Why your uncle's stock tips work for him but not for you

The same stock can make or lose money depending on when you plan to sell

[SINGAPORE] My colleague recently complained about missing out on DFI Retail's rally. "I saw the news about Guardian's parent company last week," he said over kopi at the hawker centre. "But I didn't buy because I'm saving for my kid's university fees in 10 years. Now it's up almost 20 per cent in one week."

His mistake wasn't missing the trade. It was thinking a stock that's perfect for a quick flip would also work for a decade-long hold. They're completely different games.

This confusion happens all the time. Your uncle brags about making 40 per cent on some penny stock in three months. You buy the same stock planning to hold it for retirement, and it goes nowhere for years. Or worse, your colleague tells you DBS is boring and slow-moving, so you avoid it, only to watch it steadily climb 30 per cent while paying dividends that compound.

Here's why the same stock can be both a brilliant buy and a terrible investment depending on your timeline.

The hawker uncle's three-month flip versus your CPF top-up strategy

Think about how you'd invest S$50,000 if you needed it back in three months versus how you'd invest it if you didn't need it for 10 years. Completely different approach, right?

For the short-term money, you can't afford a 20 per cent drop. You need stocks that are already moving up, with recent news that keeps buyers interested. Liquidity matters because you might need to exit quickly. Basically, you're trading on momentum and news flow.

For the long-term money, a 20 per cent drop is just noise. You want companies that will exist and thrive in a decade, paying growing dividends the entire time. You can ignore daily price movements and focus on whether the business is getting stronger year after year.

Short-term investing is like taking a taxi to Changi Airport during rush hour. You need to know which roads have traffic, which shortcuts work, and you're constantly monitoring the route. Long-term investing is like booking a flight to London six months out. You don't check flight prices daily or worry about turbulence. You just want to arrive at your destination.

Three stocks for the short-term trader

Let's talk about stocks that work if you're looking to make money over the next few months, not years.

DFI Retail Group – the company that owns Guardian and 7-Eleven – just announced they're getting serious about profits. They raised their earnings targets and promised to pay out more dividends. The stock jumped nearly 20 per cent in a week.

Now here's the interesting part. After that huge jump to US$4.10, the stock only fell to US$4.07 by the end of the week. It's like when a hawker raises prices for char kway teow from S$4 to S$5, and customers keep coming. That tells you something about demand.

For someone who bought at US$3.50 a few weeks ago, this looks promising for a few more months. The momentum is there, people are still buying, and the company just gave everyone a reason to stay interested. But – and this is important – at some point the excitement fades. Maybe in three months, maybe in six. Short-term trading means knowing when to take profits.

Venture Corporation makes electronics for other companies. Most people have no idea what they do, but the stock just hit an all-time high. While almost every other stock dropped last week, Venture went up 1.6 per cent.

That's like being the only shop with a queue during lunchtime while neighbouring shops are empty. Smart money is buying. For a short-term trade, you ride this momentum. But long-term? Who knows if their contracts will still be profitable in five years when technology changes.

Singapore Exchange makes money when people trade stocks. When the market gets exciting and everyone's trading, SGX earns more fees. It's like how the ERP gantries collect more when traffic is heavy – more transactions mean more revenue.

The stock is about 7 per cent below its recent high, so there's room to recover if trading activity picks up. For the next few months, this could work. But it's not the kind of thing you buy and forget for 10 years unless you're betting Singapore will always be a trading hub.

The two-year transformation bet

Medium-term investing is different. You're betting on companies going through real change, but change takes time.

My friend's father worked at Sembcorp for decades when it was primarily about power generation. Now the company is shifting heavily into renewable energy – solar farms, wind projects, the works. This kind of transformation doesn't happen overnight.

Sembcorp Industries is down 26 per cent from its peak earlier this year. For a short-term trader, that's scary. But if you believe Singapore is serious about clean energy and Sembcorp will be a major player, buying after a 26 per cent drop makes sense for a one to two-year hold.

The stock trades at about 10 times what the company earns annually, which is cheap compared to other energy companies. The catch is you need patience. Transformation stories don't play out in three months. They play out over multiple quarters as new projects come online and financial results improve.

Singapore Technologies Engineering is another transformation story. During Covid, aerospace basically stopped. Now it's recovering, and ST Engineering is also expanding into cybersecurity and digital services. The government backs them, they've got long-term defense contracts, and commercial aviation is coming back.

The stock has nearly doubled from its low point but is still 9 per cent below its peak. That's actually not bad – it shows steady progress rather than speculative mania. For someone investing today for 18 to 24 months, the recovery story is still playing out.

Keppel used to be all about oil rigs and marine engineering. Anyone who's driven past Tuas knows those massive structures. But oil rig construction has become less profitable, so Keppel is pivoting into data centres and renewable infrastructure. Singapore needs more data centres for our digital economy, and Keppel has the expertise to build them.

This pivot takes time. You can't just snap your fingers and become a data centre company. But over two years, if Keppel lands major contracts and shows improving profits from the new business, the stock should reflect that. Today it trades at about 21 times earnings, which is reasonable for a company reinventing itself.

The retirement portfolio stocks

Long-term investing is about finding companies that will still be important in 10 years and pay you growing dividends along the way.

DBS is the obvious one. If you asked 100 Singaporean investors to name a stock they'd hold for 20 years, probably 90 would say DBS. There's a reason for that.

The bank keeps raising dividends. They recently committed to paying S$0.72 per share quarterly by 2026, plus additional special dividends. That's a solid yield on today's price, and it keeps growing. DBS isn't going to double in six months, but over 10 years, with dividends reinvested, it compounds nicely.

More importantly, DBS isn't going anywhere. They're the dominant bank in Singapore and Southeast Asia. As long as people need banking services and Asia keeps growing wealthier, DBS has a business. You can buy it, collect dividends, and not worry about checking the price every week.

United Overseas Bank is similar to DBS but cheaper. At about 10 times earnings compared to DBS at 14 times, UOB offers better value. The bank is more conservative, which means slower growth but also fewer surprises. For retirees or people close to retirement who can't afford big drops, UOB's stability matters.

The bank pays about 5 per cent in dividends annually. In CPF, you'd get 4 per cent. So you're earning slightly more, with the potential for the stock to appreciate over time as Singapore's economy grows. It's not exciting, but it's reliable.

Singapore Airlines might seem odd as a long-term pick because airlines are cyclical. But hear me out. The stock yields 5.5 per cent in dividends and trades at just 9 times earnings – much cheaper than its historical average.

Asia's middle class is growing. In 10 years, hundreds of millions more Asians will be able to afford air travel. Singapore Airlines is the premium carrier in the region. If you can hold through the inevitable ups and downs of economic cycles, buying SIA at today's price for a 10-year hold makes sense.

Think of it this way: you're not betting on next quarter's passenger volume. You're betting that more people will fly premium cabins to Singapore over the next decade. That's a pretty safe bet given demographic trends.

Why your timeline determines everything

Here's where people get confused. Your uncle makes 30 per cent on a stock in two months and tells you to buy it. You buy it planning to hold for your kid's education in 15 years. The stock goes sideways for years, and you wonder what went wrong.

Nothing went wrong. Your uncle was trading; you were investing. Different games entirely.

DFI Retail jumping 20 per cent in a week is exciting for traders. But if you're holding for 15 years, that weekly jump is irrelevant. What matters is whether Guardian stores will still be profitable in 2040, and whether the company will pay consistent dividends. Nobody knows that yet because the transformation just started.

Meanwhile, everyone thinks DBS is boring. "It only went up 30 per cent this year," they say dismissively. But that 30 per cent plus 5 per cent dividends, compounded over 10 years, turns S$100,000 into something substantial. Boring compounds better than exciting.

This is why the same stock appears on different lists. DBS works for short-term traders because it's stable and liquid – you can get in and out easily without big swings. It also works for long-term investors because it has a moat and growing dividends. But it works for different reasons.

Sembcorp is terrible for short-term trading right now. It's down 26 per cent and showing no momentum. But for a two-year transformation bet, that 26 per cent drop is your entry point. If you're day-trading, you'll get killed by the volatility. If you're investing for transformation, you're buying at a discount.

What last week's market action tells us

Between December 5 and December 9, most stocks fell slightly as investors took some profits after a strong year. DBS barely moved, dropping just 0.07 per cent. UOB and OCBC fell less than 1 per cent. These are boring, stable moves that long-term investors ignore.

Sembcorp fell 2.2 per cent, which sounds bad until you realize it's down 26 per cent from its peak anyway. For someone planning to invest for the medium-term transformation story, this week's drop is just noise. It might even be a better entry point.

The interesting part was Venture Corporation rising 1.6 per cent while everything else fell. That's like the chicken rice stall with a queue while other stalls are empty. Smart money is buying. For short-term momentum traders, that confirms their strategy.

DFI Retail held above US$4 despite giving back a bit from its surge. That's actually bullish for short-term traders. If heavy profit-taking was happening, you'd see the stock drop back to US$3.80 or lower. Instead, buyers keep stepping in at US$4, which suggests people believe in the story.

REITs all fell slightly, which makes sense. When growth stocks are exciting, income stocks get less attention. But those 6 to 7 per cent yields from REITs will look attractive again if the market drops or interest rates fall. Timing matters with REITs.

The mistake everyone makes

People think investing is just about finding good companies. But it's also about matching those companies to your timeline.

Imagine you're buying a washing machine. If you're settling down in your resale flat for the next 10 years, you invest in a good quality front-loader from Samsung or LG. But if you're just renting a place for a year while waiting for your BTO, you might just get a cheap second-hand one from Carousell. Same product category, completely different requirements.Stocks work the same way. A company perfect for a three-month trade might be awful for a 10-year hold. And a company perfect for retirement might bore you to tears if you're trying to day-trade it.

The secret is honest self-assessment. Are you really going to hold for 10 years, or will you panic sell at the first 15 per cent drop? If you're honest and realize you'll probably check prices daily and get nervous with volatility, you shouldn't be in long-term plays. Stick to shorter-term trades where you can take profits and move on.

But if you genuinely have money you won't need for a decade and can ignore price swings, then buying quality companies like DBS or UOB at reasonable prices and collecting growing dividends is a proven wealth-building strategy.

Why staying invested usually wins

My neighbour sold all his stocks in early 2024 because he was convinced the market would crash. "I'll buy back when it drops 20 per cent," he said confidently. The market is now up almost 20 per cent, and he's still waiting on the sidelines for that crash.

Meanwhile, someone who just stayed invested captured the entire 20 per cent gain plus dividends. That's probably another 2 to 3 per cent from dividends, so call it 23 per cent total return. My neighbour needs a 30 per cent crash from here just to break even after missing these gains.

Historically, bull markets last much longer than bear markets. The average bull market runs about three times longer than the average bear market. So if you're waiting for crashes, you spend most of your time missing gains.

This doesn't mean ignore valuations or buy overpriced stocks. It means if you own quality companies at reasonable prices, trying to time perfect entry and exit points usually costs more than it gains.

Think about DBS over the past 10 years. The stock went through multiple corrections – trade wars, Covid, banking crisis fears. But if you just held and reinvested dividends, you did fine. Meanwhile, people trying to time the perfect entry missed years of dividend growth.

Keep some cash for opportunities

That said, being 100 per cent invested all the time isn't smart either. Having some cash available means you can act when opportunities appear.

During Covid, airline stocks crashed. Singapore Airlines dropped to S$3.50. Anyone with cash sitting around could buy a world-class airline at panic prices. Today it's around S$6.30, plus dividends paid along the way.

But if you were 100 per cent invested in March 2020, you couldn't buy SIA without selling something else at terrible prices. That's why most experienced investors keep 10 to 20 per cent cash. It's not about missing gains. It's about having firepower when the market gives you opportunities.

Cash also helps you sleep better. If your entire net worth is in stocks and the market drops 20 per cent, you might panic sell at the worst time. If you have cash reserves, you can ride out volatility or even buy more. That psychological comfort is worth something.

The path forward

The STI has had a strong 2025, climbing almost 20 per cent. Some stocks like DFI Retail and ST Engineering have done even better. But not every investor captured these gains equally.

The ones who did best matched their stock picks to their timeline. Short-term traders rode momentum in stocks like DFI Retail and Venture. Medium-term investors positioned early in transformation stories like Sembcorp and ST Engineering. Long-term investors accumulated quality compounders like DBS and UOB and ignored the noise.

For the rest of 2025 and into 2026, opportunities exist across all timeframes. Momentum traders can play stocks with recent catalysts. Medium-term investors can bet on transformation stories at discounted prices. Long-term investors can continue building positions in quality companies paying growing dividends.

The key is being honest about your timeline and risk tolerance. Don't day-trade long-term stocks, and don't buy-and-hold momentum plays. Match the strategy to your needs.

Most importantly, don't let perfect be the enemy of good. You don't need to catch the exact bottom or top. You just need to buy quality companies at reasonable prices and hold them long enough for the business fundamentals to play out.

As my father likes to say about his HDB flat: "I bought it to live in, not to flip." He's owned it for 35 years, through multiple property cycles, and it's worth several times what he paid. Stocks work the same way. If you buy quality and hold, time does most of the work for you.

In short, smart portfolio management means matching your stocks to your timeline, staying largely invested in quality companies, keeping some cash for opportunities, and having the patience to let businesses compound. Stick to these principles, and you'll build wealth steadily over time, regardless of where the market goes in any given quarter.

The writer does not own shares in any of the companies mentioned.