The Straits Times Index (SGX: ^STI) is down around 7% from its 52-week peak.
In other words, the current decline does not look steep.
But it’s a different story on the streets. Just last evening, the government raised the Disease Outbreak Response System Condition (DORSCON) level to orange, on par with SARS in 2003.
While a sizable decline has not happened in the stock market, we cannot ignore the impact the virus will have on businesses.
Worse than SARS
Singapore Transport Minister Khaw Boon Wan has warned that impact on the aviation industry will be worse compared to the SARS outbreak in 2003.
That’s because the number of Chinese tourists has more than doubled since the SARS episode. Khaw also noted that Chinese tourists currently account for one-third of retail sales in Changi.
At the moment, flights from China have shrunk between 70 percent and 80 percent.
The severe decline is bound to have an impact.
Visible and invisible
What is clear today is that Singapore’s tourism industry will suffer a hit.
However, there are risks that are harder to size up.
For instance, China plays an integral part in global manufacturing. It will be hard to fathom what would happen to businesses if key factories are shut down for prolonged periods of time.
In sum, as investors, we should keep your eyes open.
In the days and months ahead, it is important to remember that investing is a marathon and not a sprint. You do not have to pour all your money into the market at one moment of time.
If you do so, you will be hanging your financial future at one moment of time. That is what you want to avoid.
Without further ado, let’s get to the best reads of the week.
This week, David Kuo muses over the Wuhan Virus, and warns against complacency.
The past month is a timely reminder that things can change on a drop of a hat.
Despite our best efforts, we can get caught holding stocks that suffer sharp, short-term declines. Royston Yang is on hand to walk us through his thought process on how to handle undesirable scenarios like these.
Investing is not only about having a good brain between your ears. You also need to have a strong stomach.
Chin Hui Leong shares a pivotal book that he read around a decade ago and how it has made a huge difference in the way he invests.
On another note, Royston made the trip down to an analyst briefing for Elite Commercial REIT (SGX: MXNU) on our behalf.
Armed with a better understanding of the company, he outlined the key factors that investors should know about the REIT, all of which is captured in his updated article below.
At the same time, Royston also took time to outline the potential risks in investing in Elite Commercial REIT.
Please refer to the individual articles for stock ownership disclosures.