2024 Market Sentiment & Positioning

[sohguanh]

Haha! Very funny lei. You see historically what is US vs SGD. Probably by the time I retire (30 years later), 1SGD can change US$1

That is why all investment in USD long term need to factor this in if later you want convert back to SGD.

For Msian their MYR vs USD is quite confirmed worthwhile to invest USD long term. They are smart Msian investor in their Msian forum. Some work in Spore btw so best of both worlds.

 

[limster]

Haha! Very funny lei. You see historically what is US vs SGD. Probably by the time I retire (30 years later), 1SGD can change US$1

You are a lot more optimistic about Singapore than I am. To me, there are more internal and external risks facing Singapore and its currency versus the risks facing the US$

While I am positive about Singapore, I also realise that the bulk of my networth is denominated in S$ assets when I consider the value of my residence plus the CPF that is locked in and the $200k of SSB. I think I need to increase my holdings of non-S$ fixed income and equivalents for diversification.

 

[DevilPlate]

Not sure what really to do or invest in for now.

Planning to change T bills strategy and buy some long term USD treasury notes ( 3 and 5 years) , some park in USD T bills and wait for any crisis to hit, DCA some monthly salary into the local banks starting Jan, REITs not yet as I am not sure if they are out of the woods yet.

During covid period, many blue chip reits drop by 30-50% and by the time u know they are out of the woods, already recovered alot.

I still remember reits already recovered alot when vaccines was announced and at that point many still skeptical whether the vaccines will work anot since vaccines usually takes 5-10 years to develop.

When it is confirmed plus chop out of the woods (economy reopened gradually), most blue chips reits already recovered to pre covid levels.

 

[DevilPlate]

You are a lot more optimistic about Singapore than I am. To me, there are more internal and external risks facing Singapore and its currency versus the risks facing the US$

While I am positive about Singapore, I also realise that the bulk of my networth is denominated in S$ assets when I consider the value of my residence plus the CPF that is locked in and the $200k of SSB. I think I need to increase my holdings of non-S$ fixed income and equivalents for diversification.

Gold is universal currency.

some say BTC as well haha

 

[elvintay07]

You are a lot more optimistic about Singapore than I am. To me, there are more internal and external risks facing Singapore and its currency versus the risks facing the US$

While I am positive about Singapore, I also realise that the bulk of my networth is denominated in S$ assets when I consider the value of my residence plus the CPF that is locked in and the $200k of SSB. I think I need to increase my holdings of non-S$ fixed income and equivalents for diversification.

Between SG and US currency, I would say I more confident about SG la. I use my ass to think also know the sanction between US and China. They using SG as middle ground to start businesses. You can see the number of companies coming into SG. I will continue to invest in US companies because they are more global companies than purely US companies. I presume if today one invest in REITs, STI then too heavy in SG. But no matter how strong the SGD is, our companies are so so companies la. You take our strongest companies DBS. Compared to Apple is like dog fur compared to Tibetan Mastiff.

 

[elvintay07]

That is why all investment in USD long term need to factor this in if later you want convert back to SGD.

For Msian their MYR vs USD is quite confirmed worthwhile to invest USD long term. They are smart Msian investor in their Msian forum. Some work in Spore btw so best of both worlds.

Yeah. That is why my father no US position. He laugh at us but lucky FAANG is powerful

 

[limster]

Prudential’s new business profit increased by 37% to $2.14b, in the nine months to September. This growth continued into the third quarter (Q3). Excluding economic impacts, new business profit increased by 48%, with improved margins attributed to positive developments in channel and geographic mix.

https://sbr.com.sg/insurance/news/prudentials-new-business-sees-37-profit-growth-in-9m23

Pretty impressive. i have a small position in Prudential compared to my Aviva holdings. Despite the good results, Prudential share price is actually pretty depressed. I will consider adding more PRU.

More profits = more money to pay dividends!

 

[stanlawj]

Sell-side is pushing Investment-grade (IG) bonds for 2024 (Business Times yesterday and today).

https://www.businesstimes.com.sg/wealth/investment-grade-bonds-are-next-yield-play

https://www.businesstimes.com.sg/we...ds-says-franklin-templeton-fixed-income-chief

Update 12 Nov : Whenever sell-side does such a thing above, it is wise to ask, what is their motive?

Now we have news that Japanese investors are massively net selling US corporate bonds, which includes IG bonds and net buying UST. Sell-side obviously saw the sales and needed to push for buyers.

https://finance.yahoo.com/news/japan-us-corporate-bond-sell-220001436.html

Reduced demand from the deep-pocketed investors for blue-chip debt would likely translate to higher borrowing expenses for US corporations, which are already facing some of the highest financing costs since the financial crisis. Yields have risen to 6.07%, rivaling those seen in 2009, according to the Bloomberg US aggregate index. They were below 2% just over two years ago. [Translation: IG bonds will continue to drop in value as their yields increase]

The pullback has also extended to collateralized loan obligations, with at least one major Japanese investor cutting its allocation to new CLO deals by more than 70% because returns in their domestic market are becoming increasingly attractive, according to a person with knowledge of the matter.

While Japanese investors have sold out of corporate bonds, they bought the most US sovereign bonds in six months in September, in part because many insurers are now looking at buying the securities on an unhedged basis. Sumitomo Life Insurance Co., for example, may boost holdings in overseas bonds that it doesn’t hedge against currency fluctuations.

 

[Mecisteus]

And I guess you made positive returns last year when many others were down double digits in line with the markets.

I think he sold at the lows last year. It was buying opportunity back then.

This year rebound is a good opportunity to wind down equities.

If I/r remains high and if US continues to avoid a recession, I think only the bigger companies with strong cash flows will survive.

The smaller caps which are heavily in debt will be burned by huge interests payments.

So in short, I expect S&P to chop more sideways or grind to the upside gradually at returns lower than long term average.

 

[boroangel]

I think he sold at the lows last year. It was buying opportunity back then.

This year rebound is a good opportunity to wind down equities.

If I/r remains high and if US continues to avoid a recession, I think only the bigger companies with strong cash flows will survive.

The smaller caps which are heavily in debt will be burned by huge interests payments.

So in short, I expect S&P to chop more sideways or grind to the upside gradually at returns lower than long term average.

My portfolio sold last year was mainly based on energy stocks and I think I did sell them at a relatively high but sold too early as they remained high till this year, so I lost a year of good dividends on those ( offset by US t bills). I don’t own any tech stocks except Apple which indeed I did miss out on the run this year, didn’t expect tech to rebound.

decided to go low on equities since q4 last year thereabouts and decided to just wait for the next crash. So far this strategy has worked for me financially but might not be everyone’s cup of tea. Conservative

 

[churnmaster]

I think he sold at the lows last year. It was buying opportunity back then.

This year rebound is a good opportunity to wind down equities.

If I/r remains high and if US continues to avoid a recession, I think only the bigger companies with strong cash flows will survive.

The smaller caps which are heavily in debt will be burned by huge interests payments.

So in short, I expect S&P to chop more sideways or grind to the upside gradually at returns lower than long term average.

The fact that he managed to make positive double digit returns in a year in which the market gave negative double digit returns in itself is an achievement.

Doesn’t matter whether you sell early or late as long as you have realized the gains and you are satisfied with the overall returns.

I agree with your assessment of the market where it’s predominantly the cash generating big tech stocks that are pushing the index higher. The smaller indebted cos are getting pushed lower by the day.

Thankfully the bond yields are at decent levels providing us with an opportunity in the fixed income space.

 

[Mecisteus]

Thankfully the bond yields are at decent levels providing us with an opportunity in the fixed income space.

It follows CAPM theory.

Stocks will not do well in higher I/r environment unless earnings is exceptional.

 

[churnmaster]

It follows CAPM theory.

Stocks will not do well in higher I/r environment unless earnings is exceptional.

Yup

 

[elvintay07]

Aiya, my sifu teach me. Companies that are weak will eventually die. Stronger companies will emerge and index stays stronger. Just like Singapore F&B right? Simi ah gou ah mao close down who cares? As long as haidilao keep expanding.

 

[limster]

GSK​

​

Share Price​ 7 Day​ 1 Year​ 14.26​ 0.2%​ 1.4%​ Upcoming dividend of UK£0.14 per share at 4.3% yield​ Eligible shareholders must have bought the stock before 16 November 2023. Payment date: 11 January 2024. Payout ratio is a comfortable 37% and this is well supported by cash flows. Trailing yield: 4.3%. Lower than top quartile of British dividend payers (6.4%). Higher than average of industry peers (2.8%).

GSK can pay 4% dividend which is just a 37% payout ratio so the dividend is well covered.

Stock price, its one year performance is only +1.4% but positive is better than negative in this interest rate environment.

I do think its slightly undervalued and worth accumulating. I will probably wait for 16 Nov ex-Div and price to drop before adding some more.

 

[stanlawj]

Be careful, Japs are net selling US corp bonds, which include IG bonds. Details in previous post.

Sell-side is pushing Investment-grade (IG) bonds for 2024 (Business Times yesterday and today).

https://www.businesstimes.com.sg/wealth/investment-grade-bonds-are-next-yield-play

https://www.businesstimes.com.sg/we...ds-says-franklin-templeton-fixed-income-chief

Update 12 Nov : Whenever sell-side does such a thing above, it is wise to ask, what is their motive?

Now we have news that Japanese investors are massively net selling US corporate bonds, which includes IG bonds and net buying UST.
https://finance.yahoo.com/news/japan-us-corporate-bond-sell-220001436.html

Reduced demand from the deep-pocketed investors for blue-chip debt would likely translate to higher borrowing expenses for US corporations, which are already facing some of the highest financing costs since the financial crisis. Yields have risen to 6.07%, rivaling those seen in 2009, according to the Bloomberg US aggregate index. They were below 2% just over two years ago. [Translation: IG bonds will continue to drop in value as their yields increase]

The pullback has also extended to collateralized loan obligations, with at least one major Japanese investor cutting its allocation to new CLO deals by more than 70% because returns in their domestic market are becoming increasingly attractive, according to a person with knowledge of the matter.

While Japanese investors have sold out of corporate bonds, they bought the most US sovereign bonds in six months in September, in part because many insurers are now looking at buying the securities on an unhedged basis. Sumitomo Life Insurance Co., for example, may boost holdings in overseas bonds that it doesn’t hedge against currency fluctuations.

 

[revhappy]

What a face ripping rally. I think this is the start of markets pricing in future FED rate cuts. Both stocks and bonds are rallying. A 60/40 portfolio is perfect for this environment.

 

[aurvandil]

What a face ripping rally. I think this is the start of markets pricing in future FED rate cuts. Both stocks and bonds are rallying. A 60/40 portfolio is perfect for this environment.

We are transitioning back to a period similar to the Greenspan years. The 60-40 portfolio was created by Dalio for that market regime and will probably work quite well.

 

[limster]

Thanks to this rally Vanguard World VT is +11% YTD. My IBKR portfolio is now +9.5% YTD so still trailing, but should be on track for double-digit by the end of this year.

 

[churnmaster]

Thanks to this rally Vanguard World VT is +11% YTD. My IBKR portfolio is now +9.5% YTD so still trailing, but should be on track for double-digit by the end of this year.

By now your overall portfolio should have recouped all the losses of the previous year. If not, then something is not working.