Contents:
- Introduction
- PSEi Market Situationer: February 2025 Outlook
- Current BETA Portfolio Analysis
- Recommended Adjustments for February 2025
- Final Portfolio Strategy for February 2025
Introduction
The Philippine Stock Exchange Index (PSEi) has officially entered bear market territory, declining by 22.4% from its recent high of 7,554 in October. This downturn is attributed to disappointing macroeconomic data and a major index rebalancing, leaving investors searching for catalysts to revive the market.
In light of these developments, it's crucial to reassess our BETA Portfolio to ensure it remains resilient and well-positioned for future market recoveries. Our strategy this month focuses on optimizing growth stock allocations, adjusting REIT positions, and maintaining defensive dividend stocks.
Optimizing the BETA Portfolio amid PSEi market downturn
PSEi Market Situationer: February 2025 Outlook
As of January 31, 2025, the PSEi closed at 5,862.59, marking its lowest level in over two years. This decline reflects the impact of a slowing economy, persistent inflation, and recent storms. Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., noted, "We were affected by sticky inflation, the impact of the storms and there appears to be no clear positive support for growth in 2025, except for the infrastructure spending of the government."
The recent index rebalancing, which saw the inclusion of China Banking Corp. and AREIT Inc., also contributed to market volatility. AP Securities Inc. research head Alfred Benjamin Garcia explained that the combined free-float weighted market capitalization of these new entries required adjustments across all index stocks.
Given these factors, opportunities will be selective. It's essential to focus on growth stocks demonstrating technical resilience, defensive dividend stocks for stability, and maintaining liquidity to capitalize on potential bullish reversals.
Current BETA Portfolio Analysis
Our BETA Portfolio is currently 98% invested, with only 2% held in cash, limiting our flexibility for opportunistic trades. The current allocations are:
Growth Stocks: 32% – Positioned for long-term appreciation but lacking confirmed breakouts.
REITs: 39% – Providing passive income but overweighted in a market where capital appreciation is uncertain.
Dividend Stocks: 27% – Defensive holdings offering stability amid PSEi volatility.
To optimize risk exposure, increase liquidity, and reallocate capital to high-conviction trades, we recommend the following adjustments.
Recommended Adjustments for February 2025
Asian Terminals Inc. (ATI) – Maintain (13-15% Allocation)
ATI remains a hold position as it continues to consolidate. No additional purchases unless a clear breakout above 18.50 occurs. Stop-loss remains at 16.50.
MacroAsia Corporation (MAC) – Increase to 8-10%
MAC is showing potential strength but needs to break above 5.50 before adding positions. Upon confirmation, we will increase allocation to capture aviation sector growth. Stop-loss set at 4.90.
Monde Nissin Corporation (MONDE) – Increase to 14-16%
MONDE is at a critical support level near 6.00. Additional positions only if it stabilizes above 7.50. If the stock continues to weaken, we avoid adding and maintain current holdings.
Universal Robina Corporation (URC) – Re-enter with 5-8% Allocation
URC has been removed from the portfolio due to its ongoing downtrend. However, if the stock establishes a base above 65.00, we will re-enter with a small allocation.
AyalaLand Logistics Holdings Corp. (ALLHC) – Stay at 0%
No trade is recommended until stability above 1.50 is confirmed. Avoid accumulation until a clearer trend reversal emerges.
DDMP REIT Inc. (DDMPR) – Reduce to 6-7%
The stock remains in consolidation with no strong bullish signals. We will reduce exposure slightly to free up capital while maintaining passive income benefits.
MREIT Inc. (MREIT) – Maintain at 6-7%
MREIT remains a stable REIT, and we will hold our current allocation. No additional purchases unless a breakout above 14.00 confirms upside potential.
Premiere Island Power REIT (PREIT) – Reduce to 7%
PREIT’s price action remains weak, warranting a slight reduction in allocation while still maintaining exposure. No aggressive accumulation unless price confirms strength.
RL Commercial REIT Inc. (RCR) – Maintain as a Core REIT Holding at 12-14%
RCR remains our preferred REIT, given its largest portfolio size and income stability. We will hold our position while monitoring potential breakouts above 6.20.
Manila Electric Company (MER) – Maintain at 18-20%
MER provides stability in a volatile market. No additional buys unless it breaks above 480.
Semirara Mining and Power Corporation (SCC) – Maintain at 7-9%
SCC remains a solid dividend stock, but additional positions will only be considered if coal prices push SCC above 36.50.
Final Portfolio Strategy for February 2025
- Reduce REIT Exposure from 39% to 30-35% – Trim DDMPR and PREIT to improve flexibility.
- Increase Growth Stock Allocation from 32% to 35-40% – Add MAC, MONDE, and URC only if confirmed breakouts occur.
- Maintain Defensive Dividend Stocks at 25-30% – Hold MER and SCC for income stability.
- Increase Cash Reserves from 2% to 5-7% – Free up capital for future trading opportunities.
By implementing these adjustments, the BETA Portfolio remains well-balanced, opportunistic, and resilient amid market uncertainty. We will closely monitor price action and adjust positions as needed to ensure optimal risk management and profitability.
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Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.
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- Micro Stock Trader: Comparing the Modified 10-Step Trading Strategy vs. Retracement Trading Strategy
- Micro Stock Trader Portfolio Tracker Page
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