Instead of vying for Singapore stocks, why not consider stocks from the wider market?

What is the most important thing in stock trading and investing? Why would people want to trade at all?

We all know the real reason why people want to trade and invest: to earn more money.

Who wouldn’t like more money in their pockets and bank account? To have the new car fully paid thanks to your stocks?

You’ve heard of Wall Street; Home of the investment bankers and of course, the Wall Street Journal and the New York Stock Exchange (NYSE). It is where trillions of dollars flow in and out on average, daily! Doesn’t it just make you wonder if billionaires are truly made daily?

Why You Should Move Away from The Singapore Market

The Singapore Stock Market (SGX) on the other hand, has a cash flow averaging up to $600 to $900 million daily. Considering the country of size, SGX has a good amount of money flow. However, there is a greater market outside the borders. Certainly more money and more skills to learn.

Singapore is a relatively young country, with even younger financial institutions and markets. Our history, maturity time and sheer size is nothing compared to that of NYSE or Amsterdam Stock Exchange (AMS). AMS has had more than 400 years to mature. Whereas, SGX only has had 20 years or so.

Equities 101: How to Invest in the Stock Market

The liquidity flowing through the markets is somewhat limited. As such, Singapore’s land space to host companies is also limited. These companies are also unable to host their variants of stocks to fit into SGX.

International Stock Markets : Why You Should Move Away from The Singapore Market

If you have the resources, learn how to trade and invest in the large companies in the world market. For example, in London or the United States.

If you’re worried about being a tiny fish in the massive world of US markets. Your worries are well founded as people get played, lose money in the market every day.

Being confident in your research and technically proficient in your practice can banish any worries. You can hone these skills with practice sessions on demo accounts. Brokerage firms with this feature should most definitely be at the top of your list.

There is no competition: It would be better for you to learn at your own pace, on target. There will always be money waiting. Hence, in order to take it,  you have to master the analysis skills first.

There are useful differences between the Singapore and the US stock market. Firstly, Singapore stocks can only be bought in 100s, while the US markets allow for single stock purchases. Thus, new investors with limited cash might not be able to invest in Singapore stocks due to the bare minimum.

Trading Resources Any Investor Must Maximise Fully

So, instead of investing in say the SGX STI (an index) which averages about $3000, why not go for the larger corporations in the US, such as Microsoft or Intel, which has a much lower stock price but offers high degree of stability thanks to its status as a slow-moving, blue-chip stock?

Moreover, there are many companies in the US that offer dividends for their stocks. Dividends are sums of money that are paid out by companies to its shareholders (i.e. investors who bought their shares) out of the companies’ profits. The pay-out is usually either annually, or quarterly. As of this writing, Intel (a large blue-chip stock) is worth $29.77 and had the last dividend payout of $0.26, paid out quarterly.

 

International Stock Markets

There is much greater money liquidity in the large stock exchanges in the world, which ultimately leads to many more lucrative opportunities to make a good return on your investments.

As highlighted earlier, many of the world stock exchanges have trillions of dollars flowing through their data centres every day, compared to the barely billion dollar valuation of the SGX. The greater the valuation, the greater the opportunities for better option calls and puts, as well as dividend payouts.

This, plus the low capital gains tax in Singapore makes using a brokerage firm to trade in the NYSE a very lucrative opportunity. Actually, retail investors’ profits and losses are considered as personal investments and thus NOT a taxable asset. How awesome is that?

At this point in time, wouldn’t you agree that it would be better to trade with US stocks over the Singapore market?

Of course, if you’re planning to play it safer to start with, we recommend going into the Singapore stock market to try your hand at it. The losses would definitely be lower, depending on how much money invested of course, and the markets are a lot less volatile, which will let you sleep a little better and lose less hair.

The New Savvy: Stock Markets

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).

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