The Trump tariff war has significantly shaken U.S. stocks and global markets, affecting nearly everyone. In the first week of April, my portfolio experienced a paper loss of 1.3%, equivalent to approximately SGD 6,000.
With the Hong Kong stock markets closed for a holiday last Friday, I anticipate further declines in both Hong Kong and Singapore markets next week.
What Should I Do?
1. Reviewing My Portfolio Assets
Most of my investments are in dividend-paying stocks. I hold a notable position in the technology sector, with HST showing a floating gain of 90%, which I plan to leave untouched. BYD Electronics $BYD ELECTRONIC(00285)$ and ISDN $ISDN(I07.SI)$ have P/E ratios around 18, which is rational in a bull market, but both are currently reflecting paper losses of about 4%. I’ve decided to hold onto these investments even with significantly paper losses.
I don't not engage in speculative trading.
2. Setting Up My Watchlist and Calculating Market P/E Ratios
$Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$
- S&P 500 P/E: 25.19
- HSI P/E: 12.8
- HST P/E: 25.86
3. Preparing for a Recession and Tariff War Investments
Over the past three years, I’ve gradually built a strong dividend portfolio, and my positions are nearly at an all-time high. I currently have SGD 20,000 in cash and SGD 70,000 in Singapore Savings Bonds. I plan to redeem SGD 30,000 of the savings bonds to take advantage of investment opportunities during this turbulent time. Singapore Savings Bonds lock in interest for 10 years but can be redeemed at any time without penalty, with funds arriving in my cash account by next Month the second working day after redemption. My wife has a substantial amount of cash, Singapore Savings Bonds, and T-bills. I’ve reassured her, saying, "Your savings are like CPF; we won't touch them. My savings will allow me to explore opportunities in the capital market."
4. Avoiding Panic Selling
Panic selling is not an option for me. I will consider starting to buy when:
- The Trump administration calls for a ceasefire in the tariff war.
Or - The Federal Reserve intervenes to support the market and economy. If the Federal Reserve aims to maintain the USD as the world’s trade currency, it must uphold its purchasing power.
Or - Market P/E ratios drop to attractive levels. I find a P/E below 22 for the S&P 500 appealing, suggesting a potential 15% drop before I consider investing.
Conclusion
Remaining calm amid the panic of the tariff war is essential. My portfolio is positioned at nearly an all-time high, and I can allocate a maximum of SGD 30,000 for investment during this event. I will focus on my current portfolio and my watchlist, potentially increasing my investments if any of my holdings reach a new 52-week low. VOO and BOTZ are on my radar as long-term investment targets.
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