Top Five Investing Methods | Investing Tips in Singapore

Investment

The stock market in Singapore gives a confusing array of alternatives to prospective investors. There are dozens of investment strategies and methods. Each has advantages and disadvantages. So, how do you get started investing? In this blog, we tell you Singapore’s top five investing methods. 

Singapore’s Top Five Investing Methods

Active Stock Selection

Passive investing is quick and straightforward, but it is also a somewhat slow and unambitious approach to building your money when compared to techniques that need more active participation. You might not be satisfied with simply purchasing the ETF and calling it a day. Also, you can potentially earn better profits if you know how to pick your stocks and time your entry into the market. Active stock choosing is especially important for growth investors who want to buy low and sell high. It does need some work, though, because you must monitor the market and be ready to purchase or sell your stocks quickly when the situation calls for it.

Some growth investors like to invest in small-cap stocks, which are stocks of firms with high growth potential. Such stocks can be volatile, but they also provide the opportunity to make a large profit if a fledgling firm goes on to become the next Apple or Google. If you intend to buy and hold your chosen stocks, almost any online investment firm will suffice.

Passive Investing

Passive investing is appropriate if you wish to limit your decision-making, possibly because you lack the knowledge required to actively manage your portfolio. You simply want to save some money and let it grow. ETFs, or Exchange Traded Funds, are extremely popular among passive investors. The ETF monitors an index that is linked to a portfolio of assets. For example, Singapore’s most well-known ETF, the Straits Times Index (STI), monitors the top 30 companies on the Singapore Exchange (SGX). When you invest in an ETF, your investments are far more diversified than if you bought a single stock.

Dividend Investing

Dividend investing is a method of generating passive income that entails purchasing stocks that payout monthly dividends. After purchasing the shares, the investor may sit back and collect the dividends, which are typically paid out quarterly. Dividends can be reinvested or used as a source of income. Simultaneously, the investor has the option of profiting from capital gains by selling their shares if their prices grow. Dividend stocks are typically REITs and blue-chip stocks, which implies that many of them are steady but may not have as much growth potential as, say, small-cap stocks.

Dividend investing, on the other hand, tends to be lower risk, not only because of the low volatility of the stocks themselves but also because investors who hold their stocks for the long term will be able to extract a significant amount of value through dividends regardless of the trajectory of the share price.

Speculation 

You might be lured to conjecture if a fun weekend for you includes playing blackjack at Marina Bay Sands or Resorts World. Speculation is a high-risk, high-reward activity that entails betting on specific assets in the hopes that they would appreciate and give the speculation quick money. Cryptocurrency, FX trading, and options trading are popular among speculators. These kinds of investments — if you can call them that are volatile and unpredictable, so you basically buy them, cross your fingers, and hope for the best.

Speculative traders generally evaluate crypto exchanges and trading platforms to find those with reasonable costs, as they intend to trade frequently. They’d want a platform that can execute trades, just like they do with active stock trading.

Hands-off Investing

If you’re too lazy or too busy for passive investing, there are even more hands-off options to manage your money than purchasing an ETF or utilizing a Robo adviser. Purchasing insurance plans with an investment component, such as Investment-Linked Plans, is one of these strategies (ILPs). All you have to do is pay your payments to the insurance company, and they will invest your money in professionally managed funds. Another alternative is to buy units in a unit trust, which is a portfolio of assets in which you can invest. You won’t have to do anything because a professional fund manager will handle the investments for you. 

With these top five investing methods in Singapore, you can use your money to invest in the right places. 

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