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1 Surprising Fact About The Stock Market’s Biggest Winners

Healthcare services provider Raffles Medical Group Ltd (SGX: R01) and tourism asset owner Straco Corporation Ltd (SGX: S85) are in completely different types of businesses. But, there’s a common thread which binds them both.

Turns out, the two stocks are some of the Singapore stock market’s biggest winners over the past decade. From 30 November 2005 to yesterday, Raffles Medical and Straco Corporation have seen their shares clock some hearty gains of 659% and 567% respectively (without accounting for dividends).

For some context, Singapore’s market barometer, the Straits Times Index (SGX: ^STI), had moved up in price by just 25% over the same timeframe.

Being great long-term winners, it may seem logical at first glance to assume that both Raffles Medical and Straco’s shares would be less volatile than that of the broader market over the short-term. But, the surprising thing about the two companies is that their shares have historically been way more volatile than the Straits Times Index.

Here’s a table (click for larger image) showing you the number of days that Raffles Medical, Straco, and the Straits Times Index have suffered a daily loss of 2% or more since 30 November 2005:

Raffles Medical, Straco, and STI price table

Source: S&P Capital IQ; author’s calculations

For the period we’re looking at, Raffles Medical has seen its shares fall by 2% or more on 192 occasions over 2,536 trading sessions – that works out to be 7.6% of the time. For Straco and the Straits Times Index, the percentage of two-percent-loss-days are 14.3% and just 3.9%, respectively.

So as you can see, big long-term winners can come with above-average short-term volatility. The conclusion may be a surprise for some, but it’s a fact. There are times when you’d need to suffer some short-term pain in order to earn satisfying long-term gains. Keep this in mind when you invest.

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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 owns shares in Raffles Medical Group and Straco Corpration.