Honing in is what matters amid market volatility
Investors should focus on longer-term outcomes rather than react to short-term dislocations
Add BT as a preferred source
AUGUST kicked off with a perfect storm that sparked the great unwind of some of the most crowded, popular trades.
After a strong first-half performance, this recent bout of market volatility is a timely wake-up call for investors, a reminder that the best-laid plans can be derailed by short-term factors.
Crowded trades are positions where investors may have factored in some level of consensus and elevated expectations of certain outcomes. Some examples: That earnings growth justifies higher valuations for generative artificial intelligence (gen AI)-related stocks; or that higher inflation and a stronger US economy correlate with higher bond yields; or that a weak Japanese yen correlates with borrowing the currency to fund trades, in addition to buoying the prospects of Japanese exporters.
TRENDING NOW
CSE Global independent director quits after clashes with chairman Eugene Lai over board refresh
Cat A COE rate exceeds Cat B for third time in 4 months; premiums largely down
What’s wrong with Orchard Road? Experts weigh in on the street’s cachet and its future
Singapore workers experiencing rising anxiety; signs of fallout from pressure to use AI
