Is it safe to buy stocks yet?

It's been a long while since I updated. As shared previously, I am mostly in cash as I have foreseen some turmoil at the beginning of the year. When the major US retailers have started sounding off the alarm in Feb/Mar regarding weaker consumer spending, I sold off most of my holdings. Since then there has been a lot of volatility. I have been trading hedges and volatility ETFs. The sentiment is still very weak with a lot of uncertainty. The 2 largest economies have not yet started negotiation. The tariffs are forecasted to hurt the economy especially with small and medium businesses taking big hits. Inflation will return and growth will slow. There is already some evidence that the stance may be softening, judging by the exemption of electronics and semi, and call for rate cuts presumably to cushion the inflation impact. Afterall, with domestic pressure, and rising unfavorable polls, I don't think the tariffs can continue for too long. In fact, the man himself said there could be a deal with China within 4 weeks, somewhat implying that the whole thing should come to an end or de-escalate soon.  I am doubtful a deal could happen so soon though, if at all, since the 2 leaders are not even talking directly yet. Even if there is a deal, it might be one that is not so favorable, and there would still be some level of tariffs. I don't think all the tariffs will be removed. Further, there might be more coming soon, semi/pharma/minerals tariffs. 

The 2 main uncertainties are how high would inflation go, and how low will economic growth go? Recently, all forecasts have been not very accurate. Going forward, the forecasts will be even more inaccurate given the chaotic situation right now. Any misexpectation will cause shocks to the stocks.

It is really hard to say whether the bottom is in, especially given that there is no Fed 'put'. Will the markets drop further before recovering or just go up from here? Therefore, it might be wiser to just DCA slowly for those long-term investors, and hold really strong stocks that can weather any storms. For me, I will just continue to nibble very slowly while trading hedges. 

    

Almost empty portfolio

 The past few weeks have been a wild ride. The sentiment has been extremely bearish. I had to cut lost my short-term positions. The reason I have not been writing is because I have not taken much actions so far. My portfolio is almost empty now. I am looking for the market to stablize before going in big again. Valuations of some tech stocks look much more attractive than before, but some may argue they are still overvalued. To each his own. I think it's all relative. The stocks I sold have all dropped far below the prices I sold at because I know a big storm is coming so I acted early. Hoping to buy back at lower prices. Yes market timing at work. I am concerned that I might also miss the eventual rebound (if any) so I am just "nibbling" very small positions, to keep myself vested. When the time comes, I may average up to catch the wave. For now, I can only wait. 

So far value, defensive, healthcare and consumer staples stocks are holding up well, and even went up 5-10%. Examples : McDonalds, J&J, Colgate, and many others. Due to my busy schedule, I didn't manage to move my money into these stocks fast enough. Otherwise I could have made some small profits. It is obvious big funds are acting on their risk-off playbooks since many funds are required to remain X% vested.  Tech and AI-related stocks have taken a beating mainly due to overvaluation, overcapacity and economy concerns. It is obvious there is a rotation away from tech stocks due to risk-off sentiments. But the situation is very fluid now, once the bullish sentiment comes back, value stocks will drop and tech will go up again. But for now, it is hard to know when the bullish sentiment will be back. 

On the other hand, I kept missing out on the rally in China markets. I should have paid more attention on what's happening. Europe defense stocks rallied as well which I normally don't even pay attention to and frankly don't know well enough to have a position. Since I don't know whether the rally will continue or even turn bearish from here, I will give it a miss this time round. I sold off China stocks back in 2023 because they were either going sideways or trending down with no signs of recovery, little did we know they would make a comeback in late 2024/early 2025. The China stock rally is mainly due to stimulus, AI play, and more "assurance" that tech crackdown has stopped. Some argue that China stocks are cheap and undervalued but they are for a few good reasons -- economy, government, geopolitical, and even cultural. Cultural in the sense that I don't think they would be able to build up a consumer-driven economy like the US at least not in the next several years as Chinese people just don't really have that mindset of spending money like no tomorrow, unlike their US counterpart. Henceforth this deflation issue would stick around for a while. If government doesn't spend,  the people doesn't spend, we can only rely on corporations to spend to spur the economy. In the past since 2008 GFC, China has relied on large-sale infra building to spur the economy (it has now the largest high-speed rail network and largest cities), it literally built itself out of recession. The economy was spurred to a significant extent by government spending with the people riding on the property boom. Now that all these are slowing down, it is no wonder the economy took a hit. Transitioning to domestic consumption is a very difficult task.  I doubt the stocks will ever be fully-valued or reach their true valuations at least in the next 2-3 years. I am not against them but am saying enter with your eyes wide open. Without giving more details, investors also need to understand the alignment of interests between government and corporations regarding stock markets. US on the other hand, the S&P went up even higher at the end of Trump's first term despite the trade wars (but of course before Covid started).  Will this time be any different as the circumstances are different now with high inflation, weakening labor market? Only time will tell.  Well, investing and trading should be based on probability and calculated risks. If you ask me, the answer is pretty obvious. 

In the US market, from the Nvidia and Broadcom decent/strong results and forward guidance, I think the AI theme still has some room to run, so I am slowly accumulating bit by bit, but don't dare to go in too much since they are still in a strong downtrend. Nvidia in particular looks fairly valued or even slightly undervalued even after considering its slowing growth rate. I don't expect Nvidia to melt-up or even break its own high in the near-term, even when the bullish sentiment is back. Another thing to consider about the semiconductor industry is tariff/export restriction risk. I doubt the 25% tariffs would follow through, as it would really have serious consequences. Overall, considering all factors, I may just take a small position or go for an ETF instead, or maybe go for a larger short-term position. The AI industry is expected to grow 15-20% CARG until 2030 which is in line with historical tech trends like Internet, smartphone, etc. It usually takes several years for new tech to be improved and widely adopted. I am also looking at the cybersecurity sector, specifically the ETFs, not individual stocks like Crowdstrike/Cyberark since their sky-high valuations are undergoing a correction right now. It seems like quite a defensive sector due to increasing cyber attacks / data leaks. In fact, cybersecurity is one of the top concerns cited in a global business leader survey.  

During my research, I also found out about some very interesting high-yield US ETFs giving >10% annually. Stay tuned for the next blog post!

Recent Trades: YTD all accounts beat the S&P index

Recently, I sold off the leveraged ETF for one of the semi stocks this week.  I bought on last Friday but it dipped suddenly on Feb 2, Sunday overnight trading when Trump announced tarriffs. The price went 10% below my purchase price but given that the stock has strong momentum, it bounced even higher after a few days and I gained 10% when I sold off. Why I don't post exact stock symbols/name is because of the recent MAS regulation. My posts are purely for educational purposes only, and I do not provide any financial advice nor sell any financial products. 

Buying and selling leveraged ETFs is risky, and one has to be very careful with the stock pick. Always set a cut loss and monitor carefully.  As I shared in my previous posts, I have been allocating more capital to short-term trading and now I hardly have < 10% long-term holdings, because there is a greater uncertainty this year due to trade wars, slowing down of rate cuts, a possible rate increase and doubts on AI capex spending. The fear/greed index is still showing fear, the longest streak it has been since 2024.  

One of my smaller accounts had a 80% gain from June 2024 to Feb 2025. I had losses and profits. One of the biggest losses is 20% for a commodity leveraged ETF which I forgot to set a cut loss. But fortunately, I was able to recoup the losses via a few trades.  I am looking to scale this profitable strategy up to my main account which is not so easy given the much larger capital. It is mentally and technically quite difficult to 'deploy' large sums quickly for a trade. 

I'm sure there are many times when you cut loss or sold, only to see the stock rise up even further.  I had many such encounters in the past. Example, as explained in this past post  I sold off 2 SaaS tech stocks during the  period of uncertainty and now they have went up by 10-20% since then. Do I regret? Yes and no. Looking back, I felt uncomfortable and wanted to increase my cash level. But of course, who doesn't want to make more $? 

One way to reduce risks for short-term trading, is do not hold your positions over key events / weekends. Easier said than done, so always be prepared to cut loss or average down. Key events such as company earnings, economic news, etc. 

Many of you have messaged me privately what is a leveraged ETF? I will explain more in my next post.

   

DeepSeek sell-off is a great opportunity

I wanted to write this post earlier, but I was busy with life & work. It's very fortunate I sold off my semi positions before the DeepSeek rout. I sensed the greed due to the "Stargate" news (explained in my previous post). Each time some thing surged up too fast too furious, you know it's time to take profits.  

During the sell-off, I did some quick trades using semi and crypto leveraged ETFs. And another easy 10-20% returns. Every time there is fear and deep plunge, there will surely be a quick bounce the following day.  YTD my accounts have beaten the S&P. The volatile market is indeed a trader's dream come true. The market is quite predictable in many ways. Through my daily observations of the market and monitoring of hundreds of stock charts, I have recorded down many patterns and devised multiple strategies to generate low-risk, high-yield returns. I have a few different accounts. 

I hope I can inspire some of you out there to pick up trading. It is not so easy, and yet not so difficult. It just takes a lot of courage, discipline, judgment and emotional control. Sometimes you have to go against your instincts and think logically. For example, buy on fear and sell on greed. It's usually easier said than done. Also you'd need the ability to pick the right stocks to trade. 

  

Past year performance:

More winning trades: 10-20% profits

 Recently, sold off some semi leveraged ETFs when I see them surged so much based on news of "Stargate". Took profits of 10-20% from these trades. When it dips again, I will buy some to trade the bounce. In this year, I think I will allocate more capital towards short-term trading. Imagine you'd just need to have 10% profits for 3 times (using your entire portfolio capital), and that will mean > 30% gains in the year, sufficient to beat the market.    But of course, easier said than done. I have managed to achieve 40-60% CARG in my smaller accounts last year and hoping to achieve the same using my main, larger account, using the same trading strategies.  

I am also looking to buy some strong growth companies on weakness. I noticed some strong stocks, when they dip 5-10%, they will quickly bounce back. Examples are FB, Netflix. 

The first thing any investor or trader should think of is: what is the risk or downside? To me, that's the most important factor before entering a position. There are so many kinds of risks we need to be aware of, so trading is not that easy, but with hard work and discipline, it's not that hard either. I will talk more about the various kinds of risks next time. Also how to pick the right stocks to trade. Stay tuned!

 

 

Recent profitable trades: win rate 100%

Recently, I have made several trades, making anywhere from breakeven to > 10% profits due to the recent volatility. I focus on tech and semi related and non-tech leveraged ETFs that have strong momentum / breakout.  The sideway movements of these stocks make them good targets for swing trading. My frequent mistake is I don't take profit in time, and the profit either drops or turns into a loss, and then I will have to cut loss or wait for a rebound. If the stock is worth holding, I will just hold. But fortunately, so far, my win rate has been 100% for the trades made this year.   

The market is still in fear, the longest streak for the past 3 weeks. I am being careful here and have sold off Monday and IOT which I bought earlier, with a small profit. Still holding onto TradeDesk with a small profit. With the earnings season here, there could be more volatility ahead, though so far we have some good news for the inflation front and bank earnings.  

For the past 2 years, the US market has been going up strongly due to expectations of Fed rate cuts. Now that the rate cuts are expected to slow down, who knows what will happen to the market? As such, I am moving more towards short-term trading. I am waiting for a good entry point to enter long-term for the stocks in my watchlist. I am also having a concentrated portfolio which I can easily focus on given my other committments.  

https://www.cnn.com/markets/fear-and-greed

$3m net worth: A new post after a long hiatus

It has been 5 years since my last post. As we come to the end of 2024, I thought of sharing some updates and resuming my blogging journey. Since the pandemic in 2020, I experienced many changes in my life that took time away from blogging: new family, kid, change of jobs, new hobbies, etc. 

I reflected on my investing journey and life, and I was neutral on how far my net worth has grown. I could've certainly been more aggresive  in taking up more risks in investing, for higher rewards. You could say that I am a person who is always pushing myself ahead and never be contented with what I have. 

I have a "growth mindset" and I believe everyone should adopt it as well. One should always stay hungry, continuously try to learn more to improve. Never be afraid of failures. "Stay hungry, stay foolish".

Anyways, for the past year or so I have experimented with various short-term trading strategies in my accounts. Some of the accounts reached 40%, as high as 60% annualized returns. These are accounts with small capitals ranging S$20-150k. I hope to scale up the strategies to my main account for more profits. I have experimented using single index/stock leveraged ETFs to juice up the returns. 

I have also adopted a more aggressive growth investing approach. I have divested all my China and SG stocks, and moved entirely to US markets. China is currently experiencing an economic "turmoil" and may stay that way for multiple years, not to mention the geo/domestic political risks. SG market is still quite "dead" in this high interest rate environment. The usual investible companies are the banks and REITs and a couple of "growth"/value SME stocks. In the past, I have analyzed over 500 SG and China stocks and my conclusion is: Ultimately, US markets boost the highest returns with relatively lesser risks and has many more high-quality growth companies globally as they choose to list in the US exchanges over other regions. The US economy continues to do well in spite of inflation due to strong consumer spending (70% of the GDP) and government spending in the form of deficits and of course the ability to maintain the strength of the dollar due to its reserved currency status.  Putting aside social issues, from an investor's point of view, US markets are the heaven.

But some may argue US stocks are overvalued based on historical benchmarks. To that I will just say being "overvalued" may be the new norm now since there are a lot more liquidity (since the pandemic) vs investible companies. You simply can't use the historical P/E ratios to benchmark stocks nowadays. Historical benchmarks have to be adjusted by the amount of liquidity present in the markets. Growth stocks are always overvalued. The entire world, retail investors and sovereign funds alike, are investing in the US markets, so what do you expect?

Some stocks that I recently picked up include Monday.com and Samsara as their recent drop in prices present an opportunity to accumulate.  The prices are very volatile so I'd have to monitor them carefully, and cut loss when necessary.  I also made use of the dip after Powell's speech to add to SPY (using a leveraged ETF), so far this new position return has been 10% in just a few days.  

My portfolio now consists of long-term and short-term positions that are highly concentrated, fewer than 10 stocks. I believe in going in big to make a big return when I see an opportunity. Cut loss quickly if the thesis doesn't work out. If you have too many positions, you will just get the average return of the positions. To beat the index, you'd have to make sure all of these positions beat the index which is hard. So by making your portfolio more concentrated, you take up more risks in the hope that you increase the likelihood of beating the index. Fewer positions also make the portfolio easier to manage and monitor.

My trades/investments involve investing in a base index ETF followed by some positions to juice up the returns so I can beat the index. I applied the many lessons I learned over the years to make sure I consistently get high returns. It requires very strict discipline not to chase after FOMO stocks, etc. Otherwise one mistake can erase your hardwork for the year. I usually trade volatile tech stocks (swing trades), and "undervalued"/beaten down value stocks. 

Good luck everyone and enjoy the holidays!