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[Beginners’ Guide] How To Start Investing In Singapore

Ready to start investing? Whether its stocks, bonds, exchange-traded funds, or REITs, here’s all you need to know about investing.


This article was first published on 10 April 2018 and was updated with new information.

Investing is one of the most important components of personal finance. Knowing how to invest and acting upon this knowledge can help a person greatly in growing their wealth quickly and to generate sources of passive income.

Successful investors are able to retire earlier and chase their dreams without having to worry about whether they would have enough savings to last them for their lifetime. They can live life knowing that their investments can take care of their financial needs.

This article is meant as a simple guide for you if you’re a beginner investor who is unsure about how to get started on your investing journey. It also contains useful links to the other articles from DollarsAndSense.sg about investing. Enjoy!

What Can I Invest In?

The first question that people tend to ask when it comes to investing is what exactly they can invest in. This is actually a pretty simple question.

Unlike the past, retail investors in Singapore these days have a lot more options available to them.

As an investor, you can choose to invest in individual stocks, exchange-traded funds (ETFs), Real Estate Investment Trusts (REITs), bonds and even government created products such as the Singapore Savings Bonds.

This does not even include other types of investments such as unit trusts, property funds, peer-to-peer (P2P) lending and Robo-advisors.

Of course, what you ultimately choose to invest in has to be in an instrument that you understand and are comfortable with taking the risk on.

Before we start, it’s important to first understand some of the key investing concepts that you need to know. Here are some recommended articles:

6 Rules To Remember Before You Start Investing

What Your Personality Says About How You Are Likely To Invest

4 Critical Success Factors That You Cannot Afford To Ignore If You Want To Succeed In Your Investment Journey

What You Should Know If You Want To Diversify Your Investment Portfolio Effectively

Now, let’s take a look at common investment instruments.

Common Investment Instruments

Stocks

Stocks are the most common instrument that people turn to when they talk about investing. The Singapore Exchange (SGX) offers more than 700 stocks that investors can choose from. Of course, finding the right stocks to invest in is not as straightforward.

Here are some articles about stock investing you can read to give yourself a head start on what you need to know.

Value Vs Growth Vs Index Investing: Which Is The Best Strategy For You?

Step-By-Step Guide To Stock Investing In Singapore

6 Basic Things You Need To Know Before Investing In Your First Stock

Step-By-Step Guide To Investing Using Regular Shares Savings (RSS) Plan

After Identifying A Good Company, Should You Consider Investing In Its Stocks Or Bonds (Or Both)?

Alternatively, you can check out our weekly curated digest of 4 stocks that you should be paying attention to based on market trends. The weekly article serves to point out certain observations and trends and is by no means meant to serve as investing advice.

ETFs

If investing in individual stocks isn’t your cup of tea, a good alternative would be to invest in ETFs.

ETFs can be thought of as a mutual fund that seeks to only do one thing, and that is, to mimic the index or sector that it is tracking. It aims thereby to receive the benchmark market returns. Here are some articles that you can refer to understand how ETFs work.

How Does ETFs Investing Really Work In Singapore?

Here’s Why We Think Your First Stock Investment Should Be The STI ETF

Why It Makes Sense For You To Be Investing In ETFs

4 ETFs Investors In Singapore Should Know About

Mutual Funds Or ETFs? Which Should I Choose?

REITs

Real Estate Investment Trusts (REITs) are getting more popular as an investment class as it’s a relatively accessible means of property investing for an increasingly investment-savvy population.

A REIT basically owns a portfolio of properties which are rented out. The rental income is then used to defray the cost of owning the properties and the remaining profits are paid out as dividends to shareholders.

You can read the following articles to understand how REITs work.

Taking Your First Step Into REITs Investing In Singapore

7 Types of REITS In Singapore, And The Reasons Why People Invest In Them

 5 Things You Need To Know About Investing In REITs In Singapore

Investing in REIT ETFs Listed In Singapore: 5 Things You Need To Know

Complete Guide To Investing In Singapore REITs

DollarsAndSense.sg also publishes an S-REIT report card every quarter with details and observations surrounding the performance of local REITs. Check it out if you would like a deeper understanding of specific and top-performing REITs for the quarter.

Bonds

Bonds represent debt obligations that organisations and companies issue.

Simply put, these entities are borrowing money today with the promise that they will pay coupons (or interest rates) throughout the lifetime of the bond as well as the principal once the bond matures. Investors purchase them as they are comparatively less volatile and risky, compared to stocks.

Unlike stocks, bonds have a maturity period. The maturity of bonds can be as short as one year or as long as over 30 years. Bonds with a shorter maturity period are characterised as less risky as there is a shorter time frame for interest rates to fluctuate or, for the bondholders to fall into financial difficulties.

Some investors automatically assume that bonds are safe investments, especially when compared to stocks, properties or private businesses.

While this may generally be the case, it does not mean that bonds investments are without risk. In fact, assuming that they are without risk is a major misconception.

Here are some articles that we have written about bonds that you can read.

Bond Investing 101: The Different Types Of Bond Investments You Can Make In Singapore

Are Bonds Really Safe? Here’s What You Need To Understand Before Investing Into One

Stocks Or Bonds? Here Are The Pros And Cons Of Each Type Of Investment

4 Reasons Why Some Investors Choose Bonds Over Stocks

More Beginners’ Guides To Check Out

Here are some other useful beginner’s guides that you might also be interested to read:

[Beginners’ Guide] Buying Insurance In Singapore

[Beginners’ Guide] Fresh Graduates’ Guide To Starting Work In Singapore

[Beginners’ Guide] How To Start Trading In Singapore

FSM INVEST Expo 2020

FSMOne.com believes in INVESTING, Fundamentally – investors should first understand the basics of investing before they get started, and it is also important for them to focus on fundamentals in the research perspective of investing.

Join FSMOne.com at FSM INVEST Expo 2020 on 18 January 2020 (Saturday) from 10am to 6pm at Suntec Convention Centre (Hall 403)!