Dilemma regarding stocks

[martin]

Semi-retired so my funds are for retirement and old age. I am very much risk averse, and have kept my money in bank FD, SSBs, max my cpf, but still have some in stocks, mostly reits, sti etfs and a few blue chips like our 3 banks and ST Eng. Personally, i am rather worried about the global political situation, the threat of a major war seems quite real. Even if not, a big recession looks likely too. What are your thoughts about liquidating equities and put into FDs (because i am really risk averse) or other instruments like gold? I am not very well-versed in matters like this so like to hear your thoughts. Thanks.

 

[jayou8]

I am in a very similar profile as you. However personally I see great opportunity coming ahead of us. For me I would continue to be overweight on very short duration instruments like T-bills and bonds so as to average my returns to near 3% and above. The moment you sense interest rate cuts, that is when things will start to be not too rosy and hence I think it is the best time to go equites etf shopping.

I will still keep my current holdings of equities etf and reits as my exposure is not very high.

 

[martin]

I am in a very similar profile as you. However personally I see great opportunity coming ahead of us. For me I would continue to be overweight on very short duration instruments like T-bills and bonds so as to average my returns to near 3% and above. The moment you sense interest rate cuts, that is when things will start to be not too rosy and hence I think it is the best time to go equites etf shopping.

I will still keep my current holdings of equities etf and reits as my exposure is not very high.

But should a war break out, wouldn’t stocks plunge and our values significantly wiped out?

 

[jayou8]

But should a war break out, wouldn’t stocks plunge and our values significantly wiped out?

My memories when I started working was the Gulf war. It looks like dooms day has come but in reality it was just a blip in the markets.

If there is a nuclear war then it is another story. Have $ in the bank does not matters anymore.

 

[martin]

My memories when I started working was the Gulf war. It looks like dooms day has come but in reality it was just a blip in the markets.

If there is a nuclear war then it is another story. Have $ in the bank does not matters anymore.

Ya, Ukraine war also not much impact. But if US-China, the fallout would be massive.

 

[rachdanon]

I am in similar mind frame. But I have personal reasons to stay liquid for a possible major financial decision, so stocks are out for me. Am not so much risk aversed, but I dont have the time nor inclination to watch stocks/equities with respect to world events. I do have some legacy reits etc that I bought 20 years back when my dad was advising me, but only a 5 figure sum. I just leave them there, never monitor and collect dividends.

 

[jywy2005]

Guess we all have the same risk-adverse traits. I am retired and I have most of my funds parked in endowment plans that are capital protected. The rest in FD, SSB, T-bills etc all safe instruments.

My investments are solely in the banks and reits for dividends income. Going to average down if prices go lower. I intend to park only 30% of my funds in equities.

 

[BBCWatcher]

War (or even heightened tensions) is usually good news for defense stocks. But that's no secret.

War also can be inflationary (eventually), and in that event you're in some degree of trouble if you're holding mostly or entirely assets that are subject to inflation risks.

 

[aarontansp]

Semi-retired so my funds are for retirement and old age. I am very much risk averse, and have kept my money in bank FD, SSBs, max my cpf, but still have some in stocks, mostly reits, sti etfs and a few blue chips like our 3 banks and ST Eng. Personally, i am rather worried about the global political situation, the threat of a major war seems quite real. Even if not, a big recession looks likely too. What are your thoughts about liquidating equities and put into FDs (because i am really risk averse) or other instruments like gold? I am not very well-versed in matters like this so like to hear your thoughts. Thanks.

I feel the world will not get any better. Better to liquidify and enjoy your retirement in peace with CPF or FD.

 

[martin]

War (or even heightened tensions) is usually good news for defense stocks. But that's no secret.

War also can be inflationary (eventually), and in that event you're in some degree of trouble if you're holding mostly or entirely assets that are subject to inflation risks.

Yes, the rising inflation is not helping either.

 

[martin]

I feel the world will not get any better. Better to liquidify and enjoy your retirement in peace with CPF or FD.

I’m personally very pessimistic too. Already max out my cpf. I am deliberating if i should liquidate some of my equities and put into more FDs as interest rates have been rising.

 

[reddevil0728]

I’m personally very pessimistic too. Already max out my cpf. I am deliberating if i should liquidate some of my equities and put into more FDs as interest rates have been rising.

Instead of FDs can consider tbills if already exhausted SSB also

 

[martin]

Instead of FDs can consider tbills if already exhausted SSB also

New area to me. Any recommendations?

 

[reddevil0728]

New area to me. Any recommendations?

See this first 2 posts
https://forums.hardwarezone.com.sg/threads/singapore-treasury-bills-t-bills.6769601/

 

[iceblendedchoc]

also consider retirement at another country, which your sgd provide better exchange rate so no need to feel so overly stress during retirement and can stretch your money better and longer.

 

[BBCWatcher]

I’m personally very pessimistic too. Already max out my cpf. I am deliberating if i should liquidate some of my equities and put into more FDs as interest rates have been rising.

Well, you probably shouldn't do that if your current portfolio allocations make sense given your time horizon. But if you were to do that (sell stocks) I'm not exactly sure why you'd pick fixed deposits specifically. Why not 6 month T-bills?

You should be aware that the real yields associated with fixed deposits and 6 month T-bills are currently negative. Only real net total returns matter, not nominal. A 3% nominal yield in a 5% inflation economy is much, much worse than a 2% nominal yield in a 1% inflation economy. Whenever you park Singapore dollars as Singapore dollars — in fixed deposits, T-bills, other Singapore Government Securities, etc., etc. — you should have some inflation forecast in mind because that is your bet, fundamentally. (It's definitely a bet, a gamble. You assume all the Singapore dollar inflation risks if you're holding Singapore dollars.) If you're forecasting that inflation will be much lower (very soon), and stay lower, then it might make sense to buy some long bonds. (SSBs for example would be nice, although those are oversubscribed lately.)

 

[martin]

See this first 2 posts
https://forums.hardwarezone.com.sg/threads/singapore-treasury-bills-t-bills.6769601/

Great. Thanks for this.

 

[martin]

Well, you probably shouldn't do that if your current portfolio allocations make sense given your time horizon. But if you were to do that (sell stocks) I'm not exactly sure why you'd pick fixed deposits specifically. Why not 6 month T-bills?

You should be aware that the real yields associated with fixed deposits and 6 month T-bills are currently negative. Only real net total returns matter, not nominal. A 3% nominal yield in a 5% inflation economy is much, much worse than a 2% nominal yield in a 1% inflation economy. Whenever you park Singapore dollars as Singapore dollars — in fixed deposits, T-bills, other Singapore Government Securities, etc., etc. — you should have some inflation forecast in mind because that is your bet, fundamentally. (It's definitely a bet, a gamble. You assume all the Singapore dollar inflation risks if you're holding Singapore dollars.) If you're forecasting that inflation will be much lower (very soon), and stay lower, then it might make sense to buy some long bonds. (SSBs for example would be nice, although those are oversubscribed lately.)

I only know so much. Not a sophisticated investor. Just want to safeguard my retirement funds and get as much returns as i can. Therefore appreciate all the inputs here.

 

[sohguanh]

I only know so much. Not a sophisticated investor. Just want to safeguard my retirement funds and get as much returns as i can. Therefore appreciate all the inputs here.

You already shared what you did and that is what I did too
1. SSB, T-bill
2. Bank FD
3. Single premium endowment insurance
4. High yielding account like CIMB FastSaver
5. REIT , dividend paying stocks

I understand you also go for REIT and dividend paying stock means you are willing to take some risk correct? How about trying those offered by Syfe Cash+ , StashAway Simple , Endowus Smart Secure ? And today I saw readers posting about Singlife Account too.

 

[martin]

I understand you also go for REIT and dividend paying stock means you are willing to take some risk correct? How about trying those offered by Syfe Cash+ , StashAway Simple , Endowus Smart Secure ? And today I saw readers posting about Singlife Account too.

Haven’t looked at those yet. Actually, my post was about the threat of a major war and whether i should liquidate all or some of my shares and put elsewhere that would be less affected if indeed a big war breaks out.