Investing in 2026

Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice.

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In normalcy:

1. Remain vested
2. Reinvest dividends
3. Reduce cash by DCA-ing monthly
4. Rinse and repeat

In correction:

1. Continue normalcy plan
2. Invest more in undervalued and underallocated counters

In crisis:

1. Continue normalcy plan
2. Deploy war chest
3. If capitulate, invest aggressively

Overarching goal:
1. Reduce cash/bond exposure
2. Ensure all dividends reinvested
3. Points 1-2 ensure annual dividends will grow

Assume 4% yield. Reinvesting it means your portfolio grows by x1.04 annually, meaning your dividend income rises by 4% annually, all else equal.

In 18 years, your dividend income doubles.

The key is to aim for a high but sustainable yield, while reinvesting 100% of your dividends if you can. This ensures your annual dividends grow by at least your dividend yield annually, all else equal. So if your dividend yield is 4%, your portfolio and hence dividend income will grow by 4% annually. When compounded, this has a significant impact in the long run.

This is the underlying reasoning for reducing cash and further raising exposure to dividend stocks. The period of elevated interest rates is ending and holding cash has become less lucrative.

Deaccumulating cash accumulated from the past few years of high interest rate, and reinvesting into dividend paying stocks would be the strategy moving forward for 2026, as long as interest rates continue falling or remain below the 2-3% range in Singapore. 

If rates rise back to the desirable range of 2-3%, rate of reinvestment and new investments would be moderated, as more spare cash would be redirected to low risk instruments for stable returns. Meanwhile for now, will continue to focus on accumulating quality dividend stocks and a small bit to growth stocks and globally diversified indexes for growth.

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Disclaimer:
The content and information provided on this blog is solely for educational and informational purposes, and should not be construed as financial advice. The accuracy or completeness of the content and information provided in the blog cannot be guaranteed. Before making any investment decisions, it is important for readers to research and carry out independent verification of the information provided, or consult with a qualified financial professional. No warranty and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of actions taken based on the ideas or information found in this blog.

No copyright infringement intended. The images used in this blog are solely for educational and informative purposes, and are © copyrighted by their respective owners.

Copyright © 2026. All rights reserved. SN Finance Blog

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