The Stock Market's Wild Ride

SINGAPORE: Brace yourselves—stock markets are facing a chaotic month! Following President Donald Trump's announcement of extensive tariffs on imports, global indexes plummeted. But just when it seemed the bottom had dropped out, optimism returned with Trump's news of a 90-day delay on certain tariffs, sparking a rebound.

Expert Insights: Timing is Tricky

Financial analysts are sounding the alarm on trying to time the market. Mr. Vasu Menon from OCBC stresses, "Timing the markets is a tricky and risky game, especially given the unpredictability of Trump's policies." This sentiment is echoed by many, who argue that aiming to outsmart the market can lead to missed opportunities.

As stock prices rebound from their lows, investors often feel hesitant to jump back in, complicating the decision to buy.

Hugh Chung, Chief Investment Officer at Endowus, adds that reacting emotionally to market volatility can lead to poor decisions—like selling off investments or sitting on the sidelines waiting for stabilization.

Adopting a Smarter Strategy

So, what’s the better approach? Dollar-cost averaging, as suggested by Mr. Menon, involves investing a fixed amount regularly, which minimizes emotional decision-making and allows investors to take advantage of market fluctuations.

This method keeps investors engaged, potentially leading to gains rather than just holding cash and watching from the sidelines. Furthermore, it reduces risk by having available funds in case of further market corrections.

Eastspring’s Christina Woon believes that owning dividend-paying stocks can also offer a safety net during turbulent times, as these stocks provide income regardless of market fluctuations.

Keeping a Long-Term Perspective

However, ignoring market movements isn’t a viable strategy either. Investors should be agile, leveraging pullbacks without the pressure of perfect timing. Mr. Marc Franklin from Manulife Investment Management advises maintaining a long-term perspective to benefit from potential growth.

In light of the tariffs, he notes that China might shift towards a consumption-driven economy, which could create opportunities and challenges in the global market.

Hope for Stability?

Looking ahead, there’s glimmering hope as negotiations progress and geopolitical tensions ease. Ms. Woon believes we are on the brink of a lengthy journey, and while recovery can be unpredictable, it’s crucial to remain optimistic.

Mr. Menon highlights Trump's temporary tariff pause as a potential turning point for the global economy. While markets will likely remain volatile short term, he advises those with a taste for risk to seize opportunities as they arise. Overall, a constructive investment outlook remains achievable over the next year.