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Fear is rife on the stock market. Investors have taken it on the chin but this is not the time to give up.
Singapore Straits Times Index (SGX: ^ STI) peaked in early May of this year and exceeded the 10% mark dreaded in less than two months to enter correction territory. Today, more than six months after this year's summit, the STI is still down about 16%.
As the slowdown continues, some investors are beginning to feel the pressure. In some ways, fear has given way to exhaustion. After all, it has been difficult for an investor to make any gain. Consider these statistics:
- Less than a quarter of the 30 companies in the Straits Times Index report positive returns for 2018.
- The average return since the beginning of the year of a first-rate title is negative 9.7%.
Meanwhile, the good news is rare. Negative developments, such as Asian Pay TV Trust's (SGX: S7OU) massive reduction of dividends, dominate the titles of the media. Faced with all the growing challenges, it is not surprising that some investors feel fearful – and tired too.
From the above, you can see why it is tempting to choose the easy way out and give up. But you really should not.
Courage, investors from Singapore
Investors were feeling tired in April 2008 as well.
Before that, the American base S & P 500 The index peaked in October 2007 and fell into correctional territory in less than two months. By mid-April 2008, no stock market rally was in sight and the index had stagnated in the doldrums for more than six months. As the hearts of investors began to waver, Motley Fool co-founders Tom and David Gardner urged our members to stay invested. In April 2008, they wrote in a memo:
"We are all affected by fear: fear of death, fear of failure, fear of what a bear market can inflict on our retirement portfolios. But courage advances, acts, remains productive despite the fear we feel. "
You see, our co-founders understood very early that investing was not limited to numbers and a multitude of ratios. As with what is happening today, fear reigned over the stock market in 2008. But, as investors, we have to find the courage, despite the fear we feel, d & # 39; invest.
Looking back, we can now see wisdom in their timely words – that is, if we had stayed invested.
Since early April 2008, shares of companies such as the local bank DBS Group (SGX: D05), air caterer SATS (SGX: S58) and vehicle inspection VICOM (SGX: V01) generated total returns greater than 120%, 265% and more than 500%, respectively. Investors who left the market at the time would have missed these satisfactory earnings.
So, like Tom and David Gardner before me, I tell you: Courage, Singapore Investor.
Our promise to you
Even in uncertain markets, there is always a way to invest profitably. It's about knowing where to find these opportunities.
We are not afraid of falling markets.
That's why we can systematically offer our members a selection of stocks every month … Even if the stock market suffers from crises of fear and exhaustion.
Since we started, we have 24 recommendations on active stocks. We believe that they will be able to go through difficult times and make you potentially rich in the long run.
If you want to know what stocks to buy in these uncertain times, just click here to get started.
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A version of this article appeared for the first time in the November 23, 2018 issue of Take Stock Singapore.
The information provided is for informational purposes only and is not intended for personal investment or financial advice. Motley Fool Singapore recommended the shares of VICOM, DBS Group and SATS. Motley Fool Singapore writer Chin Hui Leong owns VICOM, the DBS group and SATS.
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