What will I buy in the 2025 Market Crash? DBS Bank, REITs, US Stocks, Bitcoin?

Well, what a day!

Or rather – what a 3 trading days ever since Trump announced his “Liberation Day” tariffs.

On Friday, right before the open of the US market, China announced reciprocal 34% tariffs on US products.

And then all hell broke loose – because if the current trade war devolves into a game of ever increasing retaliatory tariffs, then well we all remember how this ended in the 1930s, the last time the world was involved in a period of escalating tariffs (Spoiler alert – the Great Depression).

S&P500 is in bear market territory (down more than 20% from top):

And today, the sell off spread to Asia.

Nikkei is down 7.8% and circuit breakers triggered:

Hang Seng Tech is down a mind blowing 17% (worst day for Hong Kong since the Asian Financial Crisis):

And DBS Bank is down 10%:

STI down 7.5%:

In times like this… cooler heads prevail

In times like this… cooler heads prevail.

3 things that I wanted to discuss:

1. My updated thoughts on the tariffs so far (as of 7 April 2025)
2. How I would adjust my portfolio in the weeks / months ahead?
3. Sharing thoughts on each asset class

This is a modified FH Premium post written on 7/8 April.

I am making this available to all readers to keep you updated on my latest thinking given the current market volatility.

For my latest macro views, and what I am buying/selling, do consider subscribing for FH Premium.

You will also get access to my latest macro views, full stock / REIT watchlist, and personal portfolio (updated weekly).

My updated thoughts on the tariffs so far (as of 7 April 2025)

Over the weekend you’ve probably heard a huge range of opinions from everyone on how this trade war will play out.

Even in the private telegram chat I’m seeing very active discussion, with hugely differing views.

I’m just going to put it out there, that how exactly this plays out, will depend on a few key factors:

1. How other countries respond – and do they “cut a deal” with Trump?
2. Will congress pass tax cuts – and what size?
3. Will China unleash domestic stimulus?
4. How the Feds react (from a monetary policy perspective)

Trying to predict all of the above, in a system as complex as the global economy, is to me a fool’s errand.

What is Trump’s End game here?

I’ve shared my views on Trump’s end game a couple of times in the past, and it generally remains the same (generally backed up by comments you see from Scott Bessent).

It is that Trump is willing to go through some short term pain, if it radically restructures the US (and global) economy, setting the US up for mid term success.

My view on that front remains the same.

So the key question, is at what point does the short term, transition into the mid term.

At what point does the pain get too high for Trump to stomach.

And that’s not an easy question to answer.

I see a lot of commentary saying that Trump will cave sooner or later.

But if you really ask me, I see every other country other than US as more likely to cave before Trump.

Let’s say you’re a country like Vietnam.

With 46% tariffs on all exports to the US, is the pain bigger for Vietnam, or is the pain bigger for US?

The way I see it, a lot of countries are going to cave in the weeks / months ahead.

With the exception of China – where I just don’t see a China deal on the table (with China, I see it as intentional decoupling).

If I am right on this – then Trump 2.0 is probably the biggest shake up to the global world order since WWII (and probably on COVID level in terms of global impact).

Trying to predict what the world would look like after this shakeup, wow that is a really hard call.

That’s like trying to predict what the world would look like in 2022, in March 2020 during COVID.

Policy makers have not started to panic… yet? Too early to call a bottom?

Think about it this way – the right time to start buying in 2020 was when the Feds pivoted to unlimited QE, and in 2008 when QE started.

Both events marked the time when policy makers started to panic, and they unleashed sufficient stimulus to offset the crisis, and that marked the bottom.

The crucial difference this time so far, is that policy makers have not started to panic (at least not yet).

Which is why in my view it makes it risky to try and call a bottom just yet, especially with the kind of price action playing out.

Some potential bottom events:

1. Trump starting to cut deals with other key trading partners
2. Feds panicking and starting to cut rates
3. Feds/Treasury restarting QE

So far at least, Trump, Powell and Bessent have been very calm, and talking about how tariffs need some time to play out, and Powell on how he wants to watch the data before deciding on rate cuts.

Until either of them start to panic, I would be cautious on trying to call the bottom.

Although that said – in reality I recognise there will be significant uncertainty in trying to call a panic.

What would well happen is that Trump starts to cut deals with certain countries (eg. Japan, Vietnam), and not other countries (eg. China, EU).

So again, there is a lot of grey here, which goes back to my point (below) on not obsessing over catching the bottom perfectly, and focussing on the big picture.

If things are cheap enough, and there are signs that policy makers are starting to “panic”, then there’s no need to catch the bottom perfectly.

How I would adjust my portfolio in the weeks / months ahead?

So…

Given all the uncertainty – how would I deal with it from a portfolio perspective?

The best analogy I have.

Is think back to 2008, and 2020.

Imagine how you felt back then when your investment portfolio was sitting on huge mark to market losses, and all the uncertainty you felt over what was to happen next.

And imagine you could redo 2008 and 2020 again.

What would you do differently?

Think back to 2008 and 2020 – what was the best way to react?

When I asked myself that question – 3 points came to mind:

1. Buy the ground zero – when markets price in the end of the world
2. If you want to sell, you need to sell early, and you need to buy back at the right time
3. Accept that you will not buy the bottom perfectly

Let’s discuss each of them.

Buy the ground zero – when markets price in the end of the world

When I really thought about it.

I realised that to get the biggest “bang for your buck”.

You want to buy the Ground Zero for each crisis.

This was banks in 2008 when the financial system was melting down.

Airlines, oil, copper in 2020, when the entire world shut down.

The reason why this works is obvious in hindsight – valuations.

Once markets started to price in a complete doomsday scenario, this provided unbelievable risk-reward for longer term investors.

When you buy at dirt cheap valuations, as long as the company doesn’t go bankrupt, you would be looking at very decent returns on the other side of the crisis once markets realise the reality is not as bad as made out to be.

What is the ground zero in this crisis?

Which brings us to the question – what is the Ground Zero in this 2025 crash?

It’s still early days, so no need to be a hero and speculate too early, as I would want to just watch the price action and see what gets sold off to ridiculous levels.

But as an investor, I need to have an opinion, so let me share some early opinions.

The way I see it – it may be the players who are highly exposed to global trade.

Thank names like:

1. Logistics companies
2. Consumer goods companies who outsource manufacturing heavily to Asia
3. *Maybe* Commodities

See the full list of names and updated views on FH Premium.

But.. just watch the price action

That being said – while I have some initial views above.

I would just watch the price action on this one.

See that sells-off the most in the days ahead.

Then make a call on whether it makes sense to start buying those sectors, to play the eventual turnaround.

Accept that you will not buy the bottom perfectly

And I say eventual turnaround.

Because c’mon.

I’ve been in this business long enough to know this is how markets work.

Markets go up, markets go down.

This is as timeless as human nature itself.

The key to doing this is to sell when everybody is buying (euphoria), and to buy when everybody is selling (depression).

The hard part of course, is getting the execution right.

What I find helps me, is to accept that I would never get the bottom perfectly.

I recall buying Exxon Mobil at $40 during COVID as oil prices went negative.

Exxon Mobil then went to $30 which needless to say gave me a huge fright.

But after than Exxon soared as high as $125.

My point is this.

Accept that you will never buy the bottom – and don’t waste your time / effort trying to.

Focus on the 80/20 here.

Focus on the 20% of the effort, that gives you 80% of the results.

If a stock you like is down 50%, just buy a bit.

If it drops more and you have cash, buy more.

If not, just hold and wait for markets to play out.

The worst thing you can do is to be obsessed with trying to time the bottom perfectly, and end up missing the move entirely.

If you want to sell, you need to sell early, and you need to buy back at the right time

I get a lot of questions on whether to sell, and then to buy back earlier.

To answer this question – I would say think about how you executed this in 2020, or in 2008.

If you sold – did you sell at the right time?

And perhaps more importantly – did you buy back at the right time?

If you know what you are doing, and you sell early, and buy back at the right time, then of course that is the best outcome.

But in my experience, most people end up selling too late, and buying back too late.

To the point where they end up selling at a big loss.

And their eventual buy in price may not be much lower than the price they sold at (sometimes even higher).

So be realistic with yourself on this one.

If your track record is good, and you trade like Stanley Druckenmiller, of course go ahead.

If you did not execute this well in 2008 and 2020, then ask yourself whether you have changed, such that this time would be different.

What would I buy in the 2025 Market Crash? US Stocks, REITs, Bitcoin, Bonds?

For obvious reasons – this is based on what I am seeing today.

Given how fluid and fast moving the situation is, you need to be flexible.

Have a view, but if the facts / situation changes, change your mind.

I’ll share views on each of the following:

• Singapore
  • REITs
  • Bank stocks
• China stocks
• US Tech
• Bitcoin / Gold
• Commodities (Oil / Copper)

REITs

Textbook answer – the current situation should be good for REITs.

Higher risk of US recession means lower interest rates, and lower interest rates should benefit REITs.

But as you can see, REITs have been selling off as well.

My gut feel is that investors are just in liquidation mode at the moment.

They are selling first to raise cash positions, and asking questions later.

This actually opens up opportunities to look for bargains, if prices get too ridiculous.

I would focus on blue chip REITs with a strong balance sheet and solid sponsor, holding primarily Singapore real estate in great locations.

See the FH Stock / REIT watch for my views on individual REITs.

Bank stocks

Conversely the current situation is not good for banks.

I’ve always been very nervous about DBS Bank at 2.0x Price/Book – for this exact reason.

At 2.0x Price/Book, you’re pricing in a very optimistic future.

If the future turns out less optimistic (as it just did), that’s a lot of downside in play.

You can see how the recent sell-off has taken DBS Bank back to 1.6ish book value, where it was trading in early 2024.

It’s definitely cheaper than it was just 1 or 2 weeks ago, but if indeed there is going to be a period of economic weakness, I would hardly say DBS is dirt cheap at 1.6x book.

Textbook answer – the current situation is not good for banks.

Higher recession risk, lower interest rates, that’s not a good scenario for banks.

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Will I buy more bank stocks? Will I buy DBS Bank?

I know many investors have been using the sell-off to load up on bank stocks.

Me – I don’t know.

Personally I haven’t added to bank positions just yet.

Gut feel tells me it’s too early, valuations wise even after the sell-off the banks are hardly cheap, and charts wise you can see how DBS has broken below all key moving averages (50, 150 and 200).

But for very long term investors with no position and lots of cash on the sidelines, maybe your view would be different.

China stocks

China though, is interesting.

60% tariffs on China is of course a disaster for Chinese exporters (and if you count the new 50% tariffs from Trump being threatened, that’s pretty much the end of US-China trade).

But that’s first order thinking.

Second order thinking, is what will this force Beijing to do.

If Beijing is forced to offset the 60% tariffs by unleashing a huge domestic stimulus package.

And the size of the package is enough to offset the tariffs impact.

Then hey that could be exactly what China needs to get out of the current deflationary spiral.

The million dollar question, and the one that keeps me up at night, is whether Beijing will do it.

And there I do have my concerns.

I know all the signs coming out from Beijing (such as policy statements, Xi meeting with Jack Ma etc) suggest they will.

But a lot of things can go wrong.

They may take longer than expected to pass the stimulus, they may pass a stimulus in too small a size, the US-China conflict may spiral out of control and so on.

I’ve generally been waiting for concrete actions from Beijing before I add to China positions in size.

And so far, I still haven’t seen stimulus of the size needed to offset China’s current deflationary spiral.

I’ll watch how this plays out.

If China stimulates in the size / extent required, I will add to China positions in size.

If China doesn’t then I think the current deflationary spiral will continue, which makes China positions risky to be in.

US Tech Stocks

US Tech is getting crushed at the moment simply because valuations were too expensive.

This is what I have been saying about pricing in too optimistic a future – it doesn’t take a lot for that future to turn bad.

The uncertainty comes in 2 forms:

1. Uncertain earnings impact due to possible global recession?
2. Multiple compression due to higher uncertainty

But frankly after the vicious selloff, I’m starting to like the valuations again.

Yes no doubt there will be plenty of short term volatility and calling the bottom is a fool’s errand.

At a certain price, it would probably be a no brainer to just average into the S&P500 or NASDAQ.

Bitcoin / Gold

The current selloff has taught us a couple of things:

1. Gold is the true hedge in an era of geopolitical uncertainty
2. Bitcoin is a pseudo hedge – it works, but not as well as gold. Almost like a 50/50 between Gold and NASDAQ
3. Crypto (ex Bitcoin) is just a risk on asset class – it soars to the upside when things are rosy, and things are bad it nosedives

So position accordingly.

The recent unbelievable strength of Gold suggests real structural inflows into Gold, and how Gold could actually be a true store of value / hedge in this climate of geopolitical uncertainty.

The recent price action of Bitcoin suggests that while not a true hedge, there could be plenty of upside for Bitcoin on the other side of this crisis once the market shifts back into risk on mode. So actually I like Bitcoin as well, and I may add on weakness.

And crypto – it’s probably just best skipping crypto unless you’re really prepared to get into the weeds. I personally would just use a mix of Bitcoin and US Tech stocks instead.

Commodities (Oil / Copper)

I’m just going to be brutally honest and admit that the current price action for commodities (oil in particular) stumps me.

Copper stocks are getting crushed, which makes perfect sense to me if you price in higher risk of global recession.

Why oil stocks are holding up so well though, does puzzle me.

With reduced global trade and higher risk of a global recession, with Saudi’s raising production, and Trump in favour of drill baby drill, I’m actually quite puzzled why the oil stocks are not a lot lower than where they are now.

I’ll watch this space very closely in the weeks / months ahead.

Just like during COVID, the market cycle will eventually recover, and the more pessimistic a future that investors price in, the more attractive the risk-reward will be, and the more keen I become to add to positions.

Whatever the case, things are moving very quickly, and while these are my views as of 7/8 April – I will change my mind on a dime as facts change.

As always, I share my most updated thoughts, including what I am buying/selling, on FH Premium.

This is a modified FH Premium post written on 7/8 April.

I am making this available to all readers to keep you updated on my latest thinking given the current market volatility.

For my latest macro views, and what I am buying/selling, do consider subscribing for FH Premium.

You will also get access to my latest macro views, full stock / REIT watchlist, and personal portfolio (updated weekly).