Investment in Singapore: How do I start?
Contrary to popular belief, it is not difficult to start investing in Singapore. It only takes two simple steps to start investing.
- Choose a licensed broker. There are many online platforms available, including DBS Vickers, UOB Kay Hian, and Phillip Securities.
- Open an account. You can open a brokerage account with as little as SGD 1,000. Following that, you can start investing in a variety of securities and financial products, such as stocks, bonds, and exchange-traded funds (ETFs).
Great, now you are ready to start investing!
Best Investment in Singapore
There are many types of investments in Singapore. Opportunities include safe investments that generally come with lower returns, or higher risk options that can provide you with greater upside. If you are wondering where you should invest your money for greatest returns, it is important to consider how much risk you are willing to take, and what you hope to achieve in the long run.
For instance, if you are looking for low-risk investments that provide lower but guaranteed returns, the Singapore Savings Bonds, which are issued and backed by the government and have a low minimum investment amount of SGD 500, would be an ideal choice. Another choice would be to invest in the CPF Investment Scheme or Supplementary Retirement Scheme, which provides both tax benefits to investors as well as guaranteed returns.
Alternatively, if you are looking for higher returns, you can consider investing in financial products such as ETFs, Real Estate Investment Trusts (REITs), and stocks. These financial products offer higher returns, but naturally, they also come with slightly higher risks. However, if you are seeking even higher returns, you can explore alternative investments such as peer-to-peer lending or debt financing.
Alternative investments are generally not readily available to retail investors, and often come with minimum investment amounts. They may also be less liquid as they are not publicly traded.
For a fullguide on the CPF Investment Scheme, read our article "CPF Investment Scheme (CPFIS): How To Use it To Generate High Income".
Alternative Investments
Alternative investments are methods of investing in Singapore that are not related to traditional financial products such as stocks or bonds. They often include assets such as private equity, hedge funds, commodities, real estate, and lending.
Kilde primarily deals with private debt deals which provide lucrative yet safe returns of up to 13.5%* per year. To date, Kilde has generated 11.9% net returns annually for investors with 0.0% default since inception. Your investment will be managed for fees as low as 0.5% with early redemption every three months and monthly coupons provided.
In other words, for investors who are seeking an opportunity to access a unique form of investment that may not be easily accessible, and for those who are looking for greater returns, Kilde’s offers an excellent entry for you to start making an effective and intelligent investment in Singapore.
Stocks
Stocks are also commonly referred to as equities, which represent ownership in a company. When purchasing stocks, you become a shareholder of the company, and you can benefit from the growth of the stock’s value if the company grows and starts to earn more profit. This will then allow you to sell your stocks for a profit. Similarly, if the company performs worse, the value of the stocks will go down, and you will have to hold on to your stocks or sell them at a loss.
Investors generally do research on companies that they are interested in, evaluate their financial statements, and look at the general market sentiment, before making an informed decision on whether or not they would eventually like to invest.
Real Estate Investment Trusts (REITs)
REITS are popular investment options in Singapore as they offer investors with an easy entry to the real estate market. You do not need to have enough capital to purchase a property, and you also do not need to worry about having to own and manage the physical property. REITS are companies that specialize in owning and managing income-generating properties, such as office buildings, residential properties, and commercial buildings. By investing in a REIT, you are essentially buying a portion of the company and its portfolio.
Investors like investing in REITs as they serve as a way to diversify your portfolio. This is because investing in it allows you to invest across properties in different regions and sectors. Furthermore, REITs generally provide investors with high dividends. This is because REITs in Singapore do not have to pay corporate tax if they distribute at least 90% of their taxable income as shareholder dividends. So your investments in REITs can provide you with a way to generate passive income.
Exchange-Traded Funds (ETFs)
ETFs are investment funds that track the performance of an index or sector of the market. These financial products can be traded like stocks and offer investors a great way to diversify their portfolios. ETFs are also extremely liquid, which means that you will be able to retrieve your invested capital in a short period of time if necessary.
ETFs also provide an extra advantage of lower fees changed than mutual funds. However, investing in ETFs comes with risks involved with market fluctuations. Strong market performance will also lead to greater returns. For example, investing in tech ETFs in 2021 would have likely generated excellent returns as the tech sector outperformed the general market.
Supplementary Retirement Scheme
However, it is important to note that you may only start withdrawing from your SRS account at the age of 62. Otherwise, you may be subjected to penalties, which will diminish your overall returns. Hence, SRS is considered to be less liquid, and should be considered primarily for building up your retirement savings.
CPF Investment Scheme
Under this scheme, you can invest your Ordinary Account and Special Account savings in a list of approved financial products, with a minimum investment sum of $20,000. This is an excellent way for those who want to build up their retirement savings as well and also provides the opportunity to diversify their portfolio in Singapore.
If you wish to participate, you can either manage your funds directly and make your investments personally, or you can invest in various unit trusts that are managed by fund managers. A wide variety of financial products are made available to investors in Singapore, from lower risk options such as government bonds to higher risk options such as stocks.
Singapore Savings Bonds
SSBs are extremely flexible, with different maturity dates offered from between one to ten years. Investors in Singapore can thus choose between investing their money for a shorter or longer period of time, which ultimately depends on their personal investment goals. SSBs offer a step-up interest rate, whereby interest rates go up over time as the bond approaches its maturity date. SSBs also come with a guaranteed return of capital of maturity, whereby investors can expect to receive their initial investment alongside the interest earned when the bond reaches maturity.
While bonds are considered to be a safer type of investment in Singapore, they tend to generate lower returns.
Where to Invest in Singapore
When it comes to investing in Singapore, there are a variety of online platforms and brokerages that you can consider. Some popular options include DBS Vickers, Saxo Markets, and StashAway. Each of these platforms in Singapore differ in terms of the services they offer and the fees they charge, so it is important to do your research and compare them before choosing a platform or advisor that best suits your needs.
If you’re interested in alternative investments, consider Kilde. Sign up here and try out a new and effective investment strategy today.
Best Investment Plans in Singapore
When deciding on which is the best investment plan in Singapore and what to invest in, it is important to consider the following factors:
- Long-term goals,
- Time horizon,
- Risk appetite.
Investment strategies commonly fall into one of the following three categories:
- Long-term growth. For investors looking to grow their wealth over a longer period of time, a diversified portfolio of ETFs or blue-chip stocks may provide a source of diversification as well as a good balance of risk exposure and potential for growth.
- Short-term income. Investors looking for steady income in the short term may consider investing in REITs or bonds.
- High risk, high reward. For those willing to take on higher risk in exchange for potentially higher returns, alternative investments like private equity or the private lending market may be an option to consider.
Conclusion
Investing in Singapore is not as confusing as it seems and there are many opportunities for investors of all risk profiles and goals. By conducting the necessary research and working with a trusted platform or advisor, you can make informed decisions that help you identify what to invest in and how you can set yourself up for the best investment strategy in Singapore.
It is important for you to keep your portfolio diversified such that you can reduce the overall risk that you are exposed to. Additionally, there may be unexpected short-term market fluctuation. As such,it might be wise to make consistent investments periodically so that you are not fully exposed to sudden market downturns.
All in all, investing can be a powerful tool for building wealth and achieving financial goals. However, you should approach investing with caution and a responsible mindset. By taking the time to educate yourself on the basics of investing, assessing your financial situation, and selecting investments that align with your values and goals, you can make informed decisions that benefit your financial future.
Remember to avoid get-rich-quick schemes and seek professional guidance when needed. With patience, diligence, and responsible investing practices, you can set yourself on a path towards a more secure financial future.
*KILDE PTE LTD (“Kilde”) is incorporated in Singapore (registration no. 201929587K) is licenced and regulated by the Monetary Authority Singapore and holds a Capital Markets Services Licence (CMS101016) and an Exempted Financial Advisor License under the Financial Adviser Act. The information provided in this marketing material is intended for “accredited investors” and “institutional investors” (collectively “qualified persons”) only. This marketing material, and any information in this marketing material, or any documentation that Kilde provides in relation to this marketing material is provided without any representation or any kind of warranties whatsoever (whether express or implied by law).
This advertisement has not been reviewed by the Monetary Authority of Singapore.
