After President Trump suddenly announced trade tariffs in April, global stock markets took a hit. The S&P 500 dropped more than 10 percent in two days, prompting some investors to declare the return of “buy the dip” season. However, it promptly recovered once Trump paused his plan to implement the tariffs in most countries.
This sudden swing raised an important question for Singapore investors: Should they invest when prices fall or hold back and wait?
At the InsureXpo 2025, Dinesh Dayani spoke with Loo Cheng Chuan, founder of the 1M65 CPF strategy and a seasoned crash investor, on how he approaches these moments of volatility.
Here’s an excerpt from the conversation:
Dinesh: You’re a crash investor. You’ve said it yourself. What personal lessons have you learned when doing so, both good and bad.
Loo: I started crash buying in 2007. Having formed my financial safety net, my CPF, and accumulated some dry powder. When the market crashed, I went in. I bought the STI Index, a bit of S&P 500, and some OCBC stock, which I still hold today.
The OCBC and S&P 500 performed well, but the STI Index was disappointing. That was my first big lesson: what you buy matters. You don’t just buy because something crashed. Buy what has a track record of compounding and surviving crashes.
Every crash has its own peculiarity. Some are V-shaped, like COVID. Some are U-shaped and take a long time, like 2022. You must study each crash individually.
I’ve said this before…
“it’s okay to miss a crash. It’s not okay to die in a crash.”
Dinesh: We’ve seen some influencers going online saying they’ve already made money from the recent dip. But you’ve taken a more conservative view. Why?
Loo: It’s a new phenomenon. In the past, most people stayed out of crashes. But in the last two rounds, some of us made money bottom-fishing. Now everyone becomes very hungry to jump in. But some went to the other extreme. They became too rash, too fast.
I read economic signals because I’m an economist by training. If the situation aggravates, there are two precedents. One was the US-China trade war in 2018. The other was the 1930s Smoot-Hawley Act, when the market dropped 70 to 80 percent.
Dinesh: When markets crash, emotions tend to take over. Do you think most investors are mentally prepared to handle a buy-the-dip strategy?
Loo: Buying the dip is emotionally very difficult. Unless you have a strong financial safety net and the mental discipline to stay calm, it’s not easy to act when markets are falling. It may sound simple to buy after a 20 or 30 percent drop, but most people fear it will fall even further.
A fund manager once told me that you need to be 90 percent robot and 10 percent human. I think I’m about 70–30, but that’s after years of experience. For first-time investors, it’s very hard to stay rational. It is a good time to be fearful when others are greedy, and to be greedy when others are fearful. But my advice is to start small and understand that this strategy requires both courage and control.
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