How to Invest in the Stock Market in Singapore?

What is stock market investing?

Investing in the stock market involves buying financial securities – mainly stocks or bonds – with the aim of making a profit in the medium or long term. These securities are traded on the financial markets, where buyers and sellers meet.

Investing in the stock market allows you to become a shareholder of a company (via stocks) or a creditor (via bonds). In return, the investor can receive income (dividends or interest) and hope for a capital gain on the resale of the securities. This type of investment is therefore a way to grow your savings by taking advantage of the development of companies and the economy.

Unlike speculation, which relies on short-term operations that are often riskier, investing in the stock market is a long-term strategy. It requires a good understanding of how the markets work, accepting a degree of risk, and diversifying investments to limit exposure to losses.

What are the different accounts for investing in the stock market in Singapore?

To invest in the stock market, it is essential to have a suitable account that will hold your financial assets (such as stocks, bonds, ETFs) and centralise your trading operations. In Singapore, several types of investment accounts are available, each with different tax implications, contribution rules, and investment objectives:

Here’s an updated comparative table with an additional "Investor Profile" column to help you better select the account according to your goals and experience level:

Once your investment account is open, you must choose a financial intermediary to execute your stock market transactions. Here are the main options in Singapore:

• A full-service broker: Provides personalised investment advice, research insights, and dedicated account management. Popular names include Phillip Securities (POEMS), DBS Vickers, and OCBC Securities.
• An online discount broker: Ideal for independent investors seeking access to SGX and international markets at competitive fees. Leading platforms include Tiger Brokers, FSMOne, and Saxo Markets Singapore.
• A robo-advisor: Offers automated portfolio management based on your risk profile, with low minimum investment thresholds (e.g., Endowus, StashAway, Syfe).
• A CFD broker: Suitable for experienced and active traders who wish to engage in short-term, leveraged trading on various financial instruments (e.g., IG Singapore, CMC Markets).

What to Invest in on the Stock Market?

The stock market offers a wide range of financial products that allow you to diversify your portfolio according to your objectives, risk appetite, and investment horizon. Here are the main types of assets in which it is possible to invest:

Stock Trading

Shares represent a portion of a company's capital. By purchasing a share, you become a shareholder and may receive dividends (a portion of the profits) as well as hope for a capital gain upon resale if the price increases. Shares are investments with high potential returns, but also with high risk, as their value depends on many factors (company results, economic situation, geopolitics, etc.).

The best stocks to invest in on the stock market depend on your goals and investment style. Thus, you wouldn’t invest in the same stocks whether you are looking for a regular return or a significant capital gain.

• For a steady return: you should favour the most stable stocks such as Astrazeneca, Total, or McDonald's.
• For significant capital gains potential: you should favour growth stocks such as Tesla, NVidia, Apple, or Airbus.

Our opinion

Stocks are suitable for investors willing to accept market volatility in exchange for the prospect of higher long-term gains. Sectoral and geographical diversification is essential to limit risks.

ETF (trackers)

ETFs (Exchange Traded Funds) are index funds listed on the stock exchange. They replicate the performance of an index (such as the Straits Times Index, the S&P 500 or the MSCI World) by investing in all the securities that make it up. ETFs are traded like stocks, in real time, and allow for wide diversification at a lower cost.

Our opinion

ETFs are particularly suitable for beginner or intermediate investors looking to easily gain exposure to a market or sector without having to choose each stock individually. It is an excellent long-term passive management tool.

Unit Trusts

Unit trusts are collective investments actively managed by professionals. They pool the savings of multiple investors to build a diversified portfolio, according to a defined strategy (stocks, bonds, mixed, thematic, geographic, etc.). Unlike ETFs, their valuation is done once a day, and their fees are generally higher.

Our opinion

Unit Trusts are designed for investors who prefer to delegate the management of their portfolio to experts. They are well suited to those who wish to benefit from a structured management framework, at the cost of a return that is often lower than ETFs, due to fees.

Obligations

Bonds are debt securities issued by governments or companies. By buying a bond, you lend money to the issuer, who undertakes to repay you at maturity, with the payment of regular interest (coupon). Bonds are generally less risky than stocks, but offer a more moderate return.

Our opinion

Bonds are an essential component of a balanced portfolio, particularly for cautious investors or those nearing retirement. They help stabilise overall performance and ensure regular income.

How to invest in the stock market when you are a beginner?

More and more young people are now embarking on stock market investing, but there's no age limit to start in this field. However, as a beginner investor, it's necessary to take a few precautions before diving in.

• The simplest solution is to entrust the management of your investments to a third party whose job it is, such as a financial advisor, or to software specially developed for this purpose, such as a robo-advisor.
• It is also possible to make your own investments in the stock market, but in this case, it is preferable to take the time to train and take an interest in how the markets work before you start investing your money.
• Since an investor does not become profitable overnight, it is also preferable to not invest money in the stock market that you may need to live on or to cope with unforeseen expenses.
• Similarly, it is necessary to put in place a precise investment strategy and ideally in the long term by setting achievable goals and taking risk into account.

When to Invest in the Stock Market?

While it is possible to make stock market investments at any time, it is necessary to identify good opportunities before buying stocks. To know if it's the right time to buy one or more stocks on the stock market, you need to ask yourself these simple questions:

• What is the current economic situation? Is there growth, or are we in a period of crisis?
• What level of risk are you willing to take? An investor with a high-risk appetite will frequently find interesting opportunities in the stock markets, while a cautious investor will prefer to wait before investing.
• What is the real value of a listed stock? The intrinsic value of companies listed on the stock exchange must be defined in order to know if it is the right time to acquire their shares.
• When does the company pay its dividends? Finally, if you have opted for a yield strategy with shares that pay a dividend, you must hold these shares no later than the day before the ex-dividend date.

Why Invest in the Stock Market?

Investing in the stock market offers numerous advantages for growing your wealth, protecting your capital against inflation, and diversifying your income streams. Here are the main reasons to invest in the financial markets:

• Grow your savings in the long term: Stock markets have historically generated attractive returns over several decades. Regular, long-term investment allows you to benefit from the growth of companies and the economy.
• Protect your capital against inflation: Uninvested savings lose value over time. By aiming for a return higher than inflation, the stock market makes it possible to maintain or even increase the purchasing power of your capital.
• Generate passive income: Some stocks pay regular dividends. Bonds pay coupons, offering a stable income to the investor.
• Diversify your assets: The stock market makes it possible to supplement real estate investments or secure savings products.
• Good diversification reduces exposure to a single type of asset or risk.
• Easily access global markets: With online brokers and ETFs, it is possible to invest in thousands of companies around the world. This allows you to position yourself in different sectors, geographic areas and levels of economic development.

Good to know

The stock market is a powerful tool for investors ready to take a long-term view. Well managed, a stock portfolio can become a lever for sustainable growth and a pillar of your wealth strategy.

Which broker to choose for investing in the Stock Market in Singapore?

To invest in the stock market, it is essential to go through an approved financial intermediary, called a broker. They transmit your buy and sell orders to the markets. The choice of broker directly influences your investment experience, the fees you will pay, the accessible products, and the tools at your disposal.

Here are the main categories of brokers available in Singapore, with their characteristics:

Expert's Opinion:

• An independent investor who wants to diversify at a lower cost will favour an online broker.
• An active trader will opt for a CFD broker, being aware of the risks.
• A beginner or long-term saver will prefer automated management with a robo-advisor.
• Finally, a cautious profile or one attached to their bank will use a bank broker, despite higher fees.

How much money do you need to invest in the stock market?

The money needed to invest in the stock market will depend on various factors, including your personal financial situation. Here are the rules to follow if you want to get started:

• Invest a portion of your savings in the stock market: It is important not to put all of your savings into your stock market investments. You need to keep some of your savings to use in case of need. Ideally, and if you can, keep 20% of your capital in a secured investment or a traditional savings vehicle and invest 80% in the stock market.
• Invest in the stock market with a small budget: It is entirely possible to invest in the stock market with a small budget. It is not necessary to have a large capital to start building a stock portfolio. SGD 500 to SGD 1,000 will be enough to create the basis of it, and you can then reinvest your income from dividends or capital gains to buy new securities.
• Don't put all your eggs in one basket: While the stock market is attractive in terms of returns and investment, it is necessary to properly allocate the money you invest in the stock market, ensuring that your portfolio is diversified. For example, you can invest a portion in stocks, another portion in one or more funds, and another portion in bonds.

Investing in the Stock Market with a Small Budget: Our Advice

If you are a beginner investor and want to invest small amounts in the stock market, you have two solutions:

• Invest your current savings: this is possible from SGD 500
• Invest a small amount each month: you can also freely make payments into your stock market investment accounts, such as a securities account, to gradually fund it.

What are the Tax Implications on Stock Market Investment Income in Singapore?

Income generated from stock market investments — capital gains, dividends, and interest — is subject to a very favourable tax environment in Singapore. In general, Singapore adopts a territorial tax system with no capital gains tax for individuals. Here’s an overview of the applicable tax rules based on the type of account and the nature of the income:

1. Capital Gains and Dividend Taxation

In Singapore:

• Capital gains (from the sale of shares, ETFs, etc.) are not taxable for individual investors.
• Dividends:
• Dividends from Singapore-listed companies (i.e., one-tier exempt dividends) are tax-free in the hands of investors.
• Dividends from foreign companies may be taxable if they are remitted to Singapore, but many countries’ dividends are exempt under specific conditions (e.g., foreign-sourced income exemption rules).
• Interest income from bank deposits is generally exempt if derived from approved banks in Singapore; otherwise, it is subject to normal income tax.

Note:
For individuals classified as frequent traders or operating a trading business, income from trading activities could be treated as taxable business income.

2. Tax Treatment by Type of Account

3. Treatment of Losses

Since capital gains are not taxable, capital losses are not deductible against other types of income.

Important

Only individuals carrying on a business of trading in shares may recognise both profits and losses for tax purposes.

4. Special Case: Dividends

• Dividends paid by Singapore-resident companies are generally exempt from tax under the one-tier corporate tax system.
• Foreign dividends:
• Are exempt if they meet certain conditions, such as being paid from profits already taxed overseas at a rate of at least 15%, and the income is remitted to Singapore.

Example

If you receive SGD 1,000 in dividends from a Singapore-listed company like DBS Group Holdings, you do not have to declare or pay any additional tax on this amount.

Our 5 Tips for Investing Well in the Stock Market

Now that you know the basic rules of investing in the stock market, here are five simple tips to follow to quickly become a profitable investor:

• Set achievable goals: Every investor should set financial goals for their various investments. These goals will depend on the purpose of the investment. Is it to prepare for retirement, finance a purchase, or a specific project? A motivating goal will be an engine that allows you to dedicate yourself to your investment with passion.
• Learn about the stock markets: Good knowledge about the stock markets and how they work is essential if you want to make profitable investments. So take some time each week to inform and train yourself. There are many online training modules that allow you to learn analysis methods, and you can also consult targeted financial news feeds.
• Favor a long-term investment horizon: Unless you are an expert in the financial markets and want to speculate in the short term in order to generate maximum profits in a short time, it is wiser to invest with a long investment horizon. Speculation presents many risks that you can avoid with progressive investment.
• Know your risk tolerance: You must define as precisely as possible the level of losses and variability of your capital that you are willing to bear. Remember here that the higher the potential return of an asset or market, the higher its level of risk will be. A strong risk aversion should direct you towards the least risky instruments such as bonds or certain secured funds. If you have a high tolerance for risk, you can try riskier investments such as stocks or https://hellosafe.fr/investissement/crypto-monnaie/prometteuses.
• Don't let your emotions take over: Finally, investing in the stock market is an activity that can generate a whole host of emotions such as stress, infatuation, or fear. A good investor should not let these feelings make them make bad decisions and should always keep their initial strategy in mind and stick to it.

Looking to invest in the stock market on your own and with complete autonomy? Join a quality online broker without delay and start placing your orders in the market.

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P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.