There has been early warning since the past recent weeks that the Fed could do early tampering with its Quantitative Easing (QE) sooner rather than latter. The result – BLOODBATH across the markets all across the globe. Dow Jones and S&P led the early losers while Nikkei, DAX, FTSE, HSI and STI followed soon after.
Today’s STI drop of 61 points probably marks the first time since it drops more than 90 points 2 years ago during the Eurozone crisis in mid 2011. Back then, it was chaotic and almost every stocks were left on the bargain shelf. Since then, we have seen a relatively strong progress of the STI moving upwards for 2 consecutive years until yesterday before bombing out to today’s losses. Of course, it is only early days now and this could simply only be a knee jerk situation. But we can almost see how much money has been pumped in and out during these situations.
This post is going to focus more on specific stocks which has been more resilient than the others in paring today’s losses. As with all corrections, no stocks are spared (even defensive stocks) but these stocks fares better than others in times of corrections and could hold a key point should a recession comes. SPH, Vicom, Neratel, Second Chance, QAF and SIA/ST Engineering are a few of those in my portfolio which have fared better in today’s bloodbath market. I’ve been a little fortunate to have switched most of my holdings in these stocks which have defensive ability performance.
REITS are not spared lightly in today’s losses. Most REITS have dropped easily 5% from the most defensive healthcare (Plife/First Reit) to Retail (CMT/FCT) to Industrial (Cache/Ascendas/AIMS). I have used today’s opportunity, which I think has been way oversold, to accumulate more FCT as I am comfortable with a 5% yield. I think pressures for REITS will be around in the next few weeks as we see weak investors exit the market. For the long term investor, this could be another round of opportunity to accumulate which is akin to the 2011 situation.
Have a good long weekend and most importantly, watch the DOW tonight and tomorrow!!!