Are Things Really As Bad As They Seem Now?

There are two charts I’ve been checking incessantly these past few days – that of the Straits Times Index (SGX: ^STI) and the PSI level. The Straits Times Index is languishing below 2,900 points currently while the PSI had spiked to more than 300 just a few hours ago.

As I dashed about my house trying to keep the N95 mask on for my toddler with the Singapore stock market flashing red, there were moments when I caught myself thinking “If only the Straits Times Index chart is trending upward while the PSI is going down.”

To add on to our woes, there’s even a risk of Singapore falling into a technical recession soon. But as always, before I allow myself to be swallowed by despair, I’d remember the Persian adage: “This too shall pass.”

That will almost certainly be true for the haze. Although it is a terrible situation to live with – environmental desecration that causes smoggy air which results in health hazards is no fun at all – the haze we’re seeing now is a temporary man-made crisis that will end sooner or later.

What about the market?

The Straits Times Index has declined by roughly 15% since the start of the year – if there’s no recovery, 2015 will turn out to be a bad year for stocks. But, this isn’t the first time Singapore’s benchmark index has gone through a bad year.

Over the past 27 years since 1988, the Straits Times Index has suffered double-digit losses in 1990, 1997, 2000, 2001, 2002, and 2008.

But through it all, the Straits Times Index has increased from 834 points on 1 January 1988 to 2,830 currently (as of 11.30 am). That’s a return of around 4.6% annually, excluding dividends.

Foolish Summary

No one’s investing journey is likely to be a smooth slope upwards. There are bound to be ups and downs. But at the end of the day, the market will likely reward patient investors over the long-term.

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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 Stanley Lim doesn't own shares in any companies mentioned.