The stock market is soaring.\u00a0<\/p>\n
Singapore\u2019s Straits Times Index (SGX: ^STI) closed above the 4,400 level last Friday (3 October), a historical high after advancing approximately 16.5% in 2025.\u00a0<\/p>\n
This surge has, unsurprisingly, sparked a wave of excitement and urgency, fueling the fear of missing out (FOMO).<\/p>\n
However, history has shown that such hot markets can be deceptive, often misleading individual investors into costly mistakes.\u00a0<\/p>\n
While each investor may respond differently at market highs, the critical question isn\u2019t whether to invest, but how to maintain discipline amid the rapid rise in share prices.<\/p>\n
Why Hot Markets Tempt Investors<\/p>\n
A rising market creates an illusion of easy profits, as FOMO drives investors to chase prices higher while the media buzz strengthens the pack mentality.<\/p>\n
As the index continues its rise, even cautious investors have the impression that it is better to be quick than to be disciplined.\u00a0<\/p>\n
The appeal of quick profits justifies the placing of more reckless wagers that are not properly evaluated.<\/p>\n
The Dangers of Chasing Highs<\/p>\n
Buying at inflated valuations means paying premium prices that leave little room for future returns.\u00a0<\/p>\n
Stocks priced for perfection can suffer from major selloffs even with minor disappointments.\u00a0<\/p>\n
History shows that sharp corrections often follow periods of euphoria, erasing gains quickly.\u00a0<\/p>\n
When markets eventually fall, the investors who were swept up by FOMO will often react emotionally, selling in panic, and in the process, undermining their own long-term wealth creation.<\/p>\n
How to Invest Wisely in a Hot Market<\/p>\n
But if that is the case, how do you keep your money safe in hot markets?\u00a0<\/p>\n
Here are five rules to follow during market highs.<\/p>\n
Focus on the fundamentals: When investing, analyse earnings and cash flow as well as the balance sheet. Even in uncertain times, well-run businesses can still create value.<\/p>\n
Use dollar-cost averaging: Investing a fixed amount at regular intervals over time, regardless of market conditions, helps to smooth out your average cost.\u00a0<\/p>\n
Invest in multiple sectors: Focusing only on the hottest trends such as technology or AI can be risky, while diversification helps reduce volatility.\u00a0<\/p>\n
Conserve cash: Keep cash to make the most of market volatility. Cash provides the flexibility to act when opportunities arise.<\/p>\n
Think long-term: Compounding rewards patience. Investors who consistently reinvest in quality companies, rather than timing the market, are more likely to reap the fruits of their investments.Examples From Singapore\u2019s Market High<\/p>\n
Singapore\u2019s current bull run highlights how quality companies can thrive even when prices look elevated.\u00a0<\/p>\n
Three blue chip stocks: DBS Group Holdings (SGX: D05), Singapore Exchange (SGX: S68), and Singtel (SGX: Z74) demonstrate why fundamentals matter.<\/p>\n
DBS closed on Friday at S$52.86, a whisker away from its 52-week high of S$53.24.\u00a0<\/p>\n
For the second quarter of 2025 (2Q2025), total income rose 4.6% year on year (YoY) to S$3.6 billion despite a slight dip in net interest margins.\u00a0<\/p>\n
Over the same period, the bank reported a net profit of S$2.8 billion, a 1.3% YoY increase.\u00a0<\/p>\n
DBS also announced a S$0.75 dividend per share for the quarter, consisting of an ordinary dividend of S$0.60 and a capital return dividend of S$0.15.\u00a0<\/p>\n
At its current price, shares offer a 5% yield.\u00a0<\/p>\n
With a market capitalisation of S$150 billion, DBS shows why financial strength and digital transformation underpin resilience in all market conditions.<\/p>\n
Meanwhile, Singapore Exchange posted record results for its fiscal year ended 30 June 2025 (FY2025), with net profit of S$648 million, up 8.4% year on year.\u00a0<\/p>\n
Net revenue grew 11.7% to approximately S$1.3 billion as trading activity surged.\u00a0<\/p>\n
SGX announced a rising dividend policy, committing to increase quarterly dividends by S$0.0025 cents annually from FY2026 through FY2028.\u00a0<\/p>\n
The bourse operator\u2019s IPO pipeline is the strongest in years, supported by market reforms and institutional inflows.\u00a0<\/p>\n
At S$17.53 last Friday, SGX attracts investors seeking exposure to Singapore\u2019s economic dynamism and growing capital markets.<\/p>\n
Shares offer a dividend yield of 2.1%.\u00a0<\/p>\n
Elsewhere, Singtel delivered a five-fold increase in net profit to S$4.02 billion for its fiscal year ended 31 March 2025 (FY2025), boosted by a one-off gain from its Comcentre divestment worth S$1.3 billion.\u00a0<\/p>\n
For 1QFY2025, underlying profit rose 14% year on year to S$686 million.\u00a0<\/p>\n
Shares climbed to S$4.25, the highest it\u2019s been since 2015, following the announcement of a S$2 billion share buyback programme and asset monetisation plan.\u00a0<\/p>\n
The future prospects of Singtel are reinforced by strong regional contributions, especially by the increasing data centre business of Singtel, along with strong contributions from Bharti Airtel.\u00a0<\/p>\n
Stable dividends along with commitment from the company towards ensuring returns to shareholders is a matter of concern for the investors.<\/p>\n
These examples demonstrate why investors must look beyond market momentum to examine underlying fundamentals.<\/p>\n
Get Smart: Stay Disciplined in Hot Markets<\/p>\n
One should approach a hot market with the discipline of a patient investor and not dive head-first.<\/p>\n
Investors can reap success in a bull market by combining disciplined dollar-cost averaging, avoiding cash-flow negative investments, and maintaining a well-diversified portfolio positioned for sustainable long-term growth, regardless of short-term market swings.<\/p>\n
DBS, SGX, and Singtel exemplify why strong businesses can still provide investors with decent dividend yields even at elevated prices.\u00a0<\/p>\n
True wealth comes not from chasing market highs but from compounding returns in quality companies through every cycle.<\/p>\n
The world\u2019s gotten unpredictable, but some Singapore companies have quietly kept thriving. You\u2019ve probably seen them in your daily life. And yes, they\u2019ve kept paying dividends through it all. Meet 5 resilient stocks built to navigate global storms. Get the free report here<\/a> and see how they\u2019ve done it.Follow us on Facebook<\/a>, Instagram<\/a> and Telegram<\/a> for the latest investing news and analyses!<\/p>\n Follow us on Facebook<\/a>, Instagram<\/a> and Telegram<\/a> for the latest investing news and analyses!<\/p>\n Disclosure: Joanne owns shares of DBS.<\/p>\n \t