As part of a new series showcasing insights from top financial experts, this article was contributed by financial strategist and founder of Weipedia, Wong Kon How.
Who says Singapore stocks are boring?
Last week, the STI Total Return Index, which is built on price returns and reinvested dividends, made an all-time high and traded above 6,000 for the first time. Singapore stocks are known for their generous dividend payouts. In absolute returns, if to include compounded reinvested dividends, we will see Singapore equities in a different light.
Source: TradingView
Cannot ignore the grey rhino
A 'grey rhino' is a term used to describe a highly probable, high-impact, yet neglected threat. US bonds, specifically US T-Bonds, are considered to be at risk of crashing, and inflation fear still linger, yet US Indices are at an all-time high. This clear sign of divergence is being ignored by most investors, despite its potential global impact.
Source: Tradingview
Flight to quality to Asia
Flight to quality refers to the phenomenon where investors move their investments from higher-risk assets to safer ones during times of economic uncertainty or market volatility, and it is already happening, with more funds flowing into Asia.
Foreign Direct Investment: 50% of global FDI into Asia
Asia is 70% of world’s growth
Singapore, being a hub, will tend to benefit
Investment strategy: In a higher inflation environment leading to higher interest rates, I will maintain accumulating low gearing and dividend payout companies. I will add-on when STI close above its critical resistance.
Source: TradingView
This article was contributed by:
This document does not constitute an offer or solicitation to buy or sell any investment product(s). It does not take into account the specific investment objectives, financial situation or particular needs of any person. Investors should seek advice from a financial adviser before investing in any investment products or adopting any investment strategies. In the event that the investor chooses not to seek advice from a financial adviser, he/she should consider whether the product in question is suitable for him/her. The investment product(s) discussed herein are subject to significant investment risks, including the possible loss of the principal amount invested. Any examples provided are for illustrative purposes only. Past performance of investment products is not necessarily a guide to future performance. Weipedia and its affiliates may deal in investment products in the usual course of their business, and may at any given time be on the opposite side of trades by investors and market participants. Any statements or information expressed by other organisations are of the respective authors. Weipedia and its affiliates make no warranty as to the accuracy, completeness, merchantability or fitness for any purpose, of the information contained in this document or as to the results obtained by any person from the use of any information or investment product(s) mentioned in this document. Weipedia undertakes no responsibility to update this document. Weipedia reserves the right to make changes to this document from time to time. In no event shall this document, its contents, or any change, omission or error in this document form the basis for any claim, demand or cause of action against Weipedia and/or any of its affiliates and Weipedia and/or its affiliates expressly disclaim liability for the same. This document is being made available to only certain qualified recipients. In the event that this document or any part thereof is recirculated, transmitted or otherwise distributed in any format to any other person by a recipient, such recipient will have the full responsibility to ensure that such recirculation, transmission or distribution complies with all applicable laws, rules, regulations and directives in all the relevant jurisdictions. Weipedia and its affiliates hereby disclaim all responsibility and liability arising in connection with such recirculation, transmission or distribution.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
