The chart above trends the relative performance of DJIA and S&P versus the STI for the past five years. The blue line refers to STI, red DJIA and blue S&P.
The return of STI over the last 5 years is close to zero. However, compared to the DJIA and S&P it is in slightly positive territory whereas DJIA and S&P are negative. This simply means you would be better off buying/holding shares in the STI 5 years ago compared to that of the DJIA/S&P.
In addition, it is also interesting to note that there is a strong correlation in the way STI reacts to the movements in the US. Suggesting that the local STI market is still strongly linked to the volatility of US shares market.
The question remains if this is something that we would continue to expect considering the divergence in the long term performance of one (STI) over the other (DJIA/S&P).
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