Dividend Investing to $1 Million #7: Rate Cut Relief
The Feds actually cut rates. It’s only a quarter of a basis point, but it’s something. Let’s see how my portfolio fared after this rate cut.
Table of Content
Hey guys, welcome back to another dividend portfolio update for my Dividend Investing to $1 Million series.
It’s Singapore’s birthday. August has rolled around, and while the red and white flags dotting every HDB block is honestly heartwarming – patriotism isn’t dead after all – the sea of red might be too much. All the excess red seems to have seeped into the markets.
I guess we all knew this was coming. It was great while it lasted.
But now, let’s shift our attention to the reason behind this downturn.
Trump. He’s truly the gift that keeps on giving.
Sometimes I ask myself what the world did to deserve someone like him as the president of the biggest financial powerhouse in the world. Must have sinned real hard in the past, huh?
Anyway, once again, there’s lots to cover so without further ado, let’s get into the most important market news in July.
July’s Market News
1. The Fed Holds Interest Rates Steady (Yet Again.)
What Happened: The Federal Reserve announced on July 30th that it would be leaving its benchmark interest rate unchanged at 4.25% to 4.50%. This marks the fifth consecutive meeting where rates have been held steady as they hold true to their “wait-and-see” strategy this year. However, for the first time in over 30 years, more than one member of the FOMC dissented, voting for a rate cut instead.
Simple Explanation: Jerome Powell is still worried about tariff-driven inflation, so he wants to hold rates elevated to keep product prices down. However, some members within the committee are concerned that the job market is finally showing signs of weakening, and keeping interest rates high for any longer will result in irreparable damage. Disagreements are commonplace in any work environment (yeah, I’m sure we all know this very well), but this is the first time in over 3 decades within the FOMC that there were conflicting votes.
How This Could Affect Us: With the benefit of hindsight, we now know that the Fed might have made a questionable call in holding rates steady. The revised employment data released on August 1st showed that the US job market is in crisis with growth stalling. On the bright side though, there’s now a very high chance the Feds will cut rates. The futures market shares this sentiment as well, with the odds of the Fed cutting rates by 25 basis points in September more than doubling from 40% to over 80%.
I think I’ve made it clear by now that everything happening in the US will likely, in one way or another, affect Singapore. Broadly speaking, the US benchmark interest rate influences the cost of borrowing for everything from mortgages to business loans, so… a rate cut is a good thing for us. Plus, it will likely provide a tailwind for the US market as well, which is good for our portfolios.
2. Trump’s Tariffs Finally Go Into Effect
What Happened: On July 31st, President Trump signed an executive order imposing a new round of tariffs on a wide range of trading partners. These country-specific tariffs, which vary from country to country from as low as 10% to 41%, are set to go into effect on August 7th.
Simple Explanation: After Liberation Day, Trump put in place a temporary 3-month suspension to give all countries a chance at negotiation. Now, after another short extension, he’s finally putting gas to the pedal and making good on his promise by going full speed ahead with his tariffs. He has assigned different tariff rates to different countries based on trade imbalances and whether or not they negotiated “in good faith”. Anyway, it’s easy to see what he’s doing. He’s forcing all these countries back to the negotiation table (or maybe they never even bothered to negotiate in the first place) to cut deals favorable to the US if they want sustained access to the world’s largest consumer market.
Potential Impact on Markets:
- Winners:
- U.S Government: Tariffs were estimated to have brought in a whopping $267 billion in Q2 of 2025, versus $78 billion during the same period in 2024. That’s more than TRIPLE the revenue year-on-year and a huge windfall for the US treasury.
- Losers:
- U.S. Consumers: Economists are predicting that the tariffs will be passed on to consumers in the form of higher prices. It’s estimated that the average American household could pay up to an extra $2,400 per year on goods.
- Multinational Companies: The new tariffs are expected to disrupt supply chains and slow down global trade, potentially leading to lower corporate profits for companies that rely on international business.
- U.S. Companies: Many American businesses, both big and small, that import goods or components will see their costs go up. For bigger companies, this could hurt their bottom line and force them to raise prices. For smaller businesses, this raise in prices could impact their fragile margins, causing them to go belly up.
How This Could Affect Us: I personally think these tariffs are a big deal. I’m getting a weird sense of deja vu while typing this out, almost as if I typed the same exact words just 4 months ago.
As prices rise in US due to tariff-induced inflation, we could also see it ripple outwards globally with Singapore being affected too. Global trade slows down as countries and companies figure out how to do business in this new tariff-stricken economy. The most likely short-term scenario is that this negatively affects our portfolio with lots of volatility over the next couple of weeks or even months.
3. Legal Proceedings Over Trump’s Tariffs Begin
What Happened: On July 31st, a U.S. Court of Appeals began hearing oral arguments in a case challenging the legality of Trump’s tariffs. This comes after a lower court ruled that the president overstepped his authority by imposing broad duties without congressional approval.
Simple Explanation: Lots of businesses and even 12 U.S. states are suing the Trump administration, saying that only Congress has the power to impose tariffs under the Constitution. Even with all his power as president, they claim that Trump does not have the right to evoke the IEEPA and implement tariffs on such a large scale. A lower court already agreed with them, so now an appeals court is taking a look. If the appeals court agrees with the lower court, it will then go to the Supreme court for the final verdict.
Potential Impact on Market:
- A ruling against the tariffs could cause a rally in the stock market as it would remove a major source of economic uncertainty and reverse the negative effects of the tariffs.
- If the court sides with the administration, it could send a signal that the tariffs are here to stay, which may lead to further fear and uncertainty.
How This Could Affect Us: Honestly… there’s nothing to get excited about. Yet. This is more of a FYI because this case is a long way from being decided. It’s most likely going to drag on for a few more months, or years even if it reaches the Supreme court – which I’m certain the Trump administration is betting on – before a conclusion is reached. By then, it might already be too late.
But fingers crossed. Let’s wait and see what happens.
4. U.S. Job Market Slows Down
What Happened: The U.S. Bureau of Labor Statistics (BLS) reported on August 1st that the economy added only 73,000 jobs in July, well below what many economists expected. The BLS also made a significant downward revision of over 250,000 jobs from May and June. In response, President Trump fired Erika McEntarfer, the head of the BLS, accusing her of “falsifying” the numbers.
Simple Explanation: The job market, which has held up surprisingly for the longest time, just took a turn for the worse. Not only did hiring slow way down in July, but the government agency in charge of gathering employment data also admitted that its May and June numbers were over-reported. It’s a bad look for Trump who has insisted that the economy has never been better. He got mad and fired the head of this agency that puts out this data, claiming the numbers were “rigged” to make the Republicans look bad. It’s the most classic case of shooting the messenger.
It reminds me of this one scene in the movie 300 where King Leonidas kicks the Persian messenger into the pit.
How This Could Affect Us: This is an extraordinary mess.
The BLS is a nonpartisan agency led by nonpartisan technocrats. This means that the agency – and the employees within – take a neutral stance and do not involve themselves with politics. For the lack of a better word, the BLS is run by nerds (and I’m using this term lovingly) who live and breathe data. Their sole mission is to collect, analyze and provide the most accurate data possible with the resources they have at hand.
This lends it, and the reports they put out, a huge amount of credibility. Investors worldwide rely on its labor reports and CPI data to guide major decisions.
If Trump appoints a loyalist to take over the seat left by former Head Erika, we could lose the ability to rely on BLS data as there will be doubt about the accuracy of it. Thankfully, according to former commissioner Erica Groshen, it’s not that easy to manipulate the data in his favour. It will require a mass exodus and mass hiring of partisan staff, which will certainly trigger whistle-blowing and major backlash.
Market Performance
July was a fantastic month for the most part. Besides for a decline on the 31st of July, the market was relatively steadfast in its forward charge with lots of green.
This strong growth could be attributed to easing trade tensions as trade agreements were reached with multiple countries such as Japan, South Korea and most importantly, the EU. We also saw strong corporate earnings as Q2 earnings season kicked off with a bang. Nearly 80% of S&P500 companies beat estimates as AI demand continues to grow.
All these factors added together led to casual optimism despite lingering concerns over tariff-related headwinds. And maybe investors were just tired of being fearful all the time, accepting that uncertainty is simply the norm in this new Trump economy.
The decline on the 31st was due to Trump doubling down on his tariffs and announcing the new rates that would go into effect as of 7th of August.
Despite the slight downturn at the end of the month, S&P500 Global reported that the S&P500 was up 2.17% in July for a total of 7.78% YTD.
The DJI went up 0.08% in the same period for a total of 3.73% YTD.
My Stock Purchases
Nothing too crazy this month. I only made three purchases in total, and they’re mostly US-centric securities.
Besides for the monthly allocation of US$200 into both CSPX and VWRA which you should be familiar with by now, I also bought US$250 worth of SCHD. I kept the rest of my DCA’d amount in cash.
“But bro, what happened to buying more Singapore stocks?”
Don’t get me wrong; I’m not deviating from my strategy. I fully intend to continue reducing my exposure to the US and buying more Singapore stocks.
My problem right now is that I want to own more DBS, but DBS is too goddamn expensive. One lot of DBS is currently S$4,885, and I simply cannot afford to buy one lot of it every month at the moment. Not with my current salary.
So… I’m just going to save a portion of the amount I’m DCA-ing every month until I can afford to buy one lot of DBS shares.
Just so you know, I currently have around S$520 worth of cash in my brokerage account. This is likely going to take a couple of months, so be prepared for my stock purchases over the next few months to be particularly unexciting.
My Portfolio Performance
Overall Performance
My portfolio essentially remained flat month-on-month. Net of contributions, it only grew 0.04% from June to July.
On the other hand, my portfolio’s overall return actually decreased from 15% to around 13%. This isn’t a good indication of my portfolio performance though, as the fresh capital I injected diluted the percentage returns. The dilution was especially bad this month as I deposited almost 5x of what I usually deposit on a monthly basis (6,800 vs 1,150).
So… nothing went wrong with my portfolio. My returns didn’t actually suffer. It just looks worse on paper.
Year to date, net of contributions, my portfolio is up 4.04%.
In comparison, year to date, the S&P500 did 7.8% in returns while the DJI returned 3.7%.
The gap between the S&P500 and my portfolio has widened further since last month – and I’m expecting it to widen more and more as the year goes on – but I’m still pretty happy with my returns thus far.
Anyway, below is a chart showing my total portfolio value split into my capital investment (blue) and my actual returns (green) over the course of 2025.
Performance by Stock
I’ve always analyzed my stock performance in past updates by looking at a snapshot from my investment tracker at the end of the month.
I’ve come to realize that this method is… kinda flawed.
The issue is that looking at one month in isolation doesn’t actually tell you how your portfolio/stocks really performed that month. You know what valuation it ended at and how much your portfolio is up, but you don’t know the change it underwent. Furthermore, now that most of my stocks are in the green (and fingers crossed, they stay that way), it’s no longer obvious when a stock gains or loses value. In the past, you might see something jump from red to green. But now, green just stays green.
So for this month’s update, I’m trying something new.
Instead of just a single end-of-month snapshot, I’m comparing this month’s stock performance directly with last month’s. This gives me a baseline as reference to finally answer how my portfolio performed this month.
So… we can see that my Singapore stocks really carried my portfolio in July. I’m still up slightly in aggregate with US stocks, but it’s negligible.
Biggest losers are Visa (-6 pp), Coca-Cola (-4 pp) and Apple (-3 pp).
Biggest winners are Microsoft (+13 pp), Keppel (+11 pp) and Google (+10 pp).
Note: pp here stands for percentage points.
Dividend Payouts
I received US$102.73 (S$133) in dividends in July from SCHD, Coca-Cola and Altria Group. Second highest payout I’ve received so far this year and I’m not gonna lie, it feels good to collect these paychecks. The best part is that they’re only going to get fatter and fatter.
This brings the total dividends I have received year to date up to S$462. I’m less than S$100 off my entire dividend payout from 2024 (S$545), and I’m barely 2/3 done with the year.
The snowball effect is in full effect now and it’s crazy awesome to see.
Closing Thoughts
I’m a sucker for closure. So I’m not exaggerating when I say that the day I was waiting for has finally arrived.
Trump’s Liberation Day tariffs are officially in place. Multiple countries are now staring down hefty, tailor-made tariff rates. And while there are some countries who have managed to negotiate deals with the US, they’re still subject to tariffs, just lower than what otherwise could’ve been.
I’m not even going to talk about what they had to give up in the process to secure these deals. It’s kinda disgusting to think about it.
At the end of the day, it’s a humongous win for Trump. The deals he carved out are hugely beneficial for America’s economy.
But that’s where it ends.
While Trump continues tooting his own horn and thumping his chest shouting that these deals are the biggest victory in the history of mankind, there are some… early warning signs that things aren’t as rosy as they seem.
See, the market’s been propped up by strong corporate earnings fueled by AI hype, a seemingly ever-resilient job market, and relief over certain trade deals getting done. That’s how we hit all-time highs.
But we now have confirmation that 1 out of 3 of those factors was false. July’s labor data came in weaker than expected and there were gigantic revisions to the initial May and June’s numbers. The job market in America is actually (as expected) slowing down.
And I know this is just one red flag. For someone with a reputation of ignoring red flags in my love life, you would think that I’d turn a blind eye to this too.
But… I can’t shake the feeling that this is the figurative straw that breaks the camel’s back.
We are still yet to see the full effects of tariff-induced inflation. Now that the rates are locked in for most countries, I expect the effects to start materializing in the next couple of months. And there’s also the matter about America’s piling debt which is quickly spiraling out of control. Gentle reminder that Trump’s Big Beautiful Bill is most likely only going to add to it too.
Maybe I’m overreacting. I probably am. I remember feeling the same way back in April when the tariffs were first rolled out, and we somehow made it through without a meltdown. After all, as I type this today, the S&P 500 is once again flirting with all-time highs.
Either way, my strategy doesn’t change. I’m here for the long game, and like how I’ve always done in the past, I’ll ride out the storm by DCA-ing through whatever comes next.
And uhm, lowering my exposure to US in favor of Singapore.
Progress Summary
While my portfolio value spiked massively in July, it was more due to the huge cash injection it received to fund the purchase of Singapore stocks rather than the market’s movement.
My capital appreciation remains relatively flat this year. But progress is progress, and we’re still up a little, so I’m not complaining.
I am now 49% of the way there to my first big milestone.
And that about does it for this month’s update!
Stay safe, stay financially savvy, and most importantly, stay invested.
Until next time, cheers!
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