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Hi fellow investors, there’s something a bit eerie about the markets right now.

Geopolitical tensions are flaring up — fighting in the Middle East, conflict risk spreading across the region, oil supply on edge — and yet, the markets? Barely a ripple. Stocks haven’t tanked, oil hasn’t spiked that much, and VIX, the fear index? Still sleeping like a baby. You’d think the world is at peace.

And that’s the part that worries me the most.

Because when risks are so obvious… yet the market shrugs… it often means investors are either in denial, or numb to danger. And that’s when shocks can be the most painful. This is because any escalation may tip the balance over to the downside very quickly. 

Look, I’m not here to make anyone panic — but if you, like me, want to stay one step ahead, then this is exactly when we need to think about defence.

So in this post, I’ll walk through several options that I’ve either already invested in — or am seriously considering adding more to — if market volatility spikes again. These are not “sell everything and hide under your kopi table” options. But they are the kind of moves that let you sleep better at night when the headlines get ugly.

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 discussed, but what works for me might not work for you.

Alright, let’s get started!

Fixed Income – Not Sexy, Just Sensible

Let’s start with the most boring-sounding thing that might just save your portfolio: fixed income.

I’ve talked about this before — and yes, I’ve already put part of my portfolio into SGD-hedged credit funds. These funds give you exposure to a basket of global bonds, but without the currency risk. And with short durations, they’re less sensitive to interest rate spikes. In uncertain times like this, I don’t need excitement. I need reliability.

I’ve been gradually building my fixed income position over the past year. And with yields still attractive, I’m locking in solid returns while protecting against equity drawdowns.

For Singapore investors, products like U.O.B. Asset Management United Singapore Bond Fund or the SGD Fund or LionGlobal Short Duration Bond Fund, or even Endowus Fixed Income – Secured for broader diversification, can provide stability with decent yields. 

And if you’re ultra-conservative, don’t forget Singapore Savings Bonds — but for me, the yields have declined so much that I’ve kind of given up on putting more money in them.

But here’s something I’m also watching closely — USD-denominated fixed income.

Now I know what you’re thinking: if the US dollar is weakening, why bother? But hear me out. During periods of global uncertainty, the USD tends to surge. It’s the ultimate safe haven. And right now, the U.S. dollar index is hovering near multi-year lows. If things spiral in the Middle East — or if the market suddenly wakes up to inflation, oil shocks, or geopolitical risk — we could see a sharp rebound in the dollar.

And that’s where USD bonds come in. If you buy USD-denominated fixed income, you’re not just locking in yield. You may also benefit from a currency kicker. Even simple instruments like USD money market funds, short-term treasuries, or investment-grade bond ETFs like the iShares iBonds series can give you both safety and potential upside.

To me, this is like buying an umbrella before the rain. Maybe it stays dry — great. But if the storm comes, I’d rather be holding fixed income than fumbling with speculative growth names.

Defensive Dividend Stocks – The Quiet Achievers

Now, let’s talk about dividend stocks — not the flashy ones that go up 20% in a week and crash just as fast. I’m talking about the steady payers. The kind of companies that just… keep going. Rain or shine. Middle East crisis or Fed drama.

These are the essential services, infrastructure, or healthcare-linked stocks that people and businesses rely on — no matter what.

Let me give you a few examples I personally hold or watch closely.

NetLink NBN Trust – This one is almost too boring. They run Singapore’s fibre broadband infrastructure. Unless Singaporeans suddenly decide they don’t need Wi-Fi (unlikely, especially with 4 devices per person), NetLink will keep collecting its stable fees. Dividend yield? Still above 5%. Not exciting, but rock-solid.

Parkway Life REIT – Another personal favourite. Long master leases with hospitals in Japan and Singapore. Healthcare demand is secular — it doesn’t care about geopolitics. It’s not cheap in valuation, but as a core defensive REIT, it delivers stability and gradual growth. I’m still holding.

Singtel may not be flashy, but in shaky markets, boring can be brilliant. Its core telco business provides steady cash flow, and recent results show a recovery underway. With tariff hikes in the region and moves to unlock value from its data centres and associates, there’s potential upside. The dividend’s modest but reliable — just the kind of stability investors want when markets turn choppy.

Sheng Siong supermarket is the classic stay-home defensive. Q1 results were strong, and management has doubled down on growth — planning 8 new store openings this year instead of 3. Add in a solid 4% yield, net cash position, and stable demand for groceries, and you’ve got a stock that quietly holds up — or even shines — in turbulent times.

The key here is this: you don’t just want high dividend yield. You want yield that is backed by stable cash flows. And if you find businesses that can grow those dividends slowly over time — even better.

I’m already invested in several of these. And if market volatility picks up more steam, I may even shift more into them — not for growth, but for peace of mind.

Before we move on, I just want to take a quick moment to introduce something new — my YouTube membership. I actually intended to keep it low profile for now… but someone beat me to it! A big shoutout to Henry Tan, the very first “Dividend Uncle’s Kaki” — that’s the name of the membership tier I created. As always, I started this channel just to share my personal investing journey and connect with fellow dividend lovers — not to make money from it. But if you’ve been enjoying the content and just want to show some love to this uncle, feel free to check it out. 

Defence Stocks – The Ones That Might Benefit from Geopolitical Risk

Yes — believe it or not, some companies actually thrive in chaos. It’s a bit grim to say, but wars, conflicts, and rising geopolitical tensions usually mean more spending on defence. And where there’s government spending… there’s opportunity for investors.

Let’s start local.

ST Engineering — Singapore’s crown jewel in defence tech. This is not just a weapons company — it’s a diversified engineering group with segments in aerospace, smart city solutions, and cybersecurity. But defence is its backbone. And with governments quietly ramping up military spending, ST Engineering has kept up with stable contracts and even modest growth. I’ve held this for years — and it’s quietly been one of the best-performing stocks in my portfolio.

Now hop over to Europe — where things are… shall we say, tense. And in a tense continent with Russia-Ukraine in its backyard, companies like UK-listed BAE Systems are front and centre. The UK-based defence contractor has seen its order book balloon in recent years, especially after the Ukraine war started. They supply everything from submarines to cyber defence systems.

If you want diversified exposure to this theme without picking individual names, there’s even a European Defence ETF — like the VanEck Defense UCITS ETF (or DFNS). It’s been gaining attention, and not just for war buffs. Investors see it as a thematic hedge. 

Now — is this a strategy for everyone? No. Defence stocks have already surged prior to this episode, headlines can shift overnight, and you might not be comfortable investing in this sector from an ethical perspective. But if you’re looking for hedges that might zig when everything else zags, these are worth putting on your radar.

The Classic Havens — Gold and Oil

Now when markets get jittery, where do the nervous investors go?

That’s right — gold and oil. The two oldest safe-haven trades in the book. But even these aren’t behaving like they used to. Which is exactly why we need to take a closer look.

Let’s start with gold.

Gold is priced in US dollars — so when the dollar weakens, gold tends to shine. And right now, with the US dollar index at 2-year lows, that upward pressure is real. On top of that, central banks have been buying up gold. Countries like China and Russia are steadily increasing reserves.

Retail investors? There’s increasing interest in gold ETFs like SPDR Gold Shares (or G.L.D.), or even physical gold if you prefer to hold it close. Now, gold won’t pay you a dividend, so this Uncle doesn’t usually back up the truck — but for stability, and as a hedge, it plays a clear role.

Then there’s oil — and this one’s a bit more… explosive.

Oil is the heartbeat of geopolitics. And with tensions flaring again in the Middle East — especially after Israel’s attacks on Iran, the market is watching closely. Any supply shock in the region could spike oil prices fast. That’s the risk premium we’re talking about.

Closer to home, Keppel Corp and Sembcorp Industries do benefit somewhat from the energy cycle — although not direct plays on crude oil itself.

But just like with gold, don’t expect huge income here. These are more about portfolio insurance. When things go wrong, you want something that can run in the opposite direction.

Riding the Fear Index — The V.I.X.

And finally, if you really want to ride the emotional roller coaster of the markets — then you look at the V.I.X.. Yes, the so-called “fear index.”

Now, I actually did a full video before on how I invested in the V.X.X. ETF — that’s one of the ways to get exposure to short-term VIX futures. And let me tell you, this one is not for the faint-hearted, and I almost got burnt too.

Because here’s the thing: the V.I.X. doesn’t move slowly. It spikes — and then it crashes. Sometimes, it crashes even when the world still looks scary, simply because market volatility starts to drop. So if you get the timing wrong, your V.I.X.-linked investment can melt away faster than an ice cream cone in mid-day Orchard Road.

That’s why I keep my exposure to this, if I do enter the trade, very limited. For me, it’s more like an insurance hedge — one that kicks in when markets panic. But unlike gold or fixed income, this isn’t something you hold and forget. You have to watch it. Closely.

Just don’t overdo it. You don’t want your hedge to become the source of stress.

The Dividend Uncle’s Take

Sometimes, the biggest risk is not the event itself — but the market’s reaction, or lack of it.

I’ve already positioned part of my portfolio into these more defensive investments — fixed income, stable dividend payers, gold. And I’m not changing course just because the market feels sleepy. In fact, if volatility does spike again, I’ll be looking to allocate even more into these areas.

Because let’s face it — most of us aren’t trying to beat the market every month. We just want steady returns, fewer shocks, and a way to grow our wealth without sweating every headline. These aren’t flashy investments, but they do their job when it matters.

And if you’ve been feeling uneasy about how calm the market is despite all the noise… you’re not alone. Just remember: defence isn’t weakness. It’s wisdom.

So that’s it from this Uncle today. The world feels shaky, but we don’t have to be. Stay diversified, stay invested — and most importantly, stay calm. If you found today’s post helpful, give it a like, share it with a fellow investor, and subscribe for more steady takes in an unsteady world.

Thanks for watching — and I’ll see you in the next one.