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Add banks and enjoy higher interest income too. My plan.

Monday, November 21, 2022

After blogging about how I would like to increase my investment in the local banking sector, I went on to increase my investment in UOB by 19% and in OCBC by 11% in the following two weeks.

Why did I do this and in case you are new to my blog or do not remember, read this:

DBS, OCBC and UOB at 40% of portfolio?

To be honest, they are not at 40% of my portfolio yet as their stock prices rallied somewhat too quickly or I was adding to my positions too slowly, maybe.




Anyway, the catalyst for this short update is a comment from a reader in a blog. 

If you are interested, read it in the comments section: HERE.

This is my reply to his comment:

Technically, the banks are somewhat overbought at this point and price action seems to be grinding or churning at resistance. 

This doesn't mean that their share prices couldn't go higher but a correction is probably to be expected and it will present a chance to add if it happens. 

As for fixed deposit, we will just have to make hay while the Sun shines and enjoy the higher interest rates while they are available. 




If the Fed does what they say they will do, then, the higher interest rates could stay high for longer as the aim is to mop up liquidity. 

There will come a point when there isn't too much liquidity sloshing in the market but looking at how yields are behaving, we might have some way to go. 

When we are at that point, we might not have a simple correction in equities as things could get ugly. 

Don't know how things will look in the future. 

All I can do is to have a plan which makes sense at least to me. 




1. Stay invested in bona fide income producing assets that have the ability and willingness to pay me.

2. Stash emergency funds in risk free and volatility free products which pay reasonably well. 

3. As for a war chest, I don't have a very large war chest like I used to have but in retirement my aim isn't so much to grow wealth aggressively anymore. 

It is all about financially security and not having to rejoin the workforce because I did something exceedingly foolish with my money.

Crossing fingers!

Gambatte!

References:

1. Growing passive income.
2. Inflation and my budget.
3. 4% yield T-bill and my plan?





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