Dividend Investing To $1 Million #3: Trade War Reignited

Well, it’s June. Welcome to another episode of Dividend Investing to $1 Million.

We’re almost halfway done with 2025.

I could have sworn yesterday I was just planning for 2025 and enjoying the cool January weather. Bright-eyed, optimistic and ready to make 2025 the best and most productive year of my life.

Then Trump happened.

Actually, make that a double whammy because the fantastic weather didn’t stick around for long either. Now the sun is threatening to roast us all alive.

And while the days are scorching hot in sunny Singapore, the markets appear to be cooling down.

Anyway, I didn’t make any changes to the introduction. I decided to leave it be because with how things are going, when I bring this live in 3 or so days time, the markets might have reversed after Trump casually announces that he’s imposing hefty tariffs on Mars. And then it might actually be accurate again.

So, onto the market news. Buckle up, it’s going to be a lengthy one.

Just slightly more than 2 weeks ago on the 12th of May, after a discussion between US and China’s trade representatives in Geneva, Switzerland, the world got the news everybody was hoping for.

Secretary Treasury Scott Bessentt announced that the negotiations proceeded smoothly and great progress was made towards de-escalation. There were lots of political jargon being thrown around during the press conference, but essentially, both parties agreed to suspend tariffs temporarily for a period of 90 days.

During these 90 days, both parties will continue discussions over the finer details to get a proper deal across the line.

The market rejoiced. Optimism sent the S&P500 spiking 3.3% on the day the news broke.

But we’re talking about Trump here.

Just a week after announcing this monumental breakthrough, he decided that things were getting too dull and stable and it was time to get the party going again.

It all started with him threatening one of the most valuable companies in America. He posted on Truth Social that he was going to slap Apple with a hefty 25% tariff if they did not bring manufacturing back to the US.

It was a little weird for him to single out Apple specifically and he must have realised it too himself, for he later extended this threat to all smartphone manufacturers (mainly Samsung) intending to sell to American consumers.

Just hours later on that very same day, he followed that bombshell up with another threat – this time to one of America’s biggest trading partners, the EU. He claimed that talks over a deal weren’t progressing as smoothly as he had hoped. Mainly because the EU were not negotiating in “good faith”.

So, well, naturally, as any influential world leader does, when another country doesn’t immediately bend over backwards to meet your demands, you exert dominance and threaten the other party with economic ruin.

Trump suggested 50% tariffs on the EU, starting immediately on the 1st of June.

To put how big of an increase that is into perspective, the initial tariffs he set on Liberation Day on the EU was only 20%.

And the best part? Just earlier this month, Trump promised to lower the price of pharmaceuticals in America. Guess what the EU’s primary export to the US is?

Yep, pharmaceuticals.

But in typical Trump fashion, after – and I quote, verbatim – “a very nice call” with European Commission President Ursula von der Leyen, he announced that he will delay these tariffs till the 9th of July to allow for further discussions.

This threaten and retreat tendency from Trump resulted in a term gaining traction among financial circles – TACO. It’s an acronym for Trump Always Chickens Out.

And let’s just say Trump wasn’t too happy about it when asked on his thoughts regarding that term. He labelled the term “nasty” and spewed out a word salad that even I couldn’t quite understand, but I believe he was claiming that this was all part of his broader trade strategy.

But that wasn’t the biggest blow to Trump’s ego that week. In an extraordinary turn of events, on the very same day, the U.S Court of International Trade issued a ruling that suspended all of Trump’s Liberation Day tariffs, declaring them unconstitutional.

It’s quite technical, but here’s what happened in simple English. Tariffs are something only Congress is allowed to decide on. Even as president, Trump can’t just slap them on whenever he wants, especially not on such a large scale. He tried to get around this by using a special law called the IEEPA (International Emergency Economics Power Act), which gives the president executive decision-making power in extraordinary situations deemed to be of great emergency. But the court essentially went “nah, you cray” and so, his tariffs were ruled to be unlawful.

Of course, the Trump administration immediately appealed the decision. As of right now, they have been granted a stay. This means that the tariffs are allowed to remain in place during the appeal process. We should hear some updates regarding this by June 9th, when the plaintiffs are required to respond to the appeal with their argument.

And that about does it for May’s market news! It was a long one, so if you made it this far, you’re a real one.

Oh, one more thing before we move to how the market reacted. A gentle reminder that we are now exactly 1 month away from the expiration of the 90-day tariff pause. The initial expiry date was set to be the 8th of July. We have only announced 1 deal so far, and that’s the “ground-breaking” UK-US one that every expert laughed off.

Of course, everybody is hoping that Trump’s appeal to reinstate his Liberation Day tariffs are thrown out of court. But in the worst case scenario, if he gets his way and the tariffs are allowed to go back in place…

If we thought the first half of 2025 was rough, we ain’t seen nothing yet.

We are now slightly over 4 months into Trump’s reign. The rollercoaster ride continues without any signs of slowing.

After the temporary suspension of tariffs between China and US on the 12th of May, the market breathed a monumental sigh of relief. Nobody cared that it was temporary. Investors were begging for any signs of progress, and this was all they needed to scramble back in.

Of course, once the dust settled and more information starts to see the light of day, people panic. Why aren’t there a string of good news? The slightest bit of negative news spook investors away again.

Hence we saw a little inverted U here.

But since then, the market has only continued on its upwards trajectory.

This is in part due to May’s employment data that came in stronger than expected. 139,000 jobs were added in May, which came in ahead of expectations of 130,000. Unemployment rate remained flat for the third consecutive month while wages rose 0.4% month-over-month.

Overall, a good sign that the job market remains resilient despite the flailing economy.

But the biggest contributing factor is likely how investors have grown numb to Trump’s constant pivoting of policies. So if things aren’t outright on fire… actually scratch that. The economy is already on fire. It has been since Liberation Day. It isn’t even that scary anymore.

Now, as long as things look like they aren’t about to immediately implode, it’s still a good time to invest. Business as usual.

Okay, enough trendlines and market sentiments. Let’s take a look at the actual numbers.

S&P500 Global reported that the S&P500 was up 6.15% in May for a total of 0.51% YTD.

The DJI was up 3.94% in the same period for a total of -0.64% YTD.

So, while the market was busy recovering from the damage inflicted by Trump’s erratic policies, what was I up to?

It was a relatively ordinary month. Besides for my usual monthly contribution of US$200 into CSPX and VWRA respectively, I bought into 3 more stocks that are down on their luck, hoping to lower my average cost per share on them.

And by down on their luck, I really mean it. Even in a pretty shitty market, these stocks have had it exceptionally rough.

They are Apple, Exxon Mobil and SCHD. And here’s why.

Purchased Shares: 1.49

Price/Share: $201.17

Total Transaction Value: US$300

The American tech giant is down 16% year to date. It has significantly underperformed its other peers in the Mag 7 group. Heck, it has underperformed even benchmarks from the tech-heavy Nasdaq.

Shocking, huh? I never thought I’d see that day in my lifetime. Not so damn soon anyway.

The main reason for this level of underperformance is macroeconomic. Weakening global demand amidst economic uncertainty and the ever-looming threat of tariffs by Trump – a mind-blowing 25% if Apple doesn’t shift all manufacturing back to America – has diminished investor confidence.

It doesn’t help that Apple seems to be caught in a spiral of innovation delay. Intelligence updates touted for this year have been pushed back to next year. This is viewed unfavorably by investors, especially as key competitors such as Google and Microsoft have launched a suite of AI features, seemingly taking the lead in the AI race.

One could only hope that this isn’t a death spiral.

But… I want to say that this is Apple. It’s an enduring brand with a moat so incredible that I don’t feel inclined to bet against it, no matter how bad things seem to be.

So well, I’m snapping up as much shares as I can right now!

Purchased Shares: 1.94

Price/Share: $102.94

Total Transaction Value: US$200

This is a slightly tricky one. Exxon Mobil’s stock price has declined 2.97% year to date. Not as worrying as Apple, but the underlying reasons for this drop in valuation paint a different story.

Oil prices are falling due to a combination of oversupply and weakening demand. The former is a result of an increase in output from OPEC+ (led by Saudi Arabia and the UAE) while the latter can be attributed to global growth slowing down. That said, this isn’t out of the ordinary. Oil prices fluctuate and tend to follow a cycle. We’ve seen this play out countless times in the past and oil prices usually rebound once the global economy picks up again.

What’s most concerning to me is Exxon Mobil’s stance on ESG. Instead of transitioning towards clean energy, they are doubling down on oil production. With a growing emphasis on reducing carbon emissions and pressure from regulatory bodies to adhere to climate rules, Exxon Mobil has painted a bright red target on its back by refusing to play by the rules. They have therefore lost a significant amount of capital investment from ESG-focused funds, which has dragged down its valuation.

I understand that I’m really taking a gamble here as XOM might fail to shift its strategy in time.

But once again, much like with Apple, this is a bet I’m willing to make.

Purchased Shares: 9.57

Price/Share: $26.13

Total Transaction Value: US$250

My poor boy really took a beating this year. But I guess it’s to be expected considering the companies that make up the bulk of this ETF. Still, due to how diversified it is, I’m not overly concerned about this decline in valuation.

Which is why I am buying in again while it’s on sale. The best part is that at this price, the dividend yield is an insane 9.95%!

It’s a stark difference from just 6 months ago in November when it was at its peak of $29.72. The dividend yield back then was 8.75%.

Sure, this is before we take into account the withholding taxes, but it’s still an amazing dividend yield.

It’s been a real struggle for my portfolio to make any meaningful gains this year. And the month of May, despite some encouraging news that briefly buoyed the market, failed to make a difference either.

Despite a resurgence towards the end of the month, my portfolio is actually down 1% year to date if I don’t count the contributions I’ve DCA’d in every month.

Zooming out and looking at my portfolio as a whole, I’m still up roughly 11%. But that’s a far cry from the 18% at the beginning of this year.

The S&P500 index, however, has finally realised some gains YTD! It took the better half of the year, but we’re finally seeing some green. As mentioned above, it’s a whopping 0.5%.

It’s better than nothing. And maybe we should learn to appreciate it more, because with how things are going currently in the White House, it might very well be the last time we see any green for the rest of the year.

It’s a sea of green with the exception of OCBC.

Other than that, nothing too much has changed from last month. Visa, Microsoft and Altria remain my biggest winners and my biggest losers are still SCHD, Apple and Exxon Mobil.

I do want to point out that I have only been buying into VWRA and CSPX for 4 months. And I’m already up 5.6% and 5.4% respectively!

I received a total of S$133.59 in dividends in May. Most of the dividend payouts came from just 3 stocks – Altria, OCBC and Keppel.

But the main takeaway is that this marks the biggest monthly dividend payout I’ve received so far in my dividend investing journey! It’s a wonderful feeling, watching my dividends slowly grow along with my portfolio.

More to come soon, I’m sure!

I never paid much attention to global markets in the past.

Don’t get me wrong. It’s not like I was entirely out of the loop. But until I started this blog, I never felt the need to monitor market news this closely. I’m basically reading the news on a daily basis now to ensure I keep up with what’s going on. I can’t digest everything, but I make sure I am aware of what’s going on in the US at the very least.

Because like it or not, America remains the beating heart of the global economy.

And on one of those mornings when I was sipping on my kopi-c kosong and scrolling through the absurd number of new articles that had popped up overnight covering Trump’s antics, a thought occurred to me.

I genuinely feel that, as investors, we’ve been incredibly fortunate over the last couple of decades.

For the most part, market movements were driven by real, tangible events. Natural disasters, collapse of overleveraged financial institutions, poor macroeconomic outlooks etc. Sure, there was always a degree of speculation baked into the markets, but the spikes and troughs we saw could usually be linked to something rational.

Once Trump took office, that shit went straight out the window.

In the past two months, it feels like entire market cycles are being dictated by the whims of one man. A single social media post, a sudden policy shift, or even a vague threat has the power to wipe billions off the markets.

I’m sure this was a wake up call for everyone. After all, nothing screams wake up louder than half of your retirement funds evaporating in an instant because of a single tweet by a single man.

For me, this also made me aware of just how vulnerable I was. My portfolio is way too US-centric.

This made sense a couple years ago. The dollar reigned supreme and start-ups with billion dollar valuations were popping up all over San Francisco. The US was the tech hub. It was leading the AI charge. Capital investment was at its peak, and the economy was absolutely booming.

But in this present day?

Fuck no.

Diversification is no longer optional. It’s necessary. More so than ever before.

At the moment, I’m only doing VWRA (btw, despite being labelled a “World ETF”, 62% of companies tracked by this fund are still from the US) and some SG stocks in OCBC and Keppel. I need to make some bolder moves because this is not sufficient. Just based on value alone, more than 90% of my portfolio is still invested in US equities.

Time to do more research into SG stocks. And while I’m at it, might as well search my pockets for more cash to buy some DBS.

And that about does it for this month’s update!

Stay safe, stay financially savvy, and most importantly, stay invested.

Until next time, cheers!