The U.S. stock market, particularly the S&P 500, just experienced a sharp and painful drop—what many are calling a “bloodbath.” Over a few trading sessions, the index shed hundreds of points, dragging global markets down with it. For Singaporean investors, especially those with exposure to U.S. equities through ETFs or brokerages like Tiger Brokers, Moomoo, or IBKR, the red across portfolios is hard to miss.
So, what exactly happened? Should we be worried? And most importantly—what should we do during this period of uncertainty?
Let’s break down the causes, implications, and how Singapore-based investors can respond smartly and confidently.
🌍 What Happened in the U.S. Market?
The S&P 500 dropped significantly due to a combination of factors:
1. Persistent Inflation and Sticky Interest Rates
The U.S. Federal Reserve signaled that it may keep interest rates higher for longer as inflation remains sticky. This hawkish stance makes investors nervous because high rates:
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Increase borrowing costs for companies
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Reduce consumer spending
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Lower the present value of future earnings (especially for tech and growth stocks)
2. Bond Yields Surging
The 10-year U.S. Treasury yield shot past 4.5%, making fixed-income investments more attractive and prompting a shift away from equities. Rising yields often precede slowdowns or recessions.
3. Geopolitical Risk
Conflicts in the Middle East, tensions in Ukraine, and ongoing friction between the U.S. and China add pressure to the markets. Investors are reducing risk exposure amid global uncertainty.
4. Earnings Season Nerves
U.S. corporate earnings season has been mixed. While some companies are beating estimates, others—especially in tech and retail—are falling short, sparking sell-offs in major sectors.
🇸🇬 Why This Matters to Singaporean Investors
As a global financial hub, Singapore is deeply tied to international markets. Our CPF Investment Scheme (CPFIS), Robo-advisors (like Endowus or Syfe), and REIT portfolios often include U.S. equities or ETFs like the S&P 500 (SPY, VOO) and Nasdaq-100 (QQQ).
If you’re holding these:
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You’ve likely seen some paper losses recently.
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You might be wondering if you should sell or hold.
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You may also be comparing it to the safer returns of Singapore Savings Bonds (SSBs) or fixed deposits, which are now yielding 3–3.4% annually.
But market corrections, though painful, are not new—and not always bad.
📈 Corrections Are Normal (Even Healthy)
Historically, the S&P 500 sees a 10% correction every 12–18 months. It’s part of the natural cycle of the market.
Over the long term, markets trend upward. Since 2000, the S&P 500 has powered through:
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The dot-com crash
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2008 Global Financial Crisis
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COVID-19 pandemic
And despite those events, it has generated annualised returns of around 7–10% over time—much higher than most fixed income options.
🧠 What Should Singapore Investors Do?
Here’s a game plan tailored for retail investors in Singapore—whether you’re investing through cash, SRS, or CPF.
1. Don’t Panic and Dump Everything
Selling in a panic often locks in your losses and causes regret when markets rebound. If you’re investing for long-term goals like retirement, property down payments, or children’s education, keep a cool head.
💬 “Time in the market is more important than timing the market.”
— Proven wisdom, especially relevant now.
2. Check Your Investment Horizon
Ask yourself:
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Are you investing for the next 1 year or the next 10?
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Can you stomach volatility in exchange for future growth?
If your goal is 5–10 years away, short-term dips shouldn’t bother you. For example, a 35-year-old investing for retirement at 65 can afford to ride out volatility.
3. Continue Dollar-Cost Averaging (DCA)
If you’re doing monthly DCA into ETFs like:
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SPY / VOO (S&P 500)
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QQQ (Nasdaq)
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IWDA / VWRA (global exposure)
… then stick with it. You’re now buying shares at a discount. This reduces your average cost per unit over time—a proven strategy for building wealth steadily.
4. Diversify Beyond the U.S.
Singaporean investors often concentrate too heavily on U.S. tech. Use this time to diversify:
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SGX-listed REITs like CapitaLand Ascendas REIT, Mapletree Logistics Trust
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Global ETFs with Asia/Europe exposure
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Dividend stocks in the U.S. and Singapore
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Bond ETFs or SSBs for capital preservation
You don’t need to abandon U.S. equities—just balance your portfolio better.
5. Review Your CPF & SRS Portfolios
If you’ve used SRS to invest in index funds or REITs, remember:
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These are long-term tax-deferred investments.
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Don’t panic sell based on short-term dips.
If you’re investing your CPF OA in equities, make sure the risk is aligned with your age and retirement plans. Consider a mix of:
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Endowus Flagship CPF Portfolios
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LionGlobal Infinity 500 (CPFIS-approved S&P 500 tracker)
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Conservative bond funds for older investors
6. Park Emergency Funds in SSBs or T-Bills
While markets are volatile, it’s smart to park short-term cash in safe instruments like:
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Singapore Savings Bonds (SSBs) – Now yielding ~3.3% over 10 years
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6-month T-bills – Yielding ~3.7–4.0%
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High-interest savings accounts – With Singlife, UOB One, or OCBC 360
But don’t confuse emergency savings with long-term investing. They serve different purposes.
7. Consider “Barbell” Strategy
One smart approach during uncertainty:
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Core holdings: Broad-based ETFs and dividend-paying blue chips
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Tactical bets: Small positions in growth stocks or sector plays (e.g., energy, AI, green tech)
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Defensive buffer: Cash, bonds, and REITs with stable yields
This gives you upside potential while managing downside risk.
✨ Final Thoughts: Stay Calm, Stay Invested
The current market drop feels scary—but remember: every crisis has eventually passed. The best investors don’t react emotionally. They observe, learn, and take advantage of market inefficiencies.
For Singaporean investors, this is a time to:
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Revisit your strategy
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Stay diversified
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Continue investing systematically
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Focus on long-term goals like financial freedom or early retirement
Corrections test your discipline, but they also offer opportunity.
🧘♂️ “The stock market is a device for transferring money from the impatient to the patient.”
— Warren Buffett
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