How to Invest in Singapore Stocks
Stocks may seem intimidating at first, but it’s quite easy to do. It’s an investment vehicle that may seem complex at first, but there are many ways to invest in Singapore stocks, no matter your level of experience or how much money you have to spend. This article will give you some tips on how to go about investing in Singapore stocks, so be sure to read on and stay with us as we guide you through the process. Here’s what we’ll be covering: What are Singapore stocks? How do I invest in Singapore stocks? Is investing in Singapore stocks worth it?
Step 1: Do your research
First, you need to figure out the stocks that interest you. There are many types of companies: blue chip stocks (old companies like Procter & Gamble or General Electric), conglomerate stocks (companies that have businesses across many industries like Samsung), growth stocks (companies that will experience higher rates of growth like Apple), small-cap stock(small companies with high growth potential but lower visibility than large-cap) and special purpose investments (companies whose business doesn’t fall into any other category). Once you know what kind of company interests you, research its history on a site like Bloomberg or NASDAQ and make sure it has a strong history. Next, take note of the index against which the shares trade.
Step 2: Choose the right broker
The right broker will also depend on what type of investor you are. If you want to invest in your spare time and pick up new stocks that catch your eye, you may be better off with a commission-free platform. However, if you prefer the assistance of an advisor or would like direct access to funds, go with a full-service broker. Make sure whichever broker you choose is authorized by the Singaporean Securities and Futures Commission.
Step 3: Open an account
Find an online broker you’re comfortable with and open an account. Start by linking your bank account to the broker so you can use your bank balance for trading. Next, set up two-factor authentication, the financial industry’s version of the second layer of security on top of passwords. This is usually done through e-mail or text message and it offers a degree of protection against scams. Finally, take care when choosing which stocks to invest in; only pick those you’re confident about and keep a close eye on them for a while before deciding whether they are worth more than your initial investment.
Step 4: Know what you are buying
4. Know what you are buying
What is the share price? Some of the main aspects that will influence the share price are earnings per share, dividends, cash flow, and PE ratio. In addition, think about some key considerations before investing: Where is the company domiciled? Does it have a history of profit or losses? Is it dependent on commodity prices or an industry slowdown for success? The stability of the stock market in which your shares trade also merits consideration. This can be measured by following key indicators like trading volume and short interest. Furthermore, some stocks may offer leveraged returns throughputs or call options available on the stock.
Step 5: Use dollar cost averaging
Another way to invest is by using dollar cost averaging. Dollar-cost averaging is where you buy shares of stock periodically over time (usually monthly). This will help smooth out the volatility of the price swings, meaning that you will get some nice returns even if the share price drops sometimes. For example, suppose that a company’s stock is selling for $10 per share and you want to invest $1000. Instead of buying all 1000 shares at once, you could set up an investment plan where you purchase 500 shares now for $5000 and then another 500 shares at the end of one month for $5000. By doing this, your average share price will be closer to $10.
Step 6: Stick with it!
One mistake that most people make is investing too much money in a single company. Some of the biggest and most well-known companies are considered blue chip stocks, and they’re the ones that make up most of the Dow Jones Industrial Average. Even if you want to invest heavily into one stock, you may want to spread it out across different companies. Let’s say you like Exxon Mobil, but don’t want all your eggs in one basket. You can invest some money in Chevron as well because they are also an oil company with a long history of success and growth.
Step 7: Stock trading mistakes to avoid
Avoiding these common trading mistakes will help you become a more profitable trader:
• Becoming too emotional – It often feels like a win or a loss is life or death. It isn’t. You have time and resources to learn from your mistakes, and being emotionally invested can lead you down the wrong path quickly.
• Poor money management – It’s important to have money set aside for trading, but don’t let yourself run out of cash so that you’re forced into the markets when they may not be opportune times.
• Inability to cut losses – You must know when it’s time to stop following your original game plan and move on before further damage is done.