My trip into the mountains to study Existentialism and what it means for the FIRE movement

 

Something got into me during the semester holidays. After conducting my Early Retirement Masterclass and teaching a semester of both Law and Data Analytics, I told myself I needed to head solo into the mountains to study existentialism.

So last Saturday, I crossed the Causeway, took the ETS to KL, then spent a day meeting students and relatives before taking a 5-hour bus to Cameron Highlands with a book on Existentialism. In Cameron, I tried two approaches to enjoy the place. The first was an intense one-day tour of the area that covered about 80% of what I needed. The second was a day to recover from the first, where I just hung around Tanah Rata and went where my nose led me. 

As a result, both extremes don't really suit me, and while I finished the book, I still couldn't really understand what Existentialism is all about.

So this article is my attempt to reflect on the few Existentialist concepts I was able to grasp in my solo travel, which I hope the reader will appreciate.

So the basic notion is that we can't really choose our circumstances when we are born. We have a starting hand in life, and we also inherit social expectations from the people around us, societal norms, and built-in behavioral biases from fields like evolutionary psychology. 

But we are not bystanders; we have to live, so some of us take up careers, buy things, and pursue status, all to impress people we may not know or like, just to conform to society. People should do this; you must act in a particular way. Chinese New Year is like an audit where you are ranked in personal achievements relative to your cousins.

Conforming and being conventional is okay, until you realize our time in this world is limited. When you conform to others' or society's expectations, you aren't really taking the time to do what you really want, and existentialists see this as acting in bad faith. So does it make sense to be a walking resume and just be the kind of cousin that gets all the accolades during CNY?

So how should one live? 

First, you need to understand that you are in this prison-like situation; then you need to take ownership of your life. Make choices for your life despite these societal constraints. This is what existentialists say is being authentic. 

I see many of these concepts in practice as I travel solo. 

When I travel alone, I don't need to consider the needs of fellow travelers, so I can do what I want, but only for the short time I have before I return to Singapore. But this freedom comes with some anxiety. So, I have to make different choices about the trip's intensity and figure out which itinerary I prefer. Like A/B testing. The intense day trip was physically uncomfortable, but I saw many things and even made new friends on LinkedIn. The day I did nothing was blissful, but I felt vulnerable to FOMO. In the end, I was just happy to see my cousin so that I could bitch about my trip over a cup of Teh Halia.

I've always had an inkling that Existentialism will play a major role in the FIRE movement.

Once you attain it, financial independence will give you a lot of optionality in life. I've dedicated more than two decades to pursuing and then teaching it. But an existentialist will laugh and say that financial independence is just a beginning and not even a person's final form.

Optionality gained from financial independence should drive more agency in life. 

If you don't have to work anymore, what would you do? 

Whatever you do needs to have meaning because your life is short. So retirement may be acting in bad faith because RE is already built into FIRE by definition. 

Why should you retire just to signal that you've gained financial independence?

Mirroring a concept in philosophy, when you gain financial independence, you've just begun existing in Singapore society.

Existence precedes Essence. 

There is fundamentally no new meaning in your life just because you can live off your investment income. I used to call FI a person's Financial Nirvana, but an existentialist will disagree.

But now, with your new financial power, you need to exercise your agency to break away from the notion that you are working for money. 

Life is too short to work for money after you have money.

Without a clear definition or meaning of life, existentialists believe that people now have the freedom to choose a life path that gives themselves meaning.

So this is the glide path for folks who gain financial independence. 

First you can get enough income without work. Since you are no longer confined to the social expectation of having a career, you might need to find what kind of work, or non-work, gives your life meaning. 

Then you do it. 

You gain authorship over your own life.

If, after much introspection, you still want to retire early, so be it!

So I'm at the tail end of my trip now. I hope to get back to my mundane existence in Singapore tomorrow. I think I've gone too far bringing such a dry philosophy book with me into the mountains. 

I will limit these projects to perhaps just once a year. 

The phenomenology of Financial Independence

Before arriving in Cameron Highlands, I took a 5-hour bus to Kuala Lumpur and pushed through a book titled At the Existentialist Cafe by Sarah Bakewell, which made a valiant attempt to explain existential philosophy. I found a section on the eccentricity of philosophers interesting, after struggling to learn anything.

I guess if I can understand just a tiny part of the book and can apply it to my work, it's a small win, and I can come back from the mountains a satisfied guy.

So the concept I struggled with was phenomenology. It is a particular way of looking at something from a viewpoint other than facts. So when you practice phenomenology, you describe a phenomenon. Take, for instance, coffee. Phenomenology is not about the chemical composition of coffee or how many stages coffee beans need to go through to become the cup of coffee you have today. The phenomenon of coffee is more like its rich aroma filling your nose just before you drink it, and the feeling of drifting out of your stupor as you get your first caffeine hit.

So naturally, I have to apply this newfound skill to understanding what financial independence is; it's certainly not about the current yield of your investment portfolio, but what freedom means for people whose passive income exceeds their expenses.

But...Who am I kidding... AI can do the job better than me. 

This is what ChatGPT said:

Financial independence is not merely a numerical condition in which passive income exceeds expenditure; it is a transformation in how a person experiences time, work, risk, and choice. Before financial independence, time is often structured by economic necessity: work schedules, income requirements, debt obligations, and career incentives shape the horizon of everyday life. Financial independence loosens this structure and creates greater temporal autonomy.

Phenomenologically, this shifts from constraint to optionality. Work is no longer experienced primarily as an obligation imposed by financial need, but as an activity that may be chosen, modified, or abandoned. Decisions can be evaluated less by their immediate monetary consequences and more by whether they are meaningful, interesting, or consistent with one's values.

Yet financial independence does not automatically produce fulfillment. Removing financial necessity can also expose questions that employment previously concealed: What is worth doing when one no longer has to work? What provides structure, identity, recognition, and purpose? The experience can therefore contain both liberation and disorientation.

The deeper significance of financial independence is consequently not freedom from work, but freedom from economic compulsion. Its value lies in expanding the individual's field of possible action—the ability to decide how one's finite time should be spent rather than having that decision largely dictated by the need to earn an income.

Wow ! 

That blew my mind.

Even if you think it fundamentally states the obvious, phenomenology allows the user to isolate intuitive, human emotions from something, which I think can apply to marketing, or at least to motivating people to achieve financial independence. This is certainly consequential because I'm more than happy to couch financial independence in such terms when I create content.

Of course, to leverage AI at this level, you need to put in the effort to understand phenomenology—that is a tall order. 

I also find that in Cameron Highlands, I have to study every single influence on existentialism. Now I'm grappling with Martin Heidegger's ideas, and I'm so lost that even AI can't really take me very far. I know it has some utility in the FIRE movement, but it remains too abstract for me.

 Maybe I'll be more enlightened tomorrow.

Does agency matter?

I'm currently on a solo adventure in the Cameron Highlands. Between tours, I should have some time to blog.

I have interesting discussions with my young students that aren't always about technology, and there's certainly a lot of anxiety about job availability because of AI. One area I suggest the students develop is agency. At that time, I defined it sociologically — what kind of constraints society places on a student and how they can overcome them to be successful on their own terms. My logic is sound: for most of my students, adopting the same success standards as their JC peers would do them little good, regardless of what their parents might think.

But a smart guy in my class has a valid counterpoint. If everybody exercises agency, then the spoils will go to those who exercise the most agency, so the competition remains fierce, and it's back to square one.

I'm a sporting guy; I'm happy to concede the point, although I'm not convinced by his argument yet, but I'm glad he put serious thought into this matter, which itself is an exercise of agency, as the lecturer is not always right.

Fortunately for me, Martin Seligman, the father of positive psychology, later published a thorough perspective on agency from a psychological standpoint. According to Seligman, agency is comprised of three parts:

• Efficacy - You must believe that you can be the author of your own fate.
• Optimism - You must believe your future will be better than your situation today.
• Imagination - You are creative enough to solve problems your way or envision a better life for yourself.

Surprisingly, most of the book isn't particularly useful to me, as Martin's work reads like a history book, showing that periods of great human flourishing correspond to words in the era's literature that reflect great human agency.

But for me, now I have a new tool to debate agency in class. As it turns out, a diploma program will ideally level up a person's efficacy by improving their skill set, making them more employable, etc.... But a certain proportion of optimism is genetic. Imagination is also a function of personality, like openness to new experiences.

So, in practice, few folks have the capacity for agency. In fact, I can imagine progressives trying to paint agency as something that has links to race, social status, and social capital. Some might say that tolerating agency will magnify inequality, which the political left and sociologists fetishize.

I've got one final point about the book. 

The best part about the book has nothing to do with agency.

As it turns out, Martin Seligman can lucid dream. 

So, as his colleagues begin to die of old age, he can summon them back in his dreams to discuss the topics that he is working on. He admits that these dream colleagues can only answer based on what he knows of their work, and that it's not too different from using AI.

Why do gurus need to show off their Lamborghinis ?

 

Short answer: because the Lamborghini is the product. The investment course is just how you pay for it.

If you scroll through finance content aimed at Singaporean men in their twenties, you will notice that the backdrop rarely changes. A supercar, a rooftop bar, a Marina Bay view, a watch the camera lingers on a little too long. Nobody films a dividend statement at a hawker center. There is a reason for this, and once you see it, you can't unsee it. It also explains why so many young men end up in strategies that are designed to blow up.

The real market is status, not returns

Most investment gurus are not selling returns. They are selling status, and their biggest buyers are young men.

Young men want high status, and they believe, with some justification, that status improves their prospects with women. I wrote about the research on this in 2019 in Do women prefer nice guys or rich guys? and again last year in Why guys without a passive income of $500 had better not start dating. Whatever you think of the evidence, belief drives purchases. A 24-year-old who thinks money buys him a better position in the dating market will pay for anything that promises to get him there faster.

So the guru's marketing problem is simple. How do you show a young man, in three seconds of a TikTok scroll, that you have what he wants?

You can't show him your Sharpe ratio. He doesn't know what it is, and it isn't attractive anyway. You show him the car.

Economists call this costly signaling. A Lamborghini costs well over S$1 million in Singapore once COE is included. That makes it a credible signal that someone has a lot of money. Notice that it doesn't say how the money was made, and it doesn't even say the guru owns the car. A rental for a half-day shoot will do. The signal only has to get past the viewer's gut, not his calculator.

Why the car always comes with a high-risk strategy

This is what matters for anyone thinking of buying a course.

If your marketing rests on showing spectacular wealth, you need a spectacular story to explain it. "I bought a basket of SGX REITs and banks and compounded at 7% for 20 years" does not explain a Lamborghini at age 29. Only a high-return strategy does: options, leveraged forex, crypto, small-cap momentum, margin trading.

There is also a structural reason the guru market selects for high-risk strategies, and it has nothing to do with whether the guru is honest. I ran a simple simulation to show it.

Take 10,000 young men. Give each one a strategy with the same 8% average annual return. Half of them get a steady portfolio with 12% volatility. The other half get a leveraged one with 50% volatility. Run it for five years.

After 5 years	Steady (12% vol)	Leveraged (50% vol)
Median outcome per $1 invested	$1.43	$0.85
Tripled their money	0.1%	14.1%
Made 5x or more	0.0%	5.2%
Lost half or more	0.0%	36.6%
Lost 90% or more	0.0%	14.6%

Monte Carlo simulation, 10,000 paths per strategy, normally distributed annual returns, losses capped at -100%. Illustrative only, not a forecast of any specific strategy.

Look at the leveraged column. The typical investor loses money. More than a third lose half. One in seven is wiped out. And yet roughly one in twenty makes five times their capital.

Now think about who makes content. The 5% who turned $50,000 into $250,000 have a story, a screenshot, and maybe a down payment on a nice car. The 15% who were wiped out stop posting. The steady investors have nothing to show except $1.43 for every dollar, a good result nobody wants to watch.

So even if every strategy has the same expected return, the people who end up on your feed come almost entirely from the high-risk tail. You are not looking at a sample of investors. You are looking at a sample of survivors.

The guru's incentives make this worse. If his strategy works, he sells courses. If it fails, he deletes his account, and another winner from the same lottery takes his place. His payoff looks like a call option, so he should prefer high volatility. Your payoff looks like the whole distribution, including the part where you are wiped out.

Why young men specifically take the bait

Two things push young men towards this trade.

The arithmetic of a small portfolio. A 25-year-old with $20,000 earning 6% makes $1,200 a year. That buys nothing he can show anyone. The only way a small portfolio can change your life in two years is to take risks that are just as likely to destroy it. High-risk strategies are not irrational for this group. They are a rational response to the wrong goal.

Risk appetite peaks in young men. This is well documented in behavioral research and needs no further explanation to anyone who has driven on the PIE on a Friday night. In the ERM readings, I describe dopamine-seeking as the first of three psychological roots of rookie portfolio design. A variable-reward strategy that pays off big once in a while feels very much like a slot machine. The Lamborghini tells you what the jackpot looks like.

Put the two together, a status-hungry buyer and a marketer who has to signal high returns, and you get a market that consistently matches the riskiest strategies with the people least able to survive their losses.

A detour through my Second Brain

Here is something I found while writing this.

Earlier this year, I moved 20 years of blog posts, research reports, and teaching notes into an Obsidian vault, and I've indexed it in a Qdrant vector database so I can search by meaning instead of keywords. Before writing this article, I asked it about "investment gurus showing off luxury cars to young men."

The top results were not about gurus. They were SGX research reports on Hong Leong Asia, which makes truck powertrains, and China Sunsine, which makes rubber chemicals for tires. The embedding model saw "cars" and went straight to engines and tires. When I searched for "high risk high return strategy," it returned the leverage section of my Olam report and position sizing tables from my REIT analysis.

That's a funny result, but it also says something. In my own notes, risk shows up as a net debt-to-equity ratio, a refinancing schedule, or a trim level. It's a spreadsheet. In guru marketing, risk shows up as an orange car. Same concept, completely different representation, and the second one sells far better.

When I adjusted the query, the vault surfaced the posts I expected, and I found I had been writing this article in pieces for almost a decade without connecting them:

• 2017, Inconspicuous consumption and the theory of platforms: how educated people signal status without luxury goods, written in the same post where I discussed the margin trading debate going around the blogs.
• 2018, The Things that you buy leave no trace: research showing an expensive car really does make its owner happier than an average one, which is exactly why the signal works.
• 2019, Do women prefer nice guys or rich guys?: the mating-market premise behind the whole guru economy.
• 2019, MBA in a Nutshell #17 – Sales: AIDA (Attention, Interest, Desire, Action) versus consultative selling. The supercar is the cheapest Attention trigger there is.
• 2022, Why we pursue status: my notes on David Marx's Status and Culture and how chasing status destroys wealth.
• 2025, Why guys without a passive income of $500 had better not start dating: money and the dating market, again.

Status, mating, sales funnels and risk had sat in four separate clusters of my vault for years. The guru's Lamborghini is what links them. That is the real argument for building a second brain. You can't remember what you wrote eight years ago, but a machine can show you that you already had the pieces.

What to do instead

If you are a young man reading this, I am not going to tell you to stop wanting status. That is like telling you to stop being hungry. Here is what I would do instead.

1. Ask for the drawdown, not the return. Any guru selling a strategy should be able to tell you its worst peak-to-trough loss and how long recovery took. If the answer is vague, or the track record started after 2022, walk away.
2. Ask how many students blew up. A course that cannot tell you its failure rate is showing you the 5% column of my table and hiding the 15% column.
3. Separate the signal from the source. Ask what share of the guru's income comes from trading and what share comes from selling courses. In most cases, students, not markets, paid for the car.
4. Size your portfolio to survive. Before you can compound, you have to avoid being wiped out. A strategy that ends with a 15% chance of losing 90% is not an investment plan, whatever the upside.
5. Pick a better status game. The status that actually holds up in Singapore, a paid-off flat, a dividend stream that covers your basic expenses, a career with optionality, doesn't photograph well. It also doesn't get repossessed.

The guru needs the Lamborghini because his business depends on you looking at the right tail of the distribution. 

Your job is to look at the whole thing.

If you're middle income, your best relationship manager is yourself.

 

Three incidents over the past month pointed to the same conclusion: for middle-income Singaporeans, nobody in the financial industry is structurally set up to give you their best attention, and you no longer need them to. The tools to run your own money are cheaper and better than they were even two years ago. What you have to supply is the discipline and the willingness to check numbers. 

Three incidents

One. An ex-classmate of mine, a successful businessman, turned up at a networking event underdressed. A relationship manager made a backhanded remark about it. The comment was petty, but it was also information: a part of the industry sorts people by appearance, which is a poor proxy for either wealth or judgment, and an even poorer basis for allocating service.

Two. A financial advisor posted a story about a private banker who reluctantly accepted a client’s S$3 million account, then told the client to build it up to S$5 million to maintain the relationship. Treat it as marketing copy, because that is what it is. The reason it works as marketing copy is that it inverts the relationship in a way people recognize: the client becomes responsible for growing his assets to keep his banker interested, rather than the banker being responsible for growing the client’s assets.

Three. A relative of mine, an ex-banker, told me REITs had been performing badly and that my approach was therefore wrong. He then showed me his custodian account: a diversified UCITS global ETF on the LSE, in a 60/40 portfolio, presented as self-evidently superior.

The third conversation is the one worth unpacking, because he was half right and I was half right, and neither of us could settle it by tone of voice.

What the numbers actually say

I ran the comparison afterward. All figures below are total returns in Singapore dollars, using a 2.5% risk-free rate, for the five- and ten-year periods to 26 September 2026. The proxies are the STI ETF (ES3) for local blue chips, the Lion-Phillip S-REIT ETF (CLR) for S-REITs, the MSCI World ETF (URTH) for global developed equities, and a 60/40 mix of ACWI and AGG to shape his portfolio.

Five years

Portfolio	Annualised return	Volatility	Sharpe ratio
STI ETF	16.1%	11.2%	1.22
S-REIT ETF	−1.1%	12.7%	−0.28
MSCI World	10.4%	16.8%	0.47
60/40 global	5.6%	11.5%	0.27

Ten years

Portfolio	Annualised return	Volatility	Sharpe ratio
STI ETF	10.3%	13.0%	0.60
S-REIT ETF	2.6%	14.7%	0.01
MSCI World	12.3%	18.3%	0.54
60/40 global	7.4%	12.0%	0.41

Three things fall out of this.

First, my relative was right about REITs, and I was wrong to lump them in with the rest of the local market. S-REITs have delivered roughly nothing for a decade and have lost money over five years, with equity-like volatility during that time. Rising rates did most of the damage, and leverage did the rest. If you hold S-REITs, hold them for the income and the eventual rate cycle, and be honest that the last five years were bad.

Second, the local market as a whole has been strong, largely due to the banks. On a risk-adjusted basis, an investor who simply held the STI ETF for five years outperformed a global 60/40 portfolio by a wide margin. That result is period-dependent. Roll the window back ten years, and the gap narrows sharply, which is the point: five-year Sharpe ratios are not a permanent ranking of strategies.

Third, the 60/40 portfolio my relative was proud of returned 5.6% a year over five years with a Sharpe ratio of 0.27. It is a reasonable, defensible portfolio. It is not genius, and nobody should present it as such.

The wider lesson is the one that matters for this article. Neither of us could have resolved that disagreement in conversation. It took 10 minutes to process the price data. Anyone who tells you what your portfolio should look like, and cannot show you the numbers behind the claim, is giving you an opinion dressed as advice.

The middle-income bind

The middle is the worst place to sit in the current service model.

If you have modest savings, the people willing to serve you are usually paid by commission on what they sell you. The advice is not necessarily bad, but the incentive is tied to the product, not to your outcome.

If you have just enough to qualify for a relationship manager or the entry tier of private banking, you are the smallest client in the book. You are competing for attention with people who have ten times your assets, and you will lose that competition on most days.

The cost is easy to quantify. A 1% annual advisory or platform fee on a S$300,000 portfolio is S$3,000 a year. The same money in an index ETF charging 0.12% costs S$360. Over twenty years, that difference compounds into a meaningful part of a retirement.

Why doing it yourself got easier

From a tentative listing date of 13 October 2026, SGX will list four Xtrackers UCITS ETFs, traded in Singapore dollars. The one that matters most for a core holding is the MSCI World ETF (ticker XWR), with a total expense ratio of 0.12% per year, and the S&P 500 ETF (XUS) at 0.03%.

Why this is useful for a Singapore investor:

•           You can buy it on SGX through CDP, so the shares sit in your own name rather than with an overseas custodian.

•           It is expected to qualify for SRS investment, subject to eligibility and your platform supporting it. Confirm with your SRS operator before you plan around it.

•           As Irish-domiciled UCITS funds, US dividends inside the fund are taxed at 15% rather than the 30% a Singapore investor faces on US-listed holdings, and they sit outside US estate duty.

Two caveats that the launch publicity will not emphasize. Trading in Singapore dollars does not eliminate currency risk, because the underlying assets are still foreign; it only changes the currency in which you see the price. And bid-ask spreads on a newly listed SGX ETF are unproven, so compare the spread against the London or US listing before assuming the local one is cheaper overall. DWS delisted its Singapore ETFs in 2020, which is worth remembering when choosing a holding you intend to keep for 20 years.

For those who want to own individual stocks, AI has genuinely lowered the cost of research: extracting figures from an annual report, building a first-pass comparison of peers, checking whether cash flow covers dividends. It removes the clerical work. It does not supply judgment, and it will state a wrong number as confidently as a right one. The workflow only improves if you verify the output against the filings.

What being your own relationship manager actually requires

Firing the middleman is not free. You take on the work, and the work is specific:

1.         Write your policy down. Target allocation, what you will buy, and what would make you sell.

2.         Know your costs. Expense ratios, brokerage, custody, and spreads, totaled once a year.

3.         Measure against a benchmark. Return, volatility, and Sharpe against an STI ETF and a global index ETF. If you cannot beat both after costs, hold them instead.

4.         Review after results, not after headlines. Once or twice a year is enough for a portfolio you own for income.

5.         Keep a decision log. Write down why you bought. It is the only way to tell skill from luck later.

That is a few hours a year. It is less than most people spend choosing a phone plan, and it is the difference between being sold a portfolio and owning one.

Nobody at a bank is going to care about your money as much as you do. The useful response is not resentment; it is to make yourself competent enough that their attention stops being the thing you need.

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This article is for education only and is not financial advice. Return figures are computed from adjusted daily price data to 26 September 2026 and will change with the measurement period.

Letter to Batch 43 of the Early Retirement Masterclass

It has been an honor and a privilege to conduct a 5-Day Early Retirement Workshop for you.

Three months ago I wrote to Batch 42 that the Straits Times Index at 5,212 was a generational milestone, and that a rising index compresses dividend yields. Both statements have held up. Neither went far enough. The index has kept running, the leadership on SGX has shifted decisively towards growth, and the hunting ground for income investors in Singapore has narrowed to the point where your own portfolio exercise produced only twelve names.

The Index Is at a Record, But the Real Money Was Made Outside It

The STI closed at 5,801.96 on 4 September 2026, a fresh all-time high and roughly 35% above where it stood a year earlier. It returned 13.1% in the first half of 2026 alone. By any historical standard for this market, that is an exceptional run, and the banks did most of the heavy lifting inside the index.

Now look at what happened outside it. In the first half of 2026, AEM Holdings returned 512%. UMS Integration returned 132%. Nanofilm returned 113%. Frencken returned 106%. Against an STI that gained 13.1%, the semiconductor supply chain not only outperformed; it made the index look like a savings account.

Every one of those businesses is tied to the same story: AI capital expenditure flowing into semiconductor equipment and precision manufacturing. The market spent the first half of the year repricing that exposure, and it repriced it hard. As of May 2026, AEM traded at around 42 times earnings versus a historical average near 14, UMS at around 38 times versus 16, and Frencken at around 29 times versus 11.

I want to be direct with you about what this means, because it would be dishonest to gloss over it. If you had anchored on dividend yield in January 2026, you missed all of it. None of these counters would have passed the screens we ran in class. Their yields are small or absent, their earnings are cyclical, and their current multiples price in an earnings recovery that has not fully arrived. That is a real cost of the discipline you have just learned, and pretending otherwise would insult your intelligence.

The question is what to do about it, and my answer is nothing. You cannot build a retirement income stream out of counters that pay you almost nothing and require you to be right about the AI capital expenditure cycle. The market may well be correct that these businesses earn into their multiples. It may also be wrong. Either way, the exposure does not do the job you need done.

Singapore Is No Longer a Comfortable Market for Dividend Investors

When I started writing Tree of Prosperity, assembling an SGX portfolio yielding 6% required patience but not much cleverness. Dozens of counters with decent balance sheets paid above 5%. That is no longer true, and I think you should hear it plainly rather than discover it slowly.

The banks' re-rating is the clearest illustration. OCBC sits in your portfolio at $24.61, yielding 3.84%. That is a good business, well-capitalized, with room to continue returning capital. It also pays you less than 4% now, even though the same franchise yielded well above 5% not long ago. The market has repriced quality income upward. What remains cheap on a yield basis is, more often than not, cheap for a reason.

This is the structural shift. Singapore equities have become a market where good income is expensive and cheap income is fragile. The gap in between is where your work has to happen now, and it takes more effort than it used to.

REITs Remain the Exception, and That Is Where the Bargains Are

While the STI was setting records, the FTSE ST All-Share REIT Index fell 8.2% over 2026 to early September. The two moved in opposite directions, and that divergence is the single most useful fact in this letter.

The iEdge S-REIT Index now offers an average distribution yield of 6.3% to 6.4%. The sector trades at roughly 0.86 times price-to-net-asset value, a 14% discount to stated book value. With the 6-month T-bill at about 1.70%, the yield spread is close to 460 basis points. Historically, spreads above 400 basis points have been attractive entry points for investors who can tolerate the associated volatility.

The weakness is driven by rates, not operations. Markets are pricing at least one more Federal Reserve hike by the end of 2026, and the Singapore 10-year government bond yield has risen about 0.53 percentage points over the past year to 2.38%. Rates are the weather that REITs live in, and the forecast turned hostile.

What did not turn hostile is the cash. Most S-REITs grew distributions year on year in the first half of 2026, with several posting double-digit gains. Keppel DC REIT and OUE REIT both posted double-digit DPU growth. Prices fell while distributions rose. That combination is precisely what expands the yield available to a buyer, and it is why REITs occupy five of the twelve slots in your portfolio.

Three checks before you add to any REIT position. First, the proportion of debt that is fixed rather than floating, because a REIT with 70% fixed-rate debt is insulated in a way that one with 70% floating exposure is not. Second, the interest coverage ratio and gearing indicate whether the distribution can survive a hostile refinancing. Third, whether the discount to book is a mispricing or a judgment about the book itself. A REIT at 0.7 times NAV because the market disbelieves the valuation is not a bargain; it is a disagreement you have to win.

Why Your Final Portfolio Has Only Twelve Stocks

You made a batch decision I want to put on the record, because it was more rigorous than what I usually see.

You set a portfolio yield target above 6%, and then refused to reach it the easy way.

The easy way was Deep Value. Every screen we ran surfaced counters trading below net cash. Anchun International at 30.5 cents against roughly 67 cents of cash and short-term deposits per share. Fuxing China at three to four times earnings and 0.13 to 0.16 times book, among the statistically cheapest names on SGX. HL Global, where cash per share exceeds the share price. Asia Enterprises, Nippecraft, Koyo, VibroPower. On a spreadsheet, these are the cheapest things in the market.

You eliminated all of them, and your rejection notes were consistent: severe illiquidity, controlling-shareholder influence, no formal dividend policy, and earnings that were project-driven, one-off, or negative. The line one of you wrote on Anchun was the sharpest thing produced in the whole exercise. You are paying 30.5 cents for something holding roughly 67 cents of cash per share, but you need management to eventually unlock it, and cheap can stay cheap for a very long time.

Cutting the Deep Value bucket removed most of the high-yield candidates in one stroke. Twelve counters survived, with a projected portfolio yield of 6.21%. The five-year backtest on that basket returns 19.91% annualized with a standard deviation of 12.02%, a Sharpe ratio of 1.41 against a 3% risk-free rate, and a maximum drawdown of 12.21% in October 2023. Those are respectable numbers for a portfolio built to pay you, not to beat an index.

Twelve is fewer names than I would normally want. Be honest with yourself about what that means: with twelve holdings, a single suspended distribution costs you roughly 8% of your income. The mitigation is that your cash flows come from genuinely different places, including banking, suburban retail, healthcare property, data centers, fiber infrastructure, energy, steel, regional beverages, and two Hong Kong listings. Diversification is about the drivers, not the count. Even so, treat twelve as a starting point. Add names as your capital grows and as your watchlist throws up better entry yields.

Putting It Together

Batch 43 enters a market where the exciting money is in counters that do not pay you, and the counters that do pay you have been marked down because of the interest rate cycle. That is an uncomfortable position for a new dividend investor, and I would rather you understood it now than felt it later.

On the evidence, it is also a reasonable time to buy income. A sector yielding 6.3% at a 14% discount to book, with distributions still growing, is not a market that hates your strategy. It is a market that has temporarily marked it down.

The framework you learned holds. Buy businesses with durable earnings and a record of returning cash. Buy them when the yield is attractive relative to the alternatives. Check that the balance sheet can survive a bad refinancing. Spread the income across sectors so that no single rate decision can break it. Review the portfolio thoughtfully, not obsessively.

Persist

The hardest part of this journey is not the analysis. It is the first few years, when the dividends are small next to your salary, and the compounding has not yet become visible. A $200,000 portfolio at 6.21% pays about $12,400 a year, or a little over $1,000 a month. That does not replace an income. It buys your groceries. It is still the beginning of what will eventually replace your income.

You will also be tempted, repeatedly, by the AEMs of the next few years. Someone in your circle will have made 500% while you collected 6%, and they will mention it. Hold two facts in your head when that happens. Their return is unrealized until they sell, and you have no idea what they did with the other 90% of their capital. Your portfolio is built to pay you whether the AI cycle continues or breaks, and that is a different objective, not an inferior one.

Measure yourself against your income, not against the index. Count the dividends received this year against the dividends received last year. That number is the one that determines when you can stop working, and it is the only scoreboard that has ever mattered in this course.

Keep buying. Keep reading the annual reports. Keep the watchlist current and the cash ready for the days when the market offers you a better entry yield than it does today. Those days come around more often than you would think.

I am proud of the work every one of you put into Batch 43, and the Day 5 portfolio was among the most disciplined I have seen. I look forward to hearing where your journeys take you. As always, my door remains open.

Good luck, and invest wisely.

 

Christopher Ng Wai Chung

Tree of Prosperity

19 September 2026

Are local racists leaving money on the table in the stock market?

 

It's understandable why the government is concerned about local racism. Some hurtful comments were made about ethnic Indian Singaporeans in response to the disaster in Nepal. I'm another case: criticism of Singapore's investments in Air India attracted another round of racist comments about Indians in general. 

As an investor, I think we should not politicize a company's business decisions. 

• If you believe that SIA can turn around Air India's fortunes, then you should buy the stock. 
• If you are indifferent like me, stay out of the SIA share market. 
• If you are super-confident that SIA would lose money, then muster the courage to short the counter instead of politicizing this issue. 

India has a rising middle class and superb GD growth, and this should get some investors excited.

Today, I want to ask a provocative question. 

Are local racists leaving too much money on the table in the markets? 

And to illustrate this further, I drew a scatterplot of all the stocks in my portfolio, plotting Return on Equity (ROE) against the Price-to-Book Ratio (PB), using data from Yahoo Finance. Then I fit a least-squares regression line through the data points. Points furthest above the line may indicate drastic undervaluation.

So the most undervalued stock is Laopu Gold, which will be the subject of a future blog article an it;s my latest acquisition.

But note that a close second is CapitaLand India Trust, which, in my opinion, has superb performance at a steep discount to its market price.

I did further research by invoking a quick stock research skill I built into my Claude Co-work, and this is what it had to say:

Stock Name: CapitaLand India Trust

Ticker: CY6U.SI

Current Price: SGD 0.950

Analyst Target Price: SGD 1.33

Fundamentals: PE Ratio - 4.7 | PB Ratio - 0.77 | Current Yield - 9.8% (8.3% run-rate — a 1.44c advanced distribution put three payouts in the trailing window) | ROE - 15.3% | RSI 180 days - 46.8 |

Business: A Singapore-listed business trust owning Indian real estate — 22.0 million square feet of completed IT business parks, industrial and logistics facilities, and data centers across Bangalore, Chennai, Hyderabad, Pune, and Mumbai.

Revenue Source: 1H 2026 total property income of S$137.6 million (INR 9,923 million) is almost entirely rent from IT business park tenants, with a growing data center and industrial slice, supplemented by interest on S$417.9 million of receivables from six forward-purchase development assets.

SWOT Analysis: 

Strengths - Net property income margin widened to 78.1% from 76.1%, driven by 24% positive rental reversions and 91% committed occupancy, lifting distributable income by 8% to S$64.2 million, while the Navi Mumbai data center Tower 1 was fully leased and handed over to a hyperscaler in July, with full income from August. 

Weaknesses - The rupee fell 12% against the Singapore dollar, converting 13% DPU growth in INR into just 1% in the currency in which unit holders are actually paid, and only 53% of borrowings are hedged back into INR. 

Opportunities - There is 4.9 million square feet of development potential inside the existing IT parks plus 6.4 million square feet across the forward-purchase pipeline, funded from S$1.1 billion of debt headroom, with a July INR 5.5 billion drawdown alone expected to add 1.6% to DPU. 

Threats - Gearing of 38.0% is at the high end for an SGX-listed trust, and with 25.5% of borrowings floating, Indian rate moves hit distributions quickly — the units already sit at their 52-week low of S$0.95, down from a S$1.28 high.

Typical Dividend Months: March and September

From this quick examination, I can conclude that everything under management's control has been decent, with high rental reversions. But the PE ratio is single-digit, and dividend yields are close to 10%. But everything seems to be ruined by movements in the Indian Rupee. But even though analysts have a high target price, the REIT's six-month momentum is negative.

Of course, this doesn't mean there's actual racism behind such low valuations, but I think the weakening Rupee would still make this REIT a tempting buy.

At this point, I already own this REIT. It's generated some capital losses, but after accounting for dividends received, I'm still up on my purchase price.

Same rules apply.

If you think the Rupee's weakness could push the REIT lower, then stay out of the markets. 

But if you believe that there's somehow a thin veneer of racism that is similar to what you've noticed in social media comments about SIA, and it's a reason for this discount, then you may want to risk some capital to see if you are correct.