Finance Smiths

Not surprisingly, the Stabilization Phase Covid restrictions have been extended for another month due to continuing pressures on the healthcare system. I’m disappointed that the Government did not take a risk to relax the restrictions but instead decided to delay the inevitable by extending them. While I understand their reasons for doing so, I’m not sure whether it would result in a meaningful difference in the long run when we eventually exit the Stabilization Phase anyway. Perhaps they are buying time for the healthcare system to ramp up its medical staff and resource capacity to withstand future spikes in more severe Covid cases.

I do feel bad for industries that are taking a massive hit from these on and off Covid restrictions. I reckon the additional support package may be enough to help these businesses and individuals survive another month. But the structural and long-term damage to their financials and livelihood is already done. Given that the subsequent recovery may not be smooth, it will take them much longer to repair the damage. I can’t imagine all the decades of hard work and savings being undone by just 2 years of pandemic and resulting Government policy actions that is beyond your control. The worst part is that there’s actually a vaccine that works for this virus but you are getting screwed by people who refuse to take it for non-medical reasons other than personal beliefs.

I’m not going to comment any further on this because there’s nothing I can do to change the minds of the Government or people. I just accept the decisions that are being made and move on with my life. Because time continues to pass and I’m not going to waste my day getting upset and angry about things I cannot change. I focus on getting through each day, improving something along the way and finding another thing to be happy about. My family’s normal daily and weekly routines have resumed so we just keep looking forward in the hope that the situation gets better over time.

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I have been getting busier at work as I take on more things to do. But I still manage to carve out time in the work day to do my own things and run errands. The same goes for my wife as we both try to manage the balance between work and personal time at home. Our work hours are rather stable so far though the workload can vary from week to week. We get sufficient time with our son on the weekdays in the afternoon and evening after his pre-school in the morning and we spend most of the day with him over the weekend. And we see our families and close friends often enough not to feel alone. This will have to do until we exit the Stabilization Phase and we can mix in more stuff after the Covid restrictions are relaxed.

Anyway, I was monitoring our liquid assets this week and it has been climbing daily. Equity and crypto markets are rallying, hence pushing up my positions across the board. I made some good and bad calls in the past few months on buying and selling tech stocks and cryptos. But the end result is still positive for me, which I feel a sense of relief more than anything else. When I see this kind of gains in equities and cryptos, I generally stay on the sidelines and don’t do any manual investing. I let my automated monthly investment plans do the regular investing work for me to keep my FOMO in check. I only start to go in when I see more red than green consistently in my portfolio and my investing moves get bigger the more red shows up in my portfolio. Otherwise, I just wait around, do nothing on the investing front and focus on living my life.

I’m glad the weekend is here so we can take some time off to rest. It has been a busy week at work for us while adjusting to a new home living situation. Daily routines have been disrupted and this week is a real eye-opener on what can happen when the family has to go through a medical issue together. At this time, it looks like the most difficult part is over and we may be able to resume our normal lives from next week onwards. I didn’t have time to actively monitor our investments in the past few days and only had time to catch up today.

Seems like both stocks and cryptos are rallying and prices are going higher now compared to just a few days ago when I commented on this topic. I don’t have an issue with markets trending sideways or higher because my regular investment plans ensure I don’t miss out on gains with consistent capital injections. My problem is when markets drop and I don’t have enough cash on hand to buy the dip. Or worse, it becomes a mini-crash and I ran out of cash after buying the dip.

Given the way things are going, I don’t expect a significant market crash to happen anytime soon. Yes, I know there are always ongoing issues in various parts of the world that can negatively impact the markets. But big market crashes tend to happen from something totally unexpected (i.e. black swan event), rarely from something people can see coming and have time to prepare for. A good example would be the current crisis with the China real estate sector that is badly affecting the China property stocks and bonds. While contagion risk is possible and the effects can spread to other parts of the China economy, I will be surprised if their Central Bank and Government does nothing about it and let it happen.

The biggest game-changer to markets in our generation and the ones after us is just how easily and to such a large extent that Central Banks and Governments are willing to intervene to save their economies. While SG did not money-print like US, the SG Government dipped into their reserves to pay for Covid support packages. Essentially injecting money into the SG economy via direct support measures to employees, self-employed and businesses. As a result, it protected most of our livelihoods, especially by ensuring jobs were not lost. There was a concerted effort across industries and Government regulatory bodies to retain as many jobs as possible.

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Even when jobs were inevitably lost, efforts were made to retrain and reskills workers for jobs in other industries. To soak up the excess capacity until the badly hit industries can recover and start hiring again. My view is that this is going to work and I have positioned my investment portfolio accordingly. The road to recovery may not be smooth but it’s more likely to happen than not the more time passes. Anyway, one interesting thing I have noticed about myself is how much less stressed I am after completing my private property purchase end of Sep. I was worried about which investments to sell to raise cash for the downpayment, the timing of when to sell, etc.

I got too eager with buying the fall in Chinese tech stocks and dip on US tech stocks that I ran my cash balance to the lowest point ever since starting work. This was at the start of Oct and I found myself having to check on my bank account balances constantly to make sure I have sufficient money for rent and living expenses. It’s also when the markets started falling for a while so I was monitoring my investments and watching them go down along with my cash after paying bills. It’s a surreal feeling to know that nothing has fundamentally changed, but how much more panic has set in when I have no buffer.

This all changed after the rental income from my new place (currently being tenanted) got credited into my bank account earlier in the month. And I also just got paid my salary income for the month. The cashflow improvement was immediate and I now have a small buffer. My wife is getting her monthly salary income next week and this will give me an even bigger buffer. All of a sudden, I stopped checking the markets because I was less worried. And guess what, the markets started rallying afterwards. I’m not saying all of these are inter-connected. But it does show that the less stressed you are about and the less you need for something to happen, the more the situation can turn in your favour in time. But once you start getting desperate and stressed out hoping for something to happen, the situation can turn against you so much more quickly.