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Hey fellow investors! It’s been a great run for the Singapore market lately — our blue-chip champions like Sembcorp, Keppel Corp, ST Engineering, and the local banks have all surged to impressive highs. Even the STI ETF is floating near multi-year records, and if you’ve been holding these, well done! Many of us are seeing returns that are well into the double digits — even triple digits for some.

But when your portfolio starts looking like a sea of green, that’s exactly when I think it’s time to take a step back. Not to panic, but to reflect. Because while we’re long-term investors, we’re not passive — we should review and not be afraid of rebalancing, but with intention, especially when markets hints at signs of weakness after periods of strong performance.

So in today’s post, I’m sharing why I’m trimming down some of my best-performing Singapore blue-chip stocks and reallocating those funds into REITs and fixed income — sectors that I believe are now offering better value and opportunity.

So stick around — I think this is one of those moments where rebalancing quietly before the crowd moves might make all the difference.

But before we dive in, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own some of the shares and REITs discussed, but what works for me might not work for you.

Alright, let’s get started!

Singapore vs. US Markets – A Surprising Divergence

Before I get into why I’m trimming some of my STI blue-chip winners, let’s take a step back and talk about something quite unusual that’s been happening in the markets.

Singapore’s stock market has been on a surprisingly strong run lately. The Straits Times Index, or STI, has been quietly but steadily climbing. Back in 2023, it ended the year slightly down, just a small decline of 0.34%. But in 2024, it staged a strong comeback—up nearly 17%, and it didn’t stop there. So far in 2025, the STI is already up another 4% to 5%, hovering just below 4,000.

Now, 4,000 has become one of those magic numbers that the media loves to talk about, and yes, it does mark an all-time high. But to me, what’s more important than the number is how this performance stands out when we look around the world.

Because if you look at the US market right now, it’s not having a good time. The S&P 500 and Nasdaq have both dropped more than 10% from their recent highs—technically entering correction territory. On a year-to-date basis, the S&P 500 and Nasdaq are down more than 8% and 14% respectively (as at 3 April 2025). And the same tech giants that were pulling the market up over the past two years—names like Nvidia and Tesla—are now dragging it down. This is not limited to tech. Market sentiments across all sectors have plummeted, arising from uncertainties from tariffs and economic outlook.

So this is rare. We don’t often see Singapore outperform the US like this, and it raises the question—what’s driving the STI’s strength?

Well, a big part of it comes down to our blue-chip stocks. Companies like Sembcorp Industries, Keppel Corp, and ST Engineering have done incredibly well, rewarding shareholders after more volatile times when they underwent some restructuring of businesses. 

Even the banks have continued to benefit from the high interest rate environment, which helps with their net interest margins. That’s helped keep earnings and dividends strong, making them a defensive anchor in any portfolio.

So in short, Singapore’s blue-chip stocks have had a phenomenal run, driven by both earnings strength and positive investor sentiment. That’s a big reason why the STI has outperformed global peers recently—even as US markets are starting to struggle.

But as we’ll explore in the next section, this also means it might be time to take some profit off the table—because while things have gone up a lot, they might not stay this strong forever.

Why I’m Rebalancing My STI Winners – With Gratitude and Strategy

Now, let me be very clear—this isn’t one of those doom-and-gloom “I’m selling everything!” moments. I’m still a believer in Singapore’s blue-chip stocks and what they’ve achieved. In fact, over the past week when the US markets faltered due to tariff announcements, Singapore’s STI has continued to be resilient. 

But I also believe that when certain stocks have done well—sometimes very well—it’s a good time to practice some portfolio discipline and reposition for future opportunities. So here’s why I’m choosing to trim down some of my STI blue-chip winners.

First, it’s about portfolio discipline. Some of my positions, like ST Engineering and Sembcorp, have gone up more than 100% since I first bought them. That’s not common for me—I tend to be a more conservative investor, so these kinds of gains don’t come around all the time. And that’s exactly why I’m trimming. My goal is simple: get back more of my original capital invested over time, and eventually leave only what I call “house money” in the market. It’s not easy to reach this stage—especially with long-term dividend stocks—but it’s a goal worth working towards. When you’ve doubled your money, I think it’s perfectly reasonable to lock in some gains and reduce your risk, while still keeping skin in the game.

Second, I want to raise my cash position. Not because I’m bearish, but because cash gives me optionality. If we get more market volatility ahead—in US stocks or even global stocks—I’ll be in a better position to take advantage of those opportunities. So this is a way to prepare for the unknown, while still enjoying the gains I’ve already earned.

And third, it’s about strategic rebalancing. Even as a long-term investor, I believe in actively reviewing the portfolio—especially when markets move to extremes. Whether it’s US market valuations reach historic highs right before the current downturn, or the strong run-up in Singapore’s blue chips while global markets falter, there are moments where it makes sense to rebalance. I’m not abandoning my long-term holdings. I’m simply shifting some profits into areas where I believe the next wave of value and opportunity could emerge.

And for me, that wave might just be in REITs and fixed income.

Why I’m Shifting to REITs Now – But With Caution

So, where am I putting some of the capital I’ve freed up from trimming my blue-chip winners? First and foremost, REITs.

Long-time viewers will know I’ve always believed in the long-term value of quality Singapore-REITs. Even during the past couple of years, when REITs were under pressure due to rising interest rates, I’ve continued to advocate for them—especially when they were trading at significant discounts to their Net Asset Value. My view has always been that if you focus on quality and stay invested through the cycle, REITs will eventually reward patient investors.

But lately, something has shifted.

In the past few weeks, I’ve noticed a clear change in sentiment. The media has started publishing more positive stories about REITs. Articles are popping up more frequently, highlighting how REITs could benefit from falling interest rates. Analysts have jumped on board too, issuing a wave of upgrades and projecting brighter days ahead for the sector. REIT prices have also started recovering, with some rebounding sharply over just a few sessions.

While I’m always skeptical when analysts all flood in, I believe two indicators are now reflecting a higher possibility of a more sustained recovery in REIT. First, interest rates. The 10-year US Treasury yield has slumped, literally. From a high of 4.8% at the start of the year, the 10-year US Treasury yield is now at below 3.9%. The drop of at least 90 basis points is quite significant, and may finally reverse the trend of rising interest expenses for REITs. Second, investor confidence or sentiment. If you haven’t noticed, the investors’ fear index or the CBOE Volatility Index or VIX has spiked in recent weeks. The implication is that investors are likely to shift their money from growth stocks to safe havens, and this include higher dividend yield stocks like REITs, and fixed income.  

Now, as happy as I am to see this shift, I’m also keeping things in perspective. We’ve had moments before where sentiment turned upbeat, only to cool off again. In addition, the underlying driver of the two indicators flashing green for REITs is the uncertainties arising from the tariff policies in the US, which in turn may negatively affect global trade and economic growth. If the worst case scenario of these uncertainties becomes the reality, demand for the properties underlying these REITs will be affected. 

So even though I’m building up my REIT positions, I’m doing it steadily over time as I monitor the situation. As I already have a substantial position in REITs, instead of jumping in all at once, I’d rather take a measured approach—adding to positions in quality REITs in my Core Portfolio, such as CapitaLand Integrated Commercial Trust, Mapletree Industrial Trust, Parkway Life REIT and CapitaLand Ascott Trust. I’ll be giving myself room to react to how things evolve.

Because when it comes to REITs, it’s not just about catching the bottom. It’s about being there for the recovery, and I personally believe there are some good scope of recoveries ahead.

Before we move on, if you find this post “shiok” so far, help this uncle out lah—give a quick ‘like’ so more people can join us in this chat about markets. And if you also shifting from STI winners into REITs or fixed income, don’t just keep quiet—leave a comment below and let’s compare notes. Who knows, maybe we all got the same idea at the same time!

And I’m Shifting into Fixed Income Too

I’m not just moving into REITs. I’m also reallocating more capital into fixed income — and for good reason.

Firstly, this is part of my overall asset allocation plan I’ve shared with you at the start of the year. I’ve always aimed to have a more balanced portfolio that includes steady income from bonds and fixed income instruments.

Secondly, it’s about locking in today’s relatively high interest rates while they remain elevated, based on my personal view that cuts are likely in the months ahead. If you believe rates are going to be cut in the next 6–12 months, then buying fixed income now means you’re getting in before yields compress.

Thirdly, I want to diversify across economic scenarios. If equity markets correct or go sideways, fixed income provides ballast to the portfolio.

So where am I investing?

I’ve been allocating more to fixed income—and one of the core funds I’m using is the Endowus Fixed Income – Secured portfolio. I just want to say that this is not a recommendation to invest in this product — I’m just sharing one of the tools I’m personally using as part of my fixed income allocation. I’m also not paid nor affiliated with Endowus. 

Now, this isn’t your typical bond fund. It’s a fund-of-funds, which means it invests across multiple institutional-grade bond funds managed by global fund houses like PIMCO, JP Morgan, BlackRock, and others. You’re not just buying into one manager’s view—you’re getting diversified expertise across different regions, sectors, and bond types.

All of this is wrapped into a single portfolio, giving me broad fixed income exposure without having to pick individual bond funds myself—and in this current environment, where interest rates are expected to gradually fall, locking in some of these yields while diversifying risks just makes sense.

Now, this is just a quick introduction. I’ll be doing a fuller breakdown of this my fixed income portfolio in a future post, so do keep a lookout if you’re interested in how it works and whether it suits your income strategy.

The Dividend Uncle’s Take – Shifting Gears, Not Jumping Ship

Now, I know some of you might be wondering—Uncle, STI is at highs, your blue-chip stocks are doing well, dividends still coming in nicely… why move anything at all?

But that’s the thing. When the market hits extremes—whether it’s fear or euphoria—that’s when I believe long-term investors should pause and relook at their portfolio. We don’t need to react to every twist and turn, but strategic rebalancing? That’s just discipline. And discipline is how we protect our gains, and keep building.

Trimming some of my STI winners like ST Engineering and Sembcorp isn’t because I’ve lost confidence in them. Far from it—they’ve done so well, I’m up more than 100% on some of these positions! But that’s exactly why I’m taking some chips off the table and slowly getting back my capital. Specifically, I plan to take about 20% off the table for now. 

At the same time, I see clearer skies forming over S-REITs. Valuations are still low compared to blue-chip stocks and the broader market, but fundamentals are improving. Interest rates are trending down. And finally, I’m not forgetting fixed income. Diversifying into products that diversifies my fixed income portfolio helps anchor this part of my investments. I’m also into short-duration funds to keep some dry powder ready for opportunities if markets falter.

Alright, that’s all for today! Remember that this isn’t about jumping from one hot sector to another. It’s about keeping my portfolio balanced, diversified, and positioned not just for growth, but for resilience. So if you’re doing something similar, or thinking about it—let me know in the comments. And if you’re doing the opposite—hey, I’d love to hear your take too. That’s how we all learn together.

Until next time, stay steady and invest wisely!