2025 Review 1: Thoughts on 2025 and 2026

Lesson

1) I did not buy significantly during the Apr 2025 market decline. I was waiting for 20% decline but the market only decline 19%. For the next decline, I will start to buy significantly when market declines by 15%.

2) I bought Chagee earlier and broke my rule of not buying stock that are within 1 year of its listing. Subsequently, I sold Chagee at 35% loss. This teach me not to break my rules.

Diversification vs Concentration

3) I start to buy ETFs to diversify into other geographies such as Latin America and Emerging Markets. I am not familiar with markets outside Singapore and Hong Kong market. Hence, it is safer for me to buy into other markets via ETFs when I find their valuations good enough.

I also bought small positions in a few Singapore Reits as proxy diversification to real estate, as I do not own any property.

I also bought gold, silver and copper ETFs in 2Q 2025 for diversification in precious metals. However, I sold them in 4Q 2025, as their prices have run up and I am not sure if the price run will continue. On hindsight, I sold them too early, as their prices have continued to rise. 

4) I had re-think my view on portfolio concentration. In 2021, I wanted to be more concentrated and own great business. However, it is hard to find enough number of  stocks of great business to buy at reasonable price. In past few years, I manage to buy a few stocks that are good/great business. But most of the times, I find the stock price of good/great business too expensive for me, given my value investor mindset. 

Maybe my nature is not inclined towards concentrated portfolio. When I buy a stock, I will often ask 'What happens if I'm wrong?'. This prevents me from buying heavily into any one stock.

In addition, as I stop working, I become slightly more risk-averse. An Acadian post 'Concentrated portfolio managers: Courageously losing your money' noted the danger of concentration. As such, I decide to reduce the probability of bad outcome by being more diversified. 

Thoughts on 2026

5) Most world markets have a good run in 2025. They have become either reasonably valued or over-valued. While China/HK stocks seem reasonably valued, I have a positive view on China / HK stocks, as China's loose monetary policy, its $1 trillion trade surplus and expansionary fiscal policy will support the stock market.

6) From past experiences, when I had two good years, the third year will be down. I had two good years in 2024 and 2025. So I am cautious or slightly bearish on my 2026 stock returns. Similarly, I feel that 2026 STI returns may not be as good as 2025's, as STI has very good years in 2024 and 2025.   

7) I am not good at predictions. My above thoughts for 2026 may not materialise.