Is the Market Playing Hardball? What It Means for Your Portfolio
Time Travel: Investing from 2017 to 2020
Picture stepping into a time machine that takes you from January 2020 straight back to 2017. When you peek at the numbers, your investment might look like it’s in the… red.
- 2017‑2018 were bright, but even a big splash can lose some sparkle. Even with booming markets, some portfolios ended up a tad slimmer than the money you poured in.
- 2019 promised optimism, yet it turned into a roller‑coaster that left many watching their account walls shrink.
- 2020 spiraled into its own wild ride, and many bright futures seemed to fade to a serious shade of “uh‑uh.”
What Does That All Mean?
It feels like you’ve hit a comic‑book plot twist where the hero ends up with fewer comic‑book points than he started.
The Big Question: Was Investing a Bad Move?
No. The three‑year dip is more like a dud sequel—an uneasy reality check, not a verdict.
Should New and Old Investors Sit… or Jump In?
- Newbies: Re‑watch the show, grab the subtitles, and get back in the game when you spot a fresh plot line.
- Old Investors: Keep riding the waves. Diversify. Push for the next season before the stock crisis takes its final bow.
Bottom line—keep calm, stay sharp, and keep riding the market train. The next turns might just bring the green back.
Markets go in cycles, but we already knew that didn’t we?
Riding the Bull—How to Stay Upright
History does what?
Since the 2008 financial crisis, the markets have mostly been a joyous roller coaster, except for a couple of hiccups—Europe’s Debt Crisis in 2011 and the China Stock Crash in 2015.
Crashes, crashes! It’s inevitable.
Crashes are like surprise pop‑ups; you never know when they’re coming. The lesson is simple: build a portfolio that can cope with the good times and the bad times.
No crystal balls—just a good plan.
Investors ought to brace themselves for both the sky‑high peaks and the sudden dips, not just chasing the thrill of a bull market.
Case study: 2017‑2018 investors
Imagine you dipped into the market in 2017 or 2018. You enjoyed the highs—prices were soaring—and you paid top dollar for those shares.
- High Prices, High Joy – You were happy, thinking you nailed it.
- Keep climbing? Yes! – The prices kept falling those same shares, perhaps a little, but eventually they climbed again.
DBS: A Real‑world Example
Suppose you bought DBS shares in January 2017 for $18.97. By April 2018 the price hit $30 blissfully. Even after the decline you were still above $25 in January 2020.
Fast‑forward to March 2020: the share slid to $18.16—a sharp roll‑back that wiped out more than two years of gains in less than two months.
Yet you might think:
- Why did any worse happen? (We’d have paid even more.)
- Dividends keep us in the green.
Bottom line
Being ready for both up and down keeps you laughing at the market roller coaster, not crying when it dips.
We need to take the highs & the lows of the market
The market is currently between cycles.
Unlike other black swan events, Covid-19 has impacted every country directly, and as a result, the stock market has declined very quickly.
As investors, we cannot take the highs without the lows.
From 2016 to 2019, we paid higher prices and seen our investments increase in value. We were happy. But now, prices have declined and if you are like most investors, you are sitting on losses.
There is a silver lining, however. When markets are experiencing a crash, you pay lower prices for your investments.
Think of it this way. Bull markets are when returns are generated, but prices are higher for investors who wish to participate.
Bear markets are when investors get to participate in the stock market at a much lower price, but they cannot expect a return in the short-term.
Prices are lower during this period because many people expect prices to continue declining further.
So even though we want to (and should) continue investing, we should also expect that our investments will decline in value over the foreseeable future.
How does investing with the expectations that price will continue declining make any sense?
If you are currently an investor and have invested over the past three years, you would have invested at higher prices, and likely seen some reasonable gains in your portfolio until January 2020. That’s the bull market at work.
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In a bear market, this same logic no longer applies. We no longer buy stocks at high prices expecting that it will increase in value.
Rather, we buy stocks at lower prices while expecting that prices will continue declining for a period of time. This could be for six months, 12 months, 24 months, or even beyond that.
The main aim during a bear market is to be accumulating good stocks at a significantly discounted price. When markets recover, we hope that these stocks will perform well.
Unless you are trading, you should not expect a positive return during a bear market.
At the same time, if you are unwilling to invest, because you don’t think you can make a return in the short-term or would end up losing more money (probably true), then you are also saying no to investing when prices are low.
Markets may go even lower so why not stay on the sideline for now?
Should I Wait for the STI to Drop Below 2,000?
Many folks are torn between a solid call to invest and the nagging feeling that prices are still too steep. The prevailing sentiment? Hold tight until the Straits Times Index (STI) slips under 2,000.
What if the Dip Happens?
- Chance & Reality: It’s possible — even likely for the STI to dip under 2,000 soon.
- Strategy: Hang on the sidelines with a plan to jump in when that sweet 2,000 mark hits.
What if the 2,000 Target Vanishes?
Imagine the market hovering around 2,100 to 2,200 for months after a brief flattening period. That could mean the STI never actually hits 2,000.
- Scenario A: We keep waiting, missing out on low‑priced opportunities.
- Scenario B: We finally act when prices are higher, paying for the low‑price advantage that never materialised.
Key Takeaways
Investing decision hinges on:
- Risk Appetite: Are you willing to ride the roller coaster of highs and lows?
- Market Timing: Timing is crucial—waiting for a 2,000 dip could cost you if it never arrives.
- Action Plan: Set clear rules: buy when price is below your target, or consider a flexible entry strategy if the market stalls.
In plain terms, stop letting the 2,000 dream dictate everything. Treat the market like a game—plan, buy, and don’t over‑react to every dip or spike. Whether you wait or jump in, keep your feet on the ground and your expectations realistic.
Expect what is low today to go even lower tomorrow
Why Investors Don’t Wait for the “Perfect” Price
The idea that you’ll only jump into a position when the price dips to $1,000 or $1,500 sounds smart on paper, but in reality it’s a bit of a lottery.
Timing the Market: More Myth Than Reality
- It’s all about guessing when the tide turns. Even seasoned pros can’t nail the exact bottom.
- Only a tiny slice of people manage to hit that sweet spot. The rest of us of course miss it.
- You either sell yourself into a “bet” that the price will keep falling, or you ride the wave and miss out entirely.
Let’s be Real – Money Won’t Wait for You
Trying to time the market is like chasing a cat in a broken clock room — you’ll always end up chasing something that’s already been tipped over.
Watch Out for the “Dead Cat Bounce”
During market crashes, prices often bounce back briefly, only to tumble again. If you think you’ve caught the bottom, you were probably just caught in a quick rebound.
Bottom‑line: Don’t let timing fool you. It’s safer to invest with the belief that the market will rebound over time rather than hope to pin the exact lowest point. After all, your funds will do a better job of growing when you stay in the game, not when you’re constantly on the sidelines.
What should new investors do?
Bear markets occurs typically because people are 1) selling their stocks in a panic, 2) holding off their investments in anticipation that prices will go down further or 3) unable to invest because they don’t have a job or have spent all their money on groceries.
A bear market is a great time to start your investing journey because you are generally starting at a lower price. However, there is a tradeoff. In your first year of investing, you are likely to see your investment portfolio in the red.
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So, if you are looking to invest at the bottom, expecting that your portfolio will turn green after just 1-2 months, you are likely to end up disappointed.
The safer thing to do is simply start investing slowly, with money that you can afford to lose or at least not touch for the next ten years.
If you are greedy and invest quickly, you run the risk that markets will continue declining after you have entered the market.
At the same time, if you choose not to invest expecting that markets will continue to decline, you may end up missing a great opportunity to start accumulating stocks at a period where it’s heavily discounted.
Word of caution: Have a diversified portfolio because not everyone will recover From Covid-19
Don’t Toss Your Cash Like a COVID‑19 Wave
Just because you’re planning to throw money into the market doesn’t mean you can simply ignore stocks that have nosedived.
Many investors hope to “cash in” when these shaken‑up companies recover, but the reality is more nuanced.
What’s the Truth About Recovery?
- Strong firms do bounce back. Even if they hit a rough patch, they often regroup and come out even better.
- Weaker players may never pick up. Some might stagnate or, worse, fade entirely.
- Timing matters. Knowing when to jump in—and when to hold back—is key.
Pick Your Targets Wisely
Rather than just focusing on the “when” and “how much,” think about the “who.”
Is the company a powerhouse that can weather any storm?
Or is it a shaky ship that might sink over time?
Stay Updated
Keep an eye on the latest market shifts—no need for sci‑fi drama, just the honest facts.
