Printing Machine activated
Many would have known that the last 1-2 weeks were very exciting! Many of the US banks collapsed!
- Silver Gate
- Silicon Valley Bank (that caused bank run of $USDC over last weekend)
- First Republic Bank
- Credit Suisse
In the last weekend with the news on the collapse of Silicon Valley Bank, the market went down. $USDC (Crypto stablecoins) also de-pegged to below $0.9. I have seized the chance to make a small trade.
I was hoping that the Market would collapse more so that I can utilize my 60% war chest, but it didn’t. Market went up instead. FED came to the rescue again, but it is not termed as “QE”. For those who are interested, can read about New Bank Term Funding Program. Furthermore, the interest rate dropped again.
What happened since then?
Since last Monday, what has happened?
+~$148 billion – net discount window borrowing
+~$12 billion – the new Bank Term Funding Program
+~$143 billion – borrowing for banks seized by FDIC
Total: ~$300 billion
But according to FED, the $300b spike in the Fed’s balance sheet is not QE but an increase in “Loans” via the Bank Term Funding Program and credit extensions to banks. Really?
Is this QT or QE? So do FED hike interest rate to control inflation or pump more money into system to let the ever-increasing inflation to go higher?
What’s next?
My guess is FED will continue to print money to solve problem until one day they can’t. Guess as investor, we have to be patient and wait for the best chance to strike. Meanwhile, if there are good opportunities, I would continue to trade and earn some pocket money.
Last Monday during the dip, I bought Mapletree Industrial Trust (ME8U) at $2.25 and will be collecting around 4k worth of dividends/interest from various sources this month.
Recently I have also bought CLP Holdings Limited at 57.60 for the 1.21 dividend. Yay. almost free dividend.
Cash Rotting
Predicting that the market will goes down and timing the market pays dearly when you are holding too much cash while the market rally (like now where I am still holding 60% cash). As a result, my cash is rotting. Luckily at this market with high interest rates, I could still easily get 4% yield from Money Market Funds.
Options for Savers to earn high interest
SBAPR23 GX23040S – Singapore Saving Bonds (SSB) above 3% again. Buy or Bye?
I posted the above article on 2 March 2023. My guess now is I will buy more SSB to keep instead of Bye.
However, SSB liquidity is around 1 month. Meanwhile I still want to keep my cash liquid to capture any potential market opportunities. Hence, I will continue to keep my money via the two options below which I have mentioned previously (See post: SAVERs – How to maximize your interest and my Market Transaction/Updates). But I have took out the option for Treasury bill as the recent 3.65% is not attractive to lock up my funds for 6 months. I rather put either of the two options below.
Option 1: MoneyOwl WiseSaver – few days liquidity higher interest
MoneyOwl Wisesaver is investing in Fullerton SGD Cash Fund – Class A (SGD) which invested mainly in SGD Fixed Deposit and backed by Temasek. MoneyOwl itself is under NTUC income. It is as safe as you can get!
The latest rate is around 3.95%. This is liquid and you can take out anytime. Compared this to the latest 6 months Treasury Bill of 3.65%. It’s more worth it!
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To earn the first free $20, simply sign up for WiseSaver which the underlying fund is Fullerton Cash Fund – invested in rolling SGD Fixed Deposit and backed by Temasek. Then put in minimum $10 via FAST transfer to fund this account to earn full liquid ~4% yield. Since free money and risk free, why not?
Option 2: Fundsupermart Autosweep – slightly lower interest but immediate liquidity
The latest yield is 2.824% which is very decent. But the most attractive part of this option is that I am able to use the fund to trade directly and immediately. Option 1 Moneyowl WiseSaver may take a few days to transfer the money out.
Personally, I am using FSMOne.com to invest in funds & ETFs (including money market funds).
FSM is good due to the low comms and the free transfer from FSM to CDP (last year I did a few transfers and took less than a week to transfer. However, my most recent transfer was initiated on 4 Feb 2023 but the transfer to CDP was only done on 23 Feb 2023 around 2pm). Hence, user might want to take note.
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My humble view
Of course, although I still think the Macros are still not good and market will go down within the next few months, but FED could keep printing to print their way out for “bailout” until something break/crack.
Meanwhile, if there are good opportunities to accumulate strong companies, I would because I follow this idea “No Dividend No Buy and only buy those that I am willing to keep long term of at least 10 years. Must pass sleep test.”. (See related post: If I am a dividend investor, this is what I would do….)
Additionally, I would continue to trade and earn some pocket money. Last Monday during the dip, I bought Mapletree Industrial Trust (ME8U) at $2.25.
Lastly, I would keep calm and collect dividend/interest. This month I will be collecting about 4k worth of dividends from various shares and interests from various account. Luckily, despite that I am only 40% vested, my whole year estimated dividend/interest per month is around SGD$3447.78 per month or SGD$41373.34 per year or SGD$113.35 per day.
The above cashflow should be more than enough to cover my household monthly cash expenses of around SGD$3000 per month. Do note that these cash expenses exclude my house monthly mortgage and childcare fee. The reason why I excluded this is because my spouse and my CPF OA current total amount exceeded total loan that I still owed to HDB. Hence, I can pay off the flat anytime that I want to but I don’t wish to do so. For childcare fee, I have already locked up the sum in CDA acccount which will pay the fee via monthly GIRO automatically, hence I don’t need to bother with this too.
Of course, there is also the monthly paycheck that we have sacrificed our time to earn it.
Please also dont forget to build up your CPF account (See post: My Special Account Money (SA) in Central Provident Fund (CPF) – Cornerstone or Last Resort for Retirement?) too!
The very last but the most important point that I want to mention again and again is don’t forget to live Living a regret-free fulfilling life daily regardless of circumstances (See recent post: 11 Important Unexpected Life and Money lessons to learn from Your Children). Also see all my related posts in Care Your Present category.
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For quick references to these resources, you can see below.
- Ebooks and other useful resources on enhancing productivity (Investment, Excel, Notion etc). Currently most of it are free at this moment (subject to change).
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