It should come as no surprise that people are seeking other methods to save and grow their money. Investing in stocks and bonds tends to perform better over time than keeping money in the bank as fixed deposits.
You can buy shares of companies listed on practically any stock market as a retail investor. One approach to benefit from a company’s success in the upcoming years is to invest in its shares. It can yield healthy profits in the form of dividends or capital gains.
Here are a few steps for guidance on stock trading for beginners in Singapore.
- Identify your investment goals
Establish your financial objectives and the amount of savings required to meet them before you begin investing. “To make money” is what most investors will declare as their ultimate objective. Setting aside this apparent ultimate aim, it’s more crucial to ask oneself some of these crucial questions:
- How do you want to profit from your investments? Is it rapid or gradual?
- What would you consider more essential to you now, capital growth or dividend payouts?
- Are you ready to take considerable risks?
With these, you will have an idea of the investment strategy you want to adopt, whether to trade or invest in shares. Investors typically have a long-term perspective and aim to develop their portfolios gradually.
Investors want to ride the ups and downs of the stock market by purchasing quality equities at fair pricing. To purchase at a lower price and sell at a high price, traders aim to make more profit by trading when the market swings.
A watch list is a helpful practice to look into the equities you are thinking about. It gives you an overview of a company’s balance sheet and makes it simple to evaluate. You may also keep an eye on certain popular financial ratios and investment measures that investors use to assess stocks when deciding which stocks to buy.
- Determine an investment platform
A Central Depository (CDP) account is essential as it serves to hold and safeguard your Singaporean securities. This covers Singapore Government Securities as well as stocks, bonds, and other securities listed on the SGX. Dividends credited to your CDP will also need you to link your bank account to it.
Alternatively, you may begin by creating an account on a website that lets you exchange financial instruments. A financial institution account that enables you to invest through robot-advisory platforms, invest lump amounts in unit trusts, and establish a monthly savings plan are a few things to consider.
- You need to have a brokerage account online
If you want to be an investor, you need to open an account online with a broker. For example, DBS has DBS Vickers for helping investors buy individual stocks, exchange-traded funds, and bonds from financial markets across the world.
In addition to enabling you to carry out purchase or sell orders, a brokerage account usually provides you with several additional services, such as:
- Helping you with investment decisions through well-researched blogs or articles
- Facilitating easy stock trading
- Margin finance options to increase your ability to invest
- Keeping custody of your shares listed on the Singapore Exchange, should you choose not to use the CDP
- Start investing
Finding a stock to buy and beginning your investing adventure is the next step. Here are some possibilities that could make things easier for you while still offering a good amount of diversification if you are still undecided about what to invest in precisely.
- ETFs: These aim to replicate a certain market index, industry, or even commodity.
- Unit trusts: Under the guidance of an asset management firm, these are frequently diversified investment products.
- Robo-advisors: pre-made portfolios assembled for you by our team of specialists using technology, by the opinions of the DBS Chief Investment Officer.
- Invest-Saver: Use dollar-cost averaging to your advantage by making consistent investments in ETFs without trying to time the market.
Hope this tutorial on how to start investing for beginners in Singapore will be helpful to you.
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