Market sell-offs can be unnerving even for the most seasoned investors.
Here’s the hard part: the reasons for the sell-off differ every time – think of the past five years, which included the pandemic, high inflation, recession fears, and geopolitical tensions – there’s always a smart-sounding reason to sell.
You can fight back against this temptation by holding onto quality stocks that are structured to hold up better during turbulent times.
Then again, there is no amount of stocks you can own, even with a basket of these “Sleep Well at Night” stocks, that can eliminate portfolio volatility entirely.
Instead, what this cohort can do is give you peace of mind that after the storm, these businesses will emerge, hopefully stronger than before.
What Makes a “Sleep Well at Night” Stock
So, what qualities should a “Sleep Well” stock have?
In essence, we want the crème de la crème names that generate consistent, resilient cash flows regardless of market cycles.
Even better if these companies can maintain their dividend payouts during volatile periods.
Having a strong financial position with manageable debt levels can help buffer them against tough times.
Finally, the cherry on top would be for the companies to provide essential goods or services that will see steady demand even during downturns.
Remember, the key takeaway is that during periods of uncertainty, business resilience counts so much more.
Why Defensive Investing Still Matters in 2026
Investing conservatively is even more important during the uncertain times we’re living in.
With markets gyrating wildly with every headline coming out of the Middle East, combined with historically stretched valuations, we’ve seen some sharp movements both on the downside and upside so far this year.
In such an environment, you want to make sure you own resilient businesses that can help you stay invested while being reasonably assured of their survival moving forward.
DBS Group Holdings Limited (SGX: D05), or DBS — The Defensive Dividend Anchor
The first name on the list is, in my opinion, the ultimate comfort stock.
Not only is DBS backed by Singapore’s Temasek Holdings, it has also been a consistent income provider with dependable dividends.
The local bank hasn’t missed an annual dividend since 2001.
Furthermore, DBS has been profitable for ten straight years, with net profits rising from S$4.4 billion in 2017 to S$11.3 billion in 2025.
This is the kind of resilience you want to see from a business.
Venture Corporation Limited (SGX: V03), or Venture Corp — The Cash Flow Fortress
Venture Corp is another candidate for the “Sleep Well” cohort; this business has generated positive free cash flow (FCF) for a decade, with annual FCF averaging around S$290 million.
This performance is noteworthy, given the challenging environments we have seen across the decade.
Although FCF has been volatile in the past few years, Venture Corp’s ability to post positive FCF consistently adds strong financial flexibility that helps cushion against downturns.
Furthermore, it boasts an enviable balance sheet with a strong net cash position exceeding S$1 billion.
The key takeaway is that being a consistent generator of cash flows strengthens a business’s resilience.
Singapore Exchange Limited (SGX: S68), or SGX — The Essential Services Provider
Next, SGX is a business that thrives during market chaos.
The bourse operator earns fees from transactions conducted on its exchange.
During volatile markets, transaction volumes rises, and as a result, SGX usually does pretty well.
In fact, amid the Great Financial Crisis in 2008 and 2009, SGX’s annual dividend peaked at S$0.38 per share.
SGX’s top-line growth has been steady as well, increasing from around S$801 million in the fiscal year ended 30 June 2017 (FY2017) to nearly S$1.4 billion in FY2025.
Consistent demand for a business’s products and services is a powerful mitigant against market uncertainty.
CapitaLand Integrated Commercial Trust (SGX: C38U), or CICT — The Long-Term Compounder
Finally, having a strong market position can allow a business to emerge stronger after a market crisis.
CICT, with its status as the largest REIT in Singapore, is a great example of such a business.
In recent times, the REIT has taken advantage of market downturns to beef up its portfolio, as seen in its expansion into Australia in 2021 and the acquisition of CapitaSky in 2022.
CICT is big enough that it’s actually growing while everyone else is focused on keeping the lights on.
How to Build a Portfolio That Helps You Sleep Better
On your end, to keep your portfolio steady, make sure you’re not putting all your money into one industry.
Also, avoid borrowing money for stocks and stay away from hyped-up names that don’t have the profits to back up their lofty stock prices.
Do focus on a business’s long-term fundamentals and do not be swayed by daily price action or market headlines.
The worst thing you can do is to sell a quality business that is under share price pressure due to general market conditions.
So, do your best to manage your emotions; trust that you have done a decent job (following the above) in constructing a portfolio that should stand up well in the midst of market volatility.
Get Smart: The Best Portfolios Reduce Stress, Not Just Risk
In sum, investing does not mean you have to pay attention to each headline and price action daily.
Owning a well-diversified portfolio of wonderful businesses that have a proven capacity to generate consistent cash flows can help you better deal with periods of uncertainty.
Remember, staying invested in the market matters most.
Oil prices are rising. Markets are swinging. And headlines are getting louder by the day.
In times like this, many investors look for predictions. But in our experience, what matters more is having a framework.
In this upcoming webinar, Chin Hui Leong shares how we approach volatile markets through three layers: what to buy, when to deploy capital, and how to build conviction in the businesses we own.
Because uncertainty is not something to avoid. It is something to prepare for. Sign up for free here.
If you want to retire with a constant stream of dividends, these 5 stocks might be all you need. We’ve found 5 SG stocks that have kept paying (and growing) through inflation, rate hikes, and recessions. See what they are with our latest free report for SGX dividend investors. Click here to get instant access.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
