Portfolio & Dividend Update : 17th May 2025
Riding the Market Waves: Trump Tariffs and the Market Volatility
Hi Everyone! It’s me again, it has been quite some time since the last update of my Portfolio in December 2024, and now maybe it's time to share my thoughts on the latest market rollercoaster. If you’ve been following the news or your portfolio’s ups and downs, you’ve probably felt the turbulence from the recent market rout sparked by Trump’s tariff liberation day. My portfolio’s been doing a bit of a yo-yo dance this year: up 11% early on, then down to -2% when the tariff war hit, and now rebounding slightly to +7%. It’s enough to make anyone’s head spin! But as I reflect on this, I’m reminded that this kind of volatility is just par for the course. Markets are chaotic, non-linear, and driven by sentiment, but for long-term investors like us, these dips are just noise in the grand scheme of the investing world. Let’s unpack what’s happening, why it’s not worth losing sleep over, and how we can position ourselves to come out stronger on the other side.
The
Tariff Storm: Uncertainty Strikes Again
Trump’s tariff liberation day, where new tariff policies
were rolled out with much fanfare earlier this year, has sent shockwaves
through global markets. The administration’s push to reshape trade dynamics,
while well-intentioned, has stirred up a hornet’s nest of uncertainty. Markets
hate uncertainty, plain and simple. Whether
it’s new duties on imports or threats of retaliation from trading partners, the
lack of clarity makes investors jittery. We’ve seen this before with Trump’s
earlier tariff moves, and each time, the market reacts like a startled
cat—jumping first, thinking later. The S&P 500 took a sharp dip, shedding
5% in a matter of days, and the STI here in Singapore wasn’t far behind,
dropping 3-4% at its lowest point. My portfolio, a mix of Singapore Banks, REITs,
HK industrials, and some UK dividend payers, felt the sting too, sliding to
that -2% low when the news broke.
But let’s take a step back. This isn’t the first time we’ve seen a market rout, and it won’t be the last. The market’s reaction is sharp, emotional, and often overblown, which is just its nature. It’s a complex adaptive system, as the academics like to say, meaning it’s chaotic, non-linear, and swayed by every bit of news and noise that comes its way. In that sense, stock market also behave like "living organisms " that evolve and adapt from time to time, old stocks being replaced by new one in an Index ETF, new technologies companies taking over the old one. Trump’s tariff policies, with their geopolitical undertones, are exactly the kind of uncertainty that fuels these swings. Add in the broader context—geopolitical tensions, trade war fears, and even murmurs of inflation, and you’ve got a recipe for short-term chaos.
Munger Models: Complex Adaptive
Systems <source:CMQInvesting.com>
A Yo-Yo
Year: My Portfolio’s Wild Ride
Speaking of chaos, let’s talk about my portfolio’s
performance this year. It’s been a real yo-yo, hasn’t it? I started 2025 on a
high note, with my portfolio up 11% by March, buoyed by a strong rally in HK
markets, SG Banks and some solid dividend payouts. Then came the tariff liberalisation
day, and the market’s mood soured fast. By late April, I was staring at a -2%
return, a 13% swing in just a few weeks. Ouch! But as I write this, things have
bounced back a bit—I’m sitting at +7% year-to-date, thanks to a recent rebound
in some of my core holdings. It’s a wild ride, no doubt, but I’ve seen this
movie before. These short-term swings are just part of the game. The market
doesn’t move in a straight line; it zigs and zags, driven by sentiment and
headlines more than fundamentals in the short run.
What’s interesting, though, is how the market behaves over
time. It’s not a neat Gaussian distribution, like
some textbook bell curve where everything’s tidy and predictable. Instead, it’s
skewed toward positive returns—historically, markets tend to go up more often
than they go down—but with a fat tail. That fat tail means volatility can be
extreme. Big swings, both up and down, happen more often than a normal
distribution would suggest. And that’s exactly why we, as long-term investors,
can take advantage of these moments. When the market overreacts to something
like a tariff war, it creates opportunities to buy quality at a discount.
I keep thinking of the Chinese saying: crisis
equals opportunity. This kind of market rout is a crisis for
some, but for those of us with a plan, it’s a chance to plant seeds for the
future.
The
Market’s Memory: Short-Term Noise, Long-Term Growth
Here’s the thing about events like this tariff war: the market won’t remember them in the long run. I know that sounds strange when we’re in the thick of it, with every headline screaming about trade tensions and every red day feeling like a punch to the gut. But history tells us these dips are just blips. Think back to 2018-2019, when Trump’s first round of tariffs on China sent markets into a tizzy. The S&P 500 dropped nearly 20% at one point, and everyone was talking about a looming recession. Fast forward a few years, and that episode’s barely a footnote. The market recovered, climbed to new highs, and most investors who held on came out fine. This tariff liberalisation day will be the same, a normal dip in the long run if we look at the chart below. Every crisis looks just so insignificant and rebounds to a new height eventually.
Why am I so confident? Because the market’s a complex
adaptive system, as I mentioned earlier. It’s driven by human emotions—fear,
greed, hope—and those emotions blow events out of proportion in the short term.
But over the long term, fundamentals take over. Companies with strong earnings,
good cash flow, and solid balance sheets keep chugging along, and the market
eventually catches up. My portfolio’s yo-yo ride this year—up 11%, down to -2%,
now at +7%, is just a microcosm of that. The tariff war knocked it down, but
the rebound to +7% shows how quickly sentiment can shift. In five years, I
doubt I’ll even remember this dip, except maybe as a moment when I picked up
some bargains.
Seizing
the Fat Tail: Opportunity in Volatility
That fat-tail nature of the market—the tendency for big
swings—actually works in our favour if we’re prepared. These tariff-induced
dips are exactly the kind of volatility we can use to our advantage. When the
market overcorrects, it drags down even the good companies along with the bad.
That’s when I start looking for opportunities. I’m not talking about
speculating or chasing the latest hot stock—those are traps I learned to avoid
years ago. I mean buying into strong, fundamental companies at prices that make
sense. Think of names with good cash flow, low debt, and a history of paying
dividends through thick and thin. Those are the ones that’ll weather the storm
and come out stronger.
I’ve been doing a bit of that myself lately. With my
portfolio recovering to +7%, I’m starting to nibble on some of the names that
got hit hardest by the tariff fears. A couple of my Singapore Banks, HK
Insurance and conglomerates, for instance, got dragged down with the broader
market, but their fundamentals (steady dividends, high ROE and CET1 ratio) are still
solid. I’ve added a little to those positions, buying in tranches to spread out
my risk. I’m not trying to catch the bottom—nobody can—but I’m happy to buy at
a discount. That’s the beauty of these big swings: they give us a chance to
build positions in quality businesses at better valuations.
Understanding Tail Risk and the Odds
of Portfolio Losses <source:Investopedia.com>
Building
Resilience: Diversification and Position Sizing
Of course, none of this works if your portfolio isn’t set up
to handle the volatility in the first place. That’s where diversification and
position sizing come in. I’ve always believed in spreading my bets across
different sectors and geographies. My portfolio’s a mix of Singapore Banks
& REITs for steady income, HK/CHN
Banks, Insurance, Conglomerates & industrials for income and some growth,
and UK (oil majors and consumer staples) dividend payers for stability. That
diversification means that when one area, like my HK holdings, gets hit by
tariff fears, the others can cushion the blow. It’s not perfect, but it keeps
the portfolio from swinging too wildly.
Position sizing is just as
important. I never put too much into any one stock or sector, no matter how
much I like it. I keep my positions balanced,
usually no more than 5-10% of my portfolio in any one name. That way, even if a
tariff war or geopolitical tension hits a particular sector hard, I’m not left
scrambling. It’s all about managing risk so I can stay in the game for the long
haul.
Staying
the Course: Patience and Fundamentals
Geopolitical tensions and tariff wars aren’t going away
anytime soon. Trump’s administration seems set on shaking things up, and
that will keep markets on edge for a while. But as long-term investors, our job
isn’t to react to every headline—it’s to stay the course. Patience is our
biggest ally. I keep reminding myself to think of my portfolio as a business
entity, not a collection of stock tickers. My goal isn’t to chase short-term
gains; it’s to build a machine that generates good cash flow over the years, through
booms and busts. That’s why I focus on companies with strong fundamentals—good
cash flow, solid balance sheets, and a track record of paying dividends even in
tough times.
When I look at my portfolio now, sitting at +7% after this
yo-yo year, I’m not too fussed about the tariff dip. The dividends keep coming
in, enough to cover my expenses with some left to reinvest. The market’s ups
and downs don’t change that. In fact, they give me a chance to add to my
“business” at better prices. I’m not saying it’s easy, those red days still
sting, but I’ve learned to zoom out and focus on the long game.
Closing
Thoughts: Crisis Equals Opportunity
So, where do we go from here? The market’s still volatile,
and Trump’s tariff policies will likely keep stirring the pot. My portfolio
might swing a bit more before the year’s out—who knows, maybe it’ll dip below
that +7% again. But I’m not worried. The market won’t remember this tariff war
in the long run, just like it’s forgotten so many other “crises” before. What
it will remember is the companies that keep delivering, the portfolios that
keep generating cash flow, and the investors who had the patience to ride out
the storm.
My advice? If you are
still in the “wealth accumulation “stage, treat this market rout like the
opportunity it is. Build a diversified portfolio, size your positions wisely,
and focus on quality—strong fundamentals, good cash flow companies. Don’t let the
market’s chaos scare you off; use it to your advantage.
As I always say, happy investing, friends—let’s keep walking
this journey together! Stay the course, keep calm & collect dividends, ignore
the noises, have patience and think for the long term.
Cheers!
STE
Before I proceed to update my portfolio and dividends
collected in 1st Half of 2025, allow me to share some of the photos
taken during my last trip to China Huangshan ( 黄山) in April this year. It was a great experience as this is the first time we travelled on our own ( free & easy), not following the tour group.😊
九寨归来不看水，黄山归來不看山。。。
这次十一天中国之旅让我无比开心！黄山的壮丽云海、西递和宏村的古朴建筑，还有西溪南的宁静水乡，都让我感受到自然与人文的完美结合。千岛湖之美,
在嘉兴南湖游船上放松身心，漫步狂月河老街品味历史韵味，更是一段难忘的经历。当地美食如种子糕、烧卖和黄山饼让我大饱口福，每一道菜都充满地道风味。自由行的方式让我能随心安排时间，坐火车穿梭于城市之间也很方便。这趟旅程不仅让我欣赏到美景，还深刻体会到中国文化的魅力。
Portfolio
& Dividend Update :
My portfolio hasn’t shifted much; core positions remain
steady with just minor tweaks here and there. I’m still focused on value and
dividend stocks, prioritising cash flow. This approach keeps my income stream
solid, letting me reinvest and weather market swings without chasing trends.
Consistency and patience are key for the long haul.
Portfolio Return 2025 YTD XIRR: +7.18 %
* Current TTM Yield: 5.9%
* YTD XIRR with up-to-date currency adjustment
Top 50 Holdings :
51-102 Holdings :
I have reduced my stakes in CKI / CITIC Tel and switched/increased my holdings in OCBC/ Tracker 2800/ Ping An. Took profit on another HK stock ( Bright Smart 1428) as the stock has gone up by almost 200+% %, since the announcement of Ants Group ( a subsidiary of Alibaba) taking over as major shareholders. Total profit from Bright Smart was around $25K (excluding dividends), and I am still holding more than 40% of my initial holdings.
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