9 Things You Have To Know About Singapore’s Stock Market

In May this year, I had the idea to collect important pieces of historical data about Singapore’s stock market and present them in an article.

I wanted to do so because such information can give investors important context in interpreting and understanding what may happen to stocks here in the future.

The article, which was published on 29 May 2015, was titled 6 Things You Have To Know About Singapore’s Stock Market.

In it, I wrote that it “will be a work in progress, something which I’d update whenever I come across new information.” Since then, I’ve made two updates (see here and here) to bring the total count of important facts to eight. Here’s the ninth.

9. The stock market is a market of extremes, not means

Singapore’s market barometer, the Straits Times Index (SGX: ^STI), has jumped by 250% from 834 points at the start of 1988 to 2,921 points at end-August 2015. This represents a compound annual growth rate of 4.7%.

But, check out the chart below, to see how often the index’s return in each calendar year since 1993 has fallen in close proximity to the 4.7% figure.

Frequency of Straits Times Index's Annual Returns in each calendar year from 1993 to 2014

Source: S&P Capital IQ

Turns out, the stock market’s a market of extremes, not averages: There has not been a calendar year since 1993 when the Straits Times Index has generated an annual return that’s in the ballpark of 4.7% (see red bubble in chart).

How is this information useful? It can help us purge the false idea that stocks move up in a linear, orderly fashion. This can then help us remain patient with our stocks even if they sit there and do nothing for a number of years.

That’s all I have when it comes to the latest update. Is there anything about the history of Singapore’s stock market that you’d like to know? Or, is there anything you’d like to discuss? Let me know through the comments section below!

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn't own shares in any company mentioned.