Finance Smiths

I couldn’t resist writing about the market crashes caused by the ongoing tariffs and trade wars. Lots of sg finance bloggers are writing about what they are doing and the positions they are taking. Some are taking big positions by deploying quite a bit of their cash holdings, some are taking phased positions by utilising their cash holdings in tranches while others are taking small or no positions. It depends on how long you expect the tariffs and trade wars to last and the extent of impact they would have on various countries.

I have no idea how this is going to play out. During the Covid crisis in 2020, I took big positions by deploying a lot of my cash holdings to average down even though it looked like the situation could last for a long time. Central banks stepped in with their monetary easing policies such as lowering interest rates and quantitative easing. Made it a V shaped recovery and I profited until 2021. During the Inflation crisis in 2022, I took the same approach thinking inflation would be transient and interest rates wouldn’t go up that much. I averaged down too quickly using up most of my cash holdings and we all know what happened next. Interest rates spiked, the markets crashed and stayed down for the whole of 2022 before going up a bit in 2023 and then by a lot in 2024.

I still find it hard to believe it has only been 5 years. Sure, when you look back, it’s easy to say – how could you have not seen the signs of euphoria in the crypto and tech markets? Why didn’t you keep investing when the markets stayed down during the bear market so you can profit from the eventual bull market later on? All valid questions that are easy to answer in hindsight after you have the correct info and saw how the scenario played out. Assuming of course, that everything else in your life is going so well that you had all the time in the world to be objective and adopt a long term investing mindsight.

In real life when you are going through it, you get scared, start panicking, doubting whether you have made the right call. A day starts to feel like a week, a week feels like a month and a month feels like a year. The theory of relativity applies well here. Because when I was down in the shithole during 2022, it sure didn’t feel like just one year. When I look at the markets charts over the past 5 years, 2022 looked like a great time to invest and it was only one year. How difficult was it to put money in? When you are in pain and beating yourself up mentally every day, taking action even though logically you know it’s the right thing to do – becomes an almost impossible task.

So let me ask you now, once again, what do you think I should do with my cash holdings? Not knowing how long the tariffs and trade wars are going to last, not knowing whether the central banks are going to step in again. Are interest rates going down with quantitative easing because US and China are about to blow the whole world up with their game of chicken? Or is inflation coming back and interest rates don’t end up dropping, but instead go up. Sure, I can assign some form of probability calculation to each scenario but there is a time element here. Move too quickly and you get locked in to one possibility. Move too slowly and you are basically in another possibility. Don’t move at all and you could miss out on all the possibilities. What kind of swing should I take at the markets here?

Your guess is as good as mine. For now, I have been averaging down on some positions such as REITs, ETFs and Cryptos. Didn’t take any positions with Banks and Tech stocks yet. Nothing big but nothing small. Makes me wonder, did my past winning and losing experience make me a more patient investor? Or just a more fearful investor? Does time in the markets naturally translate into a more conservative approach because you know what it feels like to lose money? And I’m not talking up paper wealth losses but real wealth losses that will never recover.

You can see the number of questions I have above. I used to be more sure but I have starting doubting myself a lot more. It’s difficult to have self-belief in taking positions when you realise the scenario you are betting on has nothing to do with what you will do. But instead, has everything to do with what everyone else will do. In the end, I think the markets are just a big distraction on what’s really bothering me. That I only have one source of active income and that’s my job. Which is always at risk whenever there is a crisis. It actually doesn’t matter what the markets do if I have more than one source of active income that is not my job. I would be focused on building something of my own and not get distracted by the markets. I could become even more objective and logical in my decision making if I wasn’t worried about how much cash I can put in without risking my family’s financial well-being.

Unfortunately, coming to this realisation when you are about to hit 40 is not a good feeling. Your body and mind are slower. You have a family to be responsible for. The challenges you have to overcome are greater when you have more to lose. I may write more about how I try to work towards having more active income. Idea, execution, failure and repeat this process until something works. Figure out what I’m good and bad at. Go into a job that pays you well enough and leaves you with sufficient time & energy to build something of your own. Now that is something worth pursuing!

My last post was in Jun 2023 and to be honest, I did not expect my next post to be in Apr 2025, about 22 months later. Sure, I took a very bad hit financially in 2022 and was struggling to recover in 2023. I thought it was going ok so I’m now wondering what in the world happened then and after that, to make me stop blogging for almost 2 years. FYI, I considered letting the absence hit 2 years before announcing a comeback in Jun 2025 but decided it was a ridiculous idea. Mainly because that may result in me disappearing for another 2 years. Haha.

Actually, come to think about it. I’m starting to remember what happened during that period of time. Our younger boy was not in preschool then because we opted not to put him in infant care so we could get more time with him. Similar to what we did with our older boy. The big difference was that it was fully WFH for us due to Covid with our older boy but by the time it came to our younger boy, we were starting to WFO more. So we had to do a lot more schedule juggling. And our younger boy was falling sick a lot because he was exposed to what our older boy was getting from preschool. Then, we both entered into rough patches of work at around the same time that required long hours and plenty of fire-fighting both in the office and at home. Ahhh, it’s coming back to me now.

Such a pity really that I stopped blogging. With time, I start to realise how these life experiences can be useful to others. Whether as a guide or warning on what can happen to a person’s life when you lead it this way. If sharing can help others to avoid making the same mistakes as you or help them consider making some improvements in their lives, wouldn’t it be worth doing so?

Anyway, I’m not sure whether I’m back but I do feel like I’m in a better headspace compared to Jun 2023. It’s true that as long as you keep yourself alive and fighting, things do get better over time. But only if you survive, a caveat I must add. If you get knocked down and stayed down, it can be difficult to come back and life can really go to shit. There’s no secret to surviving, you just try to get up on time, forget about everything that is going wrong with your life and improve on something you screwed up the day before. And before you sleep on time, think about what you didn’t do well for that day and make a mental note to do something about it the next day. It can be how you manage your family, job, business, yourself in anything – attitude, behaviour, performance, finances, etc. Most of the time, I was failing to do this properly. Woke up late, felt like crap, went through the motion, slept late. Incredibly vicious and negative life cycle to break out of. This is not a success story because that’s why I said try to do it.

But given enough time, about 22 months to be exact, you realise all that bad effort still translated into something useful. Just imagine, even with minimal effort and feeling like you are useless most of the time, it still amounted to something. You just have to give it sufficient time to take hold. I don’t have an inspiring story to share about how resilient I was. But I do have a realistic story about how practical I was. I think there’s value in sticking around even after getting knocked down. How you try to recover, all the tricks/hacks you try to use or habits your try to build/kick. Even if they don’t work for you, they may work for someone else.

I mean, my main focus is still going to be writing about finances. After all, it’s in the name of my blog. But I want to write more about the life learnings around it. How small decisions at critical times actually lead to the biggest impact on your life. Learning to recognise when you are in one of those moments, to be aware that what you decide on at that point could very well change the trajectory of your life. Has to be one of my most important takeaways from my absence. So, let’s see whether this lasts. Or will I disappear again for who knows how long the next time?