Endowment Plan Disappointment

Dear Readers,

I am writing to share my disappointment and the broader lessons learned after the maturity of an endowment plan, I purchased from Great Eastern in 1999. The plan, which was intended to secure my financial future, has fallen far short of reasonable expectations, especially when compared to alternative savings methods and the inherent limitations of long-term commitments like this. I was told that I would receive maturity amount of 41,000.00 after 25 years based on the illustrations benefit and by the Financial Advisor.

Plan Outcome: A Financial Disappointment

Premium Paid: SGD 947 annually for 25 years, totalling SGD 23,675.

Maturity Payout (2024): SGD 33,234.09.

Net Return Over 25 Years: SGD 9,559.09.

Yearly Returns Computation Breaking down the net return over 25 years:

Annual Return (9,559/25) = SGD 382.36 per year

Annualized Interest Rate: Approximately 1.31% p.a., which barely outpaces inflation and significantly underperforms other low-risk alternatives.

Comparison with Fixed Deposits -

Over the same 25-year period, fixed deposit rates averaged 2–3% annually. If the same premiums (SGD 947/year) had been deposited into a fixed deposit account at a modest 2.5% interest rate, the maturity amount would have been approximately SGD 38,702 — outperforming the endowment plan by more than SGD 5,000.

Moreover, fixed deposits are:

Flexible: Unlike the endowment plan, fixed deposits allow early withdrawal (albeit with minor penalties) and offer liquidity in times of need.

Transparent: Fixed deposit returns are predictable and unaffected by discretionary bonuses or opaque insurance company decisions.

Illiquidity of Endowment Plans -

Endowment plans lock policyholders into long tenors (25 years in this case), making the funds inaccessible for emergencies. Early surrender incurs significant penalties, eroding both the principal and any accrued returns. This inflexibility often negates any perceived benefits of such plans.

Risk vs. Reward in Insurance Payouts -

The core promise of an endowment plan lies in its dual function as an investment and insurance product. However, the likelihood of receiving a significant insurance payout from such plans is statistically low:

Cancer Probability: The lifetime risk of developing cancer is approximately 1 in 5 for individuals, depending on age, lifestyle, and occupational hazards. This means that 80% of policyholders may never claim significant payouts for critical illnesses.

Lifestyle and Occupation Impact: Individuals with low-risk lifestyles or jobs further reduce their chances of triggering insurance payouts.

This data highlights that most policyholders are unlikely to fully utilize the insurance benefits they pay for, leaving the insurer to retain substantial profits.

How Insurance Companies Profit -

Insurance companies like Great Eastern operate on the principle of Other People’s Money (OPM) and a model akin to Options Investing:

Premium Collection: Regular payments from policyholders are pooled together.

Asset Investments: These pooled funds are invested in high-yield assets such as real estate, which generate rental income, and equities or bonds, which provide compounding returns.

Payout Disparity: Policyholders receive limited returns, while companies retain the majority of investment profits to reward stakeholders and shareholders.

This approach creates a significant imbalance: policyholders bear the opportunity cost of tying up funds for decades, while insurers leverage these funds to maximize their own profits.

This structure parallels the characteristics of options trading:

• Insurance Companies: Act like sellers of options, collecting premiums and minimizing payouts.

• Policyholders: Act as buyers, paying regular premiums but often receiving limited returns.

The profit margins for stakeholders remain high, while policyholders are shortchanged with low maturity payouts.

The Case for Insurance as Protection, Not Investment -

Endowment plans highlight the pitfalls of mixing insurance with investment. Based on my experience, insurance should serve its core purpose: protection. For those seeking affordable and meaningful coverage,

I strongly recommend:

Accident Insurance: Provides critical payouts for unforeseen events.

Total and Permanent Disability (TPD) Insurance: Offers financial support in life-altering situations.

Health and Term Insurance: Affordable premiums with high sums assured to safeguard against major medical and life risks.

These types of insurance ensure robust financial protection without the financial compromises of endowment plans.

Closing Thoughts -

This experience serves as a cautionary tale for others considering endowment plans serve as a stark reminder that the interests of policyholders often come secondary to profits. The illiquidity, low returns, and opaque bonus structures of such plans fail to justify their costs. As consumers, it’s vital to critically evaluate these products, weigh their real returns against inflation, and explore alternative investments such as index funds or savings bonds. Consumers should demand greater transparency and fairness from insurance providers and explore alternatives that prioritize genuine financial growth and protection. I hope my story serves as a wake-up call for others to make informed financial decisions.

Market Outlook For 2025 (Wood Snake)

Dear Readers,

 

It is time for me to update everyone on the opportunities and threat for year 2025 (Wood Snake) as the year 2024 (Wood Dragon) is coming to an end soon. 

I hope everyone make their fortune in year 2024 (Wood Dragon), please do donate generously to help the unfortunate with extra abundance of resource, I have made some donations to GiveAsia fundraising campaign to help patients with hefty medical bills.

First and foremost, I would like to wish everybody a "Happy New Year" and I hope Year 2025 is a blessed year for all Traders & Investors, with abundance in new opportunities, good health and wealth.

Despite my busy schedule, I would like to take this opportunity to update everybody on what are the dangers and opportunities in Year 2025 that you can take and perform necessary risk management or adjustment in your portfolio based on scientific quant data to derive better decision-making process. 

US Foreign Policy Analysis

Based on Financial Market Data Analysis, I already knew President Trump would be re-elected as 47th term POTUS beating President Biden/ VP Kamala Harris in the Presidential Election 2024 in November. 

However, many global media outlets are drawing on the conclusion that President Trump is erratic hence his policy is unpredictable and is a hard opponent to many world leaders. i disagree with the global media opinion and President Trump is highly predictable with is Foreign Policy and Economic Policy implementation.

There is a Chinese saying goes "别人笑我太疯癫。我笑别人看不穿", translate into English “Others laugh at me for being crazy. I laugh and others can’t see through it”.

My opinion is based on the observations of President Trump in office as 45th term of POTUS and the US electorate dynamic that he will continue with the Trade War with the global trading partners rising as high as 10% to 60% where he mention during his election campaign, targeting China and its US allies like Europe, Canada, Japan, South Korea, Australia, India and Mexico and South America.

President Trump would be good for Commodities in general ranging from precious metals to agricultural produce and energies. why?

 

 

In the 2024 U.S. presidential election, Donald Trump secured a victory in the Electoral College, winning key battleground states such as Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin. These states contributed significantly to his margin of 312-226 votes in the Electoral College.​

STATE-LEVEL ECONOMICS - Electoral College Key States and Industries

• Arizona: Aerospace, electronics manufacturing, and tourism.
• Pennsylvania: Energy production (shale oil, coal and natural gas), steel and health services.
• Wisconsin: Dairy farming, Food production, Advanced manufacturing
• Michigan: Automotive manufacturing and Advanced manufacturing
• Nevada: Tourism, gaming and mining (notably gold and silver).
• North Carolina: Biotechnology, financial services and manufacturing.
• Georgia: Agriculture (particularly peaches and poultry), film production and logistics.

Policies targeting these industries could reinforce their economic contributions, particularly in sectors aligned with Metal (manufacturing, finance) and Earth (agriculture, energy).

These industries are significant contributors to the economic growth of their respective states and played a role in shaping voter preferences in 2024. Trump's focus on economic and trade policies, as well as his appeal to manufacturing and rural sectors, likely resonated with voters in these regions​

To deliver his election promise or slogan to "Make America Great Again" and for Americans to live a better life than 4 years ago with higher spending purchasing power in Americans wallet, President Trump will continue with Trade Protectionism, impose trade tariffs to negate trade deficits and budget deficits.

---

How Tariffs Affect Trade Deficits

1. Reduced Imports:
• Mechanism: Tariffs increase the cost of imported goods, making them less attractive to domestic consumers.
• Effect: This can reduce the volume of imports, narrowing the trade deficit in the short term.
2. Retaliation and Reduced Exports:
• Mechanism: Other countries may retaliate with their own tariffs, making U.S. goods less competitive in foreign markets.
• Effect: This reduces exports, potentially offsetting the gains from lower imports.
3. Impact on Consumer Prices:
• Mechanism: Tariffs often lead to higher prices for goods, reducing consumer spending power.
• Effect: If domestic demand shifts toward cheaper foreign alternatives (despite tariffs), the trade deficit may persist.
4. Currency Adjustments:
• Mechanism: Tariffs can lead to changes in currency exchange rates. A stronger dollar makes U.S. exports more expensive and imports cheaper, countering the effects of tariffs.
• Effect: This limits the effectiveness of tariffs in reducing trade deficits.

---

Trade Deficits and Budget Deficits

Trade deficits and budget deficits are distinct but interconnected:

• Trade Deficit: Reflects the imbalance between exports and imports.
• Budget Deficit: Occurs when government spending exceeds revenue.
• Link: Persistent budget deficits (due to borrowing) can strengthen the dollar, making exports less competitive and exacerbating trade deficits.

---

Historical Examples

1. Trump’s Tariffs (2018–2020):
• Imposed tariffs on Chinese goods to reduce the trade deficit.
• Result: The trade deficit with China initially declined but widened with other countries, as overall consumer demand for imports persisted​
2. Smoot-Hawley Tariff Act (1930):
• Increased tariffs on imports during the Great Depression.
• Result: Retaliation by other countries reduced global trade, worsening economic conditions.

---

Economic Consensus

Most economists argue that tariffs alone cannot negate trade deficits because they:

• Do not address underlying structural issues, such as savings-investment imbalances.
• May distort markets and lead to inefficiencies in the global supply chain.

Sustainable solutions include boosting domestic production competitiveness, diversifying exports, and addressing fiscal imbalances. 

During his 45th presidency, Donald Trump negotiated with China to increase their purchase of U.S. agricultural products as part of the Phase One Trade Agreement, signed in January 2020. The key agricultural commodities targeted included:

1. Soybeans:
• Soybeans were a primary focus, as they are one of the largest U.S. agricultural exports to China. China traditionally imports massive amounts of soybeans for animal feed and cooking oil.
2. Pork and Meat Products:
• China agreed to increase imports of pork and other meat products, addressing their domestic pork shortages caused by African Swine Fever.
3. Corn and Wheat:
• These grains were emphasized to support American farmers and diversify China’s agricultural imports.
4. Dairy Products:
• Cheese, milk powders, and whey were included as part of the agreement to expand access to China's growing dairy market.
5. Cotton and Other Crops:
• Cotton, along with other smaller agricultural commodities like sorghum and ethanol, was included.

Under the agreement, China committed to purchasing an additional $32 billion worth of U.S. agricultural products over two years (2020–2021), compared to the baseline level in 2017​. Despite these commitments, meeting the targets was challenged by global trade dynamics and the COVID-19 pandemic​

---

My Opinion Deriving From Data Analysis Interpretation

Inflationary pressure forecast to worsen in year 2025, but why inflationary pressure where data point to major downward trend and recent inflation figure was 2.6% up from previous 2.4% in September 2024, previous month Core inflation was 3.2% in July/August 2024 and recent September/October core inflation rate was 3.3% seen an uptick. 

Interest rate is forecast to rise in year 2025 to combat rising inflation contributed by de-dollarisation seen dumping on US Treasury, interest rate easing of 0.75% by the Fed Reserve, Trade war and Trade Tariffs imposed on US allies & trading partners

https://www.straitstimes.com/business/economy/xi-better-prepared-for-trump-even-as-60-tariffs-risk-chaos

With current Fed Reserve Funds Rate has been lower to 4.58% on 8 November 2024 Fed Reserve Meeting, there has been 2 rounds of easing conducted by the Federal Reserve 0.5% on 18 September 2024 and 0.25% on 8 November 2024 from the peak 5.33% 

 

Inflation Rate October 2024

 

Core Inflation Rate October 2024

 

---

1. FUND FLOW ANALYSIS

Global Investment Trends

1. Equities:
• Anticipated support for key U.S. industries under Trump (manufacturing, energy, and agriculture) are likely to attract domestic and foreign investment, boost domestic equities, especially in industrial and energy sectors.
• Potential geopolitical stability or new trade deals could funnel capital into industrial and export-oriented sectors.
2. Fixed Income:
• Federal Reserve's potential pivot to lower interest rates in response to geopolitical risks (e.g., Ukraine, Taiwan Straits, or Korea Peninsula) may support bond markets.
• Rising interest rates earlier in the cycle could attract inflows into U.S. Treasuries if the Federal Reserve maintains a restrictive stance.
• Based on data analytics, Federal Reserve would hike interest rates to mitigate inflation (cost push & demand pull) amid the backdrop od de-dollarisation dumping of US Treasury, higher commodity prices and trade tariffs aim to reduce trade deficits and budget deficits.
3. Commodities:
• Commodities like oil and gold may see heightened fund flows amid geopolitical tensions, particularly if conflicts disrupt supply chains or raise energy prices.
• Increased government spending and infrastructure development could drive fund flows into commodities like crude oil and industrial metals.
4. Currency Markets:
• Risks of de-dollarization from BRICS nations and central bank diversification away from USD could reduce demand for U.S. treasuries but simultaneously boost safe-haven flows into gold.
5. Sectoral Focus
• Energy (Earth and Metal Elements): Likely to benefit from pro-energy policies and reduced regulatory barriers, attracting significant fund flows.
• Technology (Wood Element): Potential geopolitical frictions with China may continue to channel investments into domestic semiconductor and AI industries.

Sector Rotation Quant Data 29 November 2024

---

2. TECHNICAL ANALYSIS

Key Indicators and Outlook

1. Baltic Dry Index (BDI):
• Reflecting global trade volumes, the BDI may remain volatile due to disruptions in shipping routes (Ukraine, Middle East) or higher demand for bulk commodities tied to U.S. infrastructure policies.
• Representing global shipping demand, the BDI is expected to rise if infrastructure spending increases, signalling stronger global trade flows.
• Red Sea and Suez Canal was constantly targeted by the Houthis conducting an offensive against the merchant container ships from the West, plying the artery route of shipping (Suez Canal) causing many ships to pay a premium insurance coverage operating along Red Sea and Suez Canal, paying higher labour wages and bonuses for Seafarers, or re-route taking a longer distance causing delays or bottleneck in shipping by consuming more diesel adding to higher costs of shipping a result of cost push couple with demand pull inflation. 

https://www.tradewindsnews.com/containers/cma-cgm-and-hapag-lloyd-invoke-force-majeure-as-more-carriers-reroute-vessels/2-1-1574080?zephr_sso_ott=7Imgim

https://www.ft.com/content/274fac45-7f38-493f-8ce8-7b7ea3e54ad0?fbclid=IwAR14BmI2TqYrM8vd9akFqoSvWklS97FElZTpwKoEQByI4mMr2cY1lDtRnGs

https://www.reuters.com/business/autos-transportation/evergreen-shipping-line-stop-accepting-israeli-cargo-suspend-red-sea-route-2023-12-18/?fbclid=IwAR1KQMjVsUWZE61CON8GsJ_bQQeIqTdlaYuqKN_J7CDos_RZ8ZTNDSfNx04

https://www.tradewindsnews.com/ship-management/employers-agree-new-red-sea-wage-bonus-amid-houthi-attacks/2-1-1576105?fbclid=IwAR04TXGPkU0s-FVVtX1pkkbg1voI9pHcetVYjEOwJY7u6cTO6HNeL9DYVNo

https://www.tradewindsnews.com/opinion/container-lines-plot-massive-rate-rises-as-chokepoint-diversions-ramp-up/2-1-1569928

https://www.channelnewsasia.com/world/danish-company-maersk-pause-all-container-shipments-through-red-sea-3992441

https://www.freightwaves.com/news/why-attacks-on-container-ships-caused-container-stocks-to-jump

• Support Levels: 900–1,000.
• Resistance Levels: 1,500–1,800.

2. Crude Oil:
• Trump’s pro-energy policies (e.g., expanding domestic production) and Middle East instability could push crude oil higher.
• Crude Oil producers will channel more resources into investment to boost supplies when crude oil futures price is price higher whereas vice versa Crude Oil producers will limit channelling resources into investment causing shortage in supplies when crude oil futures price is price lower.
• in November 2022, a total of 180 million barrels of crude oil was released from strategic reserves to mitigate price of energy inflationary pressure felt by US residents in the midst of Russia Ukraine war where US and allies enforce economic sanction on crude oil and natural gas supplies embargo. Oil released from the strategic reserves has result in dangerous low inventory level that require to re-stocking to pre-released inventory levels, so crude oil current trading at 69 USD, downside is limited supported at 65 USD level with attractive upside of risk reward ratios 7.75 : 1 (31 : 4).
• China economic growth will once again determine the direction of crude oil, oil is one of the important primary energy sources and has a strategic role in promoting economic growth. Since it initiated an economic reform program in 1978, China has witnessed rapid economic growth and an improved living standard (Zheng and Luo 2013). Meanwhile, oil consumption in China increased rapidly from 91 Mtoe (in 1978) to 560 Mtoe (in 2015), with an average annual growth of 5.0%. China in not rich in oil resources, and its oil reserves account for only 2% of the world oil reserves. Hence, China is highly reliant on the oil imports, and about 61% of oil consumption was imported in 2015. China became a net importer of crude oil in 1993, and the world’s second-largest oil consumer in 2002. Since the early 1990s, with increasing economic growth, improved quality of life and the booming development of automobile and aviation industry, total oil consumption in China has increased rapidly. The share of oil in total energy consumed has gradually increased, from 8.3% (in 1965) to 18.6% (in 2015).

• Another wild card is "Will history repeat itself, Crude Oil Embargo in 1970s?" During the 1973 Arab-Israeli war, OPEC imposed an embargo against US in retaliation for the US decision to resupply the Israeli military and to gain leverage in the post war peace negotiations.

https://history.state.gov/milestones/1969-1976/oil-embargo#:~:text=During%20the%201973%20Arab%2DIsraeli,the%20post%2Dwar%20peace%20negotiations.

https://www.aljazeera.com/news/2022/10/19/biden-releasing-15-million-barrels-of-oil-from-strategic-reserve

https://www.barchart.com/story/news/12179723/g-7-joins-eu-on-60-per-barrel-price-cap-on-russian-oil?custom_url=news

• Support Levels: $60–$75.
• Resistance Levels: $90–$100.

3. Gold:
• As a safe-haven asset, gold may experience volatility but trend upwards with rising inflationary pressures, Fed rate cuts and geopolitical tensions.
• Increased fiscal spending under Trump could drive demand for gold (hedge against inflation) and industrial metals.

https://www.bloomberg.com/news/articles/2022-12-07/china-announces-jump-in-gold-reserves-after-more-than-3-years

https://asia.nikkei.com/Business/Markets/Commodities/China-thought-to-be-stockpiling-gold-to-cut-greenback-dependence

https://www.reuters.com/markets/commodities/chinas-reported-gold-reserves-rise-first-time-since-2019-2022-12-07/

https://www.scmp.com/economy/economic-indicators/article/3202672/china-stockpiling-gold-1-million-ounces-added-november-amid-beijings-asset-diversification-efforts

https://www.kitco.com/news/2022-12-07/China-buys-32-tonnes-of-gold-in-November-first-increase-in-reserves-since-2019.html

https://www.bullionstar.com/gold-university/chinese-central-bank-gold-buying

https://moneyweek.com/investments/commodities/gold/603131/how-much-gold-does-china-own

• Support Levels: $1,800–$2,000, $2,200 and $2,500.
• Resistance Levels: $2,800–$3,000.

4. U.S. Dollar Index (DXY):
• A strong dollar may face pressure from Fed rate adjustments and de-dollarization trends.
• A strong dollar could weigh on exports but attract foreign capital, supporting equities.
• Based on data analysis US Dollar is poised to weaken instead of strengthening hence there would be a flight of Wall Street domestic and foreign capital to Emerging Markets seeking Alpha.
• China has been reducing its USD foreign reserves for consecutive months in a strategic move to prepare for Reunification War with Taiwan, anticipating US will sanction China and confiscating China USD Foreign Reserves.

https://www.spglobal.com/marketintelligence/en/mi/research-analysis/china-may-move-to-limit-impact-of-us-financial-weapons.html

• USD has an inverse relationship with other currencies, a see-saw relationship, USD strengthen other currencies weaken, USD weaken, other currencies strengthen. Eg. EURUSD goes up is risk on, EURUSD goes down is flight to safety.
• Strength of USD having direct correlation with interest rate yield hike is positive with Federal Reserve possible hiking interest rate cycle in year 2025/2026 to combat inflationary pressure, but macro direction does not support strengthening of USD. 
• Support Levels: 100 (Psychology Level), 95 and 90.
• Resistance Levels: 105–108.

---

3.    FUNDAMENTAL ANALYSIS

Economic Policies

1. Trade and Tariffs Policies:
• Trump’s focus on revitalizing manufacturing and reducing trade deficits may boost domestic production in key battleground states (e.g., Michigan, Pennsylvania, Wisconsin).
• Policies encouraging "America First" trade could benefit domestic industries like agriculture and energy while impacting global supply chains.
2. Infrastructure Spending:
• Increased federal spending on infrastructure projects could stimulate demand for commodities like steel (Metal), concrete (Earth), and energy (Earth).
3. Geopolitical Risks:
• Conflicts in the Ukraine war, the Middle East, and potential escalations in the Taiwan Strait or Korean Peninsula could disrupt global supply chains and elevate defence spending.
• These 2 ongoing wars potentially posed a threat to global supply chain disruption where we witness high insurance premium to transport freight, supplies route cut off.
• President Biden Administration running huge budget deficits provide funding to Ukraine where Federal Reserve are conducting Quantitative Easing (QE) operation and decreasing interest rates on September and November 2024 Federal Reserve Meeting, from the peak of 5.33% to current 4.58% will likely contribute to soaring inflation moving forward.
• With President Trump back in power, his main foreign policy priority is to stop the war in Ukraine delivering his election promise to his electorate by using trade tariffs as the tools for negotiation for peace, terminate funding to Ukraine in a bid to reduce budget deficits, will require higher interest rates to reduce money supplies (Quantitative Tightening QT). 

Key Economic Indicators

1. Interest Rates:
• A Federal Reserve pivot towards rate hike by late 2025 could raise borrowing costs and dampen investment sentiment but mitigate worsening inflation.
• inflation is anticipated spiralling out of control during President Trump’s Term, reason being trade tariffs was passed to US consumer, the Federal Reserve may pivot to rate hike gradually or impulsively, raising borrowing costs and dampening growth.

2. Inflation:
• Rising energy prices due to geopolitical tensions may heighten inflationary pressures, pushing gold and other safe-haven assets higher.
3. De-dollarization:
• Efforts by BRICS countries to reduce reliance on the USD may lower its dominance in global trade but increase gold and commodity usage as alternative reserves.

---

4. METAPHYSICAL ANALYSIS: ELEMENTS IN 2025

Year of the Wood Snake

1. Wood: (Primarily Element)
• Growth industries like technology and renewable energy may thrive, representing innovation and expansion.
• Risk: Potential conflicts with Metal (regulation or financial constraints).
2. Metal:
• Symbolizing precision industries, manufacturing and finance, Metal industries may gain from Trump's pro-industry policies.
3. Earth:
• Stability-driven sectors (e.g., energy, agriculture) are likely to expand under favourable trade conditions and infrastructure projects. Strong growth expected in shale oil, natural gas, and infrastructure.
4. Water:
• Represents fluidity, global trade and logistics. Risks include disrupted trade flows from geopolitical conflicts, impacting shipping and Baltic Dry Index.
• Shipping (Baltic Dry Index) and transport may see gradual recovery.
5. Fire:
• Optimism and consumption trends may drive recovery in retail and tourism, supported by pro-growth policies.
• Stronger consumer sentiment could boost sectors like tourism and entertainment.

---

5. RISKS AND OPPORTUNITIES

Opportunities:

1. U.S. Economic Growth:
• Policies supporting domestic industries could lead to GDP growth of 2.5%–3% in 2025.
2. Commodities Boom:
• Infrastructure investments and geopolitical tensions may boost prices of crude oil, steel, and gold.

Risks:

1. De-dollarization:
• May weaken the USD’s global influence and affect U.S. borrowing costs.
2. Geopolitical Conflicts:
• Escalations in Ukraine, the Middle East, Korea Peninsula or Taiwan could destabilize global markets.
3. Inflation:
• Higher commodity prices could reignite inflationary pressures.

---

6. STRATEGIC OUTLOOK

1. Investments:
• Focus on energy (Earth), manufacturing (Metal), and technology (Wood).
2. Safe Havens:
• Gold and Treasuries remain essential for risk mitigation.
3. Global Trade:
• Monitor shipping and logistics sectors for opportunities amid BDI volatility.

6. OUTLOOK AND STRATEGIC TAKEAWAYS

Economic Growth

• U.S. GDP growth could accelerate to 2.5%–3% in 2025, led by fiscal stimulus and energy policies.
• States in the Rust Belt (Wisconsin, Michigan) and Sun Belt (Arizona, Georgia) may see disproportionate gains.

Investment Themes

• Favor sectors aligned with Earth and Metal (energy, manufacturing).
• Technology (Wood) remains promising but may face geopolitical challenges.

Risks

• Retaliatory tariffs from key trading partners could dampen export growth.
• A volatile geopolitical environment may drive unpredictability in commodities like oil and gold.

---

Latest CNBC Interview with President Trump

 

https://youtu.be/b607aDHUu2I?si=J2mt6XYR5i4MU43n

 

Conclusion / Summary: Interest Rate Cut Expectations in Year 2025

My observations for Year 2025 where many Traders and Investors are anticipating for more interest rate cut easing by the Federal Reserve to stimulate the slowdown in economy growth and fears of recession due to excessive interest rate hike.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/fed-likely-to-cut-rates-again-this-month-as-2025-view-grows-more-cloudy-86639995

There will be no recession in year 2025, despite downside pressure to persist occurring in Financial Markets, drawdowns are expected to be between 20% to 25% with recent high for S&P 500 index reaching 6100 approximate in December 2024 post US Presidential Election Rally won by President Trump. 

Whether The Federal Reserve will gradually or impulsively hike interest rate to 8% combatting inflationary pressure, de-dollarisation that seen dumping of US treasury swopping for increasing gold reserves holdings by the global Central Banks.

A shift to Petro Yuan already gradually taking place replacing Petrodollar may cause the USD to weaken, depreciate, losing world reserve currency crown, through losing Petrodollar benefit of consistent trade deficits and source of liquidity, inflow of foreign capital through Petrodollar recycling, US would be stuck with lots of extra dollars that would be no longer in demand, these dollars would return and flow back to US then translate to massive inflation.

Investors should adopt short term hedging by buying puts and selling calls option expiring between January to December 2025. S&P 500 is forecast to retest 4800 previous high as support and accumulate by end December 2025 where demand zone between 4500 (26% drawdown) to 4800 (21% drawdown) from 6100 peak in December 2024, provided data analytics still point to Bull market beyond year 2025. 

 

 

Trading Volatility – Long SVXY as of 6 December 2024

 

I wish my readers all the best in their investing journey.

 

 

Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.