Market Crash For Bonds, Equities and Gold- Is a Recession Coming?

Hi Folks, welcome back to Investment Income For Life! Wow, so many YouTube videos on plunging asset prices. SREITs continue to spiral downwards with an all year low. The scary thing on everyone’s mind is how low will SREIT crash to. Bonds is not spared and even US Treasury are getting whacked with so many institutional selling off of US long term bonds despite soaring record yield of 5.3%- so even risk free US 10 year bond is no longer perceived as risk free….haha. Even Gold price, the safe haven asset, has started plunging. Those who bought at the high of US$5,264 per oz earlier in February 2026 would have been devastated by the crash of more than 20% to current level of around US$4,100 per oz within half a year. Against this backdrop of plunging investment assets prices, there are more and more news published of folks losing their jobs. So is a recession coming? Also is it time to sell off some equities to prevent further dip in the investment portfolio? 

1. Sell off Equities Investment To Wait For Sell-off Momentum To Be Over?

Well, folks who have read my blog post will know that I am not a fan of market timing and speculation. Also, if the market started to rally after one has sell-off, then it would be a very painful and regretful investment decision (not to mention foolish). So far, only my SREITs is free-falling. My HKEX Tech stocks have fallen but they still remained in an acceptable range especially Alibaba which is still above my average cost. Of course, if I have a crystal ball, I would have sold off half of my SREITs in the beginning of the year. Also, I would have sold off Alibaba when it touched HKD180 previously on hindsight…haha…but then we cannot reverse time right?

I am staying away from most SREITs for now despite the very attractive new prices for REITS such as Capitaland Ascendas REIT, Mapletree family REITs etc. Nevertheless, I took a nibble (S$2k to S$3K) into additional United Hampshire US REIT (“UHREIT”) which is giving close to a 9.9% yield. I may further accumulate it if its price plunged further.  On UHREIT, the complexity lies in assigning a depreciation rate to the USD vs SGX forex loss due to US printing money and mammoth budget deficit. From table 1, it is best to prepare for a negative depreciation in USD investment of -2.6% per year. So a yield of 9.9% from UHREIT true-up will mean around 7.5% of distribution yield compensation for grocery related strip malls. Also, pray hard that Donald Trump will not come up with new withholding taxes on REITs with US holdings.

Table A- USD vs SGD Decline %

2. US Government and Corporate Bonds.

While there are many doom day videos on US Treasury, I personally think that it is overly done. The record high yield of over 6% to 6.5% yield for some of the commercial bonds at AA- ratings is becoming very attractive. Compare to diving in to grab SREITs, I actually prefer to put more of my money into a diversified portfolio of bonds especially those that hold bonds for only mid term tenure of 3-5 years. 

I think that once the AI boom worldwide gradually slow down (we are already seeing AI CEOs coming out to give excuses using AI safety and the necessity of slowing down the rolling out of new frontier models), the US Fed will need to start cutting rates again in order to drive much need growth for the stagnant US Economy. Once rate are cut, bond prices will have capital appreciation. So earn the 6% plus in annual yield and enjoy future potential capital gain. I don’t think US Treasury is going down the path of being worthless immediately.  

 

3. Gold As Alternative Asset During Economic Crisis

I can only say that I am glad that I have sold off my few thousand dollars foray into Gold before the peak of February 2026 for a small profit. Who would have thought that the gold craze party will end so abruptly in just another half a year and also while amidst the ongoing Russian Ukraine war as well as US-Iran war? I am staying away from Gold. But if it dropped to the US$ 3,000 level, I would think then that it is probably a good idea to get some to diversify my investment portfolios as I like its non sticky correlation to other class of investable assets.

Parting Thoughts

I think that there is currently a lot of market volatility and also potential further plunge in equity investments especially high interest rate that surely will crash the fragile marco economic environment sustained only by AI. As such, my preference now is to keep most of my dividends to build up cash reserves and also invest into bond funds. Should equities crash further, I will sell off most of my bonds funds and switched them into buying blue-chip SREITs at high yield of 6.5%-7%+.