According to Bloomberg, retail investors in Singapore have been shunning local stocks in favour of the U.S. market. Their take on the investors’ shift in sentiment is that the local authorities should make bold changes to reinvigorate the domestic bourse.
It’s true that the Singapore shares lacks excitement. The moribund nature of the Singapore market has been blamed on a dearth of local snazzy counters that can give the likes of the NVIDIAs, the Apples and the Teslas of this world a run for their money. Even the Hong Kong and Malaysian markets can be more thrilling than Singapore.
But for some investors, the attraction of the Singapore market is precisely because it doesn’t have high-flying tech stocks. What is so wrong with income-paying banks, REITs and conglomerates?
The financial channel interviewed a few brokers in Singapore who revealed that local investors want to make money, quickly. Who doesn’t? These brokers also believe that investors tend to choose more liquid or volatile assets that don’t naturally exist on the Singapore Exchange.
That got me thinking. I wonder if it is investors who want volatile counters or have brokers been telling investors that they need them in order to make fast money? Let’s not forget that brokers profit from investors jumping in and out of shares. The more they trade, the more money that those brokers could make.
It is true that the Singapore market is perceived as dull and boring. But let’s not confuse activity with progress. We should never mistake action for achievement. Often, doing nothing is best. But that requires patience.
Importantly, Singapore shares can enjoy their day in the Sun, too. In 2024, the benchmark index gained 17%, thanks to an outperformance by banks. Next time, it could be REITs that lead the gains. So, it is not always necessary to chase the latest fad to make money.
Momentum trading or heading to where the action is might appeal to thrill seekers. But momentum trading is nothing more than market timing. By comparison, buy-to-hold investing might seem like old hat. But it is time in the market that can be more productive, if not more exciting, in the long run.
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Disclosure: David Kuo does not own any of the shares mentioned.
