Balancing Caution and Opportunity: My Investment Strategy in Uncertain Times

Currently, I don't invest in companies whose products or services I use regularly. Instead, my investment portfolio with Tiger Brokers focuses on a mix of stocks and bonds, all in the U.S. markets, while I am based in Singapore. My holdings include Occidental Petroleum Corporation (OXY), Ready Capital Corporation (RC), and bond ETFs consisting of TLT (iShares 20+ Year Treasury Bond ETF) and TLH (iShares 10-20 Year Treasury Bond ETF).

Investment Rationale for Current Holdings:

1. Occidental Petroleum (OXY): I believe OXY is currently undervalued relative to its peers, offering a strong investment opportunity. The company is well-positioned in the energy sector, which is vital to the global economy. Its focus on oil and gas exploration aligns with current market trends, and I see it as superior to many other companies with products and services I use regularly, in terms of growth potential and valuation. Additionally, OXY's operational efficiency and commitment to returning value to shareholders make it an attractive long-term investment.

2. Ready Capital Corporation (RC): RC stands out in my portfolio due to its high dividend yield, which enhances the overall income-generating capacity of my investments. The dividends add a predictable income stream, which is particularly appealing in uncertain economic times.

3. TLT and TLH (Bond ETFs): These treasury bond ETFs play a crucial role as a hedge against recessionary risks. Given the potential for economic downturns, I have adopted a cautious approach by allocating a portion of my portfolio to these instruments. They offer stability, regular dividend payouts, and protection during periods of market volatility. Their counter-cyclical nature provides balance to my portfolio, particularly as I anticipate increased market uncertainty.

Current Strategy and Market Outlook:

• Cautious Positioning: I am currently refraining from adding new stocks to my portfolio outside of my existing holdings. This decision is driven by concerns about a potential recession. My strategy prioritizes preserving capital and ensuring portfolio resilience against adverse economic scenarios.

• Focus on Dividend and Stability: Both RC and the bond ETFs support my preference for steady income through dividends. While this approach might limit short-term growth, it aligns with my goal of maintaining a stable portfolio amidst economic headwinds.

• Avoiding Consumer-Centric Stocks: While I don't invest in companies tied to products I use regularly, this decision reflects my belief that these businesses may not currently offer the best risk-reward opportunities. My preference for OXY, for example, underscores my view that undervaluation and sector-specific potential outweigh familiarity in investment decisions.

Areas for Potential Improvement:

1. Geographical Diversification: While my current portfolio is concentrated in the U.S., expanding into other regions, including Singapore or broader Asian markets, could provide additional growth opportunities and reduce geographical risk.

2. Sector Diversification: My portfolio leans heavily on energy, real estate finance, and government bonds. Exploring sectors like technology, healthcare, or consumer staples might enhance diversification while tapping into long-term growth industries.

3. Reevaluation of Economic Scenarios: While my cautious stance is prudent given recession fears, periodic reassessment of economic conditions could help me identify emerging opportunities. Staying too conservative might lead to missed growth prospects if the recession risks are overestimated.

4. ESG and Growth-Oriented Investments: Considering environmental, social, and governance (ESG)-focused investments or high-growth sectors such as renewable energy, biotech, or artificial intelligence might add a forward-looking dimension to my portfolio.

5. Currency Risk Management: Being based in Singapore and investing in U.S. markets exposes my portfolio to currency risk. Monitoring exchange rate fluctuations and potentially hedging currency exposure could safeguard returns.