What are Singapore stocks and how does it work?
Singapore stocks refer to stocks listed on the Singapore Exchange (SGX). Investors or traders can purchase Singapore stocks off the SGX with a brokerage account. This brokerage account can be opened with any broker of choice.
Reasons to invest in Singapore stocks
Investors have the option to invest in financial markets of many different countries. With Singapore stocks, there is a sense of familiarity – they may be brands you shop at, bank with or use on a daily basis. Examples of such ‘homely’ stocks include DBS, CapitaLand, ComfortDelGro and Sheng Siong.
Setting goals with Singapore stocks
Your investment goals help to determine your investment style and the products you invest in. Example of goals include:
- A comfortable retirement
- Buying a house or car
- Financial freedom
- Paying for your child’s education
- Starting your own business
You can have multiple investment goals. With Singapore stocks, many investors look to generate passive income, investing in stocks that regularly pay out dividends, such as bank stocks or Real Estate Investment Trusts (REITs).
Understanding types of investment products
Products available for you to trade include:
- Exchange Traded Funds (ETFs)
Getting started with your CDP and trading accounts
You will need a Central Depository (CDP) account to buy and sell shares on the SGX. Your CDP account safekeeps the securities that you purchase. Read more about the CDP account.
You will also require a brokerage account. In Singapore, you can choose between a CDP-linked account or a custodian account. Compare the pros and cons of a CDP-linked vs custodian account here.
Know your brokers and how to choose the best brokerage
You can choose a brokerage firm based on factors such as:
- Investment products available
- Market access
- Tools and indicators provided
- Investment insights and educational materials available
- Platform interface and user experience
To help you with your decision, check out this article on the best brokerage accounts in Singapore