After weeks of heightened tension and volatility, investors finally caught a break — at least for now.
Global stock markets jumped after former US President Donald Trump announced a 90-day pause on his proposed tariffs.
For investors, this was the signal they were waiting for — a sign that the worst-case scenario might not play out just yet.
At time of writing today, the Straits Times Index (SGX: ^STI) is up 5.5%.
Some of the top movers in the STI are the trio of banks; DBS (SGX: D05) is up over 8%, UOB (SGX: U11) up over 7%, and OCBC (SGX: O39) up over 6%.
Relief Rally — But Don’t Get Too Comfortable
This pause has triggered what market watchers call a relief rally — where markets surge simply because the news wasn’t as bad as feared.
Investors hate uncertainty, and tariffs are the wild card weighing on sentiment.
The pause gives businesses and investors breathing room to assess their next move.
But as UBS warned on Thursday, “Market volatility is likely to remain elevated in the weeks ahead as investors assess rapidly shifting tariff developments and consider the potential implications for growth, inflation, central bank policy and financial markets.”
What Should Singapore Investors Do?
This is a textbook case of why long-term investors should avoid reacting emotionally to short-term news.
The market will swing wildly — up on good news, down on bad — but Smart Investors know that the best returns come from staying invested and riding through the volatility.
Jumping in and out of the market based on headlines is a dangerous game.
Nobody can consistently predict what comes next — not even the experts.
Amid the uncertainty, focus on what you can control:
- Stick to quality companies with strong fundamentals
Look for businesses with healthy balance sheets, sustainable competitive advantages, and proven management teams. These companies are more likely to weather economic uncertainty. - Ensure your portfolio is diversified
Spread your investments across different sectors and geographies. Singapore-focused companies may react differently to global trade tensions than export-dependent businesses. - Stay invested for the long haul
Historical data consistently shows that trying to time the market leads to underperformance. Patient investors who remain invested through market cycles tend to see superior results.
What Happens Next?
While the 90-day pause is good news, it doesn’t remove the uncertainty.
The underlying issues driving the tariff tensions remain unresolved.
In the weeks ahead, markets are likely to react to every rumour, statement, or tweet (especially from Trump).
Expect volatility to stay high.
For long-term investors in Singapore, this volatility presents both challenges and opportunities:
- Sector impacts will vary: Companies in trade-sensitive sectors may continue to face pressure, while those serving domestic markets could show more resilience.
- Quality at better prices: Market uncertainty often creates opportunities to acquire stakes in excellent businesses at more reasonable valuations.
- Dividend stability: Companies with strong cash flow and a long track record of paying dividends can provide income while waiting for markets to stabilize.
Get Smart: It’s about the fundamentals
Today’s market rally is a reminder that headlines drive short-term price moves — but fundamentals drive long-term returns.
At The Smart Investor, we’ve always advocated focusing on the things that truly matter: business quality, reasonable valuations, and long-term perspective. These principles have guided investors through countless market cycles and political uncertainties.
Stay invested. Stay focused. And most importantly — stay patient.
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Disclosure: Joanna Sng owns shares of DBS, UOB, and OCBC.
