As many of you would know, I initially built SGXcafe for my personal investment needs. Hence many tools here exist because I use them personally for my own investing.
iAssist and iSuggest were tools that I built in an attempt to help me diversify my portfolio as it was rather challenging to decide which stock to add to my portfolio among the several hundred stocks listed in SGX.
However, there is a flaw in simply just trying to diversify. I did not really attempt to discriminate between “good” and “bad” stocks explicitly and I actually ended up with some “bad” stocks in my portfolio. In my attempt to recognize “good” stocks – which I loosely define to have a positive (green) P&L after factoring in dividends – I created Dividend Strength. By applying machine learning techniques on fundamental data that I have, Dividend Strength identifies stocks that will be able to pay good dividends, year after year.
Many of the stocks that I added to my portfolio were before I created Dividend Strength. So when Dividend Strength was first ready, I used it to look at my own portfolio and found that many stocks that are green were those with high Dividend Strength, and many stocks that were red were those with low Dividend Strength. That gave further validation that Dividend Strength was indeed on the right track.
In fact, if you look at my portfolio now and sort it by Dividend Strength, you would still see the same trend because I have yet to sell the “bad” stocks as I haven’t devised a good way to time when to buy/sell. Speaking of which, perhaps I should develop a tool that uses technical analysis to try to decide when to buy/sell…
Nowadays, I mainly add stocks into my portfolio which helps in diversification and have strong Dividend Strength. This is why and how I use Dividend Strength.
How about you? How do you make your investment decisions? What are the features in SGXcafe that have been helpful in your investment decision?