Investing in the stock market can seem complicated, with its jargon, charts, and seemingly endless options. It’s easy to feel overwhelmed, and many new investors find the prospect of buying their first stock a little daunting.
In reality, learning how to invest in stocks Singapore investors buy (SGX-listed stocks and REITs) comes down to a few practical fundamentals. To help you get started we’ve put together a guide that simplifies the process of how to trade stocks in Singapore.
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Get access to SGX-listed stocks and REITs, place trades quickly, and use odd-lot trading to buy or sell in quantities below the standard 100-share board lot—helpful for starting small, topping up precisely, or managing position sizes more accurately.
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Table of Content
- What Are Stocks, and Why Should You Invest in Them?
- Key Stock Market Terms Every Beginner Should Know
- Build an Investing Plan Before Picking Stocks
- How to Buy Stocks in Singapore? (Step-by-Step)
- What Fees Should You Be Aware of When Buying or Trading Stocks?
- How Do I Receive Dividends from My Stock Investments?
- Key Risks of Stock Investing and How to Mitigate Them
- Quick Takeaways
- Why Choose Syfe for Buying Stocks in Singapore?
- Frequently Asked Questions (FAQs)
- Resources & Further Reading
What Are Stocks, and Why Should You Invest in Them?
A stock represents ownership in a company. When you buy a stock, you’re buying a small share of that company. As a company grows and becomes more profitable, the value of its stock can increase.
So, why should you consider learning how to invest in shares in Singapore? There are several compelling reasons:
- Potential for growth: Historically, the stock market has generally trended upwards over time (though returns are not guaranteed and prices can be volatile). This means that if you invest wisely and patiently, your money has the potential to grow.
- Dividends: Some SGX-listed companies and many Singapore REITs distribute part of their income to investors, which can support an income-focused strategy.
- Compounding Returns: When your investments earn returns, and those returns then earn further returns, you’re experiencing the power of compounding. Over time, this can significantly accelerate the growth of your wealth.
- Building Long-Term Wealth: Ultimately, learning how to trade stocks is a way to build wealth over the long term.
For those looking for a simpler approach, digital wealth management platforms like Syfe can automate the process of portfolio growth by helping you build a diversified portfolio aligned with your financial goals.
Key Stock Market Terms Every Beginner Should Know
Navigating the stock market can feel like learning a new language. To help you get started, here are some essential terms you should know:
- Stock/Share: A unit of ownership in a company. When you buy stock, you own a small piece of that company.
- Shareholder/Stockholder: Someone who owns shares of stock in a company.
- Stock Exchange: A marketplace where stocks are bought and sold. Examples include the Singapore Exchange (SGX).
- Brokerage Account: An account you open with a financial institution (like a brokerage firm) that allows you to buy and sell investments like stocks.
- Dividend: A portion of a company’s profits that is distributed to shareholders.
- Portfolio: A collection of investments, such as stocks, bonds, and other assets, owned by an individual or institution.
Build an Investing Plan Before Picking Stocks
A stock purchase is a transaction. A plan is what keeps you investing when markets are volatile and headlines are distracting. Before selecting any stock, it is helpful to make four decisions.
Set a clear goal and time horizon
Your time horizon influences how much volatility you can tolerate.
- Short-term goals (0–3 years): Stocks may not be suitable for money needed soon, as drawdowns can be sudden and recovery can take time.
- Medium-term goals (3–10 years): Stocks can work, but diversification and disciplined sizing become more important.
- Long-term goals (10+ years): A longer horizon generally improves the ability to remain invested through cycles.
A practical rule: invest in stocks with money you can leave invested for years without being forced to sell during a downturn.
Decide how much to invest (and keep it sustainable)
A sustainable investing amount is more effective than an ambitious amount that is abandoned after a few months. Consider:
- an emergency fund,
- essential insurance coverage, and
- repayment of high-interest debt.
Then choose a monthly amount that can be maintained through different market environments.
Choose your approach: Dollar-cost averaging (DCA) or lump sum
Most investors invest from salary savings, so DCA is common: invest a fixed amount on a fixed schedule regardless of market price. DCA can:
- reduce the stress of timing the market,
- build consistent habit, and
- reduce “all-in at the top” behaviour.
Lump sum investing can be suitable when you have a large cash amount and strong risk tolerance, but it requires comfort with short-term volatility.
Set risk guardrails (the rules that prevent costly mistakes)
Guardrails turn good intentions into repeatable behaviour.
Recommended guardrails for beginners:
- Position size cap: Limit a single stock to 5–10% of your portfolio.
- Limit the number of holdings: Start with a manageable number (e.g., 5–12 stocks) so each holding is understood.
- Avoid single-theme concentration: Do not load most holdings into one sector (e.g., only REITs, only banks).
- Pre-define sell triggers: Write down what would prove your thesis wrong before you buy.
The objective is not to eliminate volatility. The objective is to avoid portfolio damage that forces poor decisions.
How to Buy Stocks in Singapore? (Step-by-Step)
Buying stocks might seem complicated, but breaking it down into manageable steps can simplify the process. Here’s a step-by-step guide:
Step 1: Open a CDP Account (For Singapore Stocks)
The Central Depository (CDP) account is like a safe for your Singapore-listed stocks. It’s essential for buying and selling stocks on the Singapore Exchange (SGX) and receiving dividend payments to a linked bank account.
To be eligible for a CDP account, you must be at least 18 years old, hold a Singapore bank account, and not be an undischarged bankrupt. You can apply directly through the SGX’s CDP website or conveniently via a brokerage that offers CDP-linked trading.
With Syfe Brokerage, investors gain access to SGX-listed securities through a CDP sub-account created specifically for them, eliminating the need to open an individual CDP account. This approach offers a streamlined investment experience, potentially reducing costs while maintaining the same high security standards provided by the CDP system.
Step 2: Open an Online Brokerage Account
A brokerage account is your gateway to the stock market. It’s the account you’ll use to buy and sell stocks. Choosing the right brokerage is important. Consider factors like reliability, the features offered, and fees.
Step 3: Fund Your Trading Account
Once your brokerage account is open, you’ll need to deposit funds into it. This can usually be done through bank transfer or other methods offered by the brokerage. One of the major advantages of using Syfe in Singapore is its low deposit requirements, making it more accessible for new investors looking at how to trade stocks.
Step 4: Choose the Right Stock to Buy
Choosing which Singapore stocks to buy requires research and due diligence. Consider factors like the company’s financial health, industry, and prospects.
Financial health can be assessed by examining financial statements like balance sheets and income statements while understanding the industry involves researching market trends, competitive landscapes, and potential disruptions.
Information for such market research can often be found in company annual reports, financial news websites, and analyst reports.
Step 5: Place Your Order
Once you’ve chosen a stock, you can place your order through your brokerage platform. You’ll need to specify the stock you want to buy, the number of shares, and the type of order. Many SGX counters trade in board lots (often 100 shares), which influences the minimum practical investment amount per trade.
For users on Syfe Brokerage, the user-friendly interface simplifies this process by allowing you to easily search for the stock you wish to trade, specify the number of shares, and choose your order type directly within the app. Moreover, Syfe’s odd-lot trading capability for SGX-listed names allows you to buy and sell in quantities smaller than the standard board 100-lot, offering greater accessibility and control.
Step 6: Monitor Your Investments
Investing is an ongoing process. It’s not enough to simply buy stocks and then forget about them. Regularly monitoring your investments is crucial for long-term success. This involves tracking the performance of your individual stocks as well as the overall performance of your portfolio.
But monitoring does not mean watching prices daily; it means reviewing holdings and fundamentals on a steady schedule.
- Monthly: Check portfolio weights and any material developments affecting your investment thesis.
- Quarterly: Review results updates or major announcements for core holdings.
- Annually: Reassess whether holdings still align with goals and risk tolerance.
Over time, some positions may grow faster than others. Rebalancing (trimming and reallocating) helps maintain your intended risk profile and reduces unintended concentration.
What Fees Should You Be Aware of When Buying or Trading Stocks?
When looking at how to invest in stocks in Singapore, it’s important to remember that the share price is only one part of the equation. There are often additional fees you should be aware of, which can impact your overall returns:
- Platform Fees: Some brokers charge fees for using their trading platforms. These fees can be a fixed monthly or quarterly charge or based on the number of trades. Some platforms also charge fees for fractional shares.
- SGX Market Fees: When trading stocks on the Singapore Exchange (SGX), there are certain market fees to consider. These include a trading fee (currently 0.0075% of the transaction value), a clearing fee (currently 0.0325% of the transaction value), and Goods and Services Tax (GST) on the brokerage services provided.
- Foreign Market Fees: If you’re trading stocks on international exchanges, you’ll likely encounter different types of fees. These can include transaction levies, stamp duties, and exchange-specific trading fees.
- Taxes: Many countries impose withholding tax on dividends paid to foreign investors. For instance, the withholding tax on US dividends for non-US residents is typically 30%. Additionally, some countries, like South Korea, have capital gains taxes, which are taxes on the profits you make from selling stocks.
How Do I Receive Dividends from My Stock Investments?
What Are Dividends?
Dividends are payments made by a company to its shareholders, representing a portion of the company’s profits. Companies can choose to distribute a percentage of their earnings as dividends, or they can reinvest those earnings back into the business. Singapore REITs, for example, are well-known and sought after for their dividend distributions.
For long-term investors seeking passive income, dividends can be a valuable source of returns. Syfe Brokerage provides easy access to dividend-paying stocks, allowing investors to build portfolios that generate regular income.
How Are Dividends Paid for CDP-Linked Brokerage Accounts?
For Singapore securities held in a CDP account, dividends are typically credited directly to the bank account that is linked to your CDP account.
How Are Dividends Paid for Custodian Brokerage Accounts?
When you hold Singapore or international stocks through a custodian brokerage account, such as with Syfe Brokerage, dividends are deposited directly into your custodian account held with the broker. This means the dividend payments will be credited to your trading account within the Syfe Brokerage platform. You will receive the dividends, net of any applicable withholding taxes, in your account’s buying power within 1–2 working days after the company pays them out.
Key Risks of Stock Investing and How to Mitigate Them
Investing in the stock market offers the potential for substantial returns, but it’s also important to be aware of the inherent risks involved:
- Market Volatility: Stock prices can fluctuate significantly and rapidly, sometimes due to factors beyond any individual company’s control.
- Overtrading: Constantly buying and selling stocks, often driven by short-term market fluctuations or emotional reactions, can lead to higher transaction costs and potentially lower returns.
- Emotional Investing: Making investment decisions based on fear or greed can be detrimental to your portfolio.
- Lack of Diversification: If your portfolio is concentrated in a few stocks or a single sector, you’re more vulnerable to market fluctuations or company-specific problems.
So, how can you mitigate these risks when you trade stocks in Singapore?
- Long-Term Perspective: Investing with a long-term horizon can help you ride out market volatility.
- Disciplined Approach: Develop a well-defined investment strategy and stick to it. Avoid making impulsive decisions based on emotions.
- Diversification: Spread your investments across different stocks, sectors, and asset classes to reduce the impact of any single investment on your portfolio.
- Consider Automated Investing: Syfe’s automated investment plans and diversified portfolios can help minimise risks by automatically diversifying your investments and rebalancing your portfolio according to your risk tolerance and financial goals.
Quick Takeaways
- Learning how to invest in stocks Singapore investors buy starts with a plan: goal, horizon, and monthly amount.
- To buy SGX stocks, you generally need a brokerage account.
- Many SGX stocks trade in board lots (often 100 shares); platforms like Syfe offer odd-lot trading (trade in smaller quantities) which can make it easier to start small or size positions precisely.
- Factor in the full cost of SGX trading: brokerage commission, SGX trading fee (0.0075%), clearing fee (0.0325%), and GST on applicable charges.
Monitoring should be structured, not daily: review monthly, go deeper quarterly, and reassess annually; rebalance as positions grow to avoid unintended concentration.
Why Choose Syfe for Buying Stocks in Singapore?
Choosing the right investment platform is a key decision, and it often comes down to finding a balance between control and convenience. Syfe recognises that investors have different needs and preferences and offers a range of options to simplify the process of buying stocks in Singapore.
For those who like to be actively involved in stock selection and trading, Syfe Brokerage provides access to the markets with a focus on keeping costs low, thanks to its competitive fee structure. The ability to buy fractional shares also opens up a wider range of investment opportunities. And with real-time trading capabilities, you can stay on top of market movements and execute your strategies efficiently.
For those who prefer a hands off approach, Syfe Core portfolios offer a simple, more hands-off approach. These fully-managed globally diversified portfolios take the guesswork out of diversification by automatically spreading your investments across a mix of assets.
Plus, with professional management and automatic rebalancing, you can leave the complexities of portfolio management to the experts. Ultimately, Syfe aims to provide options that cater to different investment styles, empowering individuals to take control of their financial futures in a way that suits them best.
Frequently Asked Questions (FAQs)
1) How do I invest in stocks in Singapore as a beginner?
Start by setting a goal and time horizon, choose a brokerage account structure, fund your account, research a small number of SGX stocks using a checklist, and place limit orders with disciplined position sizing.
2) Do I need a CDP account to buy SGX stocks?
Not always. Some brokerages offer CDP-linked trading, where SGX securities are held via CDP arrangements, while others provide access through alternative custody structures such as a CDP sub-account. The best option depends on your preferred holding structure and the broker’s setup.
3) What is the minimum amount to start buying Singapore stocks?
It depends on the stock price and board lot size (often 100 shares), plus brokerage fees. For example, a S$2 stock may require roughly S$200 for one board lot before fees. Syfe’s odd-lot trading capability for SGX-listed names allows you to buy and sell in smaller quantities than a full board lot.
4) How often should a beginner review their stock portfolio?
A monthly review is sufficient for most long-term investors, with a deeper quarterly review for core holdings. Daily monitoring often increases emotional decisions and unnecessary trading.
5) Is there capital gains tax on stock profits in Singapore?
IRAS states that gains from buying and selling shares or financial instruments are generally viewed as personal investments and are generally not taxable (facts and circumstances matter).
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