Inflation is, perhaps, the biggest threat to long-term wealth.
The Monetary Authority of Singapore (MAS) expects core inflation to average 1.5% to 2.5% in 2026.
Even “low” inflation compounds over time, and a dollar today buys less tomorrow.
Using MAS’s Goods & Services Inflation Calculator, we can see that healthcare, food, and transport that cost S$50 in 2015 would cost approximately S$61, S$64, and S$70, respectively by 2025.
When your money is kept in cash, it will lose value to inflation, so you will no longer be able to afford the same things years later.
Hence, many investors combine high-growth US companies with sturdy Singapore dividend stocks to grow their wealth.
Two Different Weapons Against Inflation
Smart investors combat inflation with two key assets: US growth stocks and Singapore dividend stocks.
US Growth Stocks
Innovative companies such as Microsoft (NASDAQ: MSFT) and NVIDIA (NASDAQ: NVDA) have the potential to increase earnings over time.
An advantage of these US growth stocks is their global revenue exposure.
There is long-term growth potential as these companies enter new markets and expand their products and services, offering capital appreciation.
For example, NVIDIA is the leading supplier of graphics processing units (GPUs) that are essential for running AI models.
For the quarter ended 26 April 2026 (1QFY2027), NVIDIA’s revenue rose 85.2% year on year (YoY) to US$81.6 billion.
Net profit was even more impressive, reaching US$58.3 billion, up 211% from the previous year’s US$18.8 billion.
That figure included US$15.9 billion of non-cash gains on NVIDIA’s equity investments; excluding those, adjusted net profit was US$45.5 billion, still up 139%.
The objective of investing in US growth stocks is to own businesses that can increase in value as their earnings compound over the long term.
Singapore Dividend Stocks
Singapore dividend stocks serve a different purpose by providing regular cash income.
They add a degree of stability as mature businesses may experience less dramatic price movements compared with high-growth stocks.
Blue-chip companies such as DBS Group (SGX: D05) and Singapore Exchange (SGX: S68) are strong anchors in this area, as are real estate investment trusts (REITs) like CapitaLand Integrated Commercial Trust (SGX: C38U).
In its 2Q2026 report, DBS posted a record net profit of S$3.08 billion, up 9% YoY, and total income rose 6% to a new peak of S$6.09 billion despite a challenging environment.
The board declared an ordinary dividend of S$0.66 per share for the quarter, 10% higher YoY, plus a capital return dividend of S$0.15 which has been held at the same level since early 2025.
Together, they take the quarterly payout to S$0.81.
Why You Don’t Have to Choose Between Growth and Income
Many investors mistakenly believe they must pick either growth or income.
In reality, the two strategies are complementary within a portfolio.
Growth stocks compound capital, potentially increasing the future value of the portfolio as companies expand their earnings.
Dividend stocks, meanwhile, generate cash flow today.
Their payouts can be reinvested to acquire more shares without additional capital.
Growth and dividend stocks work as part of a long-term strategy that manages the impact of inflation while building wealth for greater future financial flexibility.
How a Blended Portfolio May Perform Across Different Market Conditions
During Economic Expansion
Growth stocks may benefit from rising corporate earnings and stronger consumer demand, supporting capital appreciation for investors.
Dividend stocks continue providing regular income through their payouts.
A blended portfolio can, therefore, benefit from the potential upside of growth stocks while retaining passive income.
During Market Corrections
Share prices can fall even when the underlying businesses remain fundamentally sound.
Dividend-paying stocks provide ongoing cash flow, helping investors remain focused on long-term objectives rather than reacting to short-term movements.
By reinvesting dividends, investors can buy shares at a lower price.
During Higher Inflation
Businesses with strong pricing power are better positioned to protect their revenues by passing costs on to customers during periods of higher inflation.
Dividend income can also help offset rising living costs.
Combining companies with earnings growth potential and sustainable dividend growth can help investors address the long-term impact of inflation.
The Importance of Dividend Growth
Rather than chasing a very high dividend yield, investors should look for a company that can consistently grow its earnings and cash flow while offering a growing dividend stream.
Rising payouts are better able to keep pace with inflation and help maintain your real purchasing power over time.
Building a Portfolio That Works Together
Rather than evaluating each holding in isolation, investors should look at how their investments can work together.
Growth stocks can be held for capital appreciation while dividend stocks generate recurring income.
Holding both US growth stocks and Singapore dividend stocks provides geographic and sector diversification, reducing dependence on a single factor.
The right allocation mix, however, depends on the investor’s circumstances, such as financial goals, investment time horizon, and risk tolerance.
Constructing a portfolio in which different stocks play complementary roles in long-term wealth creation is more important than finding that “perfect” stock.
A few common mistakes get in the way.
One is holding too much cash during prolonged periods of inflation.
Another is concentrating solely on high-growth stocks: dividend stocks may seem “boring”, but they provide stability and income that lower portfolio risk and allow compounding to work its magic.
Investors can also make the opposite mistake by focusing solely on dividend yield while ignoring a company’s earnings growth and ability to increase its dividend over time.
Most importantly, a portfolio that grows in dollars may still fail to preserve real wealth if its returns do not keep pace with rising living costs.
Get Smart: Growth Builds Wealth, Dividends Help You Keep It
Inflation is an unavoidable part of life.
Rather than treating them as competing strategies, the smartest investors know that combining innovative US growth companies with resilient Singapore dividend stocks can bring capital appreciation and steady income, helping investors outpace inflation.
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Disclosure: Wenting A. does not own any of the stocks mentioned.
