To The Moon

Most investors believe that bank stocks are good to buy now because of rising net income interests due to higher Fed rates. Hence they are bullish. 

I do not disagree with such a view. However there are other factors affecting banking businesses. Macroeconomic environment needs to be considered. If there is a serious recession, businesses will reduce demand for loans. Consumers will also reduce demand for loans, especially car loan given high COE quantum now. Loan non performance will increase due to more loan defaults and lesser demand. 

Inflationary pressure will eat up a larger portion of disposable income. Consumer will also reduce discretionionary purchase, hence lesser borrowing. 

Banks in Singapore are strong in balance sheets and could weather the uncertain macroeconomic factors. Their share prices could be sustained due to share buyback, but I hope it is sustainable. 

Hence I am not as bullish but a little bearish. I would prefer to wait at the side, until a clearer economic picture surface. I hope to give myself a bigger margin of safety since geopolitical, currency instability and market volatility are still present 

Just sharing my views. Please do your own analysis, taking into account your investment portfolio, objective and time horizon. 

I am alright to hear different perspectives since there is no one good way to invest. 

Best wishes.