Saturday, February 11, 2023

Letter to Batch 29 of the Early Retirement Masterclass


Dear Students of Batch 29,

It’s been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

When I was preparing the slides for Batch 29, we saw some glimmers of hope in the market. The US Fed declared that we were in a period of disinflation, and markets rallied. ERM portfolios built by previous batches of students all began to see positive signs.

The possibility of a recovery then led to the possibility of restoring leverage to our ERM portfolios. While we can consider leveraging our investments again, two major impediments to executing this manoeuvre exist.

Firstly, interest rates are at an all-time high. Leveraging Singapore stocks with Interactive brokers will cost over 6%. This is higher than the dividend yield of Batch 29, which is a respectable 5.97%.

Secondly, the US economy generated more jobs, and unemployment has dropped. This can mean that inflation will be harder to control. The investing public has probably underestimated how far the Fed will raise interest rates and how long they can keep it at such a high level.

Because of these twin considerations, we will hold back on leverage for the moment, and I intend to pick up the stocks using my traditional trading account.

We will revisit the possibility during the next batch of training.

Lastly, I hope that Batch 29 will participate actively in the FB group. Sometime in Q1 2023, we should meet for an online community webinar.

Hope to see you then!

Christopher Ng Wai Chung

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