It’s often daunting to rotate your capital from a proven winner into a new opportunity.
After all, what happens if the former continues compounding while the latter falters?
That said, pulling this move could also lead to superior future returns for your portfolio.
In this article, we examine how such a hypothetical portfolio move would look: What if you reduce your exposure to OCBC Ltd (SGX: O39) and increase your exposure to Meta Platforms (NASDAQ: META)?
A slight caveat before we start: This is not about abandoning dividend investing (in fact, you can argue that Meta is a dividend growth stock); it is simply about allocating capital to where future returns might be more compelling.
Why OCBC Has Been a Great Investment
OCBC hardly needs an introduction, given its status as one of the three local Singapore banks.
A prime beneficiary of higher interest rates in the last five years, OCBC has compounded profits steadily from S$4.9 billion in 2021 to S$7.4 billion in 2025. The market rewarded the bank’s increase in profitability by sending its share price up roughly 170% during this time period.
Importantly for income-focused shareholders, OCBC’s total core dividend also rose from S$0.53 per share to S$0.83.
Although the bank’s dividend growth has trailed its share price growth, the distribution of dividends has helped compound total returns during periods of stagnant share price movement, such as in 2022-2024.
In addition, OCBC has been a consistent dividend payer, with annual dividends paid stretching back to at least 2008, and it’s no wonder that income investors have been drawn to it.
With a solid financial position underpinned by healthy capital ratios and a low non-performing loan ratio, and strong positioning in domestic loans and deposits, OCBC remains a solid bank.
So Why Sell Now?
The thing about investing is, even a great business can be a poor investment if purchased at too high a valuation. OCBC is not cheap, trading at a last-12-month (LTM) price-to-book ratio of 1.8, which is significantly higher than its historical average.
This lofty valuation could curtail future returns from the bank, especially if its earnings growth moderates from declining interest rates.
It is not easy for any business, particularly a bank that has benefited exceptionally from higher rates, to sustain exceptional performance indefinitely.
This then brings us to the concept of opportunity cost, where staying fully invested in OCBC means you cannot invest those dollars elsewhere in better opportunities.
Enter the US Tech Giant
Having established that, let us now consider the case of Meta, the owner of popular social media platforms such as Instagram, Facebook, and WhatsApp.
Around 43% of the world’s population uses a Meta app daily. This strong network effect allows Meta to be one of the global giants in digital advertising today, with the company posting regular double-digit growth in both revenue and net income since its public listing in 2012.
Meta’s strong growth momentum, exceeding that of mature banks, looks set to continue with the increasing implementation of AI already paying dividends (pun intended). In its latest quarter ending 31 March 2026 (1Q2026), the social media giant reported double-digit growth in both the volume and pricing of its advertisements.
Meta is not your speculative technology stock that has poor financials; the company consistently produces massive free cash flow (at least before the current heavy investment phase for AI) while possessing a strong balance sheet marked with plenty of cash and manageable debt levels.
Comparing the Two Investments: Income vs Growth
The trade-off between OCBC and Meta is simple: income today vs growth tomorrow.
OCBC currently offers a trailing dividend yield of roughly 4%, and the growth of its business is likely to be in line with Singapore’s and the region’s economy (low-to mid-single digits). Meanwhile, Meta offers potentially higher returns in the future with double-digit growth in its business.
From a risk angle, when you’re investing in banks, look at credit cycles and interest rate changes.
For technology companies, increased competition – especially with the advent of AI – and obsolescence risks are more critical.
What This Swap Says About Portfolio Management
Just because OCBC has delivered solid returns for you does not mean you should hold it blindly.
Remember, a company does not know you own its shares, and as discussed earlier, a great company does not equal a great investment if valuations are stretched.
Investing is all about maximising your future risk-adjusted returns, which implies you should continuously assess your portfolio to see if there are better opportunities to employ your capital.
That said, if you do decide to swap some of your OCBC shares for Meta shares, it does not mean you should fully concentrate on the technology sector; diversification still matters, and the prudent portfolio decision is to maintain a wide exposure to different industries.
What Could Go Wrong?
OCBC could continue rallying on the back of stronger-than-expected earnings should interest rates pick up, while Meta shares might see further downside pressure given its current investment cycle.
However, as you might know by now, perfect timing is hard. What we can control as investors is to focus on long-term outcomes rather than short-term movements in the market.
Other than the dangers of anchoring your positions based on past performance and mistaking a great company for a great investment, the key takeaway is that by combining both growth and income opportunities, you can ensure your portfolio is well-positioned for the future.
Get Smart: Follow the Future, Not the Past
In summary, reducing your exposure to OCBC for Meta does not mean it is no longer a great bank. Rather, such a move might be prudent considering the latter’s attractive long-term growth potential.
As always, to be successful in investing means you should not just stay married to a company just because it has done well in the past.
When opportunities emerge that might lead to better future returns, it’s okay to reallocate your capital.
Many Singapore stocks fall behind inflation, which means your money quietly loses strength over time. Dividend stocks have a very different track record. Some continued delivering 6% to 13% every year across the toughest market conditions.
In this FREE report, discover 5 crisis-tested dividend stocks that kept rewarding investors while the market struggled. Download your dividend investing guide now.
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Disclosure: Wilson H. does not own shares in any of the companies mentioned.
