The Most Expensive Show-And-Tell

On 2 Apr 2025, dubbed as “Liberation Day” by the current U.S. administration, a “show-and-tell” by the incumbent president on the imposition of reciprocal tariff rates on every possible nation and territory in the world, had wiped off at least USD 2.4 trillion worth of market cap from Wall Street¹.

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Apple plunged close to 15.8% over two days, and Amazon’s price down by around 12.6% over the same period, due to their supply chains intertwining closely with China, one of the main targets of the tariff drive. Across the global markets, indices and prices were down in various magnitudes over the uncertainties of the impact that the tariffs would bring.

In this post, I would not delve into the intricacies and implications of the tariff rates, and the main macroeconomic reasons why the U.S. is doing this, as these are factors way beyond our control, I will instead focus from the investor side of things.

Same, But Different, But Still Same

For those who had invested at least for the past six years, this plunging market scenario is like the one that was encountered during the COVID-19 crisis back in Mar 2020. Some may argue that the context of both situations is different, i.e., one was a pandemic where no one could predict when it would end, whereas the other is a deliberate economic event where somebody may know when it could end, these periods marked good moments to enter counters that one may have been waiting for, and/or to average down current holdings due to their relatively cheaper valuations.

And it seems that a lot of investors are learning this “buy the dip”; the day after Liberation Day on 3 Apr, retail and individual investors made USD 4.7 billion worth of net equity purchases (difference between bought and sold), the highest in 10 years². Yes, I am one of them.

Good Companies Tend To Be Resilient

While every equity security is screaming “cheap cheap” now, not all are equal; some may turn out well and become multi-baggers in the years to come, but there are a few whose prices could remain at a low level for longer periods. This is where the concept of company fundamentals come into play, and those with wide healthy financial numbers like good free cash flows, low gearing, etc., and strong moats like reliable customer bases and near monopolistic products/services, etc. would tend to pull through.

Fundamental analysis is needed to see if the companies are resilient. For one’s current holdings, a periodic review may be sufficient, while a full one is necessary if prospecting for new counters to invest in.

We Cannot Tell The Future

Will the tariffs be reduced? How much lower will the S&P 500 go to? What would be the bottom price for Apple?

My only answer to them is four words: I do not know. As oft mentioned by me, predictions, especially the correct outcome at the right moment, are short of impossible to state. In terms of the timing to go into the market, one can use indicators (valuations, price signals, etc.) as a gauge of whether to buy into the company/index exchange traded funds (ETFs). If one is on the path of passive investing with periodic rebalancing, and/or following a disciplined periodic approach of buying into the securities, then just continue with it.

 

The last best time to invest in a dip was five years ago. The second-best time is (probably) now.

Stay calm and invested.

Disclosure

The Bedokian is vested in Apple and the S&P 500 via SPY ETF.

Disclaimer

1 – Wynne, Alan. Lessons from “Liberation Day”: A guide to tariffs. J.P. Morgan Wealth Management. 4 Apr 2025. https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-lessons-from-liberation-day-a-guide-to-tariffs (accessed 5 Apr 2025)

2 – Gottsegen, Gordon. Individual investors made a record $4.7 billion in stock purchases Thursday as new tariffs pummeled markets. Marketwatch. 4 Apr 2025. https://www.marketwatch.com/story/individual-investors-net-bought-a-record-4-7-billion-worth-of-stocks-on-thursday-as-new-tariffs-pummeled-markets-a82a4a8c (accessed 5 Apr 2025)

Sell Banks And Buy REITs?

I have had heard of the above mantra from chat groups and online blogs, possibly due to the perception that banks are (deemed) overpriced, and the recovery of real estate investment trusts (REITs) are in progress as observed from price movements and analyst reports.

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In portfolio management terms, this is rebalancing, where assets of different asset classes/regions/sectors are bought and sold to maintain the desired portfolio make-up. Within the action of rebalancing, however, there are variations in its execution; on one end some do it passively and periodically, while on the other end some do it actively and opportunistically to capture gains from anticipated events and news.

Back on the action of selling banks and buying REITs, it would be dependent on one’s portfolio, investment strategy and methodology used, and which part of the above described active-passive spectrum one is at. Depending on each investor’s circumstance, it may not be necessary to sell one and buy the other. For our case, as we are still in the accumulation phase, we rebalance by injecting capital, thus we buy both banks and REITs.

Providing more context and detail, we had recently deployed into OCBC when its price showed weakness during the middle of March 2025; this purchase is for averaging up our current holdings. For REITs, we had been nibbling them since interest rates started to spike in 2022, with the knowledge that every asset class would go through highs and lows in cycles (my oft stated “Sunday” and “Monday” moments).

Hence, to sum it all up, an investor needs to take stock (pun intended) whether the advice of “sell banks and buy REITs” is suitable for his/her investment philosophy and portfolio situation. If the advice is sound, then it must be rationally substantiated with reasons such as the purpose of doing so, the justification of fundamentals, etc. Following blind advice without facts and context is akin to listening to jumping into the deep end of the pool blindfolded and with hands tied, which someone with a sane mind would not do in real life.

Disclosure

The Bedokian is vested in OCBC.

Disclaimer

Frasers Centrepoint Trust’s Full Acquisition Of Northpoint City

Frasers Centrepoint Trust (FCT) announced the acquisition of 100% interest of Northpoint City South Wing on the morning of 25 Mar 2025, following up with another announcement of private placement and preferential offering for investors and unitholders.

 

 Screenshot of Northpoint City from FCT presentation slides.

Some Important Points On The Equity Fund Raising

The total acquisition cost is Singapore Dollar (SGD) 1,172.9 million, with the agreed property value of SGD 1,133 million. No less than SGD 400 million will be raised from private placement and preferential offering (the private placement had just ended with around SGD 220 million raised). From the proceeds of the raised equity, around SGD 415.2 million would be used to repay existing debts, and around SGD 6.1 million would be used for fees and expenses associated with the equity raising exercise.

Post-acquisition, it is expected that the distribution per unit (DPU) accretion increase by 2.0%, with aggregated leverage (a.k.a. gearing) increase 1.3% to 39.8%, all on a pro forma basis and on the assumption that the perpetual securities are issued.

The application for the preferential offering units is scheduled to open on 8 Apr 2025 and close on 16 Apr 2025, with the listing of the units indicatively on 25 Apr 2025.

The Bedokian’s Take

A good outcome from this exercise is that FCT is having full ownership of the entire Northpoint City and with it, cementing their place as the true “King of the North (of Singapore)” of suburban malls, complementing Causeway Point in Woodlands. Positioned at the “heart” of Yishun town with the namesake MRT station and bus interchange, and with 100% occupancy to boot (for both wings as of 31 Dec 2024), it is an almost sure-win in terms of having a captive market population through Yishun residents.

The major risk variable to FCT’s hold in the north is the impact of the Johor Bahru – Singapore Rapid Transit System (RTS), which I had covered here and it represented a double-edged knife, i.e., could go both ways. Overall, we would be going for the preferential offer due to FCT’s suburban mall dominance and to keep our holdings from being diluted (anyway, I had disclosed our intention to add more FCT in our previous post, so this offering had partially fulfilled it).

For the preferential offering, the issuance ratio is 54 units out of every 1,000 units owned. As we prefer our holdings to be rounded to the nearest 100, we are likely to subscribe for additional units to make up the number.

Disclosure

The Bedokian is vested in FCT.

Disclaimer

References

Frasers Centrepoint Trust. Presentation in relation to the Proposed Acquisition of 100% interest in Northpoint City South Wing and its Trustee-Manager as an interested person transaction. March 2025. https://links.sgx.com/FileOpen/FCT_SGXAnnouncement_Investor_Presentation.ashx?App=Announcement&FileID=837297 (accessed 28 Mar 2025)

Frasers Centrepoint Trust. Results of the private placement and pricing of new units under the private placement and the preferential offering. 26 Mar 2025. https://links.sgx.com/FileOpen/FCT_SGX_Announcement_Results_of_Private_Placement.ashx?App=Announcement&FileID=837445 (accessed 28 Mar 2025)

Being Opportunistic In the Past Weeks

Uncertainties caused by the threat of tariffs (implied or about to be implemented), and a slew of other minor reasons, had spooked the markets somewhat, with the S&P 500 index down more than 4% year-to-date. A down market is the time to look for bargains, and ample opportunities to buy in counters at relatively less expensive prices and/or to average down on securities that one may have already owned.

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Yes, this smack of the characteristic called market timing, which is usually frowned upon as the future price movement is a big unknown. However, any price is a good price if the investor felt the fundamentals and/or valuations had hit the right spot.

To summarise, since February, we had added the following five assets into our Portfolio Multiverse:

• Alphabet (Bedokian Portfolio)

• Nvidia (Bedokian Portfolio)

• OCBC (CPF Portfolio)

• NikkoAM-StraitsTrading Asia ex Japan REIT ETF (Bedokian Portfolio)

• Cryptocurrencies Bitcoin and Ether (Trading Portfolio)

Frankly, more counters were planned to be added, such as Frasers Centrepoint Trust, Frasers Logistics & Commercial Trust, and some bond ETFs (e.g., ABF Singapore Bond Index Fund, Nikko AM SGD Investment Grade Corporate Bond ETF, etc.) that we had in our holdings. However, these counters had seen a rise from around mid-March that, in my opinion, was possibly due to capital shift and asset class/regional rotation into Singapore assets, among other things.

There are always buying opportunities abound in the markets, depending on the economic situation, asset classes and market sentiments.

Disclosure

The Bedokian is vested in the mentioned counters/securities/assets in this blog post.

Disclaimer

An Ounce Of Gold And An Ounce Of Silver

Gold and silver are two of the most traded precious metals in the world, and in the financial markets they are valued on a per troy ounce basis. One troy ounce (abbreviated oz) is equal to around 31.1 grams (g) on the metric scale.

However, it is obvious that both gold and silver are not the same, which every science student could tell you that they are different elements in the first place, with similarities and differences in physical and chemical properties with and from each other. In this post I shall share with you the three distinct things between them: size, amount and price.

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Size

If you had ever seen an ounce of gold and an ounce of silver together, you may have noticed that silver looked larger than its gold counterpart. This is because of a characteristic called density.

Density is defined as the amount of mass within a given volume, and its unit of measurement is grams per cubic centimetre, or g/cm³. Silver’s density is 10.49 g/cm³, while gold’s density is 19.3 g/cm³. Thus, with a given mass of one ounce, the volume for silver for that ounce is 2.96 cm³ (31.1/10.49) while gold is 1.61 cm³(31.1/19.3).

However, if you are observant enough, the dimensions of the various minted and cast bars and coins do not equate to the volume given above, and it is slightly higher (e.g., the Perth Mint’s 1 oz gold cast bar measures 1.9 cm x 1.9 cm x 0.5 cm = 1.805 cm³). One reason for this occurrence is due to the surface irregularities caused by imprints, grooves, cavities, blisters, etc. that may increase its volume. Another reason is that the dimensions taken represents the approximate measurements and do not consider the minute variations mentioned in the previous reason. 

The bottom line is that regardless of the volume discrepancies, the mass (or weight in layman speak) and purity are the more important factors in determining the metals’ value (and price).

Amount

According to the United States Geological Survey (USGS) website¹, around 244,000 metric tons of gold and 1,740,000 metric tons of silver have been discovered to date. While there may be undiscovered amount of gold and silver lying somewhere under the planet’s surface, not all could be mined because of accessibility (depth, lack of technological means, etc.). Still, this currently proved that gold is rarer than silver in terms of their amount on Earth.

Price

While the gold-silver density ratio is 1:1.84, and the gold-silver discovered amount ratio is 1:7.13, the same cannot be said for the price. Unlike density, which is fixed, and amount in the world, which is roughly around there for quite a while, the price or mint ratio, known to investors/traders as the gold-silver ratio (GSR), is fluctuating over the course of 30 years, ranging from a high of around 1:126 or so in 2019, to a low of about 1:31 back in 2011².

The GSR is used as a gauge for overweighting/underweighting on gold and silver, and the “magic number” to trigger the rotation is dependent on individual’s preferences. The popular guideline around is the “80/50 Rule” that states:

• When the GSR is above 80, switch from gold to silver.

• When the GSR is below 50, switch from silver to gold.

If one followed the 80/50 Rule to the “T”, he/she would not have had a chance to buy gold because it had never fall below 50 since around mid-2012 onwards, though he/she could have had many chances of buying silver (now is a good period, too, since it is around 89).

It is still possible to invest in both gold and silver using their individual merits without looking at their interrelating GSR, like price levels which dictates their demand and supply. In terms of usage silver has more industrial uses than gold, especially the former’s use in the growing solar energy sector.

Conclusion

Now that you have a better understanding of the two precious metals, you may be interested in reading up more on them in The Bedokian Portfolio eBook (under Chapter 5: Commodities), as well as some posts which I will include them in the Related Posts section below.

Disclosure

The Bedokian is vested in physical gold and silver, and the iShares Silver Trust ETF (SLV).

 

Related Posts

High-Ho Silver!(?) 

The Gold Rush 

The Gold Silver Ratio 

 

1 – United States Geological Survey. https://www.usgs.gov/science/faqs/minerals (accessed 10 Mar 2025)

2 – Gold/Silver Ratio. Goldprice.org. https://goldprice.org/gold-silver-ratio.html (accessed 15 Mar 2025)

The CNN Fear & Greed Index

A tool that I use in gauging the sentiment of the U.S. markets is CNN’s Fear & Greed Index (https://edition.cnn.com/markets/fear-and-greed). Presented in a semicircular odometer-style chart on a scale of 100, the index has five regions, namely: Extreme Fear, Fear, Neutral, Greed and Extreme Greed. CNN uses seven indicators in deriving the numbers, which are explained in detail in the link provided above, and the index is updated as soon as new data from the indicators are available.

Screenshot of CNN Fear & Greed Index. Source: CNN, 8 Mar 2024

As shown in the historical numbers, the index can be volatile as well, and can change within just days or weeks apart; on 1 Apr 2024, the index was at 71, which was at “Greed”, and by 19 Apr 2024, it dropped to 28 which was “Fear”. For the period in context, the markets were down due to higher reported inflation figures which lowered the probability of interest rate cut by the Federal Reserve.

It was also during this period that we had entered Apple (USD 165, coincidentally on 19 Apr 2024) after using the CNN Fear & Greed Index as one of our indicators, on top of others such as price action, and a quick review of its fundamentals. Similarly, after the index’s recent fall into “Fear” territory from 21 Feb 2025, we had added positions to Nvidia and Alphabet (and after also considering other factors and indicators).

Personally, I find the index is a good gauge to utilise though I must stress that it should not be the main dealbreaker for your buy/sell decisions. As I had mentioned above, it is good to aggregate it with your other tools and analysis before pressing the execute button.

 

Disclosure

The Bedokian is vested in Alphabet, Apple and Nvidia.

Disclaimer

The Thing About Asset Class Correlations

In portfolio management, the term “correlation” has been mentioned many times as its very characteristic formed the basis of diversification among the asset classes. For those who are new to investing, correlation is “a statistical measure that determines how assets move in relation to each other”¹. As the various asset classes behave differently during differing market and economic conditions, their relative price movements with one another would be different given a set period or snapshot of time.

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However, there has been a notion that correlation in terms of price and returns is a zero-sum game. For example, in a portfolio consisting of two asset classes (let us call them A and B) and they are negatively correlated with each other, the assumption is that if the price of A rises, the price of B would drop, vice versa. Yes, that is correct, but only half; the correlation numbers are not fixed, and there are times where A and B gain together, and at times where both suffered losses together.

As stated above that correlation is a statistical measure, it is being defined by the time frame used. If in a day, the price of A and B moves in tandem, whether up or down, they are positively correlated with each other for that moment. However, if A and B moves differently from each other over a longer period, then their correlation may be less positive, or possibly even negative, for that said period.

Hence, it is not surprising to see A and B were having a negative correlation over set time, and yet both had positive returns. Providing a real-world example, I would use two asset classes that were conventionally opposites in the correlation thing, equities and gold (see Figure 1):

 

Asset Class	VTI	GLD	Annualised Return
Equities (VTI)	1.00	-0.14	23.81%
Gold (GLD)	-0.14	1.00	26.66%

 

Fig. 1: Asset class correlations of equities (represented by Vanguard Total Stock Market ETF (VTI) and gold (represented by SPDR Gold Shares ETF (GLD), 1 Jan 2024 to 31 Dec 2024, using monthly returns correlation basis. Source: Portfolio Visualizer.

 

The Bedokian’s Take

While correlation forms part of the overall concept of diversification, for the retail investor, my take is to be aware of it and how it works. Leave the correlation numbers crunching to the academics, analysts and financial bloggers like me to provide useful insights for all. 

Another trivia, which may come as a surprise to you, is that the main cause of correlation comes from you and me (sort of), and the rest of the participants in the financial markets. I will provide a couple of links under Related Posts below to understand why this is so.

Stay calm and stay invested.

Related posts:

Know This, And You Are Halfway Knowing How The Market Works 

Diversification Is Dead! Long Live Diversification! 

 

1 – Edwards, John. Why Market Correlation Matters. Investopedia. 31 Oct 2022. https://www.investopedia.com/articles/financial-advisors/022516/4-reasons-why-market-correlation-matters.asp#:~:text=Correlation%20is%20a%20statistical%20measure,in%20relation%20to%20each%20other (accessed 23 Feb 2025)