Friday, 12 May 2023

T-Bill 3.78% vs HSBC EGA 4.55% (May 2023)

The latest t-bill BS23109E has been a respectable 3.78% for our hard earned monies 😂 Was actually expecting it to be slightly lower at around 3.5% as some of the new CPF monies pour into this t-bill auction for the new month of May, so as not to lose another additional month of CPF interest for April. Seems more people are bidding the t-bills more sensibly now, which benefits more people in the long run. 

For me, I have not been bidding t-bills for a few months because of the new HSBC EGA account which I have opened in March. With the EGA account moving to the 3rd month, I will no longer be eligible for the extra 1% Everyday+ Rewards. Still it's a respectable 4.55% slightly higher than the current t-bill of 3.78% yield. Probably it's time to look for a better yield instrument in the month of June.

The month of June brings some volatility as the USA Debt Ceiling croaches near, and political brinksmanship comes into obvious play. It's just concerning that Parties become more important than Country, as Right vs Left idealogy clash. Still I hope that at the end of the day, clear minds prevail as both sides agree that Default is not the option. 

Maybe this could be good opportunities to buy into local bank stocks or S&P500 index. Savings account and T-bills should just be temporal sandbox to park our excess funds to capitalise on better investment opportunities. With core inflation at 4%, it basically just matches the current purchasing power of our cash today. To build wealth, unfortunately we still need to do some calculated risks to overcome high inflation moving forward.

The local bank stocks have been feeling jittery over the upcoming USA debt limit, and are showing first signs of pullback, as usual from kiasu Singaporean investors 😅 S&P500 instead is still holding pretty well. Let's see if next week brings more volatility. I recall hearing some Economist from Bloomberg stating that usually investors tend to react 2 weeks before the deadline, as in 2011 when USA credit rating was downgraded from AAA.

Can only pray for true Leaders to rise up and save the political situation! 😇

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