defensive nature of Malaysian stock market. Investments into local stocks/funds will be split into blue chips, dividend play and REITs.
- Dollar cost averaging: Will start dollar cost averaging on local funds in anticipation of more downside risks, with some lump sum investments when the market crash/panics.
- Streamline overseas investments: Further lump sum investments will be mainly on Asian and emerging market funds when the market crash/panics.
