It can be scary buying a stock just before it sells off.
Imagine parting ways with your hard-earned money only to be staring at the barrel of a loss of around 20% or more within weeks or months.
However, history proves time and again that investing in great companies yields solid long-term rewards.
After all, strong business fundamentals drive your returns.
In this article, we examine what would have happened if you had bought DBS Group Holdings (SGX: D05) at its previous peak.
The Scenario: Buying at the Worst Possible Time
Consider a scenario where you bought shares of DBS at a previous high of S$58.13 per share on 29 January 2026.
By 9 March, you would be sitting on a decline of almost 10% with shares closing at S$52.81 due to the Middle East tensions.
Now, if you’d just retained your composure and held your shares all the way, without additional purchases during the downturn, this -10% loss would have reversed into a 21.4% gain with shares at S$70.57 today (13 June 2026).
This 21.4% total return includes the receipt and reinvestment of S$1.62 in dividends paid during said time period.
On an annualised basis, this works out to a compound annual growth rate (CAGR) of roughly 53.6%.
The key takeaway is clear: even buying at a market peak can yield strong long-term returns, provided you invest in high-quality businesses.
Why Great Companies Recover
So why do quality companies recover over time?
Temporary market corrections rarely stop great businesses from growing their earnings over the long-term.
As profits rise, the market eventually rewards the business with higher share prices.
Even during market corrections, great businesses continue paying solid, growing dividends that help investors realise returns even when the share price is falling.
If you’d reinvested the dividends received, you can even accelerate your long-term returns.
Finally, when market sentiment improves, the share price of great businesses tends to recover faster as their fundamentals strengthen.
For high-quality companies, time mitigates a high purchase price
What Happened After the Peak?
In our recent DBS example above, shares took roughly 103 days before recovering to breakeven.
Being a great business does not exclude its share price from market corrections.
Now, if you’d purchased S$100,000 in DBS shares at the peak on 29 January 2026, your current portfolio value would be sitting at approximately S$120,000.
The lesson is clear: for high-quality businesses, time in the market beats timing the market.
What Made This Blue-Chip So Resilient?
DBS’s strong recovery from its drawdown is enabled by the bank’s strong market position, being the largest bank in Southeast Asia.
The bank has been able to consistently translate its competitive advantage into tangible financial outcomes with consistent earnings growth and a healthy balance sheet.
In its latest quarterly earnings (1Q2026), DBS reported a record total income of S$5.9 billion while still maintaining a low non-performing loan (NPL) ratio of 1.0%.
This highlights the strength of DBS’s franchise, being able to grow its income while still maintaining disciplined lending practices.
Profit before tax came in at S$3.5 billion, representing a quarterly record.
Dividends kept flowing, with its quarterly core dividend of S$0.66 per share up 10% compared to the first quarter of 2025.
Ultimately, robust fundamentals ensure quality businesses recover fastest.
Lessons for Today’s Investors
The key lessons to be learnt from this DBS example are that investors should adopt a long-term horizon in approaching investments.
By doing so, you can withstand temporary volatility and keep your compounding journey on track.
Market highs shouldn’t deter you from investing, as long as you are acquiring quality companies at reasonable valuations.
Over time, any mistake in market timing is corrected as long as earnings continue increasing, alongside the consistent inflow of higher dividends.
Being successful in investing is much more dependent on purchasing quality businesses than timing the market perfectly.
When Buying at the Peak Doesn’t Work
Having said that, buying at the peak does not work if the business is selling off due to long-term secular disruptions.
Just look at the example of BlackBerry (NYSE: BB), whose shares are still trading significantly below its 2008 peak as its keyboard phones lost relevance thanks to the emergence of the iPhone.
Finally, buying at the peak does not pay off if the starting valuation of the business is entirely detached from earnings; this applies to quality businesses as well.
Remember, not every stock deserves a long-term holding period.
Get Smart: Time Is Often the Best Cure for Bad Timing
In conclusion, having bad market timing does not preclude you from enjoying good investment returns.
The key is to purchase quality businesses at fair valuations and stick with them as long as the underlying fundamentals continue justifying their quality.
In the long run, time and a quality business’s ability to execute will always reward your patience.
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Disclosure: Wilson H. does not own any of the companies mentioned.
