As of 31st October 2020, the STI index had lost 24.9% year to date.
We are once again in the market cycle where fear and turbulent times are over-riding investors’ sentiments towards the market.
In fact, a Bloomberg news article reported last week that Singapore and Thailand are two of the worst-performing market in Asia with the two markets down 24.95% and 24.96% respectively.
Singapore, being an open export-oriented economy, struggled to find its feet under the radar after a soft reopening in the economy fails to spur up buoyant in the market.
For the older investors that have been around in the market for a while, this isn’t something new that they’ve encountered in the market.
Let’s take a look back at how STI performed in past global recessions and how it managed to bounce back.
STI Market Performance (1987 – 2020):
Singapore is a mature open state with a focus on productivity in manufacturing and an export-oriented economy.
It is not the first time that the STI has to face the bear market and adapt to new challenges, as with evidence in the past few years it has managed to always bounce back stronger from past crises.
From 1987 to 2020, the STI has entered bear market territory a total of 10 times, which brings on average a period of downturn once every 3.3 years. It didn’t really tell much of a story though because a bear market is simply defined as a fall of more than 20% from the previous peak, which technically means you can play around within that 20% range in a nutshell but harder to predict a larger range.
|STI (1987 – 2005)|
|STI (2003 – 2020)|
|A Path to 3Fs (STI Compilation)|