As of last Friday (7 November 2025), the NASDAQ Composite Index (INDEXNASDAQ: .IXIC) sits 4% off its all-time high while the broader S&P 500 hovers 3% below its peak.
The surprise?
Singapore’s Straits Times Index (SGX: ^STI) broke past 4,500 to close at a record high, diverging from its US counterparts.
Despite the different fortunes, the same anxiety grips investors on both sides of the Pacific.
Those already invested worry that a correction lurks around the corner, threatening their gains.
Meanwhile, those sitting on the sidelines share identical concerns: why invest at near-record highs if prices will inevitably fall?
Here’s the uncomfortable truth: the stock market will eventually fall.
History says it will happen.
Every bull market ends, every rally reverses, and every peak precedes a valley.
Yet, the perennial question that nobody can answer is: when?
The risk of a decline is real.
Market corrections, or declines of 10% or more, have happened in the past and will happen again.
The statistics are sobering.
Since 1993, Singapore’s STI has experienced falls of 10% or more in eight out of every 10 years.
On the other side of the ocean, the S&P 500 experiences a similar correction about once every year-and-a-half, according to wealth manager Ben Carlson.
The tech-heavy NASDAQ historically falls once every two years.
With corrections this frequent, you’d think selling would be straightforward.
The logic is compelling: sell now, wait for the inevitable drop, then buy back lower.
There’s a clear benefit to this move: you lock in your gains.
You can sleep soundly knowing your gains are safe, maybe even take that vacation you’ve been planning.
That’s the easy part.
But for every upside, there are downsides to consider too.
There are pros and cons to every move you make in the stock market.
The trick isn’t finding the perfect move — it’s going in with the right expectations.
Let me show you what I mean using a local stock: DBS Group (SGX: D05)
Shares closed at nearly S$55 per share last Friday, a whisker away from its all-time high.
You could make a compelling case for selling today.
At this level, the bank’s shares trade at well over two times its net book value — far above its historical price-to-book (P/B) average of 1.5 times.
So, as the logic goes, you can sell now at this premium valuation, wait for shares to drift back to historical norms — then, buy back at a lower price.
The upside is clear: you lock in real gains — that’s real money in your pocket.
