Others, like DBS, already forecast an auspicious 8%, albeit a “more moderate” follow-through to 4,880 for 2026, on its way to its 2040 target of 10,000.
Should we stay the course?
Evidently, many local market investors have been rewarded with champagne gains in index stocks, REITs and small- and mid-caps (SMIDs). From my social media feeds, many are putting on winter wear as they enjoy their holidays in snowy destinations. Perhaps that is why Malaysian retailers in Johor Bahru are complaining that their takings are down, not necessarily because the ringgit has rebounded.
This December, I am staying put at home, enjoying the mildly melancholic cool, rainy weather. I find myself having more meaningful and unhurried conversations with others about their vacations. Despite the healthy gains here, Singapore is trading at a relatively modest valuation relative to the West and therefore carries less downside risk. Plenty of broader economic uncertainties remain, but cautious optimism persists that we are on course for DBS’s 10,000-point long-term target.
See also: Dancing Queen, feel the beat of the tambourine
In the interim, there is some conviction that the Monetary Authority of Singapore’s market-boosting and value-unlocking measures, which run through next year, will yield more alpha in the SMID range of stocks and that this will require more sober research in the new year.
If the DBS forecast holds, the STI ETF, where a fair amount of my CPF savings is allocated, will still accrue. However, with 2025’s fireworks of a 20% gain, I expect the gains to be more gradual in 2026, but will still beat the “risk-free” 2.5% interest of the Ordinary Account.
I hope this continues as I too meander another year closer to 55 in 2027. That is where I can withdraw some of these funds. In the meantime, putting them to work in the market here will yield approximately a 4% dividend carry, assuming market risk.
See also: Asian stocks set for muted open in holiday trade
It’s the end of the party
And the morning seems so grey
So unlike yesterday
Now’s the time for us to say
Back in September 1999, Kevin Hassett and James Glassman predicted that the Dow Jones Industrial Average would jump fourfold by 2002 or 2004, reaching 36,000 points. Back then, it was described as “the most spectacularly wrong investing book ever”. That bold call finally materialised in early 2022, just before the steep US market correction from the fluffy meme-stock Covid-2021 bubble.
And almost two years later, the Dow regained that level after some heart-wrenching churn, thanks to the Magnificent Seven stocks, the beginnings of the AI stock market rally. In recent weeks, that AI-driven rally has looked shaky, with Broadcom missing growth forecasts and falling 11% in a day. The Dow has perhaps “overshot” the author’s prediction by a third, to 48,000, even if it was 20 years off the original timeline.
Hassett, who got it so wrong then, is today a frontrunner to replace Jerome Powell as chairman of the US Federal Reserve. As the current director of the National Economic Council since 2025, Hassett would clearly have President Donald Trump’s agenda to more aggressively lower interest rates, even if Powell complained at the December cut press conference that the administration’s US employment data is overstated.
It is anyone’s guess whether inflation will rear its ugly head whilst unemployment rises, no thanks to Trump’s self-assessed “A++++” state of the economy, as we adjust to tariffs and constant policy changes.
Earlier this year, I stepped away from the wild American West and I am happy to stay away from any “morning-after” effects.
Sometimes I see
How the brave new world arrives
And I see how it thrives
In the ashes of our lives
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Still, there is much to be thankful for this season beyond the Singapore stock market returns. The recently released The Albatross Files recounts the conviction of Dr Goh Keng Swee, who, with courage, refused to take instructions and engineered a separation from Malaysia that has enabled this little red dot to thrive as we round off our SG60 celebrations.
In the separate book launched just before by another of our greats — Lim Siong Guan — titled after my school motto, “The Best Is Yet To Be”, a story was told of how Goh told his staff not to amend papers to reflect his judgment or decisions if he disagreed with them. Instead, he would write his own opinion on their paper, make the call transparently and take accountability. Respect.
As we navigate the complex world of today, made possible by the good faith, courage and determination of our founding fathers, one hopes that we too will have the conviction and the fortitude to make the calls when needed, and not be so risk-averse now that we have more to lose, that we are unable to take the bolder bets when needed. If so, STI 10,000 is a when-not-if question.
Oh yes, man is a fool
And he thinks he’ll be okay
Dragging on, feet of clay
Never knowing he’s astray
Keeps on going anyway
This year, it seems especially poignant as we empathise with the human tragedies. Wars were in the news, at the border between Thailand and Cambodia. Wars entering the fourth year between Russia and Ukraine, the latter of which is now pressured to give up territory, in an era where the Pax Americana has evolved into a “might is right” era. Wars that may yet come, as boats get blown up and tankers seized as a US naval armada circles off the coast of Venezuela.
In addition, natural disasters exacerbated by poverty, such as cyclonic floods in Sri Lanka, Indonesia and the Philippines. Or man-made tragedies, potentially from neglect and corruption, as suffered by residents of the Wang Fuk Court apartments in Hong Kong.
We are blessed to be in Singapore, but we should not take our peace and security for granted. The slippery slope of race and religion raised its ugly head in local politics this year. Let’s keep those genies firmly in the bottle.
Seems to me now
That the dreams we had before
Are all dead, nothing more
Than confetti on the floor
We are standing at the edge of another precipice, as America is, according to bestselling author Neil Howe, in the midst of the fourth turning, which began around 2008 and will redefine society. This is identified as a perilous crisis, marked by deep societal division, institutional decay, and the potential for upheaval, echoing past events like the civil war or WWII, but also promising potential renewal.
It is expected to run till the early 2030s. Extreme actions may lead to extreme reactions as Millennials and Gen Z seek community, purpose, and order, while Boomers and Gen X grapple with the breakdown of established structures.
If there were ever a time when global, regional, and local solidarity was more urgently needed, it is now. Even if climate deniers in policy and power hold the upper hand for the moment, and the Paris Agreement and annual COP commitments are slipping, we can, individually, with agency, try to live a more zero-waste lifestyle. It is with agency that we all have the power to make a small difference. And it will all add up collectively.
It’s the end of a decade
In another 10 years’ time
Who can say what we‘ll find
What lies waiting down the line
In the end of 89
When Abba wrote this in 1980, they had no idea the Berlin Wall would fall in 1989. It was peak global solidarity after the world rallied for the famine in Ethiopia with Food Aid, and glasnost and perestroika thawed the Cold War and ushered in a period of globalisation, free trade, and prosperity. It is now in reverse.
It is also the end of SG60. I am grateful to all who supported The Community Chest SGShare endeavour, where 300,000 Singaporeans spared a thought and a dollar for those less able amongst us this year, making a big impact for over 90,000 of us. I encourage us all to continue giving back regularly, especially when the market provides us with the means.
As I too complete my journey at Community Chest after seven years, having helmed half of it as the chairman, and move on to the next part of my journey of purpose, my wish for all this year-end is captured in the refrain below:
Happy New Year, Happy New Year
May we all have a vision now and then
Of a world where every neighbour is a friend
Happy New Year, Happy New Year
May we all have our hopes, our will to try
If we don’t, we might as well lay down and die
You and I
Chew Sutat retired from the Singapore Exchange after 14 years on its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange. He was awarded FOW’s Lifetime Achievement Award.
