To The Moon

You’ve raised three excellent questions — each with important implications for portfolio strategy, especially from a Singapore-based investor’s perspective. I’ll address each in turn in a structured way, then draw out some key take-aways you might apply to your holdings and planning.

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1. Can the DBS Group Research projection that the Singapore dollar (SGD) reaches parity with the US dollar (USD) by 2040 really happen?

The case for “yes, it is possible”

DBS points to Singapore’s disciplined economic policy, consistent current-account surplus, strong capital inflows, productivity gains and so on as drivers of SGD appreciation relative to USD. 

Some commentary sees long-term upward potential in SGD versus USD: for example, one article notes the gap has narrowed from ~S$1.45 per US$ in 2016 to ~S$1.30 in mid-2025. 

In theory, if Singapore continues to outperform in growth, keeps inflation/institutional stability low, remains a financial/innovation hub, and the USD weakens, then SGD appreciation is credible.

The case for “but significant hurdles remain”

FX parity means ~30+% appreciation of SGD versus USD from current levels (~S$1.29 per US$ today). That is a very large change for a currency over about 15 years.

Currency values depend heavily on macro fundamentals: interest-rate differentials, inflation, relative growth, geopolitical/regime risk, capital flows, and global liquidity. If any of those turn against SGD (or favour USD), the path becomes much more challenging.

Most independent short-to-medium-term forecasts do not assume parity. For example, one forecasting service sees SGD/USD improving modestly to ~0.84 by 2030 (i.e., ~S$1.19 per US$) rather than full parity. 

Achieving parity implicitly assumes that the USD either stagnates or falls significantly — and many scenarios for the global economy still favour USD strength (e.g., reserve currency status, safe-haven flows, US yields).

My view

I believe SGD parity with USD by 2040 is plausible in a favourable scenario, but not highly probable in a base-case scenario. In other words: treat the projection as an optimistic tail scenario rather than a default one. As a strategic planner you would perhaps assign it a modest probability (say 10-20 %), rather than assume it will happen with certainty.

From a practical standpoint: it’s useful to adopt a mindset that SGD may strengthen materially over time, but also keep in mind currency risk remains real. For your portfolio it means: you can plan for stronger SGD (if you have USD-denominated exposure), but you should not rely on it.

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2. If the USD keeps sliding, would you increase your gold allocation?

Why increasing gold could make sense

Gold is often considered a hedge against currency debasement, inflation and uncertain macro/financial regimes. 

Recent institutional commentary backs increased gold allocation as part of a diversified portfolio in a world where the USD might weaken or its reserve-currency dominance be challenged. 

Because if the USD weakens, many non-USD assets (including gold) may perform relatively better when expressed in USD terms — and for a Singapore-based investor, a stronger SGD could increase your local-currency return on foreign-asset holdings.

Why caution is also warranted

Gold is not a guarantee of gains; it can be volatile and doesn’t generate cash flows. Historically, its performance is tied to specific conditions (inflation, real interest rates, risk sentiment) rather than purely currency moves. 

If USD weakness is accompanied by other risks (e.g., global recession, deflation), gold may not always benefit as much as expected.

Increasing gold allocation must be balanced with your goals, risk tolerance, liquidity needs, and the rest of your portfolio.

My recommendation

Yes — if you believe a sustained USD weakness (or SGD strength) is more likely than not, then increasing your allocation to gold (or gold-adjacent assets) is a reasonable hedge. But I would not recommend a large overweight in gold unless it fits your broader asset allocation. Instead, it might serve as a strategic hedge rather than the core of your portfolio.

For example: moving from, say, 2-5 % gold to maybe 5-10 % might make sense (depending on your risk tolerance) if you expect currency/macro shocks. If you already have gold, you could instead focus on rebalancing or ensuring you’re not under-exposed.

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3. How would you position your portfolio for a long-term USD downtrend?

Given your role (Senior Curriculum Design Associate, stable income, long-term horizon, Singapore-based), here are strategic ideas you might consider. Note: these are broad themes, not specific stock recommendations.

a) Diversify currency exposure

Increase holdings in non-USD assets (e.g., investments denominated in SGD, EUR, AUD, or rising-market currencies) so you benefit from potential USD weakness.

For Singapore-based investors: consider more domestic assets (SGD-denominated), or global assets hedged/unhedged — compare the FX exposure.

Monitor currency risk: if you hold USD-assets, evaluate hedging strategies (e.g., currency-hedged ETFs) if you believe USD weakness is ahead.

b) Increase exposure to “real assets” / inflation-resistant assets

Real assets such as gold, real estate (REITs), infrastructure, commodities can benefit when a currency weakens and/or inflation accelerates.

For example, gold as above; infrastructure/private-market assets may hold pricing power in inflationary environments.

c) Adjust fixed income allocation

If USD weakens and global interest-rate differentials shift, you may prefer bonds outside the US, or shorter-duration bonds (less exposed to rising yields) or inflation-linked bonds.

Consider global bond exposure rather than US-centric only, or use local-currency bonds in jurisdictions you favour.

d) Select equities with currency/earning flexibility

Prioritise companies whose earnings are global (earn overseas revenue) — such companies may benefit when USD weakens because their foreign earnings translate into stronger USD value.

In Singapore context: companies with strong export exposure, global branding, or denominated in non-USD currencies.

Also consider sectors less reliant on USD strength — e.g., domestic-grown innovation, local services, regional growth rather than US-centric tech.

e) Maintain liquidity and optionality

Keep some dry powder (cash or liquid assets) to take advantage of currency shifts, hedging opportunities or to rebalance when USD weakness accelerates.

If USD weakness is part of wider macro stress (e.g., global inflation, trade disruptions), ensure portfolio resilience via diversification across assets, not just currency plays.

f) Periodic review & rebalancing

Because currency regimes can remain stable longer than expected (and reversals happen), revisit assumptions every year or so.

If your USD-downtrend thesis weakens (e.g., USD strengthens due to safe-haven demand or US rate resurgence), then pivot accordingly — perhaps reducing unhedged foreign exposure or revisiting hedges.

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Key Take-aways for you

Do not assume SGD parity with USD as a given — but treat it as one possible scenario, and plan accordingly (e.g., strong SGD would reduce your USD-asset return in SGD)

If USD weakness is credible, then gold is a useful hedge, but not the only hedge.

Positioning for a USD downtrend means broadening your focus: currency diversification, real assets, global earnings exposure, and prudent hedging.

Because you live in Singapore and presumably your spending, savings or goals (housing, retirement) are SGD-based, you have an advantage: you can emphasise SGD assets as a hedge against USD falls — but you also must manage the risk of SGD strengthening and thereby reducing the SGD value of your USD exposures.