Rising Interest Rate Environment

 This is the third consecutive hike of the Fed Funds Rate by 75bp, bring rates to 3% now.

Singapore will soon follow.

With the dot plot predicting the Fed Funds Rate to be around 4-4.5%, we should expect more rate hikes in the next two quarters.

Where does that leave us?

The stock market is tanking really badly, USD is so strong against everything, meaning bye bye gold and crypto.

Best bets are treasuries and fixed deposits.

Clear whatever loan you can too.

Small DCAs into equity portfolios.

Save cash next six months so that you can:

A) further pay up any loans where interest rates are going up too quickly

B) place into fixed deposits yielding >4%

C) buy equities on the cheap

The S&P 500 is testing the June 2022 lows near 3600. From its all time high in Jan 2022 of 4800, that has been a huge nine month drop. Once 3600 breaks, we could even see 2900 and below.

Will it rebound?

Not likely as the fundamentals have not changed. Interest rates are still rising, inflation is still too high, there is quantitative tightening going on, and the economy has not felt the full brunt of many of the recent measures yet.

Stay safe out there.

Saxo Bank Considers Euronext Amsterdam Listing

 Read the public article here.

Hopefully won’t take too long.

Will be great for the whole organization.

Super happy we’ve come this far after so long.

What better way to announce it than during Saxo’s own  30th anniversary party!

#beinvested

Die With Zero

  Been seeing this book recommended a lot lately.

A lot of interesting concepts.

Read the summary here.

Here are the nine main points:

1. Maximize your positive life experiences 
2. Start investing in experiences early
3. Aim to die with zero
4. Use all available tools to help you die with zero
5. Give money to your children or to charity when it has the most impact
6. Don’t live your life on autopilot 
7. Think of your life as distinct seasons
8. Know when to stop growing your wealth
9. Take your biggest risks when you have little to lose

Saxo Markets CBD Roadshow

 We had a roadshow in Raffles Place.

It was our first roadshow post Covid period.

Very fruitful and it was really successful.

Great time to have our newer staff showcase their sales acumen.

Influencer Vibes

 We have equipped our new office with an actually working studio.

I had to have a bit of fun with my funny influencer expressions.

Maybe I can be one some day.

Saxo Markets Singapore Dinosaur

  Many people have asked where the 'Saxo dinosaur' is in our new Singapore office.

In many Saxo offices, each has its own dinosaur, to remind all Saxonians of how important change is.

Adapt or die.

Saxo Markets Singapore's dinosaut is a live-sized Centrosaurus, a genus of Ceratopsian dinosaurs from the late Cretaceous period of Canada (76.5 - 75.5 million years ago).

It can be found on the right side of our sprawling new reception area.

SaxoWealthCare Launch Event

 We had our SaxoWealthCare launch event in the office.

I was one of the speakers. 

I remember how anxious I was, having to struggle with my gout recovery, and not feeling very prepared to host the event, nor talk through my presentation piece.

In the end it all came through pretty okay. Definitely not my best moment, but nothing so terrible that people really complained about (maybe they were just being nice!)

Here're some shots of me talking in front of a large audience.

Polestar Successful Listing

 Polestar is finally listed on the NASDAQ.

Ticker is PSNY

Hope to see it skyrocket!

To the moon!!!

HUAT AH!!!

Saxo Launches SaxoWealthCare

 Saxo Markets in Singapore recently launched the latest robo-advisory wealth management solution, called SaxoWealthCare.

This is touted as the 5th generation of robo-advisors, with state-of-the-art algorithmic automation in construction and rebalancing of your portfolios.

The main draws of SaxoWealthCare are as follows:

1) Entirely personalized and bespoke, based on your individual goals.

Users basically select their journey and input their regular or one-off contributions, and the portfolio engine does the rest of the work! Thereafter, you put in your individual goals, and the rebalancing algorithms then factor these goals in to rebalance accordingly so you attain your financial goals in the most realistic ways possible!

2) Active rebalancing

The use of the word Active cannot be said enough. SaxoWealthCare portfolios are rebalanced daily, while most others are done only half yearly or yearly. This means your asset allocation will always be in line with your risk tolerance.

3) Portfolio protection

For the more risk averse, an added option is the use of Portfolio Protector. This is an advanced balancing mechanism that constantly monitors your risk tolerance and rebalances between equity v fixed income to ensure you do not lose more than what you can tolerate.

Hence, compared to many other robo-advisors out there, SaxoWealthCare stands out as one of the most advanced of its kind. It is really one of the most complete robo-advisors for retirement planning.

Costs are very competitive, with no added fees for the ultra frequent rebalancing mechanism.

In this current poor stock market environment, now is a great chance to pursue a dollar cost averaging strategy using SaxoWealthCare, as you would be capturing the market prices low and, as you constantly make manageable regular contributions, will continue to capture the market performance through out this volatile period. By the time the market heads up again, you’d be in a great position to realize your goals.

Here are some recent public reviews of SaxoWealthCare:

MoneySmart

Seedly 

Financial Horse

How 2022 Is Playing Out For The Year

 So the past six weeks have been quite surreal in the markets.

The Fed has announced QT (Quantitative Tightening) and it starts this month starting at a reduction in Treasury Bill holdings of $50B, rising steadily up until September where it will reduce by $95B monthly. Traders are also betting the Fed is hiking interest rates by at least 250bp this year.

Now back to the past six weeks, the market (especially in the US) has had some time to digest this and clearly it DOES NOT LIKE IT. The market has been tanking since ATH and in the last six weeks have fallen almost 20%!

Last Friday night’s session, the S&P500 index actually touched this 20% mark, which signals an official bear market or recession, but bounced of from there to close still above those technical levels.

Yet the will be more carnage to come as interest rates rise and QT takes funds out of the markets,

QT alone will shrink the market, meaning while in the past, retailers could bank on QE funds to flow in, and cause a meteoric rise in stock markets (and many other correlated asset classes), those in the know will expect the opposite to happen this time around, with a similar opposite scenario playing out.

To make matters worse for the stock markets, as interest rates increase, less market participants can rely on leverage as it gets more and more expensive. Loans become more expensive. Cash becomes more expensive. This will surely further exacerbate the tanking of the stock markets.

What is this going to mean for the retail investor?

IMHO ONLY! DYODD!

Firstly, don’t even think about buying the dip. The pain has only just begun, so no point getting more cash trapped (buy and hold long term liao).

Secondly, consider dollar cost averaging. DCA a small, manageable amount monthly, quarterly, annually. This will help you catch the lows. Yet low can always go lower, maybe even three years of lower lows! So make sure you are comfortable doing this.

Thirdly, watch your loans. As interbank interest rates go up, interest rates on loans will go up. This will impact your loan repayments and thereby your cashflows. Conversely, rates of Fixed Deposits and newly issued Bonds will go up too, so it is a good time to review past commitments and consider some diversification into these asset classes.

Lastly, cash is king. We are heading into a new world order. One where the younger generation may not have seen before. The above global monetary policies PLUS geopolitical uncertainty (Ukraine war, runaway inflation) are bound to continue hurting the markets. Having more cash in hand gives one better peace of mind in times of crisis, and furthermore allows astute investors to deploy cash on the real life changing investment opportunities to come.

Consider this. The last real crash was in 2008’s Global Financial Crisis, and before then was 2000’s Dot-com bubble crash. If you came into the workforce in 2009, you’re a Gen Z and all you’d have ever seen was a bull market. Every time the markets dipped, you just BTFD (buy the dip) and things would go up and you’d make money. 14 years of such optimism. Well as Boomers and Gen X will tell you, you’re in for a rough ride.

Hang on to your hats in 2022. It will be quite a volatile ride.