When markets are pushing higher, holding cash can feel like falling behind.
I see it differently.
For me, investing is about finding great businesses and paying the right price. I would rather miss the final stretch of a market rally than buy into a stock at a valuation I cannot justify.
That’s why I’m comfortable keeping a healthy cash position while staying invested in a handful of quality companies.
Cash isn’t a sign that I’ve run out of ideas – it’s simply part of my investment strategy.
Why I’m Not Fully Invested
Cash may not generate spectacular returns, but it gives me something equally valuable, which is flexibility.
In case of a market correction, I am not forced to sell holdings at depressed prices.
And here comes the silver lining – markets rarely move in a linear fashion.
Inflation concerns, interest rate uncertainty, geopolitical tensions or economic slowdowns often drag strong companies down with the weak ones.
What To Look For Before Deploying More Capital
Investors should keep a watchlist of companies to own.
Volatility sometimes creates opportunities, which is useful if you know what you want to buy instead of making rushed decisions in the heat of the moment.
Always look for a margin of safety. Paying a sensible price for a quality business reduces the risk of permanent capital loss and improves the odds of attractive long-term returns.
Every investment is ultimately a trade-off between risk and reward. When valuations become stretched, the downside can outweigh the potential upside.
Keeping some money on the sidelines provides flexibility and optionality.
Patience remains part of your investment strategy, and while waiting, I have my eyes on two quality businesses.
Microsoft (NASDAQ: MSFT) – A Quality Compounder to Own Through Any Market
Microsoft is one of those stocks investors do not want to sell in a rush.
What keeps them invested is the strength of its ecosystem.
With a product range spanning Microsoft 365, Azure, LinkedIn and GitHub, switching costs are high enough to create a steady revenue flow for the company.
Its growing leadership in artificial intelligence further strengthens the investment case.
In the fiscal year ending June 2025, the company increased revenue by 15% to US$281.7 billion, while net income increased 16% to US$101.8 billion.
At the same time, the company’s operating cash flows amounted to US$136.2 billion, providing room for investments and shareholder rewards.
Revenue from Microsoft Cloud grew 23% to US$168.9 billion, with Azure and other cloud services increasing its revenue by 34%.
Still, there is one major factor to consider, which is valuation risks. Investors may have high expectations after a strong run, and any deceleration may negatively impact stock prices.
Sheng Siong Group (SGX: OV8) – The Defensive Income Generator
While keeping some cash on the sidelines, you still want part of your portfolio working for you. That’s where Sheng Siong fits in.
Being a household name in Singapore, Sheng Siong sells everyday essentials that consumers buy regardless of the economic climate.
Sheng Siong has growth prospects, and this makes it appealing. Its long-term vision is to build a network of 120 stores across Singapore. Currently, there are 87 outlets in operation, and there is plenty of room for growth.
For 1Q2026, Sheng Siong’s revenue totalled S$452.8 million, up 12.4% year on year, while net profit increased 12.6% to S$43.4 million.
The group also ended the quarter with S$461.1 million in cash and zero debt, giving it enough room to pursue growth plans while paying out dividends to its shareholders.
Intense competition remains an issue, and increasing labour and rental costs could put pressure on profitability margins.
Even so, Sheng Siong offers exactly what many investors are looking for: dependable cash generation, regular dividends and a clear path for long-term growth.
Why These Two Stocks Made the Cut
There is no need to have a portfolio that consists of a hundred stocks.
For me, I would rather have several holdings that I really know inside out compared to owning a stock in which I only know a fraction.
Microsoft and Sheng Siong offer different drivers of return but share one important characteristic – they are quality businesses that investors are familiar with and therefore willing to hang onto even during times of market uncertainty.
Get Smart: Patience Is a Position Too
Holding cash is not about being bearish. It’s about recognising that every dollar should be invested only when the risk-reward equation makes sense.
That’s why investors should be comfortable holding cash while remaining invested in businesses they believe in.
Microsoft still stands as an exciting story from a growth perspective, while Sheng Siong has strong earnings, pays out dividends and has room for expansion.
In investing, it is not necessary for one to always be fully committed. This can actually mean maintaining discipline and owning good businesses and waiting for times when things will go in your favour.
Sometimes, the best investment decision is simply having the patience to do nothing.
The world’s gotten unpredictable, but some Singapore companies have quietly kept thriving. You’ve probably seen them in your daily life. And yes, they’ve kept paying dividends through it all. Meet 5 resilient stocks built to navigate global storms. Get the free report here and see how they’ve done it.
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: Darien C. does not own shares of any companies mentioned.
