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[Beginners’ Guide] How To Start Investing In Singapore

Meet your complete guide on getting started with investing, whether its stocks, bonds, exchange-traded funds, or REITs.

 

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.

To help you get started on your investing journey, this article will be a simple guide meant for beginner investors who are unsure on how they can get started. It will provide useful links to other articles that DollarsAndSense.sg have written about investing.

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, let’s first understand some of the key investing concepts that you first need to know.

Here Are 6 Rules To Remember Before You Start Investing

Here’s What Your Personality Says About How You Are Likely To Invest

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

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

Let’s us take a look at some of the more 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 straight forward.

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

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

Step-By-Step Guide To Stock Investing In Singapore

Here Are 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

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 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 because of the growing investment-savvy population along with the general love that Singaporeans have when it comes to property investing.

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

Here are some articles that can help you understand how REITs work.

Taking Your First Step Into REITs Investing In Singapore

Here Are 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

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 timeframe 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 investment 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.

What Are 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

Here Are 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


 
 

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