By investing, you save some money and put it to work to grow and get maximum returns from it over a period of time. “If you don’t find a way to make money while you sleep, you will work until you die.” as the famous quote from the investor and philanthropist Warren Buffet goes. The objective of the investment is to grow your money by putting it in stocks and shares and watch it grow in the future.
Investing in stocks is buying shares of a public company in the hope of earning extra money on shares when the company grows. When compared to deposit schemes, shares or stocks are one of the most profitable investment choices that help you earn higher returns. You can buy or sell shares or stocks at a stock exchange like Singapore Exchange (SGX). With stock investment Singapore, you can strengthen your returns and income in the future.
More and more people in Singapore are investing in stocks as a part of the status symbol, and you can find over 51 percent of people owning Singapore stocks of several leading companies listed on the SGX.
Why should you consider investing in stocks in Singapore?
Investments help you have a second source of income and meet your financial objective. Moreover, they help you:
With capital growth
When you buy a board lot of shares or stocks of a company, you become a shareholder and share the ownership of the company with others.
When the business grows and expands over time, there will be an increase in the value of shares. The increase in the stock price is called capital growth. Nevertheless, the investors refer to capital growth as capital gains, which is the actual profit you make after selling your shares.
For instance, if you have bought a stock for 5 SGD per share and if you sell it at 5.20 SGD per share, the capital growth is 20 percent, which is realized only after selling off the stock.
- Yield dividend
Other than capital gains, stock investments can earn a dividend, which is a part of the profit a company distributes to its shareholders. Public companies generally use their profit to invest further and grow their business or distribute it to shareholders as dividends. To have a stable income, you can choose companies offering dividends regularly every year or quarter. If you desire, you can reinvest such dividends to maximize returns.
- Invest in diverse companies
As an investor, you can invest in any of the companies serving diverse markets. There are more than 700 companies that are listed on the Singapore Exchange (SGX). You can invest in several companies with different growth cycles and spread your risk without having a huge amount of money invested in the stocks of one company.
The other option for diversifying your investments is via Exchange Traded Funds (ETFs), which are blocks of stocks or securities created by pooling the funds of a few people.
- Transparency
The stock exchange is the place where shares, stocks, and ETFs are traded at prices in real-time. You can buy or sell shares on the Singapore Exchange at the market price, which you can view as and when they are traded. Investors can also choose to trade shares at their desired price.
- Liquidity
As for stock investment in Singapore, you can buy or sell shares easily through online brokers offering stock trading services. The shares can be bought and sold as low as 100 shares when you want to.
How to trade stocks online?
You are now ready to trade in the Singapore securities market. How should you go about it?
- You should be a savings or current account holder in a leading bank.
- You need to start a Central Depository account, which offers clearing, settlement, and depository facilities for stocks, shares, and fixed income instruments.
- Some banks like DBS offer an online trading account and link it to your CDP account.
- It’s done
In short, you can start investing in stocks in Singapore and grow your money. There are authorized brokers who can help you with the needed resources and advice.
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