Finance, Savings

How can I invest in the Singapore Stock Market?

Screenshot 2020-06-06 at 8.55.16 PM
SGX Share Price on Google

I started investing in the Singapore stock market since mid-2019. All thanks to my husband-to-be, I was being asked to go for high-risk investment options instead of buying saving endowment plans from insurance companies.

He attended a financial course by one of those investment gurus in Singapore and started to make profits from trading in the open market. That motivated me to find out more about investing and the stock market.

I actually went in only with very basic financial knowledge which I gathered from financial blogs and websites. Once I figured all the basics out, I decided to take a plunge and dive right into it. Looking back, I’m glad that I’ve started investing and wish I had known about the benefits of long-term investing sooner. If you are interested to find out how I save and invest, you can read this article.

Get rid of this misconception before you invest in the Stock Market.

Many people think that you will need to have a lot of capital to invest but in reality, you can always invest as little as $100 but make some profits, more than if you were to leave it in the bank. Thankfully, Asian stocks are relatively cheap. You can still find relatively good companies whose stock unit prices are below $2.

Once you purchase the stock, you will also earn dividends (a portion of earnings distributed by the company). After trying out this investment route, there is no turning back for me. Sometimes I wonder why schools don’t teach investing.

Buying stocks from a Singapore stock market is easy. The difficult part is probably choosing the right stock to buy and instilling the discipline to save for the future. Here are 5 easy steps to purchase a stock from the Singapore stock market. (Do note that I am not a financial advisor or trader. I am not an expert in finance and I am just sharing with you what I know, based on my experience.)

1. Open a CDP account

CDP account SGX Singapore Stock market
SGX website

All the stocks that you bought will be kept safe in the Central Depository Account (CDP) for stocks. Hence, you will need to open a CDP account in order to buy stocks. It is operated by the Singapore Stock Exchange (SGX). Every time you buy a stock, it will get deposited into your personal CDP account.

Head over to their website and open a CDP account. The application process is quite straightforward. There are no costs involved.

2. Get a brokerage or trading account

Now that you have an account to safe-keep your stocks, you will need to use another platform to buy and sell shares on your behalf. And that platform is your brokerage account. There are several brokerages in Singapore you can choose from. Every time you buy or sell shares through your brokerage amount, you will be charged with a brokerage or commission fee.

The fee varies slightly across the various broker firms so to me, it doesn’t really matter which brokerage account you choose, especially if you are just starting to buy stocks.

DBS Vickers Securities

DBS Vickers Securities Singapore Stock market
DBS Vickers Securities

I used DBS Vickers because I have a POSB bank account. It is easier for me to manage all my funds through the same platform. Once you open a DBS Vickers account, it will automatically be linked to your CPD account. The bank will also set up a new DBS Multi-currency account for you to deposit money to purchase stocks. Once you get that setup, the next step is learning how to pick the right stocks to invest and then purchase them.

Watch this video to find out how I purchase stocks through DBS Vickers Securities.

To purchase a stock, you’ll just need to ‘Place An Order‘, key in the stock code, decide how many units you want to buy and at what price you would like to purchase it for and click proceed. This portion can get a little technical but I will try my best to explain it.

DBS Vickers Securities Singapore Stock market
DBS Vickers Securities
Action

For instance, if I would like to buy Sheng Shiong stocks, I will search for it on the left column for the share price. Then I will indicate ‘buy’ on the right column and enter the quantity or the number of share units I want to buy. Make sure you leave it as ‘limit order‘. A limit order is an order to buy or sell the share at a specific price or better.

Order Duration

The order duration refers to the length of time your order will remain active in the market until it is cancelled or filled. You can set it for ‘Good till today’ or you set a ‘Good till a specific date.’

That means if let say the share price reflected today (6 June) $1.55 per unit. You feel that maybe a few days later, the share price might drop to $1.50. And you only want to buy when the share price drops to $1.50.

So, you set your order duration to a specific date say (12 June) and enter the price ($1.50) which you want to purchase at. If the share price drops to $1.50 before 12 June, the order will be filled and you will get your stocks.

Price

When you want to buy a stock, you are the buyer so you look at the Ask price. The Ask price is the lowest price a seller of a stock is willing to accept for that given stock per unit. When you key in the Ask price, you will usually get your order filled immediately.

When you want to sell a stock, you are the seller so you look at the Bid price. The bid price is what the buyer is prepared to pay for.

3. Download a stock market app and read about the world news

SGX Mobile app Investing Singapore Stock market
A screenshot of my SGX Mobile app

I highly suggest that you download a stock market app like SGX Mobile. It allows you to monitor share prices as well as to create a watchlist so that you easily monitor the stocks.

Picking a stock is never easy. I would highly recommend that you check out Seedly where they do a detail stock analysis of several good potential stocks in the market. Their articles are written in layman terms so that it is easily for non-financial people like you and me to understand the difficult financial jargons. That website has been of great help to me when it comes to picking the right stock to invest.

It is also good to read up on the current news because the latest news affects the stock market. The COVID-19 pandemic causes some stocks to plunge and some stocks to rise. A new product launch by a company can cause a stock price to go up. Likewise, a protest can cause the stocks to dip. As an investor, you have to keep yourself updated with the current affairs.

For a start, I highly recommend that you purchase blue chip stocks or REITs (real estate investment trust) which are pretty stable over the years.

4. Rest and collect dividends from your stocks which you’ve purchased

Screenshot 2020-06-06 at 9.04.51 PM
I track down all my dividend earnings on an Excel sheet.

I still consider myself as a beginner investor so I buy only a few hundred lots at one time. With the little that I’ve invested, I am able to collect dividends every three to four months. Sometimes I could be getting $3 or $70 plus for each dividend payout and it all depends on how much profits the company has made. All these dividends are credited to directly to my POSB savings account.

With that little extra pocket money, I am able to cover some of my personal expenses. It’s still so much better than leaving my cash in the bank where the interest rate is only 0.05%.

5. Sell when you make a considerable amount of profits from your stocks

Long-term successful investors will advise you to buy and hold long-term. But I really feel that it all depends on what type of an investor you are. Some practise this trading strategy called swing trade where they buy low and then sell high within a day to earn quick profits. Generally, most investors buy and hold stocks for years before they sell to make profits.

For beginners, I recommend that you buy and sell when you make a considerable amount of profits in order to get a feel of buying and selling stocks is like.

Learn your successes and failures to make better decisions for yourself. Who knows, you might end up discovering a better-investing strategy that would grow your savings?

About Author

I'm a digital content writer from Singapore who started blogging ten years ago as a hobby and won't stop till Jesus returns. Yoga and green smoothies keep me going.

Leave me a comment below!

%d bloggers like this: