Dear readers, today is Deepavali, the Festival of Lights.
To all our readers celebrating this special occasion, I would like to wish you and your families a very Happy Deepavali!
May this festive season bring you happiness, good health, peace and prosperity.
Deepavali is traditionally associated with the triumph of light over darkness, good over evil, and knowledge over ignorance.
Interestingly, I think there is also a little investment wisdom hidden in this beautiful festival.
When the markets turn dark, remember that the sun will rise again
It has certainly been an interesting and somewhat unsettling period for global investors.
Wall Street has experienced significant volatility, with technology stocks facing renewed selling pressure as investors question whether the enormous investments in artificial intelligence can deliver the returns expected.
Concerns about excessive AI valuations and a potential stock market bubble have also begun spreading across global markets.
For Singapore investors, the weakness has been particularly noticeable in our local banking stocks.
DBS, OCBC and UOB have all come under pressure following their latest earnings announcements and amid growing uncertainty about the global economic outlook.
Even other established STI companies, including Keppel, ST Engineering and Wilmar, have experienced selling pressure.
It is understandable that investors may feel somewhat uneasy.
After all, nobody enjoys watching the value of their investment portfolios decline.
But perhaps this is where the spirit of Deepavali offers an interesting reminder.
Darkness does not last forever, and neither do market downturns.
Markets move in cycles. Periods of optimism are often followed by uncertainty, corrections and sometimes even crises.
Yet history has shown that financial markets can recover, businesses can reinvent themselves, and new investment opportunities can emerge from difficult periods.
The important thing is not to let short-term market volatility cloud our long-term investment judgement.
Look beyond the darkness: Opportunities can emerge from uncertainty
One lesson I have learnt from following the markets is that some of the most interesting investment opportunities emerge when investors become overly pessimistic.
When everyone is optimistic, valuations can become stretched.
When fear takes over, even fundamentally sound companies can experience significant share price corrections.
This does not mean every falling stock is a bargain. Nor should we rush into buying simply because share prices have declined.
Instead, it is a good time to revisit our investment portfolios and ask ourselves a few questions:
- Are the companies we own still fundamentally sound?
- Are their earnings prospects intact?
- Have their valuations become more attractive?
- Are we adequately diversified?
- Do we have sufficient cash to take advantage of opportunities when they arise?
For Singapore investors, this could mean taking another look at our local banks, infrastructure companies, dividend stocks and REITs.
It could also mean looking beyond Singapore at opportunities in global markets.
The key is to remain selective, patient and disciplined.
Wealth is more than just the numbers in our portfolios
There is another aspect of Deepavali that I think is worth remembering.
As investors, we spend considerable time thinking about wealth creation, dividend income, capital appreciation and financial independence.
These are all important goals.
But wealth should never be measured purely by the value of our investment portfolios.
Good health, family, friendships, peace of mind and the freedom to enjoy life are equally precious.
Sometimes, we become so caught up in market movements that we forget why we started investing in the first place.
We invest to build a better future, provide for our loved ones and enjoy greater financial security.
We should never allow the pursuit of investment returns to take away the very happiness that wealth is supposed to bring.
A little light, a little hope, and a brighter future
As we celebrate Deepavali, let us remember its timeless message: light will eventually overcome darkness.
For investors, perhaps that means having the courage to remain calm when markets become turbulent, the wisdom to distinguish genuine opportunities from falling knives, and the patience to allow good investments time to grow.
We may not be able to predict what global markets will do next week or next month.
We cannot control interest rates, geopolitical developments or whether the AI boom will continue.
But we can control how we invest, how much risk we take and how we respond to uncertainty.
And sometimes, that is more important than trying to predict the next market rally.
Once again, to everyone celebrating, I wish you and your families a very Happy Deepavali!
May your homes be filled with light, your hearts with happiness, and your investments with prosperity.
Here’s wishing everyone a brighter tomorrow, both in life and in the markets! 🪔