As of 29 January 2026, DBS Group Holdings Limited (SGX: D05), DBS, reached a 52-week high at S$60 per share.
While this should feel like a victory for shareholders, the peculiar thing is that higher prices often make investors more worried.
This fear is compounded by media headlines that harp on high prices and the ever-lurking possibility of a pullback in share price.
The age-old question confronting investors here is, should I continue holding my DBS shares, or is it time to sell?
Why DBS Is Trading at an All-Time High
Robust fundamentals have driven DBS shares to an all-time high.
Higher net interest margins (NIMs) over the recent years have led to higher net interest income (NII), directly boosting net profits.
Strong net profits have bolstered the bank’s balance sheet, with the latest coverage ratios significantly above regulatory requirements.
Capital buffers such as the common equity tier one (CET1) ratio, fully phased in, stand at 15.1%.
Simply put, this metric means DBS has the resources to weather downturns while supporting dividend returns.
Speaking of dividends, DBS boasts a strong dividend track record; over the past five years, total ordinary dividend per share rose from S$0.78 in 2020 to S$2.22 in 2024.
Over this period, the banking giant also rewarded shareholders with special dividends every now and then.
Investors have rewarded DBS’s solid operating performance, driving shares to record highs.
The Case for Selling DBS Now
Selling DBS shares now makes sense as the bank is trading at record valuations; DBS trades at an estimated last 12 months (LTM) price-to-book of 2.5 times, significantly higher than its five-year average of 1.5 times.
Earnings might soften as NIMs compress due to a lower interest rate environment, reducing NII.
This will cause the bank’s net profits to retreat from record highs.
You may also consider selling DBS shares if the rally over the recent years has led to DBS being an outsized position in your portfolio.
Selling the shares of this bank can help reduce concentration risk in your portfolio.
The Case for Holding DBS
On the other hand, holding DBS makes sense if you are a long-term income investor focused on compounding reliable dividend payments.
As highlighted earlier, DBS has a history of paying growing dividends; selling your shares means losing out on this passive income.
DBS also owns a strong banking franchise across Singapore and Asia.
Selling your shares means you will miss participating, as a part-owner, in the upside of the bank as it continues growing its wealth management business in Asia.
Finally, if you sell your shares now with a view to buying back in the future, you have to get two decisions right: selling at the right time and when to buy back.
What Investors Often Overlook
Historically, the bulk of an investor’s returns comes from their dividends, not from trading frequently.
In the past, even after the share price peaks, patient investors have ultimately done well.
A large part of this is due to the steady annual dividend payments.
The opportunity cost of trying to time the sale of your shares, which you might not get the decision correct and miss out on greater capital gains and a reliable income, is simply too high.
A Smarter Middle Ground: Trim, Don’t Exit
Instead of closing your position, you can always opt for the middle ground and take partial profits.
You can direct the realised profits from this partial sale and invest in sectors that are underweight in your portfolio, as a form of rebalancing, or to capitalise on income opportunities.
This way, you can continue to experience the potential upside in shares alongside steady annual dividends while capping your risk exposure.
Key Questions to Ask Before Selling
If you’re thinking about trimming your DBS share, just ask yourself two questions:
One, is the party over – are you selling because you genuinely think DBS is losing its spark?
If you don’t see them growing their profits or increasing those dividends anymore, then your reason for owning them is gone.
Second, what’s the backup plan, and do you have a better place to employ that cash?
Or are you only selling your position because of emotions?
Get Smart: Selling Winners Is Harder Than Buying Them
Shares reaching record highs do not automatically mean you should sell.
If a business like DBS has a long history of rewarding shareholders with dividends and steady compounding, even if the share price stumbles for a while, patient shareholders will ultimately be rewarded over time.
Watch the business’s fundamentals, not the stock price.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
