Singapore’s Straits Times Index (SGX: ^STI) climbed to new highs last Monday (6 July 2026), and proceeded to set new record highs for five consecutive days.
As of Friday, the index has broken past the 5,400 mark, and is a whisker away from 5,500.
Along with the rise, shares of the banking trio of DBS Group (SGX: D05), Oversea-Chinese Banking Corporation (SGX: O39), and United Overseas Bank (SGX: U11) have also reached their own highs as the index marches upward.
Apparently, the rally is not done yet.
Analysts are convinced that there is still room to run for Singapore’s banks, with some even revising their target prices upward for each bank.
We’ll find out by the end of the year whether they are right.
After all, stock prices are easy to check.
But what’s easy can also be misleading.
In fact, if you are not careful, a rising stock price may be the most convincing liar in the room.
The high that whispers “you are right”
When a stock you own keeps climbing, it’s hard not to feel vindicated.
The rising price feels like the market agreeing with you.
It’s the little voice in your head saying: “You are right”.
Let’s not kid ourselves – it’s a lovely feeling.
But it is also where the trouble starts.
In their book Winning Decisions, Professor J Edward Russo and Dr Paul JH Schoemaker draw a sharp contrast between process and outcome (see enclosed table).
| Good outcome | Bad outcome | |
| Good process | Deserved Success | Bad Break |
| Bad process | Dumb Luck | Poetic Justice |
In an ideal world, a good investment process leads to a good outcome.
And then, there’s the part we often forget: a bad process can still hand you a good outcome.
They call that dumb luck.
At a market high, dumb luck wears a convincing disguise.
When almost everything is going up, the rising tide lifts all boats, the seaworthy and the leaky alike.
But alas, from the stock price alone, you simply cannot tell the two apart.
Here’s the danger: treat a rising price as proof you were right, and you stop doing the work.
You skip the hard questions.
You add to your stock position, certain you’ve cracked the code to making money.
The bill arrives later, usually when the tide goes out.
A rising stock price which is not backed by a growing business will eventually head south.
Playing with the casino’s money
Now for a subtler trap.
Consider this: win big at a casino and something strange happens.
The additional chips in your hands stop feeling like your money.
These profits feel like free money, extra cash to use at your discretion.
So you bet this “free money” in ways you never would with the cash in your wallet.
Behavioural economist Richard Thaler gave this a name: the house-money effect.
Once you’re sitting on winnings, you become prone to taking risks you would otherwise refuse, because losing “found money” doesn’t sting the way losing your own money does.
The phenomenon is important at market highs.
After a long run-up, your portfolio is fat with paper gains.
Here’s the danger: somewhere in the back of your mind, these profits stop feeling like your hard-earned cash and start feeling like “free money”.
So you reach for the speculative stock you’d normally pass on, or increase a bet you can’t quite explain.
You’re only playing with profits, right?
Here’s the truth: there is no such thing as the house’s money.
Every dollar of gain is yours.
The market doesn’t care how you label it – a 50 per cent drop hurts your “winnings” exactly as much as it hurts your capital.
So before you pour your gains into something you’d never touch with your original stake, pause and ask: would I make this exact bet if it were money I’d just spent a few years saving?
If the answer is no, the casino has already got to you.
The comfort of cashing in
“You can’t go broke taking a profit.”
It’s one of the most repeated lines in investing — and one of the most expensive.
At a market high, your winners are showing their biggest-ever gains.
And a fat green number is almost impossible to stare at without wanting to do something about it.
So you sell a slice.
Lock it in.
Take a little off the table.
Sometimes it’s to chase a hotter stock; sometimes it’s just to bank the win.
Either way, it feels prudent – responsible, even.
Behavioural researchers call it the disposition effect: we’re wired to realise our gains quickly and cling to our losers far too long.
Exactly backwards.
Here’s the thing: locking in a gain feels like removing risk.
Often it does the opposite.
The real risk in a great business isn’t giving back some of your gains – it’s not being there for the gains still to come.
So when the urge to “take some off the table” strikes at the next high, ask yourself honestly: am I selling because the business has changed, or because I am afraid of losing what I have?
Only one of those is a good reason.
It’s not to say that you shouldn’t sell at all – but do it for the right reasons.
Get Smart: Don’t let the market high do your thinking
Notice what all three traps share.
None is really about the market.
Each is about one person alone — and that’s you.
And it’s the way a rising price slips past your reason to start making your decisions for you.
That’s the quiet cost of a bull market.
The crash everyone fears at least announces itself.
These traps don’t.
They feel like wisdom, right up until the bill arrives.
So here’s one thing I’d ask, and it costs nothing.
Before the next high tempts you, write down why you own each stock and what would make you sell.
Put a date on it.
Then, when the price starts whispering that you’re a genius, or that the gains are free, or that it’s time to cash in, go back and read what your calmer self wrote.
If the business reasons still hold, the price is just noise.
If they don’t, you have a real decision to make — based on the company, not the current stock price.
The market will keep setting records, and one day it will stop.
Neither event should be the thing that moves you.
Because in the end, the highs don’t break most investors.
What breaks them is believing the price, instead of the business.
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Disclosure: Chin Hui Leong owns shares of DBS, UOB and OCBC.
