Why Stock Investing Is Not for Everyone

 Over the past decade, I've seen an increasing number of people become interested in investing, thanks to low interest rates, a rising tide of financial literacy content, and FOMO (fear of missing out) driven by friends or social media posts showcasing multi-bagger returns. However, while investing can be a powerful vehicle for growing wealth, the hard truth is that stock investing is not for everyone.

Yes, we can learn about valuation metrics, free cash flow, dividend yield, or which REIT gives better DPU. We can study ratios like P/E, P/B, or ROE. All these are important, of course. Investing is not only about financial figures. It is just as much, if not more, about managing your emotions and having the right temperament; hence, not all investors are created equal.

Let me share why I say so.

 

Markets Are Not Machines — They Are Driven by People

Unlike physics or mathematics, markets are not built on cold, rational formulas. Markets are moved by humans, and we humans are emotional creatures. At times, we are overly euphoric, and other times, irrationally fearful. We don't just invest based on logic; we invest based on hope, fear, greed, and regret.

That’s why the stock market never moves in a straight line. One month, everything looks rosy, headlines talk about soft landings, AI breakthroughs, and record profits. Suddenly, one piece of bad news hits, be it interest rates, war, or a poor earnings report, and the same investors who were chasing stocks the week before are now dumping them in panic.

In fact, if markets were perfectly rational, we wouldn’t have bubbles and crashes. But history is full of them — from the Dutch tulip mania in the 1600s, to the dot-com bubble in 2000, to the global financial crisis in 2008, and even the meme stock craze of 2021. The common factor? Human behaviour.

 

As Sir Isaac Newton famously lamented after losing money in the South Sea Bubble:

 

 “I can calculate the motion of heavenly bodies, but not the madness of people.”

And this is coming from one of the smartest men in human history.

<Image Credit : Lisa Benson, Slate >

Patience: The Superpower in Investing

 

Many investors underestimate how important patience is in building wealth through the stock market.

Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.”

That quote may sound simple, but it carries profound wisdom. Investing is not a get-rich-quick game. It’s more like watching paint dry or grass grow. You sow the seeds today, and you wait — sometimes for years — for the fruits to come.

 

Amazon founder Jeff Bezos echoed the same idea. He once shared:

 “If you’re long-term oriented, customer interests and shareholder interests are aligned. You just have to be willing to be misunderstood for long periods of time.”

Bezos built Amazon with the long game in mind. He didn’t care about quarterly profits in the early years. He focused on building something durable. Investors who trusted him and stayed invested have been handsomely rewarded — but only those who waited.

<Image credit: https://rochemamabolo.wordpress.com/>

 

 

Charlie Munger, Buffett’s long-time partner, said it even more directly:

 “The big money is not in the buying or selling, but in the waiting.”

Unfortunately, waiting is hard. Especially in a world where we get instant gratification from food delivery apps, social media likes, or fast trades on mobile broker apps. But the market does not reward speed. It rewards discipline and time.

Volatility Is the Price We Pay

 Every investment comes with a price tag. But unlike shopping malls, the price of investing isn’t always measured in dollars and cents; it’s measured in volatility.

Market corrections, where prices fall 10% or more, happen every 1–2 years on average. Bear markets, with drops of 20% or more, come every few years. The 2020 COVID crash saw the S&P 500 fall 34% in just a few weeks. Even Singapore’s blue-chip stocks, such as DBS or CapitaLand, were not spared.

 

<Image Credit: Creative Planning@Charlie Bilello>

  

Let me give you a clearer idea:

Between 1980 and 2023, the average intra-year decline for the S&P 500 was around 14%. Yet during that same period, the index ended in positive territory in 32 out of 43 years.

The lesson? Short-term volatility is normal. It’s the price you pay for long-term gains.

Sadly, many investors panic when their portfolio drops by 10% or 20%. They sell at the bottom, then hesitate to re-enter until prices are higher again. This emotional cycle — greed at the top, fear at the bottom- destroys returns. Not because the market failed, but because the investor did.

So again, I say: If you cannot stomach volatility, if you will lose sleep over paper losses, investing in stocks may not be for you.

 

 There Are Alternatives to Grow Wealth Safely

Now, I’m not here to discourage everyone from investing. But I believe it's more important to be honest with ourselves. If your risk tolerance is low or if you prefer peace of mind over chasing higher returns, there are other respectable and safer paths.

 For example:

Top up your CPF Special Account (SA). It gives you a risk-free interest of 4%. With the power of compounding, your CPF savings can grow into a solid retirement fund.

High-grade corporate bonds or Singapore Savings Bonds (SSBs) offer stable, predictable returns without the daily drama of the stock market. Some investors also opt for T-bills or diversified bond ETFs. These options may not make you rich overnight, but they help you sleep better at night. And in the long run, they still beat inflation, which is the key goal. Remember, the tortoise beats the hare, especially when it comes to wealth building.

  

Discipline and Frugality Matter Just as Much

 Even the best investments can’t help you if you don’t have the right financial habits. Many people think investing is all about picking the next  NVIDIA or riding the next GOLD or Crypto boom. But before you even put your first dollar into the market, ask yourself:

 

Do I live within my means?

Do I have an emergency fund?

Am I saving regularly?

 

A high savings rate matters more than a high investment return, especially in your early years. If you can save 30–40% of your income, you are already ahead of most people. Avoid lifestyle inflation, that tendency to upgrade your spending each time your income rises. Stay grounded. You don’t need the latest iPhone or luxury bag to prove anything.

Being frugal is not about being stingy. It’s about being intentional with money. That same discipline will help you stay invested through market downturns and keep your focus on the long term.

 

Know Yourself First

 Investing is not a game for the smartest or the most educated. It is a game for those with emotional discipline, patience, and self-awareness.

The market doesn’t care how many degrees you have. It doesn’t reward IQ. It rewards EQ, emotional intelligence. If you can stay calm when others are panicking, if you can stick to your plan, if you can wait years for your thesis to play out — then yes, investing can be for you. But if you know that price swings make you anxious, or if you can’t resist chasing hot stocks and selling on fear, then perhaps a simpler, safer path may suit you better.

 

 

There’s no shame in that. After all, the goal is not to be a hero in investing. The goal is to build financial freedom in a way that matches your personality, goals, and peace of mind.

So before you invest, ask yourself: Is this journey truly for me?

If yes, then invest wisely, patiently, and stay the course.

If not, then protect your capital, build your savings, and let compounding do its quiet magic in safer ways. In the end, it's not about being the best investor — it's about making money work for you, in a way that helps you live a better life. Stay disciplined, stay humble, and stay invested only if it suits you.

 

 

Closing Thoughts: Many Paths to Financial Freedom

 

There’s a saying, “All roads lead to Rome,” and the same can be said for achieving financial freedom. Investing is one path, but it’s not the only one — and certainly not the most suitable for everyone.

 

                                                                                                     <Image credit :Shutterstocks>

 

Some people reach their financial goals not through high-risk investing, but through frugality, prudent money management, and high savings discipline. A person who consistently saves 30–40% of their income, avoids lifestyle inflation, and lives well within their means is already laying a strong foundation. Coupled with low-risk, low-volatility options like high-grade bonds, CPF top-ups, Singapore Savings Bonds, T-bills, or even fixed deposits, one can still enjoy steady and meaningful long-term compounding without sleepless nights.

Financial freedom is not a race to pick the best stock. It’s about knowing yourself, your goals, and your tolerance for risk. It’s about having a system that is sustainable, suits your personality, and gives you peace of mind. Whether through stocks, bonds, CPF, or just disciplined saving, if you stay consistent, patient, and focused, you’ll get to your own version of Rome. That, ultimately, is what matters.

 

Cheers !  😊

 

STE