The recent massive tariff announcement by the US has sent shockwaves through global markets.
It’s baffling that how a single policy decision, driven by one administration within a democratic framework, can create such profound disorder.
I am not going to start a political debate here, but what happened underscores a crucial point: the outcome of a majority vote isn’t always “right”, especially when “right” itself is so often a matter of individual values.
Similarly, stock prices which are often influenced by short-term market sentiment, depends on market participants’ individual goals and time horizons.
Consequently, the meltdown in the market we’re now experiencing in the wake of these tariffs is a direct reflection of this inherent subjectivity.
I was much tempted to react emotionally to these market declines. While I am not panicking and selling, I was tempted to capitalise on the on-going sales.
Thanks to the plan formulated by the objective me prior to this plunge, which include a three-day cooling period, I was able to resist taking any immediate actions over the past few days.
Am I changing my earlier plan?
You might be asking if I’m altering the plan I shared three weeks prior.
In essence, no. That plan was always intended as a flexible guide, allowing for adjustments based on the dynamic nature of market conditions, particularly the speed of a market decline.
Given the current rapid market drop, my sensing is that it’s prudent to wait a while for the markets to stabilise before deploying capital.
While this cautious approach means I might miss out if the market stages a swift recovery, I’m comfortable with that potential outcome.
A quick rebound would mean my existing portfolio recovers its value, likely exceeding any gains I might have achieved by immediately deploying the “opportunity fund” during this volatile period.
What will I be buying?
When the market stabilises, these are what I intend to buy.
On the local front, I might add a bit more DBS Group Holdings (SGX: D05) and iFAST Corporation (SGX: AIY). I am also likely to subscribe to the preferential offer of Frasers Centrepoint Trust (SGX: J69U) in excess.
Regarding my US market holdings, I won’t be adding to individual stocks this time round and will simply ride out the current cycle. However, my plan to purchase the Amundi Index MSCI World Fund with my CPF-OA funds, as outlined previously, remains in place.
If you are also interested in accessing this fund, along with the Amundi PRIME US Fund, both are now available on Endowus and POEMS. It’s worth noting that Endowus charges a 0.3% annual platform fee for a single fund, while POEMS currently does not.
Though the cost-conscious choice would clearly be POEMS, my prior positive experiences with the Endowus platform might just lead me to make a seemingly “insensible” decision.
The current market presents both challenges and potential opportunities. However, before considering any investment moves during this downturn, ensure your essential needs are comfortably covered for the foreseeable future as we can’t predict how long this volatility will last.
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