Saturday, June 25, 2016

Brexit Consequences For Singapore Investors

I have written about Brexit before it actually been confirmed yesterday.



(But they are still within Euro 2016...)

Then I realize every single soul has been talking about it on Facebook and blogs. Therefore, I will be echoing some of the views that I had read up which I think is important to the Singapore Investors:

1) Expect Volatility - STI falls 2.25% and Dow closes down 600 points. Expect the stocks to be in the red moving forward for the next week. If you are convinced your stocks have good fundamentals, then DO NOT SELL ON PANIC. If not, try to stay away from looking at the stock market the next week - Find a distraction, and currently Euro 2016 is a good one.

2) Look Out For Opportunities - Since the stocks will be in the red, re-look at your watchlist. If the stocks on your watchlist have hit your target price, go for it. Remember to BUY LOW. At least if you buy now, the price will not be at the highest.

3) Understand Your Stock Holding's Business and Determine Brexit Consequences - If you understand your stock holding's business model, you will be able to determine the "Brexit" consequences. A good write up by Motley Fool has also provided a point of view on this factor.

Another way of determining the consequences is to look up the segmented geographical revenue portion on the company's annual report. Then you will be able to determine how much revenue will be affected by this Brexit drama. An example of the breakdown for ComfortDeGro 2015 Revenue is shown below.

ComfortDelGro's Geographical Segment


4) Foreign Currency Volatility - Expect the Pound and Euro to WEAKEN in the short term and strengthen when everything stabilized. This will directly impact the bottom line of your stock's Income Statement due the currency conversion rate.

(This is actually a good thing for Singaporeans who are traveling to Britain or Europe within the next few months to change some money now.)


Anyway this is just my generalization of the consequences of Brexit in the next few weeks. However, if you have a long term view of 2 to 3 years on your portfolio and understand the business model behind each company that you have shares in, then do not panic and just ride through this volatility period.

If you are thinking of looking at stocks for the long term, do give my Triple S Scorecard a try.

I will be coming up with a sharing session on the Enhanced Triple S Scorecard in July. If you are interested in either the Triple S Scorecard or the sharing session on the Enhanced Triple S Scorecard, do contact me.

Please also like our facebook page as well - T.U.B Investing.

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