Are We Fickle-Minded?

Being fickle-minded means not being consistent, and this can be a bit perturbing for others, especially when seeing that person ordering food and correcting a few times before settling on the final item.

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People love consistency because it signals a form of integrity from which trust is build upon. If someone is displaying inconsistency a.k.a. fickle-mindedness, that person would run the risk of losing his/her credibility, since a choice, an opinion or a viewpoint can change at any moment.

Speaking of change, as the saying goes, it is the only constant around. Things may change for the good, or the bad, thus we must adjust our expectations and views of the things at hand. It is not wise to stick to the same stand and maintaining the aura of consistency when the situation is heading south.

In the world of investing, you may have encountered occasions where an analyst or economist is saying one thing about the markets and economy today and then switched tack and commented the other thing on the very next day. This is also seen in posts by financial bloggers and podcasts/videos from financial influencers. Some may abhor these actions as the individuals are seen to be fickle-minded and not trustworthy, but I view them as adjusting their opinions after probably obtaining new data/information.

However, some things do remain consistent, like investment philosophies, principles and methodologies (e.g., diversification) that work most times, and age-old adages such as “be fearful when others are greedy and vice versa”.

Therefore, whenever you see someone changing their minds on something in their posts/broadcasts, take a step back and understand what their rationale was in doing so, rather than quickly judge and dismiss them.

Investing In Overseas Markets With Your CPF?

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Imagine investing in Apple shares using your CPF Investment Account (CPF-IA).

Sounds too good to be true? It is, to a certain extent.

Due to strict CPF-OA (Ordinary Account) rules allowing only certain locally listed shares, it is almost impossible to use these funds to invest in major US large cap stocks. While direct ownership is unavailable, indirect investment is possible through unit trusts (UTs) or investment-linked insurance policy (ILP) funds, which may include foreign securities like Apple depending on the funds’ investment mandate.

UTs and ILPs are categorised as Professionally Managed Products (PMP) under the CPF investment scheme, and they have a higher threshold for allowed CPF-OA investible funds compared to shares and gold.

While I shall not touch on the insurance component of ILPs as they are individualised products, their funds within share similar properties to that of UT’s. A common gripe about UTs is the deemed higher expense ratios vis-à-vis their exchange traded fund counterparts. However, in view of the CPF-OA investing rules, the choice of investment vehicles available, and the higher PMP investible limit, UTs are probably the main way to go if one wants to go beyond the 35% stock and 10% gold limits. 

Before going along this path, one needs to consider a few points before putting his/her CPF-OA to work. I had written two blogposts (here and here) to assist in the decision.

Disclosure

The Bedokian is vested in Apple, and invested in unit trusts via a robo-advisor with CPF-OA funds.

Disclaimer

The Japanese Market: Hai? Iie?*

*Yes? No?

It was once an economic powerhouse second only to the United States, and its companies, products and technological innovations ruled the international business community and attracted a huge consumer base. 

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However, after a series of events brought about by policy and economic factors, a drastic crash of its markets and economy resulted, and deflation and stagflation kicked in, marking the beginning of the so-called Lost Decade in the early 1990s. Later, the term had been pluralized to include the decades of 2000s and 2010s (i.e., Lost Decades). The extension of the lost years was due to the subsequent natural and market disasters such as the Global Financial Crisis in 2008, the Tohoku earthquake of 2011, and the COVID19 pandemic in 2020, not to mention the rise of the Chinese economy and competition.

In late 2023, the Nikkei 225 index, one of the two indices used as barometers of the Japanese equities market, began its surge to recovery, and by around February 2024 had gone to its all-time high, surpassing the level last reached in December 1989. In recent times, there were calls by institutions to invest in Japan, and Buffett’s company Berkshire Hathaway had made inroads into the five largest trading houses, which are diversified companies with huge horizontal and vertical industries and services.

On the economic front using the gross domestic product (GDP) growth rate, between Q4 2023 (coinciding with the beginning of the Nikkei 225 recovery) and Q2 2025, five of the seven quarters were positive, ranging between -0.5% (Q1 2024) and +0.7% (Q2 2024)¹. 

However…

Core inflation figures went to at least 2% every month year-on-year since Apr 2022², and while such figures were considered normal in most developed countries, for Japan, after experiencing periods of low or negative inflation, this was a rude shock, especially when real earnings including bonuses were mostly in the minus region during the same period³. Whilst the government tried to arrest the issue of inflation by raising interest rates, the sharp spike from 0.1% to 0.25%⁴ in end Jul 2024 caused a brief global market crash in early Aug 2024 (dubbed the “unwinding of the Yen carry trade”).

On top of GDP and inflation, two others longer termed “elephants in the room” are the oft-mentioned decreasing population demographics and the threat of a large earthquake (and accompanying tsunami) within the next 30 years. With so much not-so-good factors and news happening, is it still a compelling market to enter?

The Bedokian’s Take

Currently Japan is ranked fourth globally in nominal GDP on an individual country basis, below the United States, China and Germany respectively, but it is forecasted that their position would slip to fifth by the end of this year with India overtaking them. Despite having more negative than positive factors highlighted above, the silver lining is to capitalise on the weaknesses themselves. For instance, the rapid greying population favours healthcare and its related sectors and industries (e.g. medical technology components, geriatric equipment, etc.). Automation, where Japan was at the forefront before their Lost Decades, sees further runway ahead with its major role in addressing the dwindling labour population.

A weakened yen, though sounded like bad news for Japanese tourists wanting to travel overseas, is a good one from the country’s point of view in terms of the price competitiveness of its exports. In turn, this would bring about an increase in export-oriented domestic production and manufacturing (and incoming tourist dollars, too).

Learning Points

Looking at the macroeconomics of a country constituted part of The Bedokian Portfolio’s economic conditions layer for fundamental analysis⁵. Numbers like GDP, interest rates, inflation rates, etc. are publicly available from many sources and they tell an economy’s health and performance. While these macro variables are beyond one’s control, it is good practice to take them in for thought while carrying out one’s investment analysis.

Disclaimer

1 – Japan GDP Growth Rate. Trading Economics. https://tradingeconomics.com/japan/gdp-growth (accessed 16 Aug 2025)

2 – Japan Core Inflation Rate. Trading Economics. https://tradingeconomics.com/japan/core-inflation-rate(accessed 16 Aug 2025)

3 – Japan Real Cash Earnings YoY. Trading Economics. https://tradingeconomics.com/japan/real-earnings-including-bonuses (accessed 16 Aug 2025)

4 – Japan Interest Rate. Trading Economics. https://tradingeconomics.com/japan/interest-rate (accessed 16 Aug 2025)

5 – The Bedokian Portfolio (2^nd ed), p91-93

A Relook At The Four U.S. Counters

Back in 2014 (read here), I had researched and concluded on four U.S. counters which were relatively suitable for newbie and seasoned investors thinking of stepping into the U.S. markets for the very first time: the SPDR S&P 500 ETF (SPY), Berkshire Hathaway Class B (BRK.B), Apple (AAPL) and Alphabet (GOOG/GOOGL, which I would use GOOGL for this post). These were selected based on two points: representation of the U.S. markets in general (SPY and BRK.B) and being proxies for the technological and innovation might of the United States (AAPL and GOOGL).

(Picture credit: rabbimichoel from pixabay.com)

 

A casual dinner conversation with a relative had brought up the question of their current relevance and a decade down the road. The concerns brought up included issues such as the catchup on artificial intelligence (AI) (AAPL), large language models (LLMs) displacing search engines (GOOGL), the changing of the guard (BRK.B) and the possible decline of U.S. exceptionalism (SPY). 

It is valid to have such concerns, as recent narratives were going on about these issues, too. I will briefly go through each of these counters and my thoughts on them for the future.

S&P 500 (via SPY ETF)

While there are a few ways to view the United States market, I use the S&P 500 as the proxy mainly due to the diversification of sectors and companies. Never mind the huge make-up and hard carry by the Magnificent 7 (or 6, depending on how one views them), it reflects the microcosm of the overall U.S. economy.

The direction of the trade policies and geopolitical decisions pursued by the current administration had led to observers and analysts to believe that it could result in the alienation of the U.S. (including the shrinking reserve currency status of the U.S. Dollar), and subsequently the gradual loss of American exceptionalism. However, the U.S. is still a nexus encompassing the various stages of the economy, for their companies hold substantial control of the primary (extraction of raw materials), secondary (manufacturing) and tertiary (services and knowledge based), not necessarily occurring within its territories.

To add, I had presented my case for the above points (see here) and my conclusion is that the U.S. is still investible for now.

Berkshire Hathaway (via BRK.B)

BRK.B is the other proxy for the U.S. economy as not only it has listed companies in its portfolio, but also non-listed ones which represents the heart of American enterprise. The focus, however, is not on this aspect, but another: the transition.

BRK.B is synonymous with the two investing greats: Warren Buffett and the late Charlie Munger, and it had been so for the last five decades. With the announcement by Buffett stepping down at the end of 2025 and handing over the reins to his successor Greg Abel, the main issue would be whether the successor is able to follow and fill the shoes of the predecessors.

As I had mentioned here and here, there may be some deviations in investment methodology and decision-making process that is expected when someone new takes over. I would be observing BRK.B for a few years after the handover is complete.

Apple (AAPL)

News about AAPL’s catch-up on artificial intelligence (AI) has been going around, so much so that they were often compared to the person left behind on the pier while the proverbial AI ship with everyone else on board (e.g. Microsoft, Amazon, etc.) had sailed away. Tim Cook, AAPL’s chief executive officer, had just gave a speech rallying staff to go all-out on AI and make up for lost ground in the field.

Despite pessimism about AAPL’s not-so-wow-factor products and the not-so-impressive growth rate shown in the previous quarters, the last quarter results gave some signs of improvement, beating estimates in revenue, earnings per share, iPhone revenue and Mac revenue, the latter two’s margins not seen since Dec 2021. Whilst figures were not provided, AAPL had reported their installed base of active users had reached an all-time high.

With a growing user base in spite of being a laggard in AI features, I opine that AAPL is light years from being declared obsolete. They are primarily a hardware and services company, and they could possibly look for (and acquire) external sources for AI capabilities rather than develop in-house as what others had done.

Alphabet (via GOOGL)

For a moment GOOGL was written off as a “has-been” with the prediction of LLMs eating GOOGL’s lunch in the search space, which did not happen very much yet. Instead, they adapted and upped the ante by placing their Gemini LLM in the search results, thus showing both search and LLM as complimentary, rather than the latter being a substitute. 

Also, GOOGL is more than just search, and they have other business segments like Google Cloud and YouTube. The Google Cloud revenue had gone up 32% year-on-year in the last quarter, which is expected as the trend for cloud storage is increasing, partially attributed to the voracious appetite for AI applications in which LLMs are included. YouTube is seen by many as the competitor to Netflix, who themselves had beaten other streaming services like Walt Disney and Amazon.

GOOGL is considered to be one of the undervalued counters among the Magnificent 7 or 6, so business wise and share price wise, they may have more runway to go.

Conclusion

Slightly more than ten years had passed since my conclusion back in 2014 on the four counters, and my take is that they are still relevant for minimally the next decade, barring any catastrophic or black swan events happening. Due diligence and further analysis are necessary before entering as my interpretations of the four may be different from yours. Past performance is not indicative of future results, and we can only “guesstimate” what may happen in the years to come based on available data and information.

Disclosure

The Bedokian is vested in SPY, BRK.B, AAPL and GOOGL.

Disclaimer

Astrea 9 Private Equity Bonds

Azalea Asset Management, which is indirectly owned by Temasek Holdings, is issuing the Astrea 9 private equity (PE) bond on 8 Aug 2025. This bond will be listed on the Singapore Exchange, joining the earlier issued Astrea VI, Astrea 7 and Astrea 8 bonds.

There are three bond classes in the Astrea 9 series, with two classes (A-1 and A-2) available for retail investors. Figure 1 provides a brief of the two.

 

Fig.1: Information of the Astrea 9 A-1 and A-2 bond classes. Screenshot from Azalea website.

The Astrea 9 Transaction Portfolio, from which it derives the cash flow for the bonds, is made up of 40 PE funds managed by 31 General Partners and across 1,086 investee companies. These investee companies are diversified across:

• Sectors (31% in information technology, 21% in industrials, 15% in health care, and the rest across other sectors such as financials, communication services, etc.)

• Geographically (66% in the United States, 26% in Europe and 8% in Asia)

• Fund Age (between three and eight years, with the five-year and six-year making up 52%)

As seen in Figure 2, A-1 and A-2 bondholders are relatively high up in the receipt of distributions (Clause 5). 

 

Fig. 2: Astrea 9 cash flow and priority of payments. Screenshot from Azalea website.

The Rates

The annual interest rates (or coupon rates) for A-1 and A-2 are 3.4% and 5.7% respectively. Like the previous Astrea bonds, the rate for US$ denominated bonds are higher to compensate for the forex risk vis-à-vis against the S$. With the US$ depreciating against S$ by around 5.8% for the past five years, and we do not know how the US$-S$ forex rate would be, it is usually prudent to stick to local currency for fixed income instruments.

Perhaps the major consideration of investing in corporate bonds would be comparing with the (relatively) risk-free rate of Singapore government bond yields for the same duration. With the Astrea 9 bonds having the earliest callable date in five years and the maturity date 15 years later, and using the current Singapore government 5-year and 15-year bond yields at 1.8%¹ and 2.21%² respectively, the 5-year risk premium is 1.6% (3.4 – 1.8) while the 15-year risk premium is 2.19% (3.4 + 1 (step-up) – 2.21).

The Bedokian’s Take

The Bedokian Portfolio’s bond selection entails the bond to be at least of investment grade and five years to maturity³, to which both A-1 and A-2 met the mark. 

The low risk premium may be slightly uncomfortable for some conservative investors, since there is a very remote chance of the bond defaulting on the coupon payments and principal. So far, the retail tranches of past and current Astrea bonds (IV, V, VI, 7 and 8) have/had paid regular coupons on time, with no impairment of the principal.

With Singapore Savings Bond and bank fixed deposit rates going down, many investors may go for this as the next deemed “fixed deposit”, though I would caution it is still a listed instrument subjected to price and market volatility.

The offer period for the bond is from now till 1200 hrs, 6 Aug 2025.

Disclaimer

Reference

Astrea 9 Bond Prospectus - https://www.azalea.com.sg/sites/default/files/2025-08/astrea-9-pte-ltd-prospectus-30-july-2025.pdf 

1 – Singapore 5 Year Bond Yield. Trading Economics. 1 Aug 2025. https://tradingeconomics.com/singapore/5-year-bond-yield

2 – Singapore 15 Year Bond Yield. Trading Economics. 1 Aug 2025. https://tradingeconomics.com/singapore/15-year-bond-yield

3 – The Bedokian Portfolio (2^nd ed), p108.

Nine Years…

Today marks the ninth year of The Bedokian Portfolio blog. For this anniversary post, I will touch on our definition of retirement and some updates on our Bedokian Portfolio.

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Definition Of Retirement

Most people reach a stage in their professional lives known as retirement, which is typically defined as leaving one's job and ceasing regular employment. Many view retirement as an opportunity to step away from work routines and spend time differently. However, some may encounter challenges such as difficulty adjusting to new daily structures or uncertainty about how to spend their time, potentially due to a lack of post-retirement planning.

Our definition of retirement consists of two parts: reaching financial independence so that employment income is not required as the main source of funds, and gaining the flexibility to engage in preferred activities, including continued work if desired. For the first part, achieving financial independence often involves alternative sources of cash flow, such as investment portfolios or income-generating assets. The second part is qualitative and it relates to identifying personal goals and experiences previously unattainable due to work commitments.

Continuing to work after retirement remains an option, either for supplementary income or personal fulfillment, but one may choose to leave or change jobs if existing roles become physically or mentally demanding. The objective is to enable a fulfilling post-retirement life distinct from prior work routines. If continued employment is motivated solely by financial necessity or there is no structured plan for retirement activities, then one may not be fully prepared for this phase.

Our Bedokian Portfolio So Far

Despite geopolitical tensions and economic uncertainties, the bull run in the U.S. and our local markets continued, and these greatly contributed to our Bedokian Portfolio (and other portfolios in our Portfolio Multiverse, too). Our Bedokian Portfolio value as of 26 July is just around 8% shy of our 2028 year-end target, around three and a half years later.

As shared in this post we used an annual return of 4% for projection, which I guess for most people is conservative. We would prefer to stick to this number as it acts as a buffer should our portfolio value heads south in later years, and if the portfolio size grows more than expected, the plus point is that we may consider an earlier step-down point.

Cheers to all!

The Rise Of The Singapore Dollar

  

(Picture credit: PublicDomainPictures from pixabay.com)

If you had heard from those around you that travelling to some places were getting “cheaper”, they were right. This is mainly due to the strengthening of our Singapore Dollar (SGD) against other major currencies, as shown in Figure 1 over the past 5 years:

SGD to	1-Year %	2-Year %	5-Year %
United States Dollar	+5.34	+3.84	+8.66
Euro	-2.36%	-1.03	+5.15
British Pound	+0.31	-0.03	+1.64
Japanese Yen	-3.95	+10.62	+49.76
Australian Dollar	+8.20	+7.33	+14.91
Chinese Yuan	+3.81	+3.78	+11.27

 

Fig.1: Singapore Dollar to major currency pairs, 1-year, 2-year and 5-year gain/loss. Period covered 13 Jul 2020 to 11 Jul 2025 as at around 11 Jul 2025 2255hr Singapore Time. Source: XE.com. 

While Singaporeans going abroad would literally get more bang for the buck in terms of exchange rates, looking from the other side, if one is having assets in, for instance, Japan, assume the holdings’ prices remain unchanged, the loss would be around 33% over five years.

This is what investors refer to as foreign exchange, or forex, risk. It works both ways in the overall scheme of things; when the country’s currency is strengthened over a period, its imports become cheaper, but its exports would be getting more expensive for the other side, ceteris paribus.

There are many reasons why a certain currency is appreciating and/or depreciating against other currencies. The major ones would be inflation rate, interest rates, macroeconomics (balance of trade, public debts, etc.), geopolitics and demand-supply for the currencies. Factoring in these reasons into the -33% example above, there might be a variety of results, with the possibility of returns going into positive territory.

Forex risk looks daunting, but if the asset returns (capital gains and income) outpace it, the risk should not be a major issue. Though the United States Dollar (USD) may have lost around 8% over five years, the S&P 500 had gained close to 97% in the same period, making forex risk looked like a small blimp. 

Similarly, taking the Euro, which lost around 4.8% against the SGD for half a decade, the representative index STOXX Europe 600 rose by 49%. Surprisingly, Japan, which suffered the 33% forex loss mentioned above, had returned almost 76% based on the Nikkei 225 index. 

Back to the topic of strong SGD, this might be an opportune time to enter markets whose currencies had weakened and accumulate financially sound companies. 

Related post

Going Local, Global or Glocal

All figures quoted were from Google Finance and XE.com.