The STI has been seeing some gains since the start of April 2020. Apart from the oil crisis, does the community think that the STI will fall further?

Hi anon,

We don't have a crystal ball to see this, so instead of speculating, we should be preparing. The worst that can happen is if we were wrong and the markets continue to recover.

If the STI moves south, make sure you have an action plan. Likewise, if the STI heads north, have an action plan too. This way, regardless of how the markets move, you will just need to exercise discipline and act accordingly in line with your plan. And unless you are only buying ETFs (why though?), consider looking at individual stocks with the potential to outperform STI instead of the index itself, which can be weighted down by a couple of underperformers; you won't want to miss out on good companies in the meantime.

Hi anon, your guess is as good as mine. We can never know what the stock market is going to do the next moment.

My take is that instead of pondering what the market will do next, the more sensible approach would be to focus on the long-term. History has shown markets recover after every major crash.

If the valuation of a company we want to invest in makes sense given its future earnings potential, we would be better off over the long run by buying the business, regardless of what the market does. Research has shown that time in the market is more important than timing the market.

All the best!