DBS is Hitting All-Time Highs (Even With Rate Cuts Looming)

DBS Group Holdings, an important core position in many of our portfolios, has broken through to all-time-highs above $53 last week. The stock rallied defiantly in the face of headwinds possibly coming this week. The US Federal Reserve is largely expected to announce interest rate cuts on 17 September 2025. Some people are asking a very logical question: "Aren't rate cuts bad for banks?"

 

The Trap: Market Timing and Macro Watching

Market movements and hot stock prices are among the many situations that tempt investors into making mistakes. 

  1. Buying/Selling because of the High: "Prices have soared this year, we are entering a bull market!" "Prices have soared too much, it is time to take profit!" 
  2. Buying/Selling because of the News: "Rate cuts are bad for banks, I should sell now to avoid the inevitable drop." "Rate cuts are good for REITs, I should buy now because highs can go higher."

Both are a losing game. They are attempts at rationalizing and predicting something quite unpredictable (market prices).

This kind of approach can be rather stressful when the market does not react the way you expect it to. Trying to trade in and out of a quality stock might just turn into a self-inflicted wound on your portfolio. Year after year, "the market climbs a wall of worry".


Staying Anchored in the Business

The right reaction is to ignore the noise and refocus on the one thing we can truly assess: the quality of the underlying business.

Lets take a step back from the daily price movements and macroeconomic forecasts. When I take a look at DBS now, what do I see? I see a fortress of a business that treats shareholders really well.

  • A Diversified Powerhouse: I see a company whose booming wealth management arm actually benefits from lower interest rates, providing a natural hedge against shrinking lending margins.
  • A Dividend Juggernaut: I see the capital return plans that beat out both UOB and OCBC. I see the current generous dividend yield of almost 6% at $3 dividend per share. I see the potential growth of dividend payouts moving into 2026 and beyond. 
  • A Regional Leader: I see a household brand, a bank with such a dominant market position and a stable, low-cost funding base that it provides immense resilience against lower NIM.

The impending rate cut doesn't change any of these fundamental facts. The business remains a high-quality, cash-generating machine. 


An Unchanging Strategy

This situation is not a signal to act. REITs have already run up this year, and whether they will run further in the short-term is anyone's guess. Banks are near ATHs but there is no guarantee their price will crash any time soon. The looming rate cuts and many "fear, uncertainty, doubt" events will keep coming to test our discipline in the stock market. 

A sustainable, scalable investing strategy cannot revolve around reacting to these events. The dividend investing strategy is built on a very simple, repeatable process: owning great businesses for the long term and collecting the cash flow they generate.


Whether the market is at an all-time high or an all-time low, this principle remains the anchor. It's how we build wealth and, more importantly, how we invest with peace of mind.

Of course if this rate cut triggers a price correction for the S-Banks, I will gladly add more to my portfolio.


Disclaimer: This blog post is for entertainment purposes only and does not constitute financial advice. Please do your own due diligence.

 

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