A loyal shareholder reflects on riding through tough times in equities markets

EVENTS such as the conflict in the Middle East make one question many things in life.

For one thing, I question my inertia on my stock holdings. Perhaps I should have pared equities positions quickly, given how messy the situation in the Middle East is.

Elevated energy prices can drive inflation higher, hurt economic growth and foment social unrest. In such a scenario, can equities perform?

I berate myself for not using my financial knowledge as a chartered financial analyst or my prior experience working for top investment banks, including Goldman Sachs, to manage my financial investments more coldly and astutely.

Much of my listed equities holdings are in Singapore stocks. I also have significant exposure to Hong Kong stocks.

The situation comes out of familiarity. I grew up in Singapore and spent most of my working life there. I also worked in Hong Kong for several years.

Shareholder loyalty

Many of my equities investments are held through thick and thin out of loyalty.

I hold fond memories of living in Hong Kong and working for the manager of Link Real Estate Investment Trust (Reit). I express confidence in Hong Kong’s future by supporting its equities market, where my holdings include Link Reit.

While I wonder why it invested in properties in Australia and the UK, I maintain a relationship with the trust by being its unitholder. 

A large part of my net worth is tied to Singapore equities. How these investments perform will affect my financial well-being significantly when I retire.

I own a diversified portfolio of Singapore-listed equities, comprising major Temasek-linked groups and entities linked to some of the wealthiest families in town.

I support Singapore groups because I want to see our businesses thrive. I am proud when a local company succeeds overseas.

This country has given me and my family opportunities. In return, I think one way I can give back is by backing home-grown companies with a large presence here. 

Unsurprisingly, shocks such as the Iran war send equities prices tumbling.

When times are tough and fear is rampant in equities markets, I think Singapore companies can benefit from having shareholders who continue to back them.

After all, when shareholders support companies in tough times, their share prices may hold up better; this, in turn, gives a company’s lenders, staff, customers and suppliers greater confidence in the company.

Of course, I hope that it is not entirely irrational to be a loyal investor in numerous Singapore-listed entities.

Dealing with external shocks is unavoidable for an equities investor. Wars, pandemics, financial crises, major natural disasters and so forth can raise fear among investors and send share prices plunging.

Being “long Singapore”

Still, because I am long on Singapore stocks, equities could pay off in the long run.

Major external shocks may recede. And the global economy may generally expand, driven by population growth, productivity gains, growth in trade and infrastructure investments. 

As global education levels rise and artificial intelligence grows more powerful, diverse sectors could enjoy innovation-led gains. Also, we may be in the early stages of reaping benefits from the space economy.

In short, the global economy has powerful structural drivers. And Singapore, with its sound governance, business-friendly environment, embrace of AI, long-term planning and assiduous cultivation of trade ties with many countries, might shine bright.

Importantly, Singapore maintains deep and strong relationships with its neighbours. In a world rife with geopolitical conflicts, being in a peaceful neighbourhood can offer a huge competitive advantage.

The Republic’s growing attractiveness for people to live, work and play in, the trust other countries have in Singapore as a partner, and the strong Singapore dollar can power local equities over the long run.

I am hopeful that the loyalty I show in Singapore stocks in tough times will not hurt my financial adequacy in my retirement years.

Admittedly, market volatility is easier to stomach when one is in full-time employment. Receiving a regular pay cheque is handy to cover outgoings.

On the other hand, a retiree living off dividend income from owning shares might understandably be extremely anxious over whether major shocks will erode a listed company’s profits and impair its dividend-paying ability.

Boards of directors and management teams of listed companies may focus investor relations efforts on their existing large shareholders, as well as potential shareholders with big buying power. 

Nonetheless, I hope that boards and management teams of listed entities always think of small, loyal shareholders, including retirees.

Sure, business leaders can make mistakes: expand in the wrong market, miss a market trend, and move too quickly or too slowly. Nonetheless, I am generally fine if corporate leaders are trying their best and a company has more hits than misses.

Also, while I can understand companies laying off staff, I hope this is handled with care and compassion.

Parsimony

What really peeves me, however, is if companies are extravagant with the pay and expenses of boards and senior management. 

Retail shareholders put their hard-earned money in a listed company. Surely, companies should be parsimonious on board and top management remuneration and expenses.

DBS’ non-executive chairman Peter Seah and chief executive officer Tan Su Shan received remuneration of S$2.3 million and S$9.6 million, respectively, for 2025.

Tan became CEO on Mar 28, 2025, and was deputy CEO before that.

A non-executive chairman of a major company might have been a former top corporate or public-sector leader who may hardly need to be motivated by financial reward.

Are non-executive chairmen and CEOs of leading corporates excessively compensated? Their remuneration can work out to many multiples of S$149,352 – what a resident household with the median monthly market income of S$12,446 in 2025 might earn in a year. 

Moreover, the annual remuneration of members of boards and senior management easily exceeds – by many times – the annual dividend that typical retail shareholders get.

Importantly, is extreme care taken with managing the expenses related to events and trips taken by board members and top management?

I am willing to be a loyal small shareholder when the going gets tough. However, I urge boards and management teams of companies to be humble.

Recognise that when business booms, it is often not largely due to the effort of the board and management team, but because of positive sector tailwinds and favourable external conditions.