Around eight weeks.
That’s all it took to send the Singapore market into a 10% decline.
But if you plan to invest well, give yourself eight years or longer.
We’ll go one better.
If you measure yourself over eight weeks, you are setting yourself up for one of two things: disappointment or, worse, delusion.
When the stock market runs ahead of itself
Coming into the earnings season, Singapore banks were already priced at high valuations, a point I raised during my CNA segment last month.
That meant they had a lot to live up to.
And when the banks don’t deliver what the market expects, shares get sold off — starting with United Overseas Bank (SGX: U11), or UOB, last Wednesday (4 November 2026).
Here’s the twist.
UOB’s third-quarter net profit almost tripled year on year to S$1.25 billion, boosted by a favourable comparison with the same quarter a year ago.
Yet the result still fell short of the roughly S$1.37 billion that analysts had expected.
In response, shares have fallen by nearly 9% to under S$37 as of last Friday.
Make no mistake.
Profits almost tripled, and the shares still fell.
That’s what happens when the stock market runs ahead of the business.
Thank you, Captain Obvious
I can hear the critics up in arms.
If you knew bank stocks were going to fall, why didn’t you sell?
This is the false idea that a “good investor” is able to sniff out a price fall before it happens.
It looks obvious.
But only in hindsight.
In reality, bank shares have traded above their historical price-to-book (P/B) ratios — the price you pay for every dollar of a bank’s net assets — since the second half of 2024.
Take UOB.
On 26 August 2024, its shares were at just under S$31, or 1.2 times book value — already above its historical average.
If you sold back then, planning to buy the shares back later at a lower price, you’d have been mistaken.
Even after last week’s slide, UOB shares are still nearly 20% higher.
And that’s before counting the dividends you’d have given up.
Believing we could have called the fall is the delusion I mentioned at the start.
As author Thomas Phelps once said:
“Most deception is bad but self-deception is worse because it is done to such a nice guy!”
Get Smart: Don’t grade yourself on hindsight
Here’s the thing about eight weeks.
Measure yourself during a slide, and you’ll be disappointed.
Measure yourself after it, and you’ll convince yourself you saw it coming.
Neither tells you whether you’re a good investor.
Eight weeks tells you the market’s mood.
Eight years tells you the business.
So, as the banks report their results, skip the question “Should I have sold?”
Ask instead: “Is the business still growing its profits and dividends?”
That’s what will be focused on at the Smart Dividend Portfolio this week.
A market decline is not an obituary.
Instead, it is a chance to pick up shares that have been unfairly sold off.
Imagine owning businesses that continued paying shareholders even when markets were falling. That’s the appeal of dividend investing done well. Our FREE report reveals 6 SGX companies that paid dividends every single year for two decades, through the Global Financial Crisis, COVID-19, and 2022’s rate shock. Start building the kind of income stream that could fund a more comfortable retirement. Get your free report here.
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Disclosure: Chin Hui Leong owns shares of UOB.
