A study of $STI(^STI) fluctuations and yearly returns

Since an investor portfolio of common stocks is a small subset of the STI index, it maybe beneficial to have an idea of the stock market history in terms of fluctuations and returns from yearly perspectives. Based on historical data of the STI index from 1987, these are some observations which hopefully will provide some ideas of the magnitude and duration of stock market swings. I make no attempt to study the trends nor make any predictions about its future. Perhaps this is useful for setting expectations, or preparing long term investors both financially and psychologically for the possibilities.

From 1988 to 2016, for each year the maximum & minimum values, and the closing value for the year were compiled for 29 years of data. Since I don't have any dividends information, they were not added. If dividends were to be considered, say 3% compounded, then the returns will be much better. As always, DYODD, and check for any errors.

Yearly Fluctuations
1) Minimum 14% in 2014 (2953 to 3388); Maximum 81% in 2008 (1474 to 3475)
2) Average Fluctuations = 34%

Yearly Returns w/o dividends
3) Number of positive years = 17, number of negative years = 12
4) Total returns for 29 years = 250%, CAGR = 4.4%
5) Maximum gain 78% in 1999 (1393 to 2480); Maximum lost -49.6% in 2008 (3482 to 1762)
6) Number of years more than 30% = 5; Less than -30% = 2
7) Number of years between 0% to 30% = 12; Between 0% to -30% = 10
8) Worst stretch was 3 years from 2000 to 2003, declined -46%. Another 3 negative years from 1996 to 1998, declined -39%.
9) Best stretch was 5 years from 2003 to 2007, advanced 160%

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theintelligentinvestor

In 2017, the STI market returns is 18.1% and fluctuation is 19% which is similar to 2017. I have compiled for the past 30 years, ie 1987 - 2017:

Yearly Fluctuations
1) Minimum 14% in 2014 (2953 to 3388); Maximum 81% in 2008 (1474 to 3475)
2) Average Fluctuations = 32%

Yearly Returns w/o dividends
3) Number of positive years = 18, number of negative years = 12
4) Total returns for 30 years = 313%, CAGR = 4.8%
5) Maximum gain 78% in 1999 (1393 to 2480); Maximum lost -49.6% in 2008 (3482 to 1762)
6) Number of years more than 30% = 5; Less than -30% = 2
7) Number of years between 0% to 30% = 13; Between 0% to -30% = 10
8) Worst stretch was 3 years from 2000 to 2003, declined -46%. Another 3 negative years from 1996 to 1998, declined -39%.
9) Best stretch was 5 years from 2003 to 2007, advanced 160%

Yearly Returns with dividends (assumed at 3%)
10) Number of positive years = 20, number of negative years = 10
11) Total returns for 30 years = 893%, CAGR = 8%

SSJ4

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Reply to @corycat : etf is the average of the market. Unless.....all 30 stock performed worst than the historical

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CoryLogics

STI index has been flat for a decade. Will it be another ?

CoryLogics

Reply to @kc2024 : Good question. I think it heavily depends on when you start and when you ends. Why I say that is, investing decision is NOW not starting from 20 years ago.

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wellhandy

I see the post is in March, any updates? :)

This is useful because Singaporeans have shown so far to be "don't buy too high, jeep at lower" people, market prices show that. In a range for years.

wellhandy

Reply to @theintelligentinvestor : i like tame. tame markets make money with more relaxed emotions.

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fanoflynch

Hi, I am a great follower of the guy who wrote your username and I treat his book like my bible. I recite and chant it everyday and every night before I sleep and after I wake up, especially when things get scary (hahaha exaggerating).

Interesting findings and thanks for the effort put into compiling the information.

Given that the average compounded annual growth rate based on this history of the STI is 4.4% to 7.4% (with divvy), how come many Singaporeans don't invest in the SnP500 ETF or the US market in general? The returns are often much more rewarding and given that this ETF is from an index and the SnP500 has such a strong upward trajectory, it isn't any more risky than SGX. In fact, I would say Singapore's economy would collapse before America's!

marginofsafety

Reply to @fanoflynch : Actually I don't think that you can say for a fact that the S&P gives higher return over the STI tbh. If you compare the period from Apr 02 (ES3 inception) to now, actually both of them gives similar returns. You can check S&P returns with div reinvested here: https://dqydj.com/sp-500-return-calculator/

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Evilcrownofthorns

Thanks for sharing this. It's interesting but I am unsure how to make use of this information to make decisions.
But still digesting.....

theintelligentinvestor

Reply to @Evilcrownofthorns : I don't think this should be used to make decisions. Rather I think it is useful to set expectations on what can happen. Just a reminder that market is not always so rosy. Cheers!

ergkmaslowcari

STI index is stained with dirt pips % keyboard dirt collection.
DJIA keyboards are fingers licking.
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pharmaceutical industry's standard societies inequality.
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consequently east used West vs money drugstores valeant pharmaceutical products>>>
oil products and gas collapsed like pound down.https://www.bloomberg.com/news/articles/20.....
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https://en.m.wikipedia.org/wiki/Saudi_Aramco
Saudi Aramco's value has been estimated at anywhere between US$1.25 trillion and US$10 trillion, making it the world's most valuable company. Saudi Aramco has both the world's largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3), and largest daily oil production.

allenlow

if add in dividend and reinvestment the return will be alot better after so many years. still reading the intelligent investor book!

LevelUp

Thanks very much for your effort and time for coming up with this post!

Dividend_Warrior

Thanks for compiling & dissecting the data. Interesting read.

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