Have you ever canceled your outdoor plans because of a bad weather forecast—only to be greeted by bright, sunny skies instead?
That’s exactly what happened to my family earlier this year.
In mid-January, the Meteorological Service Singapore forecasted a monsoon surge from 17 to 19 January 2025. Heavy rain, strong winds—basically the kind of weather that ruins your weekend.
So we planned for indoor activities with the kids.
But when those days arrived – Nothing happened.
Clear skies. Dry weather. Not even a drizzle.
And then… nothing.
So, when another monsoon surge was forecasted early last week, I thought: Here we go again. Probably another false alarm.
But this time, the rain came.
The skies opened up and rain swept across Singapore—just as predicted.
It was a simple reminder: Even with the best models, predictions can be either hit or miss.
And nowhere is that more true than in the stock market.
Investors Get It Wrong, Too
Just like weather forecasts, market predictions often go sideways.
We’ve all heard it:
- “There’s a crash coming.”
- “Tech stocks will collapse soon.”
- “This rally won’t last.”
But reality rarely follows the script.
In fact, even when the skies look calm, volatility can sneak up on us.
Just last week, the Wall Street “fear gauge”, also known as the VIX, jumped more than 20% in a single day—its biggest surge since October 2023.
This kind of spike shows how nervous investors are even after the strong run in stock prices earlier this year.
Closer to home, the Singapore banking sector is showing signs of stress. A report by The Business Times states that banks may reduce hiring in the face of market volatility and a broader wave of global job losses in finance.
Even the professionals are feeling the pressure.
The Cost of Trying to Predict What Happens Next
Let’s say you pulled out of the US market in 2023 because analysts warned of a downturn. But instead of falling, the S&P 500 surged by 24.2% that year.
Now, we’re not saying that this is what will happen this year.
According to JP Morgan (NYSE: JPM), if you stayed fully invested in the S&P 500 from 2005 to 2024, your return would have averaged 10.4% per year.
But if you missed the 10 best days? That drops to just 6.1% per year.
And many of those best days often come right after the worst ones—meaning that investors who panic and sell are likely to miss the rebound, too.
Long-Term Investing Is the Better Forecast
At The Smart Investor, we don’t chase headlines or jump at short-term predictions.
Instead, we focus on investing in strong businesses for the long run—the kind that:
✔ Pays sustainable, growing dividends
✔ Boast solid fundamentals and cash flows, and
✔ Have the ability to weather tough times and still keep growing
One good example is a company everyone should be familiar with – DBS Group (SGX: D05).
Singapore’s largest bank recovered swiftly from the pandemic and posted record results for 2024.
Net profit initially plunged 26% year on year from S$6.4 billion in 2019 to S$4.7 billion in 2020.
By 2024, DBS saw a strong rebound and posted a net profit of S$11.3 billion, its highest on record.
The lender’s dividends followed a similar trajectory.
DBS’s quarterly dividend was slashed from S$0.30 per share in the fourth quarter of 2019 to S$0.164 by the fourth quarter of 2020 as Singapore’s Central Bank mandated that banks conserve capital amid the COVID-19 outbreak.
By the final quarter of 2024, this quarterly dividend had nearly quadrupled to S$0.60 per share, showcasing DBS’s resilience and ability to adapt and innovate.
DBS is just one example of a stock with solid fundamentals that weathered tough times and eventually raised its dividend.
You won’t need to predict the next surge or storm. You just need to stay invested, rain or shine.
Let traders worry about the next forecast.
We’ll keep growing our portfolio—the smart way.
First-time investors: We’ve finally released our Beginner’s Guide. Read it in an afternoon, follow the principles, pick an investing style and buy your first SGX stocks within the next few hours! Click here to download it for free.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Joanna Sng owns shares of DBS Group
