Sell everything and exit the stock market?

Brexit happened just a month ago but already it seems like an eternity for many investors. Since then, a series of unfortunate events had happened in Singapore stock market.

SGX market disruption

First, on 14th July 2016, the local stock market experienced a major disruption that resulted in ceased trading at 1138 hours and remained closed for the rest of the day. Some investors and traders received duplicated confirmation messages while some did not receive any confirmation messages after their trade were done. Investigation found that the disruption was due to a disk failure and SGX had moved to rectify the problem.

The market disruption had made a serious dent on Singapore’s reputation as a major Asia financial trading hub. Such an incident impacts the livelihood of traders, especially short-sellers who have to cover their positions by certain timing. For Singapore to sell itself as a so-called trading hub of Asia, it is a given that SGX trading engine have a high level of reliability. Otherwise, there will be no confidence level from investors and traders on the local stock market.

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DBS investigated by MAS

Nevertheless, even if one down-plays the SGX market disruption, an even more sinister development awaited Singapore investors. A week later, Singaporeans woke up to a shocking news that local bank DBS was investigated by the Monetary Authority of Singapore (MAS) for possible lapses in anti-laundering processes. DBS is expected to face regulatory actions for the deficiencies.

Considered as one of the most corruption-free cities in the world, this episode is an embarrassing stain on Singapore’s reputation. It also left the Singapore government red-faced and prompted MAS to set up new enforcement unit to tackle money-laundering activities in Singapore.

Doomsday for Swiber investors

Then on 28 July, local listed oil and gas company, Swiber, filed for liquidation. The shock announcement left many investors high and dry. After all, in 2007, it was trading for $7.00 per share. Now, investors could be staring at massive losses. This is a chilling development for the offshore sector and could signal more casualties on the way. Thus, if you are vested in SGX stocks, should you sell everything and exit the stock market?

To be frank, minority shareholders are often the biggest losers because they would always be the last to know the key developments of the company they invested in. They would have no time to react and sell their stocks to avoid suffering losses. The worse thing is that many investors do not diversify their investments across different assets. Thus, it only takes one poor stock’s performance to wipe out their entire portfolio value.

From February’s China stock market carnage to June’s Brexit and the recent unfortunate events, alarm bells have been rung. Investors should be aware that something may be brewing in the global stock markets. Hence, it makes sense to take a cautious approach when it comes to investing your wealth. You want to make money work hard for you, but you certainly don’t want to touch on risky assets that may turn toxic.

As a wealth builder, it is important to diversify wealth in different asset classes and not put all your eggs in one basket. Traditionally, the stock market generates the best returns for investors over the long run but there is a need to understand the concept of risk and returns. With higher returns, there are higher risks of losing your investments. Hence, it is not wise to channel all your funds into the stock market because all it takes is one market correction to wipe out your capital.

Wealth transfer

Gold and silver bullion allow you to transfer your wealth out of the treacherous stock market and hedge against market uncertainties. In particular, gold can preserve your wealth and protect your purchasing power in the face of inflation or deflation.

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In Singapore, BullionStar’s Bullion Savings Programs allow you to trade gold and silver online at any point of time. At very low price premium and spread, BullionStar allows you to convert grams in the Bullion Savings Programs (BSPs) to 100g PAMP Cast Bars and 15kg Heraeus Bars. Unlike other bullion savings programs (BSPs) are fully backed by physical precious metals.

Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.

BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.

Below are some gold bullion offered by BullionStar that are worth buying:

  1. PAMP Gold Bar – 1kg
  2. American Gold Buffalo Various Years
  3. BullionStar Mint Gold (No Spread)

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SG Wealth Builder engages Singaporeans on topics related to personal finance, entrepreneurship and investments, such as shares and real estate.

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