If you are an OFW, then you have no doubt been exposed to the numerous discussions that surround the topic of investing in Singapore. And we have no doubt that you have been pondering this question: in what should I put my money? If you are interested in investing in Singapore, the following is a list of potential places for your capital to be placed.
Investing in Singapore is just one way you can increase your finances, but is exclusive only to those who live in the country, such as OFWs and residents. That being said, why not consider the possibility and look into what investing in the country can offer you. Listed below are some important details about investing in Singapore. Read on to learn more!
- Why Consider Investing in Singapore
- Benefits and Risks of Investing in Singapore
- Invest in REITs, bonds and stocks in the Singaporean market.
- What to Expect After You Invest in Singapore?
- Video: How OFWS Can Start Investing in Singapore
- Final Thoughts
Why Consider Investing in Singapore
The island nation of Singapore, which is nestled on the southern tip of the Malayan peninsula, operates as a marine centre for about 600 ports located in 120 different nations. Because of its advantageous location, it has the potential to act as the primary base for 37,000 different companies all over the world. The growing financial markets of the country have become an important source of capital for a market that has four billion people.
Numerous factors attract foreign investment to the country.
The commercial and financial sectors are both thriving in this region. More than 25 free trade agreements are part of the extensive trading network that Singapore maintains. As of January 2021, this entails the signing of 15 different bilateral and regional agreements between 15 different states. In 2019, the nation’s exports placed it at the fifteenth spot, while its imports placed it at the sixteenth spot. As of the end of February 2021, the market capitalization of the Singapore Exchange Limited was around 7.9 billion dollars. It offers a favourable environment for conducting business. Around 7,000 international businesses have set up shop there because of its low level of corruption and low corporation tax rate of 17 percent. This low level of corruption is the consequence of anti-corruption initiatives and audits. More than half of the big companies that operate in Asia have their regional headquarters located in Singapore.
It employs a skilled labour force.
A survey of 25 countries identified Singapore as the second best in the world and the best in Asia for its capacity to enable, acquire, grow, and retain exceptionally talented individuals. Singapore came in first in Asia. Workers in white-collar occupations constitute more than half of the total labour force.
It has a solid infrastructure.
The public transportation network in Singapore is one of the most advanced in the world. This encompasses around 80 nations and the approximately 100 airlines that connect them. Additionally, it has a solid digital infrastructure, with broadband internet access being made available to almost 99 percent of the population.
Benefits and Risks of Investing in Singapore
Singapore is distinguished not only by having some of the wealthiest people in the world, but also by having favourable demographics and a flourishing economy. As the outcome of the country’s emphasis on trade, you should research the country’s dependence on worldwide overseas commerce before you even consider making investments there. This is something you should do before you even think about even considering making investments there.
Investing in Singapore can result in a number of advantages, some of which are included in the following list:
It has demographics that work in its favour.
If we compare Singapore’s GDP to other countries’ GDPs using the purchasing power parity metric, we find that its level of economic output is the second highest in the world as of the year 2020.
In comparison to other rich nations, it also boasts one of the lowest rates of unemployment and one of the highest concentrations of millionaires.
It features a market economy that is both free and varied.
Singapore is widely regarded as having one of the most liberal economies in the world and is consistently ranked as one of the countries in which it is one of the simplest to engage in international trade. This is largely attributable to the country’s environment, which is favourable to commercial endeavours. Its economy is driven mostly by shipping, the banking sector, tourism, and the pharmaceutical industry, all of which play significant roles.
The country’s heavy reliance on other countries’ markets is one of the risks associated with investing in the country.
The Singaporean economy cannot function well without the participation of other nations in trade. Despite the fact that the economy bounced back fast, this led to a decrease in economic activity both during the boom that took place in 2001 and again during the financial crisis that took place in 2008, despite the fact that the economy swiftly recovered.
It has close ties with the Chinese government.
The economies of Singapore and China are intricately connected to one another due to the enormous quantity of capital that China possesses. The gradual slowdown in economic growth that China has witnessed since 2011 has made this link an increasingly significant issue over the past few years.
- BOND STOCKS
Investing in bond stocks is the equivalent of investing in government bonds in the most direct way possible. They are traded on stock markets just like conventional equities, despite the fact that they have the same risk and return profile as government bonds.
It is necessary to establish a trading account with a broker in order to purchase Singaporean bond stocks, and you will need to do so in order to invest in Singaporean bond stocks. You have the option of doing this on the website of your broker or over the phone with them. The finest brokers will provide you with recommendations regarding the kind of bonds that are most appropriate for you based on the level of risk you are comfortable with and the amount of time you anticipate keeping the bonds.
There is a level of danger connected with investing in Singaporean bond funds; however, this level of risk is typically lower than the level of risk associated with trading equities or stock options. This is due to the fact that most investors view bond funds as being safer assets (and thus tend not to attract as many speculators). In addition, there are no costs involved with maintaining ownership of these sorts of assets; the only expense is incurred when initially purchasing the assets and then selling them again at a later date, if necessary. However, if all goes according to plan, then we strongly advise staying put till maturity to ensure that nothing is lost along the road…
- REAL ESTATE
It is common knowledge that putting money into real estate can result in significant financial gains. For instance, if you purchased a home for $1 million and it increased in value by 10% over the course of the next year, then you would have made $100,000, which is not a bad return on your investment.
You can either invest in residential or commercial real estate, both of which are viable options. Investing in residential real estate entails purchasing homes or condominiums in which the investor would ultimately reside (or sell later on). Typically, commercial investments entail the purchase of land or buildings with the intention of renting them out at a later point when there is a greater demand. Both have their advantages and disadvantages; the one that is preferable to you will depend on the circumstances of your life.
- EQUITY STOCKS
Consider buying stocks of companies that have a good track record. A company’s track record is basically its financial history, which includes how well it has performed in the past and how much money it has made for investors.
To assess a company’s financial history, start by looking at its annual report from their website or from the SEC (Securities and Exchange Commission) website. Check if the company has been paying out dividends on time for several years in a row and see if there’s any major change in their top management positions over these years.
If you don’t understand how to read all those numbers, don’t worry as there are people who do understand them! You can always hire your own accountant or hire someone from an accounting firm to help you figure out what exactly these numbers mean. Once you’re confident that this is the right investment for you, go ahead and buy your first shares of stock!
Invest in REITs, bonds and stocks in the Singaporean market.
When considering investments in the Singaporean market, it is essential to have a solid understanding of the market. You are familiar with the process of investing in the Philippines, but in this new country, you will need to modify your prior experience accordingly.
- REITs (Real Estate Investment Trusts)
These are several types of trusts that invest in real estate and then distribute the profits from those investments as dividends to the shareholders of the trust. The average payback duration for these investments is between seven and ten years, making them ideal for long-term investors who are patient enough to wait that long for their money to be repaid. If you are considering investing your money in something similar to this, one good way to think about it is as follows: if you are considering investing your money in something similar to this, think about what kind of investment would be most beneficial for you as the owner of an apartment building or office space so that when someone wants their rent paid every month, they can simply drop by and collect it without having any problems!
Bonds are a type of debt instrument that can be issued by corporations or governments, and they can have varying maturities (the amount of time left until they are fully paid off), interest rates, and other terms. This gives investors who buy bonds some degree of security over receiving periodic payments from issuers over time periods that extend beyond one year and continue until the maturity date (full repayment). There isn’t much room for growth potential beyond what has already been agreed upon prior to the purchase of bonds; however, these securities represent one way that many people choose how best to utilise their capital during retirement periods where high returns aren’t necessary anymore but still need regular cash flow coming into account balances each month. As a result, bonds are considered low-risk investments with low returns, yielding lower returns due to the fact that there isn’t much room for growth potential beyond what has already been agreed upon prior.
What to Expect After You Invest in Singapore?
After identifying your financial goals, you invest in stocks using a plan you developed and reviewed. Should you simply wait for your dreams to come true? Investing in your dreams is merely the beginning; here’s what you should do next.
1. Investment Assessments
You need to perform regular portfolio analysis if you want your stock investments to continue moving in the right direction. Having you answer a few questions will help you get a better understanding of the combinations.
2. Keep track of your progress.
It is easier for you to keep your investment strategy on track if you often examine the performance of your portfolio. Set up reviews on a quarterly or semi-annual basis to allow for timely correction of any problems that may arise.
3. Rebalance your investment portfolio
Adjust the investment mix as necessary in the event that the components depart from your plan or in the event that your investing objectives have shifted. Rebalancing refers to the process of distributing your assets so that they better meet your requirements in life.
Take, for instance, the case when your initial portfolio is comprised of growth companies and value stocks in equal parts. After a period of six months, a portfolio’s growth has reached a level of 70 percent. Sell twenty percent of the growth stocks and acquire twenty percent of the value stocks if you want to keep the same proportions as before.
4. Discover How to Invest
The world of finance is always moving in new directions. It should not come as a surprise that existing forms of investments are frequently being replaced by new ones that take their place. When we looked back five years ago, several of us probably did not anticipate that the bitcoin industry would be such a success. Keeping up with the latest financial news is beneficial to both understanding and investing.
5. Emotional Intelligence
The climate of the financial market is one that is both dynamic and fluid. If you are new to the practise of investing in stocks, you can be surprised by unanticipated shifts in price as well as shifts in the market. Investing, as was mentioned earlier, can be thought of as both an art and a science. You should be aware that shifts in stock prices are a normal and expected reflection of market conditions.
Maintaining adherence to your strategy while monitoring the progress of your investments is the most efficient method for reaching your objectives. In addition to careful consideration, patience is essential for successful investing.
6. Speak with a Financial Advisor
A financial counsellor will be your most reliable ally during difficult times. You might not have the time or the willingness to be highly active due to the various responsibilities you have. Your financial advisor is responsible for providing you with advice and managing your portfolios. If necessary, they will also assist you with any financial troubles that you may be experiencing.
Video: How OFWS Can Start Investing in Singapore
It is no secret that OFWs (Overseas Filipino Workers) are some of the hardest workers in the world. They leave their homes and families behind in order to earn a living in countries with better opportunities. While they are away, they often send money back home to support their loved ones.
But what many OFWs may not realize is that they can also use their hard-earned money to start investing. Investing can help OFWs secure their financial future and make their money work for them.
So, how can OFWs start investing? Watch the video above to explore some tips on how OFWs can start investing their money.
When it comes to making financial investments, Singapore offers a diverse range of opportunities. Although it is evident that we will not be able to cover all of them in a single post, maybe you have gained some insight on how to begin started on the path toward becoming financially independent.
Before you start investing in Singapore, you absolutely must have an unmistakable understanding of your goals and purposes. This is a prerequisite. This should be taken care of a significant amount of time before you invest. Establishing a reserve of money to use in case of unexpected expenses is an important step in the process of ensuring that you will be able to achieve your objectives. Educating yourself on the many strategies when it comes to investing in Singapore that are available to you is another significant step that you should take. After you have developed a plan, it is critical to evaluate the performance of your investment portfolio in order to decide whether or not it is continuing to contribute to the accomplishment of your goals.