Jumat, 30 September 2011

2 lots of STI ETF @ $2.72

Bought 2 lots of STI ETF at $2.72 today.

Rationale behind purchase:
1) Just got awarded bursary valued at $3000
2) Dropped 20% from its $3.39 high(in line with strategy*)
3) VIX is at 42.96 today (>40)
4) Dividend yield(ttm) is near to 3%.
5) STI is in a downtrend and stocks are generally undervalued
6) A bet on Europe's recovery
7) Time horizon of at least 5 years
8) Still have more than $10,000 in cash after purchase.  Able to buy more when prices plunge further.

*My strategy for STI ETF is to start buying when price drops 20%. Subsequently, I will buy one lot of STI ETF for every 15% it drops. Next target price will thus be $2.31(0.85 x $2.72)

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