How To Buy, Trade and Invest in Stocks in Singapore

Investing in stocks is a common strategy for those in Singapore looking to grow their wealth. It involves purchasing shares in publicly traded companies, with the expectation that their value will increase over time/

One of the most accessible ways for beginner investors to learn how to invest in stocks is by opening an online investment account with a Singapore brokerage and start trading stocks through their platform.

Many brokerages even allow you to open accounts with minimal or even no initial deposit, so you don't need a substantial amount of capital to begin your investing journey in Singapore. Some may even offer fractional share trading, enabling you to buy portions of expensive stocks and enhancing the profile of your investment portfolio.

» Learn More: What is a brokerage account?

Investing in stocks doesn’t have to be intimidating.

Start by opening an online brokerage account, adding money to it, and purchasing a stock or investment fund—congratulations! You’ve just invested in your first very stock(s). Robo-advisors or financial advisors can even help you select a stock or fund based on your risk appetite and investment goals, making it even easier to get started.

Ready to get started? We’ve broken the stock investing process down into seven easy-to-follow steps for a beginner-friendly investment journey.

» Learn More: Best brokerage accounts for online stock trading in Singapore

1. Choose how you want to invest your money

There are several approaches you can adopt for stock investing. Choose the one that best suits your comfort level and investment style.

I want to practice investing without any real capital involved.

If you're new to stock trading for beginners, you might feel hesitant to risk your own money immediately. Many brokerage platforms offer demo accounts or paper trading features. These allow you to practice buying and selling stocks with virtual currency, providing a risk-free environment to learn the basics and develop your trading skills.

I want to choose my own investments, stocks, and funds.

If you prefer to have direct control over your investment decisions, you can open a brokerage account and select individual stocks or funds yourself. This will require research and active management of your portfolio. The following sections of this blog will guide you through the process and demystify it for you.

I would like some kind of external assistance with portfolio management.

For those who prefer a more hands-off approach, robo-advisors offer automated portfolio management services. These are available via banks (e.g. DBS digiPortfolio, OCBC RoboInvest, UOBAM Robo-Invest) or dedicated platforms such as StashAway, Syfe, and Endowus. Robo-advisors use algorithms to build and manage diversified portfolios based on your risk tolerance and financial goals.

You can also engage a human financial advisor to manage your portfolio and provide financial advice based on the latest market changes.

I would like to try investing with my CPF or SRS.

If you’re Singapore and have a CPF account you can also consider investing a portion of your savings through the CPF Investment Scheme (CPFIS) or Supplementary Retirement Scheme (SRS). These schemes offer specific and accessible investment options for retirement planning, drawing on the funds in your Ordinary Account and/or Special Account.

» Learn More: What is the CPF Investment Scheme (Original Account) and how does it work?

2. Choose a broker or robo-advisor that fits your financial needs and appetite

Choosing a broker for investing on your own

First, you'll need to choose an online brokerage platform to buy and sell shares.

Compare different brokerage accounts to find one that suits your needs and budget. Key factors to consider include:

• Fees: Compare commission charges, platform fees, and any other associated costs.

• Variety of investment options: Ensure the broker provides access to the Singapore Exchange (SGX) and any other international markets you wish to trade in (e.g. pick a brokerage ideal for buying US stocks if you want to dip your toes into the US market).

• Features of the trading platform: Evaluate the platform's user-friendliness, trading tools, and mobile app capabilities.

• Research and analysis resources: Look for brokers that offer research reports, market data, and educational resources to support your investment decisions.

• Customer support: Assess the availability and responsiveness of customer service channels.

Some popular choices in Singapore include:

• DBS Vickers: Offers a wide range of investment products and research tools.

• Saxo Markets: Provides access to global markets and advanced trading platforms.

• FSMOne: Offers a user-friendly platform with a focus on mutual funds and ETFs.

» Learn more: Best online brokerage accounts for stock trading in Singapore

Investing through robo-advisors

Robo-advisors are automated platforms that can provide recommendations for stock selection while automatically managing your portfolio—giving you a hands-free, easier investing experience. Some even have features for portfolio rebalancing or financial planning to support your overall financial goals better.

If you opt for a robo-advisor, consider the following:

• Management fees: Compare the annual fees charged by different robo-advisors, typically expressed as a percentage of your assets under management.

• Investment strategies: Understand the robo-advisor's investment methodology and the types of portfolios they offer.

• Minimum investment: Check the minimum deposit required to open an account.

• Customer support: Evaluate the availability of customer support and any financial planning features offered.

Leading robo-advisors in Singapore include StashAway, Syfe, and Endowus, as well as robo-advisors from major banks like DBS, OCBC, and UOB.

» Learn more: Best robo-advisors and robo-investors in Singapore

3. Pick a type of investment account

Whether you choose a broker or a robo-advisor, you'll need to select the appropriate type of investment account. In Singapore, common account types include:

• Cash account: The most common type, where you deposit cash to buy and sell securities.

• Custodian account: Where a custodian (usually a bank) holds your securities for you. SRS accounts are a type of custodian account.

• CDP-linked account: Your securities are held in Central Depository (Pte) Limited (CDP), Singapore's securities depository. You'll need this to trade directly on the SGX.

• CPF investment account: Allows you to invest in stocks and other approved investments using your CPF funds under the CPFIS scheme.

The type of account you choose will depend on your investment goals and needs. For example, if you're saving for retirement, an SRS account might be suitable. If you plan to actively trade on the SGX, a CDP-linked account will be necessary.

Signing up for an account on any of these platforms typically involves providing personal information and verifying your identity. You may also need to meet certain eligibility criteria, such as:

• Age: Most platforms require you to be at least 18 years old to open an account.

• Residency: You'll typically need to be a Singapore resident or citizen.

• Financial requirements: Some platforms may have minimum deposit or income requirements.

Ultimately, mutual funds and ETFs offer built-in diversification, which helps to reduce risk. While individual stocks offer the potential for higher returns but also carry greater risk. You may weigh the benefits and disadvantages of either option differently based on your financial situation, financial goals, and risk tolerance.

5. Set a budget for your stock market investment

When you're ready to buy shares, you'll need to place an order through your brokerage platform. 

There are two main types of orders:

• Market order: This is the simplest type of order. You're instructing your broker to buy or sell shares at the best available current market price. Market orders are typically executed quickly, but the final price you pay may be slightly different from the price you saw when you placed the order, especially if the market is moving quickly.

• Limit order: This type of order gives you more control over the price you pay. You set a specific price limit, and your broker will only buy or sell the shares if they can get that price or better. Limit orders may take longer to fill, or they may not be filled at all if the market doesn't reach your desired price.

How much money do I need to start investing in stocks?

The amount of your initial investment varies depending on the stock prices and your chosen broker. Some brokers in Singapore allow you to start with no minimum deposit or offer fractional share trading, enabling you to invest even with small amounts. ETFs can also be a cost-effective way to invest in stocks with a limited budget, as they are traded at a share price.

How much money should I invest in stocks?

There's no one-size-fits-all answer to this question. The ideal amount to invest in shares depends on your personal circumstances and financial goals, although a general rule is to only invest what you can afford to lose.

Here are some key questions to consider:

• What are you saving for? Are you investing for a short-term goal like a down payment on a house, or a long-term goal like retirement?

• How long do you have to achieve your goals? A longer time horizon (for example, if you’re saving for retirement) allows you to take on more risk and potentially earn higher returns. In such a situation, a larger allocation to stocks (through funds) may be appropriate.

• Can you afford to lose some of your investment? Investing in shares always carries some risk, so it's important to only invest money you can afford to lose

Once you've considered these factors, you can start with a small amount and gradually increase your investment as you become more comfortable with the process. You can consider using a budgeting framework like the 50/30/20 rule to allocate funds for investing within your larger financial strategy.

6. Focus on the long-term outcomes of your investment, not just short-term changes

Stock market investments have historically been a strong driver of long-term wealth growth, measured in terms of years and even decades.

However, this does require weathering ups and downs in the short term. Avoid panic selling during market downturns—it’s possible that your stocks will go back up as the market improves. You may even see a dip in prices for several years but an overall gain within a 10-year period—all depending on the performance of the individual stock amidst changing market conditions.

If you’re concerned about market volatility, you can consider dollar-cost averaging. This entails investing a pre-determined amount of money every month no matter the actual stock price. The idea is that when the stock price is low, you’ll buy more shares, and when the stock price is high, you’ll buy less shares, all for the same amount of money. This helps build consistency in your investment strategy and bolsters your portfolio’s resilience against large market fluctuations.

Ultimately, investing in stocks means playing the long game. Unless you’re trying to succeed at options trading, resist the urge to obsessively check your portfolio daily. Focus on the long-term trend instead and give your money some time to recover from the occasional dips and falls.

7. Monitor and manage the performance of your stock portfolio and shares

After you've bought shares, it's important to monitor their performance regularly. Depending on the performance, you may need to periodically re-evaluate your asset allocation to optimise future gains. Such rebalancing can help you maintain your desired risk level.

If a Singapore-heavy portfolio isn’t performing as well as you’d like it even after six months or a year, for example, you may consider withdrawing some investments and re-investing in an international ETF that’s had more consistent growth.

Or if you’re changing your financial goals from building up short-term wealth to saving up for retirement, you may want to reallocate riskier stock investments to more conservative, reliable fixed-income investments such as bonds. This will better protect your portfolio from market risks.

To stay on top of your investments, be sure to subscribe to company news and earnings reports for any individual stocks you hold. You can usually track your investments through your brokerage account or use online portfolio trackers. And if the stock has reached your investment goals or if the company's performance deteriorates, consider selling your shares to optimise your overall returns.

Learning how to invest in stocks can seem daunting, but it's achievable with a clear approach and the right tools.

Don’t be afraid to start with smaller amounts and diversify your holdings—take the time to build a strong foundation and gain confidence in your investments first.

Do your research and choose a brokerage platform or robo-advisor that suits your needs and streamlines your introduction to the investment game.

And remember that investing is accessible to everyone: you just need to determine your strategy and the appropriate investment instruments to meet your financial goals.