I like to “visualize” what may happen in the future so that I can be better prepared to respond if a similar situation occur in the future. Some call it “forecasting”, or “speculation”, but I like to call it visualizing. Please take my words with a great dose of salt!
I wanted to verify from data of the last 20 years, whether our local banks stocks rise when the US Fed Fund Rate rises. I shall use DBS as proxy for our local banks.
While I agree never to fight the Fed, I disagree that rising interest rates will cause a recession/crash. In fact, rising interest rates has always been good for stocks. It means that the economy is growing strongly, and the Fed wants to cool the economy.
It does mean the start of the end though. But do we know when the end is?
Bonds have been under pressure lately because of possible 4 times interest rate hikes because of inflation. Everyone is looking at the 10Y US Treasuries yield which currently stands at 2.87. Many analysts are saying the same thing, but I shall quote Schroders in a recent SIAS report, “based on our models, US equity valuations are sustainable as long as US 10Y yields does not go above 3%”. Yet, when I look back in Dec 2013, the US 10Y yield stood at 3.03%. Now what happened back in 2013 to 2014? It was then a great bull run for US stocks!
I should not be too cocky. It is not what I think that is important, but what most people are thinking.
Anyway found this post : https://www.marketwatch.com/story/why-investors-shouldnt-panic-over-falling-bond-prices-2018-02-13
I am sharing the various scenarios of Hyflux perps that is playing out in my mind. Please note that the following are my speculation as no one can predict the future.
Maybank Kim Eng (Hong Kong) Benny Wong gave a bearish view of Hong Kong. whereas Maybank Kim Eng (Singapore) presented that current market in Singapore maybe a buying opportunity (I posted this yesterday http://wealthlions.com/2018/02/maybank-ke-putting-cart-horse/).
Here is the article on Hong Kong market:
Maybank KE Singapore issued a note on 6 Feb 2018 suggesting that traders may have put the cart before the horse in the inflation-induced sell-off. I reproduced it here:
I bought Singtel shares at 3.56 in my margin account yesterday.
The following are Reits with increasing DPU. Some of them have pretty low dividend yield, which I have to wait for a major correction before collecting.
- Parkway Life (wait for major correction)
- First Reit
- Mapletree Ind
- Keppel DC (wait for major correction )
- Capita Com
- Mapletree Com
- Mapletree GCC
- Fortune (wait for major correction)
- Ascendas HTrust
Just sold AEM for 26% profit and Wing Tai for 6% profit.
Time to take some profit off the table.