Not surprisingly, people are looking for alternative ways to increase and save money. Over time, betting on stock trading and bonds typically outperforms holding money in fixed deposits at the bank.
As a retail investor, you can purchase shares of businesses that are listed on almost any stock exchange. An investment in a company’s stock is one way to profit from its future success. Healthy gains as capital gains or dividends may result from it.
Here are some measures to help beginners in Singapore with stock trading.
1. Determine your investment objectives
Before you start investing, decide what your financial goals are and how much you need to save to reach them. “To make money” is the ultimate goal that most investors will state. Putting this seeming end goal aside, it’s more important to ask yourself some of these important questions:
- How do you want to make money off of your investments? Is it slow or fast?
- Which do you currently think is more important, dividend payments or capital growth?
- Are you prepared to take significant chances?
These will help you decide either to trade or buy shares, depending on your preferred investment approach. Most investors strive to build their portfolios gradually and have a long-term outlook.
Buying high-quality stocks at reasonable prices allows investors to ride the market’s ups and downs. When the market fluctuates, dealers try to increase their profits by buying at a discount and selling at a premium.
One useful tool for researching the stocks you are considering is a watch list. It provides a summary of a business’s balance sheet and facilitates evaluation. When choosing which stocks to purchase, you might also monitor several common financial statistics and investing metrics that traders use to evaluate stocks.
2. Select a platform for investments
Your Singaporean securities must be held and protected in a Central Depository (CDP) account. This includes stocks, bonds, and other assets listed on the SGX apart from Singapore Government Securities. You will also need to attach your bank account to your CDP for dividends to be credited to it.
Another option is to start by opening a profile on a website that facilitates the trading of financial instruments. Consider a financial institution account that allows you to create a monthly savings plan, invest lump sums in unit trusts, and invest through robo-advisory platforms.
3. You must have an online brokerage account
You must register an online account with a broker if you wish to invest. For instance, DBS offers DBS Vickers to assist clients in purchasing bonds, exchange-traded funds, and individual equities from global financial markets.
A brokerage account typically offers you many extra services in addition to the ability to execute buy or sell orders, including:
- providing you with well-researched articles or blogs to aid with your investment decisions
- Making stock trading simple
- Options for margin financing to boost your investing capacity
- retaining ownership of your Singapore Exchange-listed shares if you decide not to apply for the CDP
4. Begin making investments
The next step is to find a stock to purchase and start your investing journey. If you are still unsure about exactly what you want to invest in, these options may help you while still providing a reasonable degree of diversification.
- ETFs: These seek to mimic a particular industry, market index, or even commodity.
- Unit trusts: Usually diversified investment products, are managed by an asset management company.
- Robo-advisors are pre-made portfolios put together for you by our team of experts utilizing technology and the Chief Investment Officer’s thoughts at DBS.
Invest-Saver: Invest consistently in ETFs without attempting to time the market by taking advantage of dollar-cost averaging.
I hope this guide will help you learn how to begin investing in Singapore as a beginner.
