Of late, something very unusual has been happening in the financial markets.
The boring, high-yielding stocks on SGX have been outperforming US technology stocks.
For instance, the mighty Apple Computer (NASDAQ: AAPL), which is the largest component of the Vanguard Total Stock Index ETF (VT), has been overshadowed over the past year by our humble contract manufacturer Venture Corporation (SGX: V03).
But that’s not all. Consider Nvidia (NASDAQ: NVDA), the largest component of the S&P 500.
For the past year, it has lost to UMS (SGX:558), our local company that manufactures high-precision components and integrated systems for the semiconductor equipment industry.
Even according to my own programme, the Standard & Poor ETF underperformed our STI index from 1 February 2025 to 1 February 2026.
All these returns do not even account for forex movements, during which the USD has weakened against the SGD by about 5.5% to 6% over the past year.
So why have US markets done so badly while Singapore markets have done so well?
The likely reason is the widespread fear over the US Fed’s independence, the US dollar’s status as a reserve currency, and the effects of the Trump tariffs. The result is that funds can flee the US bond markets and find a new home. A country like Singapore, with a strong, fiscally responsible, and stable government, also has a market with a PE ratio of just 11-12, less than half that of the US markets.
Therefore, at the moment, the boring, high-yield strategies from the Dividend Uncles are thrashing the high-octane, narrative-driven strategies of the Tech bros. The question is what is likely to happen next.
Here are my thoughts.
(1) Too much turns on the AI narrative in the US markets
When you invest like a tech bro, you rely on a combination of market timing and narrative rather than raw financial fundamentals. And companies in the US have been relying solely on a single narrative: that AI will transform industries and lead to massive productivity gains. Companies like Nvidia supply the “picks and shovels” for the AI gold rush and are therefore positioned to benefit from this industrial shift.
In 2026, this narrative will come up against reality, as it becomes apparent whether companies can achieve these high productivity gains with AI implementation. Even if the modest 10% productivity gains projected by academics, valuations probably do not justify the x45 PE ratio of Nvidia or the x128 PE ratio of Palantir.
So basically, if people believe the story, the markets can recover, but if the story changes, the markets can crash further.
For tech bros, everything comes down to your trading agility and market timing.
(2) Modest productivity gains from AI can benefit old economy companies and traditional businesses.
Suppose you are a believer in the AI narrative; there may be a better way to invest in this narrative. Productivity gains from AI will not just affect technology companies; the solid, old-school, mature companies can also benefit from massive improvements in efficiency.
There are blue-chip companies in Singapore, such as DBS and local banks, that are getting into AI aggressively. DBS, in particular, has its own native DBS-GPT and is actively reskilling its staff. For a company that yields 4-5%, this means investors can build in a bit of growth into this dividend stalwart.
Data centre REITs like Keppel DC REIT (AJBU) offer attractive dividends and are also riding the AI wave.
(3) Dividends Uncles are largely indifferent to these changes in the economy
And at the end of the day, the Dividends Uncles do not really care what happens to their portfolios so long as they can live on the rents they collect every month.
The lifestyle and psychological makeup of a Dividends Uncle is often diametrically opposed to the investment philosophy of the Tech Bros.
Tech Bros are visionary; they focus on market timing and are very agile in the markets. Dividend Uncles build their portfolio steadily, rely on passive income, and, most importantly, endure years of underperformance to get their big payoff today. And even so, they may just rebalance their portfolios a little before focusing on other areas of their lives.
In summary, will the Tech Bros make a comeback in 2026?
Possibly, if the narrative makes a comeback.
But Dividends Uncles have the wind at their back, so they will not do so badly either.
If you’d rather not bet everything on narratives and timing, join Dividend Uncle Chris Ng tonight and learn how he builds a portfolio that pays him consistently. 👉 Join our free webinar tonight and see how he lives off his dividends.
