Straits Times Index Finally Hitting An All Time High

3rd July 2025 marks a historic moment for Singapore’s stock market.  The Straits Times Index (STI) has finally broken past its long-standing ceiling and closed at a new all-time high of 4019.57 points.  For years, the STI has lagged behind other global indices, frequently described as "boring", "defensive", or "undervalued", often trapped between 3000 and 3400.  Some others even nicknamed it the "Super Terrible Index".  However now, after what feels like a long, frustrating wait, I have finally witnessed a psychological and technical breakthrough and it feels both exciting and oddly sobering.

As someone who has been building a dividend-oriented portfolio in Singapore for years, this moment is more than just a number.  It feels like validation, a recognition that Singapore-listed companies are not stagnant, and that patience can eventually be rewarded.  It is a reminder that value and yield still matter in the long run.  I have been collecting dividends through thick and thin, reinvesting quietly, and watching the boring counters hold their ground.  Today, those "boring" stocks look a lot more attractive, and I can finally say some of my local counters have not just paid me well, they have also appreciated in capital meaningfully.

So, what now?  Is this the start of a new chapter for the Singapore market or just a euphoric spike?  I think the market may entering a more interesting phase.  The broader optimism around regional stability, improved clarity on US interest rates, possible outflow of funds from the west to the east, and a gradual recovery in China’s economy have all contributed to this breakout.  Singapore, often seen as a proxy to Southeast Asia and a safe harbour for capital, has begun to benefit from renewed investor confidence.  Certain REITs have bounced back with declining yield expectations, banks are showing resilient profits, and even industrials are finally catching a bid.  While all seems like sunshine, it may also be time for me to be cautious.

I think I got to remind myself constantly to stay realistic.  While this is a milestone worth celebrating, it doesn’t mean the STI will climb in a straight line from here.  Volatility will return, possibly sooner than expected.  With shifting geopolitics, uncertainties from unresolved tariffs issues, and ongoing wars from around the world, Singapore remains exposed.  Singapore market is comparatively very small and can be swayed easily by global fund flows.  A return of the strong USD or another inflation surprise could quickly cause foreign money to exit again.  So I am not throwing a party just yet, possible just enjoy a mini-celebration on the small wins, while acknowledging that although this level is meaningful, the path forward will still be bumpy.

From a personal portfolio standpoint, this rally has lifted my overall portfolio value, but more importantly, it has reaffirmed the core of my Barista FIRE (Financial Independence, Retire Early) approach.  Dividends are still flowing steadily, and the capital appreciation gives me a bit more buffer.  I will not change my strategy or my portfolio drastically just because we hit an all time high.  If anything, I am more cautious now.  I will continue to monitor valuations carefully.  Banks have had a strong run and gradually funds are flowing to the broader market as we see more big cap companies rise together to new highs.  At this point in time, I have already heard more chatter in forums and Telegram groups, people jumping in late, hunting for "undervalued" plays or hoping for STI to hit 4500.  That is not my game.  I have come too far with a patient mindset to abandon it now.  So yes, celebrate the high, but never abandon discipline.  I am going to stop myself from any "fear of missing out" (FOMO) purchases, and if there are no good opportunities, it is fine keeping the cash for better opportunities to come.  I may also start trimming where necessary (but minimal), especially if any of my holdings become overvalued relative to their fundamentals.

Moving forward, I will stick to my core strategy: keep expenses low, reinvest my dividend income stream for now, and avoid emotional shifts in allocation.  I am also watching interest rates closely.  If rate cuts do come faster than expected, REITs may continue to benefit, but I will just keep my expectations to the minimal, and not be too concerned with what I cannot control.

At the end of the day, this new all-time high is symbolic, but it does not change my core approach.  It just tells me that staying invested works and that compounding takes time.  Even in a market as unloved and overlooked as Singapore’s, eventually, good things do come to those who wait.  Cheers, to staying grounded, staying invested, and staying focused on the long game.  Barista FIRE, here I come...!