I am writing this as a guide to start investing for people with zero investing knowledge.
By: Cheehiong Yeo
Tags: Singapore, Stocks, Portfolio, Investing, Invest

I am writing this as a guide to start investing for people with zero investing knowledge. The idea is to distill down the investing tools to use as well as covering the different platforms that is currently available in Singapore.

Determine the goal of investing

This like many other guides on the internet is a crucial step as it determines the risk profile, the type of investments and the period of investing for the person in question. Are you investing for retirement? Are you investing to buy a house? or is this for something else?

Likewise, your age & profession, how much you save, the amount of savings you have and the amount of time you want to use to manage your finances are all important criteria for determining what best suit your needs.

I would largely break this down into 3 broad categories as shown below:

1. Low-risk investment portfolio

Typically more suited for people who are already in the older phases in life where they are not intending to grow their capital but to preserve capital.

Also for people who are putting money aside for their house, instead of putting money in the bank for low-interest rates

These include investment instruments such as money market funds (i.e. short term loans from banks to banks, etc.) and government bonds for instance, which are very safe assets

2. Moderate-risk investment portfolio

Moderate risk investments I would say is more diversified with some exposure in equity depending on your risk profile and age

I would categorize dividend / dividend growth investing into this space, together with 60/40 equity-fixed income portfolios here

Generally slightly risky – meaning you would expect a reasonable downside to your invested capital if the markets slump

More suited for mid-career people who are looking for some growth but also some decent returns on dividend payouts etc.

3. High-risk investment portfolio

High risk investment portfolios which are suited for younger audience, willing to forgo dividend in return for growth

Typically higher allocation to equities vs other asset classes like real estate and fixed income

Step 1: If you are trying to learn investing without any knowledge, the best would be to use a roboadvisor – I do not recommend wealth managers because the percentage cut of fees they take is a considerable amount if you don’t have a significant sum invested with them. Below are 3 Singapore based roboadvisors I would recommend on multiple attributes including usablility (UI/UX), investment asset classes used, fees, education platform etc.

You can go to their respective websites to read on the portfolios they provide, their fees and their historical returns so I won’t repeat useless information.

Stashaway

https://www.stashaway.sg

Referral Code: https://www.stashaway.sg/referrals/yeocd8dk

Generally the one I recommend for most beginners due to its simple UI, responsive customer service, weekly seminar that’s easy to understand and decent returns

Syfe

https://www.syfe.com/

Referral Code: SRPZ8169Y

One interesting fact is that they have a REITs portfolio (real estate investment trusts) which provides steady stream of dividend on the real estate portfolio they hold through rentals. Therefore a moderate risk investment tool

EndowUs

https://endowus.com/

Referral Code: https://endowus.com/invite?code=WP2LE

One interesting product they have allows you to invest your CPF monies which the other 2 platforms does not allow at this point in time.

This is sufficient for most people who don’t want to spend too much time monitoring their investments, to set up a recurring deposit every month like another savings account. This would require at most an hour a month to manage – and most of them has a webapp or mobile app which gives you easy access to review your portfolio performance.

Step 2: Once you learnt the basics, know what’s a portfolio, what’s a stock, what are ETFs. and want more control of your portfolio based on your needs. You should move on to step 2, where you purchase your own ETFs, bonds or stocks. These are generally higher risks as you will be managing these yourself.

There are 3 discount brokers I would recommend, and I do not recommend local bank brokerages due to the high fees – unless you are a premium customer and has good rates with the banks

Alternatively there are 3 other Brokers I would recommend starting out so you understand how to submit the trades yourself

First, if you don’t have experience with buying stocks yourself. UI/UX is very important for learning how to setup trades.

Saxo Capital

https://www.home.saxo/

UI and app is simple and reasonably easy to use

Access to international markets

Good to start with investing by yourself

Philips Capital

https://www.poems.com.sg/

Have not used this personally but UI and costs are similar to Saxo

DBS Vickers

If you are a DBS banking customer, they have the cheapest rates for local bank brokerages

UI is horrible

Or you can jump directly to a discount broker as listed below;

Interactive Brokers

https://ibkr.com/referral/cheehiong787

This is the broker I use personally for my main portfolio

It has the best FX spreads and lowest fees for quality execution at min US$1/trade

Access to most international markets and investment tools

TD Ameritrade

https://www.tdameritrade.com.sg/

Zero commission trading – there are downsides of this to be covered in another article

Only access to US markets

Tiger Brokers