📈 STI at New Highs: Is the US Super-Cycle Ending — and Is Asia the Next Beneficiary?

Singapore’s equity market is doing something it hasn’t done in years — outperform quietly.

🇸🇬 The Straits Times Index (STI) has delivered a ~25% total return in 2025 (including dividends), marking one of its strongest years in the past 15 years.

No AI frenzy. No retail mania. Just steady capital appreciation and income.

At the same time, Goldman Sachs’ Global Equity Outlook (2025–2035) raises a question global investors can no longer ignore.

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🧠 The US “Super-Bull” Was Exceptional — Not Normal

Over the past decade:

📊 The S&P 500 returned ~15% annualized

That places the 2014–2024 period among the top decile of equity decades in modern market history.

Goldman’s core message is simple:

Exceptional decades tend to be followed by normalization, not repetition.

Mean reversion doesn’t require a crash.

It only requires returns to slow.

And when returns slow, capital reallocates.

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⚖️ Why Asia Looks Different This Time

This is not the Asia of speculative growth cycles.

🇸🇬 Singapore equities today are characterized by:

• Financials benefiting from higher-for-longer rates

• Infrastructure and REITs priced for realism, not perfection

• Strong balance sheets and conservative payout ratios

• Dividend yields that compete with bonds 💰

In contrast to the US, where returns are increasingly driven by multiple expansion, STI returns are driven by earnings + cash flow.

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📉 Concentration Risk in US Markets

One uncomfortable reality:

🔍 A large share of S&P 500 gains came from a narrow group of mega-cap stocks.

This creates two issues:

1️⃣ Index-level valuations mask underlying fragility

2️⃣ Future returns depend heavily on sustained dominance

When leadership narrows, upside becomes asymmetric:

• Limited room for upside surprise

• Larger downside risk if expectations slip

This is precisely when regional diversification regains relevance.

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🔄 Rotation Is a Process, Not an Event

Investors often wait for headlines to confirm a shift — but rotation happens first in portfolios, not news.

Capital tends to move:

• From high-expectation markets

• To under-owned, cash-generative ones

STI’s performance isn’t explosive — and that’s the point.

Sustained relative outperformance is how long-term rotations begin.

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💡 Dividends: The Hidden Engine of Returns

In an environment where capital gains may normalize:

• Dividends reduce reliance on timing

• Reinvestment accelerates compounding

• Volatility becomes an opportunity, not a threat

For STI, dividends are not a bonus — they are the strategy.

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🌏 Is This the Start of an Asian Re-Rating?

Not a blanket one.

But selective markets — especially those with:

✅ Currency stability

✅ Institutional governance

✅ Yield support

are positioned to benefit if global investors reduce US concentration.

Mean reversion doesn’t mean the US fails.

It means leadership rotates.

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🧭 Final Take

The last decade rewarded US exceptionalism.

The next may reward valuation discipline and income resilience.

STI’s breakout isn’t a speculative signal —

It’s a reminder that boring markets perform when narratives fade.

🇸🇬📈 Would you rotate part of your capital into Asian equities now —

or wait for clearer confirmation. 💭