How To Win Shares And Influence The Market

The share market is a confusing place. A high flyer in the stock market can turned into a nightmare for investors in a short span of time.

Market darlings in 2014, such as Silverlake Axis Ltd (SGX: 5CP) and Sarine Technologies Ltd (SGX: U77), saw their share prices fall closed to 50% since the beginning of the year. Even large blue chips such as Keppel Corporation Limited (SGX: BN4) and Sembcorp Marine Ltd (SGX: S51) saw their share prices fell about 30% since the beginning of the year.

Can retail investors really win by investing in shares and even one day influence the market? Here is top three things you need to know.

  1. The market is a popularity machine in the short run but a weighing machine in the long run.

Although all these companies have seen a sharp declines in their share price over the last few months, investors who invested in them a decade ago would not be too unhappy with their results.


Source: S&P Capital IQ – Silverlake Axis (Dark Green), Sarine Tech (Brown), Keppel Corp (Light Green), Sembcorp Marine (Purple)

All of the companies have achieved at least 90% gains with dividend reinvested for investors over the 10-year period since 2005.

  1. You do not need to be right all the time

When investing, we should not expect to get all our investment decision right all the time. There will be times when we will make mistakes and incur losses. However, even for great investors such as Peter Lynch, getting just 60% of investments right can be considered a great achievement.

  1. No one can control the market

Sadly, if you are hoping that one day you can influence the market, you will be disappointed. Even sovereign wealth fund such as Temasek Holdings had to suffered losses when the market declined during the global financial crisis. However, that is an advantage for, us, retail investors. It means that institutional investors might not have as great an advantage over the market compared to us.

Foolish Summary

Market will always be volatile and irrational at times. However, as long as we keep a long-term view on our investments, time will be on our side and we will win in the share market one day.

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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 does not own any companies mentioned above.