Ask Me Anything: Balancing Tech and Value Stocks in 2024

March 27, 2024

Strategic moves in buying technology stocks

The excitement around rising US tech stocks and the record highs of Bitcoin and gold is hard to ignore. Yet, with ongoing global tensions, the intense US-China tech rivalry, uncertainties surrounding the US election, and fears of economic slowdown, it is clear there are risks too. We have heard your concerns about these issues recently, and this article hopes to provide you with insights into the current market trends so you can better navigate your investments in both the US and Singapore markets, making decisions with a clear understanding of both opportunities and challenges.

1. What are the implications of a continued surge in US tech stocks and record highs for Bitcoin and gold on global and Singapore markets?

The rise in US tech stocks, led by giants in the AI field like NVIDIA Corp (NASDAQ: NVDA), as well as Microsoft Corp (NASDAQ: MSFT) and Advanced Micro Devices, Inc (NASDAQ: AMD), reflects enthusiasm for AI’s growth potential. This uptrend may echo in Singapore’s tech sector going forward with a potential recovery in the semiconductor industry this year. A balanced investment approach combining tech growth with steady earners like Singapore banks and REITs can offer growth while managing risks. Tailoring this blend of tech and value stocks to fit personal risk tolerance and goals is key.

2. How might interest rate decisions by the US Federal Reserve and Singapore’s Monetary Authority of Singapore (MAS) influence investment strategies, particularly for Singapore REITs?

With expectations of interest rate cut by the US Fed this year, S-REITs could become attractive again. During the last two years, S-REITs have struggled to gain momentum amid the rising global interest rates, affecting operational margin and distribution yield amid the higher borrowing costs. Despite these challenges, S-REITs have grown at a compounded annual growth rate (CAGR) of 6% over the last decade, indicating a resilient investment option for long-term investors.

You can read more about the recovery of S-REITs in 2024 with moderate Fed rate cuts here.

In conclusion, the strong US rally, especially among tech giants riding on the wave of AI innovation, is having a positive impact on the overall market. However, prudence is paramount as investors are content with macroeconomic uncertainties and interest rate shifts. A strategy that marries the high-growth potential of tech with the stability of value investments could be the key to balancing the scales of risk and reward.

We are excited to have addressed some of our members’ questions. The article aims to deliver a straightforward and succinct summary of the varied and intricate factors influencing the current market environment.

We look forward to the next AMA session, where we’ll continue to explore and discuss important economic trends and opportunities.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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