Ha!
You all must be thinking what to do next, right?
I still remember waking up to a barrage of messages on Monday, 7th April 2025
Walao eh DBS down 17%
Welcome to the market correction 2025.
Some are saying that this round is even more brutal than the pandemic selloffs.
I feel so too. And this time, the selloffs feels to be either on purpose or boiling down to stupidity.
Nevertheless, rather than arguing on trade deficits, surpluses and tariffs, let’s look at: What should the typical Singaporean investor like you and me do?
Since Singapore Banks and REITs drop until so jialat, is it safe to buy now or wait a little longer?
Technically speaking…
With that kind of candlesticks, even the most faithful technical analyst couldn’t advise you how things are going to play out in the next few days.
Apart from DBS opened low and rallied up to finish the day above its opening.
Fundamentally speaking…
With Trump’s tariffs expected to stifle free trade, allegedly to bring manufacturing back to the States — Singapore, as a major trading hub, is poised to suffer aftermaths.
And so will the banks and REITs. Lesser Capex, lesser risk-taking growth initiatives, all spells slower economic growth.
And that will hit the renting and leasing business as well. To top that off, if a recession does manifests itself, we are looking at delinquencies from both borrowers and tenants.
A rare double whammy for both sectors that are usually inversely related to each other.
Anticipating that with no U-turn on the tariffs, Singapore banks and some of the blue chip S-REITs, together with the rest of the world, will be affected fundamentally.
That said, their business model remain intact, albeit taking hits temporarily.
There really is nothing to nitpick about Singapore banks, as I’ve previously mentioned countless times, except for their valuation. But hey, prices are cheaper now, but not as cheap everyone wants it to be.
As for REITs, well the end that everyone expected to be the end always drags on, with ever-evolving never-ends as of now.
Will the tariffs really kick in and go LIVE?
It’s a trillion dollar question. The recent market meltdown saw an anticipated of USD 2.4 trillion wiped out.
Will the tariff go live, is it just a ploy to get affected countries to sit down to renegotiate new trade deals with the US?
Your guess is as good as mine. We cannot predict what Trump will or will not do. But you can have your own assessment on the kind of person that he is.
To me, he is eccentric, looks smart, but doesn’t have the necessary intellect to lead the world’s most powerful country.
Thus, there is a real possibility for the tariffs to go through, and wreak havoc on the trade system the world has carefully established and adopted over the years.
So with that belief, we could be just seeing the tip of the iceberg of the economic contraction.
With prices potentially heading even lower if the worst transpires, those with limited capital might want to hold off deployment for now.
The opposite could just as well happen
Nothing is predictable. Trump could miraculously get everyone on board with separate trade deals to ease off the tariff threats. And prove me wrong.
And if that turns out to be the case, then in hindsight, today’s price levels we are at now, are very good buying levels.
REITs are notoriously cheap after the persisting higher inflation that has lowered down the rate cut frequencies.
We are now seeing plenty of blue chip REITs trading below book value, and SG banks trading at close to trailing 6% dividend yield.
Although prices may or may not go lower, at least we are looking at far more reasonable valuations compared to valuations earlier this year or at the end of last year.
What Trump will do versus what we can do
Did I anticipated the sell-offs? Not accurately. But I am not surprised that it transpired. If it was someone else as POTUS, then I would be surprised.
My opinion of Trump ever since he took over as POTUS is straightforward – expect the unexpected.
So with that assumption comes the more important questions—what can we do if a panic sell off happens?
You might argue that having a crystal ball to predict what would happen will help us make the correct decision today and as of now.
It is easier said than done in reality.
So, is it safe? It might be safe and it might not be.
The punchline: Always ensure you have capital to deploy when the market continues to tank. If you have tons of ammunition, now is the right time to deploy some of it.
If you don’t have that much to fire, then stay calm and wait. Unless you are more than willing to play bystander by deploying everything now, and accept there will not be any further deployment if the market continues to correct downwards.
Again, we can never control the wind—only the sails. Always remember that!