Market Outlook 2H2020

I’ve been really busy lately replying messages and moving money around. Still, I wanted to post quickly my thoughts on how I will be investing for the second half of 2020.

It seems like COVID-19 will be with us much longer than I expected. Travel this year is out of the question, and there is still a lot of uncertainty about it in 2021.

With the discussions of stepping down government support soon, I think many companies will throw in the towel. Many were hopeful that COVID-19 will pass in a few months, and hung on. But it’s becoming clearer that restrictions will be lasting a long time, perhaps years.

It’s so tough. Revenue is halved because of safe distancing measures, yet compliance costs has increased. How many can survive like that?

There was a very good interview with DBS’ CEO at CNBC. He says that the worse is yet to come, and I think he’s right. Once government support goes, it will be the banks and private sector taking the hits.

For these reasons, I wouldn’t go into REITs, banks, or Singapore stocks in general. I wrote about my aversion with these already, but I don’t see any improvement soon. I have trouble deploying Singapore dollars since investment opportunities are scarce. Short-term money market funds and insurance policies should be my SGD outlet.

It’s not to say that everyone is doing badly now. It’s a market of extremes. Some people are doing really well. Heartland malls are benefiting from the lack of activity in the CBD. Tech and data centre stocks are skyrocketing.

I now view tech stocks as safe havens. I know for sure they won’t go out of business, and their sales are improving. To me, their increased valuation is justified. With the pandemic going into extra time, these stocks should continue to do well.

I’m almost done refining my portfolio, will be posting it hopefully this month.

Take care all.

6 comments

  1. Right,, tech is the theme of today market, and i do not think it will end so soon. U still can ride the rally to the end of the year. The last tech bubble take 2 yrs to end, And we have just started, I was in in early April , lucky me, Join me,

  2. Hi FI,

    We already know we shared the same tech stocks interest. And I think they are really safe havens for now. Like you, I do not believe in Banks and REITs that much for now. But in China, I heard from all my friends that everyone is back shopping the malls like in the past. Seems like such a big country is doing much better than a smaller SG in dealing with Covid.

    How about Gold and Silver? – Safe Havens also?

    The Tech in HKSE is still cheap in my opinions, because Asian investors are less aware or less interest of tech stocks as compared to US. So maybe it is good to look into HK.

    Ant Financial is going IPO soon. This company is going to be crazy considering the fact that China only has average income of USD10K+ pa – now. Do we not think China will have average income of USD20 or 30K one day?

    Then can you imagine the Tech Stocks explosion in China?

    1. China I am honestly a bit scared to invest. The information they provide is not up to the same standards. Can collapse anytime. I shun the Chinese banks and insurers cause frankly speaking many assets are likely made up. Their market is very speculative also.

      Gold and silver I’m not familiar with, but ya I think it’s worth exploring.

      I want to consider HK too, but uncomfortable with holding HKD. Alot of talk about their currency not able to keep the USD peg.

      Ant Financial is very interesting. I tend to shy away from IPOs but their products are very good. I think I will go in for that.

      Thanks for opening my eyes Rolf

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