Saturday, December 26, 2020

Lost $1 million in Singapore stocks

 My friend said that he lost $1 million in Singapore stocks over the years. But he said that he had received this amount in dividends over the past years. He must have invested in these stocks for a long time.

He probably did not invest in the index fund (STI ETF). If he did, he probably would have earned a modest return, depending on the period of his investment.
See the chart below showing the chart of the index over 19 years and the annual return (excluding dividends). The average dividend yield is probably around 3% each year.
Within the Straits Times index of 30 shares, the financial sector did well, but the industrial sector did poorly.
If my friend had invested heavily in the industrial and transportation sector (e.g. Keppel, Sembawang, Singapore Airlines, Singapore Press, Neptune Orient Lines and Singapore Telecoms), he would have done poorly.
If he had bought the S chips (i.e. the China stocks listed in Singapore) or in some questionable small cap stocks, he would have done very badly.
I did not ask my friend what he had invested in and over which period of time. I suspect that his experience is typical of the many Singapore investors, but they probably form a minority.

1 comment:

Anonymous said...

When one can afford to gamble, they can also afford to lose.

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