Investors winding down for the Christmas holiday might look back in relief now that 2016 hasn't turned out to be a disaster after all despite a rocky start to the year.
Painful memories of the January crash - triggered by fears of a slowdown in China and weak oil prices - that sent the Straits Times Index (STI) tumbling by over 10 per cent now seem distant, with the benchmark currently sitting at 2,937.86 points, or around 16 per cent above the January trough.
This encouraging last stretch came partly from the Trump rally, which has pushed Wall Street to break record highs almost daily. The positive spillover effect has seen the STI gaining around 4 per cent since the United States presidential election on Nov 8.
Still, one of the takeaways from the past year might be: Prepare for the worst but hope for the best. If President-elect Donald Trump's victory could turn from a doomsday scenario into the catalyst for a global bull run, it does not seem unreasonable to expect some opportunities for good value stocks and stable returns in the coming year.
But it will not be a matter of just buying blue chips and waiting for the market to go up.
The key is to be selective when picking stocks amid the uncertainties that will continue to shadow Singapore's economy and investment market.
Maybank Kim Eng analyst Neel Sinha expects the STI to end 2017 at around 3,000 points, which implies very little upside from the current level for investments benchmarked against the index. The reason is the mediocre-to-poor outlook for economic growth and earnings recovery, even as risks of political and trade frictions loom.
"But we believe selective stock- picking could provide returns of over 10 per cent, as has been demonstrated so far in 2016… Our stock picks are based on screening for low earnings cyclicality, cash flow stability and low balance-sheet risk," Mr Sinha said in his recent forecasts for the new year.
"Our top picks are CapitaLand Commercial Trust, Keppel Reit, Venture Corporation, Raffles Medical Group, UOL, Bumitama Agri, Jumbo Group and Ezion."
Not surprisingly, stable dividend plays such as real estate investment trusts (Reits) again stand out as the recommended option for building a resilient portfolio.
Maybank Kim Eng expects a dividend yield of 5.9 per cent from CapitaLand Commercial Trust for next year and 6 per cent from Keppel Reit. Both Reits are notable for their premier office assets in Singapore's central business district, with the lease expiry profile still looking favourable even though the overall office market might experience some rental rate weakness.
OCBC analyst Deborah Ong recommended hospitality Reits instead, saying that, while revenue per available room (RevPAR) is expected to see single-digit declines next year, current price levels look very attractive for some of the Reits under coverage.
Her picks include Ascott Residence Trust and CDL Hospitality Trusts.
"In particular, OUE Hospitality Trust looks attractive to us, with anchor tenants Michael Kors and Victoria's Secret finally open at Mandarin Gallery, and the potential for increased contributions from Crowne Plaza Changi Airport following the opening of Terminal 4 in the second half of 2017," she said.
Away from the Reit sector, a number of companies can be counted on to offer earnings stability over the long term.
Raffles Medical, for instance, is expected to stay on its growth track, even as the hospital and clinic operator grapples with persistently high expenses arising partly from expansion plans.
Raffles Medical's share price was $1.44 at the last close, implying a price-to-earnings ratio of around 35, which Mr Sinha feels has not fully factored in growth catalysts from the group's expansion in China.