You know that feeling - a colleague mentions a market rally, your favourite investment app is flashing green, and suddenly, sitting still feels like falling behind. It’s tempting, especially in places like Thailand, where the SET Index can swing sharply on the back of political news, economic optimism, or sheer momentum.
But here’s the truth: the more emotionally reactive you are, the harder it becomes to invest well, and the more likely you are to jump in just before the music stops.
Fear, Greed and a Thai Market Rally
Thailand’s stock market has always had a certain energy. The SET Index, which included 633 listed companies as of August 2024, can shift direction on a whisper, whether it’s a new infrastructure push, baht fluctuations, or investor sentiment from overseas.
In early 2023, it saw a resurgence on the back of China’s reopening and regional tourism optimism. Headlines buzzed. Forums lit up. Some investors piled in, chasing double-digit returns.
At its 2023 high, the SET Index reached approximately 1,671, buoyed by short-term euphoria. But what followed was a slowdown, not dramatic, but enough to knock confidence. By year-end 2023, the index had dropped to 1,415.85, marking a 15% decline year-on-year. And by mid-2024, it had slipped a further 8% YTD to 1,300.96 as of June. Those who bought in near the peak felt the sting of fading momentum. Long-term investors, by contrast, simply carried on, perhaps disappointed, but not shaken.
The difference wasn’t luck. It was mindset.
Behavioural Traps in Bull Markets
Investors often talk about risk in terms of numbers: volatility, drawdowns and Sharpe ratios.
However, the real threat is usually internal, stemming from the urge to act on emotion. When the market climbs, we fear missing out. When it drops, we fear losing everything.
Three behavioural biases show up time and again:
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Recency bias: We assume recent performance will continue. If the SET has risen for three months, we convince ourselves month four will be the same.
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Herd behaviour: “Everyone’s getting in, I should too.” Especially potent in tight expat communities where one person’s bold move becomes next week’s dinner topic.
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Loss aversion: Once invested, we’re more focused on avoiding losses than making smart decisions. It leads to panic-selling or doubling down on poor choices.
In practice, these biases don’t feel like errors. They feel like instincts. But instincts aren’t a strategy.
SET Index: Up and Down, But Not Out
Zoom out on the Thai stock market and you’ll see a pattern: rallies, retreats, recoveries - rarely linear, never boring. From the 1997 Asian Financial Crisis through to COVID and beyond, the SET Index has shown resilience. Long-term annualised returns sit around 7% (in baht terms), but that’s assuming you stayed the course.
During the COVID-19 crisis, for example, the SET Index dropped to 969 in March 2020, then surged to 1,566 by March 2021, a remarkable rebound of approximately 62% in twelve months. Try jumping in and out during each spike, and you likely missed those gains, or bought just before the next pullback.
Recent performance offers a quieter but equally telling reminder: reacting emotionally to headlines is a poor substitute for having a plan.
The Emotional Cost of Chasing Highs
Buying after a strong rally feels safer. The market seems to “prove” its own strength. But those late entries are often when risk is highest, not lowest. In fact, many investors who chased the SET Index toward its 2023 high of 1,671 found themselves nursing paper losses just months later as the index slid back through 1,400.
The emotional cost is more than regret. It’s hesitation. Once stung, people often sit on the sidelines, paralysed, waiting for a perfect moment that never arrives.
For expats, the stakes can be even higher. Currency moves can turn a 5% local loss into 10% in sterling or euros. Taxes on offshore income may apply based on timing and structure. And investment timeframes may be shaped by visa rules, school fees, or a return to the home country.
Impulse-driven investing doesn’t always sit well alongside those variables.
Disciplined Investing: It’s Boring, But It Works
So what’s the alternative? Often, it’s a more measured, consistent approach.
Strategies like pound-cost averaging, investing a fixed amount regularly, may not make for exciting conversation, but they’re widely used for a reason. They take timing decisions out of your hands and help you accumulate more when prices are lower.
A well-diversified approach, across sectors, geographies, and asset types, can offer resilience during uncertain periods. A few underperformers won’t derail your plan, and a few winners won’t send you chasing unsustainable highs.
Many investors find that having clear goals helps keep them anchored. Whether it's planning for a home, retirement, or school fees, understanding the ‘why’ often makes it easier to ignore short-term noise.
The Smarter Risk is Boring
It’s natural to want action. We’re drawn to movement, to momentum. And when the markets buzz, it can feel like sitting out is somehow missing out.
But investing well, particularly when managing cross-border risks, is more about clarity than excitement.
Here’s a perspective I often share with expats I work with:
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You don’t need to beat the market.
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You need a strategy that stays sensible even when markets don’t.
So let others chase the highs. There’s often a better way forward: patience, perspective, and a portfolio aligned with your long-term goals.