The Edge Singapore’s virtual portfolio of 10 stocks was incepted on Jan 24, 2020, with a minimum yearly update and 10 stocks. Based on our discretion, these initial 10 stocks were equally allocated to a US$100,000 virtual portfolio to reflect the various archetypes of investor risk and return profiles. Our yearly portfolio returns for 2020, 2021 and 2022 were 98.1%, 13.1% and –9.8%, respectively. The 10 stocks for our 2023 portfolio were added on Jan 30, 2023, and sold on Feb 16, 2024.
2023 was a relatively good year for stock markets globally, with most stock markets recording positive gains and only a few losses. The year was marked by easing concerns over the pandemic and an outlook for more favourable interest rates for the stock market. Stock markets globally recovered much of their losses suffered in 2022, except for a few, including China. Chinese stocks continue to be subject to investor pessimism, stemming from fear of government-related policies contributing to increased investor risk. Conversely, US-related stocks continue to reach all-time highs due to more favourable interest rates.
We at The Edge Singapore believe in value investing for our global portfolio. Specifically, we believe in buying undervalued stocks and selling overvalued ones. More often than not, markets provide investors with opportunities to buy and sell stocks based on their intrinsic value, as prices of stocks are likely to be distorted by macroeconomic factors such as market shocks. Stocks may rise significantly due to irrational optimism or fall unnecessarily due to overwhelming fear. The goal is to identify temporarily misvalued stocks and act upon them. Investors should note that this is not analogous to timing the market as that mainly concerns short-term, methodical trading. Value investing denotes that the time is always right to buy undervalued stocks, but care must be given to identifying the risk and return profile of individual investors. Not all asset classes are appropriate for all investors; similarly, not all stocks are appropriate for all investors.
