Unit 8: Building a Portfolio of Thai Stocks

Unit 8:    Building a Portfolio of Thai Stocks

Despite smaller capitalized shares having often proven to be better performers, mixing a few larger cap shares along smaller cap shares is a solid strategy which has worked very well over for many years.   Some smaller shares move-up, down or hold their own just as the general market corrects down, and visa versa.  An opportunity so exists to switch into smaller caps after the large capitalized stocks have had their bull run, this strategy can so be much more effective than just taking profits.  In other words smaller cap shares do not always move the same way as the broad SET benchmark index does.

Just buying Bank or other large cap. shares will not give you this market volatility benefit, as large caps' mostly all dance together.  Since the Covit-19 outbreak (April 2020) smaller and mid cap stocks have just about doubled on average, vs. the SET index is up far less.  You can see this by looking at the MAI and sSET index.

So there is much opportunity for some fine tuning. Remember as well, there are no taxes on capital gains in Thailand and transactions cost are very low.  New shares listing on the SET  (IPO's) has not been a very profitable venture longer term. So be careful with IPO's.  I have often complained in the past the lack of follow-up performance tabulation on IPO's, post the first few days.

You should always diversify your holdings and there is always a need to have some cash at hand, just in case. Look at cash as insurance. Do not just sit fully invested. What if there is a short term set back?  It amazes me how some investors just never view cash holdings as a legitimate alternative, after a nice bull run. Greed takes over fear until this feeling reverses. 

Would it not be nice to buy shares back cheaper?  Some investors should take advantage of short-term volatility but be careful of not getting caught in the Broker’s game of trying too hard. Investing is tricky as there is a fine line between stale and over active, investing vs. trading.  I realize most do not have time for active investing, but in the new era as this Thai bull market extends buying and just holding is becoming increasingly risky, not less.  Just now I view the market as: its a market of stocks rather then a stock market.  I.e. be very selective.
 
Others fail to diversify which is even more risky than just buying and holding, for the long term.   I for one think it’s better to be more pro-active in this volatile world.   

Get some stock ideas and invest in the companies you tend to like and can identify with.  Give preference to firms which pay a high dividend. If there is a set back, at least you have some income while you wait.