Earlier last weekend, Mrs Budget and I made the decision to exit the Singapore market fully because of the lacklustre performance of Singapore stocks.
After investing in the Singapore market for slightly over 3 years, we have finally closed off all of our Singapore positions earlier today to fully invest in the US market and in cryptocurrency.
Here are the final trades of our SG stocks earlier today:
We have probably written much about the benefits of investing in the US market previously and at the risk of sounding like a broken record, the Singapore index really provides far inferior return than what the US or the crypto market can return us.
For example, about a month ago, we were kicking ourselves a bit for selling off our SG shares earlier in December because right after we sold our shares, SG market rallied even more in January.
We sold off our DBS shares in December as mentioned in our December update. In January, it rallied a further 7-8%. The same goes for the rest of our Singapore counters, which saw a huge rally in January, but we have sold too early.
However, the prices have since dropped back to December level, leveling out any “potential” gain we would have made if we held on. So the value of our Singapore stocks in February is actually roughly the same as it is back in December.
But since we have rotated our capital into crypto and the US market, because of the ongoing US stimulus and extended bull run, our capital rotation into the US market and cryptocurrency has returned us 10-20% so far, with the potential to go even further in the next 3-5 years.
If you’ve been following our latest monthly updates, you’d noticed that in January, our net worth increased by +S$82,000. Of that, our US portfolio contributed more than S$30,000, with SE, Tesla, Fastly, Palantir making the bulk of it. Our crypto holding also returned more than S$20,000 to us.
Even if we were to hold onto our Singapore stocks, in the next 3 to 5 years, optimistically perhaps we can make a 20-30% simple return, but for US market and crypto, we could potentially be making way more than that. In fact, we are already making 20-30% return on some counters in just one or two months. This is because US and cryptocurrency has a bigger global audience, and hence a bigger potential market cap.
We asked ourselves why do we hold onto our current Singapore investments, and found that the reason is because we wanted to earn the dividend returns and wait for the recovery of the stocks we are holding.
While these are all valid reasons, we found more counterarguments to these reasonings. The dividend returns on the stocks we are holding is only 3-5%, and this can be easily replaced by US growth stocks.
As for the recovery themed stocks, we realized that the opportunity cost of waiting for the recovery is very high. For example, if we had the money earlier in December, we would have average more into Tesla or any of our current holdings, or even initiated a position on SKILLZ, a speculative counter that caught our eyes since ARK started buying them a month ago. SKILLZ has since almost doubled in price.
Based on the potential returns on investment alone, coupled with the high opportunity cost, we have decided to exit the Singapore market completely and to raise our cash level.
After we click the sell button, it felt like a huge “burden” has been lifted from our shoulders, and that we dont really miss these counters.
We may possibly regret this decisionn when the stock market crash and we have no dividend cushion stocks to fall back to, but I think as long as our conviction is high on our current investment thesis, and we have a long holding period, I think we will potentially get more returns from investing in the US market and in cryptocurrency.
Historically, that has been the case too: with S&P500 returning 9-10% pa over the past 100 years, and with noone losing money in bitcoin or ether so far with them hitting all time highs recently. Institutions are all also starting to snap up cryptocurrencies.
With funds coming in from our Singapore stocks which we sold off, we will be allocating a small portion of that into some speculative cryptocurrencies, and save up the rest to build up our warchest for the upcoming market correction.
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