The market is running hot again.
Stocks that might have looked uninteresting a few months ago are suddenly back on everyone’s radar.
And when that happens, investing starts to feel urgent.
You feel like you need to act. Before prices run even higher. Before everyone else gets ahead. Before you miss the boat.
But before you act, you need to ask yourself this question:
Am I investing right now… or am I just chasing?
It is worth asking. Because in a hot market, the two can feel identical.
They look the same. They are not.
Both involve buying a stock. Both feel decisive. Both involve real money.
The difference is what drove you there.
Investing starts with the business. Chasing starts with the price chart.
Investing asks: Do I understand what I own? Chasing asks: How much higher can this go?
Investing is patient. Chasing feels urgent.
And when markets are rising fast, chasing can feel like the smarter move.
Why hot markets make us feel safer, when we should feel more careful
There is a strange thing that happens when prices go up.
Most people feel less risk, not more.
The portfolio is green. The news is positive. Everyone seems to be winning. It starts to feel like the right time to act.
But a stock that has already run significantly leaves less room for error. If the business disappoints, or if sentiment shifts, the fall can be quick. And the investors who tend to get hurt are the ones who bought late, on excitement, without a clear reason.
This does not mean entering a rising market is always wrong.
A company hitting a new high is not automatically overvalued. Strong businesses can keep growing. But the reason for buying matters.
How to tell if you are chasing
Before you act, ask yourself honestly.
Would I still want to own this if the price fell 20%?
Do I understand how this business actually makes money?
Am I buying because of the fundamentals, or because everyone is talking about it?
Does this fit my portfolio, or am I just afraid of being left out?
If any of those gave you pause, sit with it. It does not mean the stock is a bad one. It might just mean you need more clarity before you act.
Two Singapore examples worth thinking about
Consider two Singapore stocks that have attracted attention after strong share price runs: ST Engineering (SGX: S63) and iFAST Corporation (SGX: AIY).
As of 3 June, ST Engineering’s share price stands at S$11.16 after rising around 206.6% over the past three years. Over 10 years, the stock was up around 250.9%, with a 10-year compound annual growth rate of 13.4%.
That longer-term view matters. It shows that much of the move has happened more recently.
That does not make ST Engineering a bad investment. But after such a strong run, the price may already reflect a lot of optimism. Investors need to ask whether the business can still grow enough to justify that optimism.
iFAST tells a different story.
As of 3 June, its share price stands at S$9.05 after rising around 108.5% over the past three years. Over the longer term period of 10 years, the chart shows an even more dramatic rise, from around S$1.11 in December 2014 to about S$9.05 at time of writing.
But the journey was not smooth. The stock spent years moving sideways, surged sharply, corrected, recovered, and pulled back again along the way.
Both examples teach the same thing.
A rising share price is not a reason to buy. Neither is it a reason to stay away.
The question is whether the business, the valuation, and the fit still make sense for you, at this price, today.
If yes, it might still be investing.
If the honest answer is “I just don’t want to miss it”. That is probably chasing.
Get Smart: Know why you are buying
Before you act, ask what job this investment is meant to do.
Is it there for income? For growth? For stability?
If you cannot answer that clearly, it might be worth waiting until you can.
A rising price is not a reason. A falling price is not a reason either. The reason has to come from the business.
A hot market is not a signal to rush in. It is a reminder to be clear about your process.
The goal is not to buy what everyone else is rushing into. It is to own good businesses, at sensible prices, for long enough to let them work for you.
That is investing.
Everything else may just be chasing.
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Disclosure: Joanna Sng owns shares of ST Engineering and iFAST.
