Congratulations for clearing 2022! 2023 just started. I’ve a good feeling that this year will good to my SRS portfolio. If you need a quick recap, check out my top article for Dec 2022: what happen to the stock market from 2019 to 2022.
Disclaimer: This article is not and should not be taken as a buy/sell/hold recommendation.
My SRS Portfolio Dec 2022
My Thoughts and Consideration
SRS Portfolio Tracker Dec 2022
SGX:HST looks like it is finally recovering. I believe this is because China is reopening on 8 Jan 2023. They are more relax when it comes to COVID-19 testing and seems like lockdowns will be unlikely. China will be living with COVID-19. While I expect there will be short-term COVID-19 spikes and some disruptions, productivity will pick up soon after. Currently, there is no intention to add more position into SGX:HST.
Manulife US REIT’s expected aggregate leverage will be approximately 49% which is just 1% shy away from the regulatory requirements.
I believe there will be some divesting to reduce aggregate leverage in the next few quarters. Overall, these are all bad news to SGX: BTOU. Therefore, there will be no second entry into SGX: BTOU.
SGX: ME8U is a new entry into the SRS portfolio. I have receive first dividend payout from it and looking forward to the further dividends to come.
I have also embarked into dollar cost averaging into the S&P500. More to be added into this space in the articles to come.
Final Thoughts
It isn’t all sunshine for sure. Take care and hope you are well.
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
If you are reading this, you might be deeply hurt by the stock market from 2019 to 2022. I feel you. The last 4 years could have been the most profound shift in the financial market ever. In this article, I will explain what happened to the stock market from 2019 to 2022. In the conclusion, I will attempt to forecast what may happen beyond 2023.
Disclaimer: This is by no means a buy/sell/hold recommendation. Personally, I will write what make sense to me at this moment of time. Read with caution. This is a highly simplistic article and I will explain using demand and supply which are the basic market forces that move prices.
In the last 50 years, the world has become a “smaller” world due to globalisation. It is now much easier to obtain goods, services and even labour across continents. As a result, some countries who have more resources (food, raw materials, land) can sell those countries that have less. In an utopian world, resources are used more efficiently.
In a way, the fate of every country in the world are now intertwined with each other.
The closure of China, being the 2nd biggest economy has impacted the world by reducing the global supply. The illustration below show the top exports that China sells and the potential impacts on the destination countries.
What happened in the stock market 2019 to 2022 China ImportanceWhat happened in the stock market 2019 to 2022 China Exports Destination
I believe that COVID-19 was however not a credit crisis. However, as there are now more liquidity in the market. More money are now chasing the same (probably lesser) amount of goods. This increased the demand for goods and services.
The WFH Trend
What happened in the stock market 2019 to 2022 Work From Home
COVID-19 brought many changes in our lives and one of them was working from home (WFH). While retail and restaurants were badly affected, the technology sector thrived as we are more reliant on technology to conduct our meetings.
This trinity of events in my view, created inflation. With China lockdown (lower supply), increase in money supply and wages (higher demand), this pushed the prices of goods and services upwards.
To add fuel into fire, the Russia-Ukraine crisis put even more pressure the global economy.
What was believed to be a transitionary inflation became a persistent one. While we are seeing some slow down in inflation today, it is way higher than Pre COVID-19 inflation rate of 2%.
When interest rates increase, this makes borrowing more difficult. As a result, business may spend lesser and this may cool the market. We are starting to the effects of this as news of hiring freeze began to surface.
This spooked the stock market sending share prices of many technology companies tumbling to their 52 weeks low.
What happened in the stock market 2019 to 2022 Taming Inflation
What’s coming in 2023?
So, what’s next? The following section will be my prediction of the market. Please read with caution.
I believe things will become better in 2023. This is because supply chain will be easing. I believe the lockdown impacted supply chain as China is the “manufacturing factory of the world”. The world will be “reunited” again after 8 Jan 2023 as China finally open their doors to the world. At the same time, Chinese tourist will once again roam the world with pent up spending. I believe this inflation will be transitionary while supply chain eases up.
While manpower in the technology sector are still on freeze, I’m seeing more demand for manpower in the retail and restaurant space. As this sector struggles to find workers, this will push wages up. In a way, we might see improvements in income inequality. I believe this wage increase is healthy.
Hence, I believe Inflation will stay for a while. This will in turn mean that interest rates will be hovering around current levels. This will then depress stock valuation of companies.
What happened in the stock market 2019 to 2022 Moving Forward
In today context, we are preparing more for a slowdown or soft landing. As the credit window is more constricted now, it is important to build up capital fast for any opportunity.
Final Thoughts
Congratulations for making it thus far. I don’t think it was easy to invest in this environment. It was certainly a 180 degrees pivot from 2020 to 2021. Nevertheless, it is more important to be educated in investment. I believe the window of opportunity is opening.
Like what Howard Mark says, a sea change is coming. Are you prepared?
I wish you all the best. Take care!
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
Give yourself a pat in the back as 2022 haven’t been an easy year for everybody. I know some who pass away because of COVID. I know some who are retrenched. I definitely know more than one person who had a mental breakdown. I would like to say that you have already done well. Your best will look different everyday.
Your Best Will Look Different Every Day
While 2022 is ending, there are some financial news that are still impacting our lives. I will be updating the 4 most impactful financial recaps that happened in 2022 and will continue to impact us in 2023.
2022 Financial Recaps That Will Affect You In 2023
#1: Increase in CPF Top Up Tax Reliefs
In 3 Key Changes To CPF Policies From 2022 (if you haven’t read, this is my top article of 2022), I wrote about the change in rules for tax reliefs for Retirement Sum Top Ups (RSTU).
In a nutshell, the amount of tax reliefs structure have been streamlined to be up to $8,000 (instead of $7,000). and this cap will now be shared between Special Account (SA), Retirement Account (RA) and the MediSave Account (MA).
If you are planning to RSTU in 2023, the new limit will be $8,000.
#2: Interest Rates Increasing
I believe the era of low interest rates will be ending and we are moving to a more “reasonable” interest rate ranges. This increase in interest rates have sent some shockwaves to the property market. On the flipside, this means that the interest in your bank account will finally increase.
Frequent readers of my blog will know that I share about the power of the R.E.V. strategy to increase cashflow from your bank accounts. However, as the rules of the banks keep changing, I have refocus my attention on getting more consistent returns elsewhere.
I check if there are changes among the bank multiplier accounts and will only change if the changes are drastic. Best High Interest Saving Account Singapore 2022 will give you a glimpse of what’s available now. I’m willing to bet that there might have already been some new changes already.
Loans will have a higher stress test. This will mean that you will get a lower loan amount if you plan to buy a house. If you are purchasing HDB, the loan to value have dropped from 85% to 80%, this mean that you have to increase cash payment by 5%
The one that got the most concern is of the 15 months waiting period for switching from private to HDB. While this has spooked the market. I believe there will be an increase in smaller condo units as a result.
#4: We Are Still in a Bear Market
I will share some statistic to give equity investors a glimpse of hope.
While we have obviously passed that date, this mean that we may be due for a recovery soon. (Disclaimer: this isn’t financial advice and just statistics).
The financial planning industry will evolve every year. While the rules of the game might change, it is vital to keep moving towards your end goal.
You are not alone in this. I suggest that you can consider to work with a trusted financial advisor that evolves with the economy. Otherwise, take time to read and understand the changes so that you can move towards your intended goal.
I wish you all the best. Take care!
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
Are you burnt out or bored with Singtel or StarHub?
Do you wish you had a broader variety of things to watch without paying for extraneous channels?
Are you frustrated with MediaCorp TV?
Do you miss the days of variety from satellite dish entertainment?
If you answered ‘yes’ to any of these questions, you will be well-rewarded for reading the rest of this article. Provided below is a guide to getting digital entertainment for discerning Singaporeans who want to cut the cable (Read More: Purge Your Money Burdens) but still access media on their own schedule and at more negotiable prices.
Save on Cable Bills by Streaming Your Favorite Channels
Determine the Right Video Streaming Service and Plan
Because there are many streaming services out there, you need to understand what each platform offers. While it is best to do your own research, we can assist by providing an overview of the major providers, their pricing and even highlighting which ones have free trials.
Netflix
While the platform that allowed streaming to rise to its current prominence has recently taken several hits, Netflix is still a solid streaming service for original programming. It also features a decent catalog of television and films that is constantly being subjected to updates.
Pricing Structure: Netflix offers three subscription tiers.
Basic (S$12.98/month) – This option has a single-screen limit and only offers standard-definition content. Downloads are limited to one device.
Standard (S$17.48/month) – This option has a two-screen limit and offers Full HD content. Downloads are limited to two devices.
Premium (S$21.98/month) – This option has a four-screen limit and adds Ultra HD to content options. Downloads are limited to four devices.
Free trial – 30 days
Disney+
If you love anything Disney-related or its many subsidiary properties, then this is the streaming service for you.
Pricing Structure: Disney+ subscriptions come in a few plans.
Monthly – S$11.98/month
Yearly – S$119.98 upfront
StarHub Bundles – StarHub features several bundles that include Disney+.
Free trial – Not available
Amazon Prime Video
Prime Video (check review) is full of original series and films, as well as a respectable library of third-party content.
Pricing Structure: Anyone interested in a Prime Video subscription can pay S$2.99 a month. It includes access to Amazon Prime.
Free trial – 30 days
Apple TV+
If you are a fan of all things Apple or curious about shows like “Ted Lasso”, you might consider giving this platform a shot.
Pricing Structure: S$6.98/month.
Free trials – 7 days
HBO GO
HBO GO is an exhaustive compilation of Hollywood films, blockbusters and original series from the various brands of HBO and Cinemax.
Pricing Structure: Anyone interested in an HBO GO subscription without using another service provider can pay either S$13.98/month or S$29.98/three months.
Hayu
Over 200 reality programs are available the same day that Americans see them.
Pricing Structure: S$4.99/month.
Free trial – 7 days
iQiyi
If you love your pan-Asian media, this streaming service is for you. They even offer several original programs.
Pricing Structure: Anyone interested in subscribing to iQiyi has two options:
Pricing Structure: Anyone interested in subscribing to Viu has three options with special pricing available for student subscribers:
Basic – This is the ad-supported free tier but comes with only limited access to standard definition programming. Users can access content 72 hours after it becomes available to Premium users and may download one show at a time.
Premium – Users have unlimited, ad-free access to Viu’s catalog and are free to download as often as they wish. New shows become available 8 hours after the telecast. While this tier is available for S$7.98/month, that cost is reduced for lengthier subscriptions: 90 days, 180 days or a full year (S$7.58/month, S$7.19/month and S$6.39/month, respectively).
Premium (Student) – Students who present a school ID can receive a discounted subscription to Viu Premium that only costs S$3.98 per month.
Free trial – 7 days.
Buy a Video Streaming Device
Once you know which streaming services you like, your next step is acquiring a device to stream those services. In the simplest of terms, this is like a set-top box that connects directly to a TV and allows you to watch your favorite films and shows through that TV; think of it as a replacement for a cable box. While there are dozens of brands on the market, the major names include Amazon Fire TV, Apple TV, Chromecast and Roku.
Final Thoughts
Now that you have a better idea of your options, you now know which services can best suit your tastes in media. You will need a streaming device to enjoy them on a screen bigger than your phone, tablet or monitor (Read More: How To Save On Big Ticket Purchases). You can safely cut that cord and still find plenty of entertainment to consume with friends and family.
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
While I believe that cooling measures are introduce to allow Singapore’s property market to achieve slow consistent growth, there will definitely be effects on homeowners, buyers and the renters crowd. I want to share 3 main implications of the new cooling measures done on 30 September 2022.
3 Effects of Property Cooling Measure Singapore
Higher Interest Rate To Calculate Loans
For property loans granted by private financial institutions, MAS will raise by 0.5%-point the medium-term interest rate floor used to compute the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR).
For residential property purchase loans and mortgage equity withdrawal loans, they will using the 4% per annum (p.a.) floor (up from 3.5% p.a.).
3 Effects of Property Cooling Measure Singapore Maximum Loan Amount
Putting this into numbers, the maximum loan that banks will be able to provide will reduce by the following amount. Personally, I think there will be no major impact from this as the quantum for the properties are in the millions. This will affect buyers who will not be able to stretch (even more) when it comes to bidding for the property.
If asked if the interest rate floor will increase again, I personally don’t think so and likely to hover around the current rates. The MAS-MND-HDB have commented that “They (interest rates) are expected to rise further in 2023 along with US interest rates, before settling at a higher level compared to the lows during the period 2013 to 2021.”
Loan-To-Value from 85% to 80%
This is applicable for HDB housing loans only (Private LTV limit remains at 75%). This means the HDB buyers will have to increase cash downpayment by an extra 5%.
I believe this is aimed at HDB that are bigger in nature namely 5RM, Jumbo, Executive Apartments etc. In particular, this aims to reduce the raise of the million dollar HDB (231 Million Dollar HDB from Jan to Aug 2022). I believe the government intends for HDB to remain affordable and want to reduce the use of HDB to do speculation.
3 Effects of Property Cooling Measure Singapore LTV Effects
Personally, I think there may not be major impacts even for the higher quantum levels. You will also be glad to know that first timers or the lower income group will not be affected much by this because of the housing grants (up to $80,000) available for them.
15 Months Wait Out Period For Switching From Private to HDB
This is perhaps the most talked about measure as it will affect people is planning to sell their private property into a resale HDB. Currently, people who have private properties have to sell it within six months of the HDB flat purchase.
Now, there is a wait-out period of 15 months after the disposal of their private properties before they are eligible to buy a non-subsidised resale flat. This means that it will not be easy to move towards HDB. You will be glad to know that this is a temporary measure.
You will also be glad to know that this will not affect those age 55 and above who is choosing to downgrade at that time**.
I believe there will be 4 main effects of this.
#1: There will be an increase in demand for smaller condo units. If people who do not want to wait for 15 months, they may consider to downsize to the smaller condo units. I believe transactions (perhaps price) for 2BR to increase in the months ahead.
#2: There will be an increase in demand for 4BR HDB resale units. For people age 55 and above, the 15 months wait out period will not apply to them** if they shift to a 4BR HDB or smaller.
#3: In general, lower transaction as the buying pool has shrunk. I believe that over the next quarters, the overall transaction might be lower as HDB upgraders will think twice. This reduces the effective buying pool.
#4: In general, rental rates will increase.
Final Thoughts
I believe that the government is planning for a sustainable and gradual growth of property prices. The emergence of million dollar HDB, the increase in property prices and the increase in interest rate calls for prudence for financial planning.
Property play a big role in our financial planning. It will be prudent to understand your own financial situation before making a decision into the market. It is also important to remember that other asset class (eg: insurance, estate planning, equity investment) should be taken into consideration when planning for your financial future.
I wish you all the best. Take care!
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
