Stocks such as Riverstone Holdings Limited (SGX: AP4) and Raffles Medical Group Ltd (SGX: BSL) have been huge long-term winners in Singapore’s market since the start of 2007. Their share prices have climbed by 565% and 424%, respectively.
The pair’s long-term returns are no mean feat. For perspective, the Straits Times Index (SGX: ^STI) had declined by 8% over the same timeframe. But, both Riverstone and Raffles Medical were actually vicious nightmares for investors over short time horizons in that period.
Here’s a chart showing the maximum peak-to-trough loss (known as drawdown) that the duo had experienced in each calendar year from 2007 to 2015:
Source: S&P Global Market Intelligence
To pick out some jarring episodes, Raffles Medical’s shares collapsed by 64% from peak-to-trough in 2008. Meanwhile, Riverstone’s drawdown in 2011 was a stunning 30%. And all these had occurred under the backdrop of their shares more than quintupling since the start of 2007.
When it comes to stocks, painful short-term declines are par for the course and shouldn’t be taken as a sign that anything is broken.
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