Exploring Investment Options in Singapore- An Ultimate Guide

Investment can be a daunting subject for many.
When you finally make up your mind to go ahead with it, you are met with so many options; you can hardly choose one.
It is only wise to know all about the investment product before you decide to put your money in it.
You might wonder about the risks, benefits, and limitations associated with the investment.
What could be the worst-case scenario, how much could you lose, and what would be the leading factors?
All these questions may cloud your mind before you evaluate your options.
We will try our maximum to introduce you to the common types of investments and answer all the related queries.
Let’s explore your options but before that, let’s quickly see if you are ready to invest?

Am I Ready to Invest?

The iconic name in the investment world, Warren Buffet said,
‘’I made my first investment at age eleven. I was wasting my life up until then.’’
Pretty sure if you are reading this, you are way past eleven which means you must start thinking of investment if you have not already.
However, it’s really important to do a little homework and take a bird’s eye view of your financial health.
Here’s a checklist I always recommend.


Investment Considerations Checklist
  • Long Term Investment
  • Short Term Investment
Net Amount
  • High
  • Medium/Low
  • Single Vehicle
  • Mix of Vehicles
  • High
  • Low
Risk Tolerance
  • High
  • Low
  • Keep Money Safe
  • Have Higher Returns

Filling this out will clear a lot of investment ambiguities for you and steer your way towards the kind of investment product most suited to your financial health and goals.
But this is not it.
While investment is a sure road to financial freedom, to enjoy a smooth ride, a few things should be considered first.
Ask yourself the following things:
Am I clear of my credit card and other high-interest debts?
Do I have an emergency fund in place to support me for at least three months?
Do I have enough insurance coverage against unforeseeable life-altering events?
If any of the answers are in no, I will highly recommend to turn them into a yes first, before you take a step ahead with the investment.
It will ensure that you are ready to manage and mitigate any risks that come along various investments and always have a soft spot to fall on, in case the tables turn.
Now, let’s have a look at all your options.

1. Stocks

The first and the foremost option, every investor hears of is Stocks.
And it is not surprising. Stocks are one of the most reliable and proven classes of successful long-term investments.
In simple words, a stock is your share of ownership in the company.
This makes you a stockholder or shareholder and makes you entitled to the company’s assets and earnings depending on the number of shares you hold.
These assets and earnings bring money to you either in the form of dividends or capital gains.
Now, what are these?
Capital gain is the profit you make when you sell the stocks at a higher price as compared to what you bought them at. It is the most common way of benefiting from a stock.
Another way is through dividends.
Dividends are a portion of corporate earning paid to you by the company.
Every company has a different policy of paying out dividends, which could be quarterly, bi-annually, or annually.
Together dividends and capital gains will make your total investment returns.
There are two other types of stocks you should be aware of.
Value Stocks
Value stocks are stocks traded at a price below its fundamental value.
They are cheap in terms of the fundamentals of corporate performance such as sales, earnings, cash flow, and book value, and appeals to the investors with long-term investment goals.
The idea behind it is simple. Investors believe that quite often, the stock market underestimates certain stocks that belong to quality companies.
Value investors are quick in skimming them out and buying them at a discounted price.
Benjamin Graham and Warren Buffet are two gigantic names in value investing.
Blue Chip Stocks
A blue-chip stock is a share in a huge, well-reputed, and financially stable company that has been thriving well for years and has a clean history of paying dividends to its investor.
Almost everyone knows of these companies even if someone is not from the same industry.
These companies are here to stay and so, buying stocks in these companies are generally less risky.
These stocks usually have a market capitalization in billions hence making them the most popular among the investors.
Some famous blue chips in Singapore include DBS, SingTel, and BreadTalk.
Let’s quickly have a look at its Pros and Cons


  • Grow with the growing economy
  • Stay ahead of inflation
  • Gain from dividends and issue rights
  • Capital gain as the stock price rises
  • Easy to buy
  • Easy to sell
  • You become part of the company
  • If a company performs poorly, you lose your investment
  • Prices keep fluctuating
  • You need time to know and understand the company and keep following its development
  • If the company goes broke, stockholders are paid last. 

2.Exchange-Traded Funds

If diversification is one of your investment strategies, then ETF could be among your best choices.
An exchange-traded fund consists of baskets of securities that can be traded like a stock. These basket of securities may include stocks, assets, commodities, bonds, etc., which can be bought and sold in a public market.
An ETF tracks an underlying index, and its prices fluctuate all day as they are bought and sold.
An ETF may consist of multiple stocks across one particular kind of industry, or it could be multiple stocks ranging across multiple industries. Some common types of ETFs include:
Industry ETFs
Bond ETFs
Commodity ETFs
Currency ETFs
Inverse ETFs
Purchasing an ETF not only helps diversify your portfolio but is also quite cost-effective as compared to buying individual stocks.
An ETF is a kind of investment with a degree of flexibility and ease. Also, it’s liquidity makes it popular among young investors.
Here are some Pros and Cons you should know of:


  • Build broadly diversified portfolios 
  • Can be traded like individual stocks
  • Lower transaction costs and fees
  • Can be bought and sold in secondary markets
  • Selling an ETF can be difficult if the market is facing high volatility
  • Tracking errors may occur to some cost
  • Can be less cost-effective if you are making repeated purchases over time due to commissions. 

3. Unit Trust

A unit trust is one of the finest types of investment for a beginner looking for professional aid in their investing career.
A unit trust, much like a mutual fund, is created by several investors pooling in their money, which is then invested in a range of assets like properties, securities, mortgages, and cash equivalents. The profits generated are not reinvested back in the fund but go directly to the individual unit owner.
The unit trust is mediated by a trust deed under which the investor becomes the direct beneficiary. They are classified as:
Equity Funds, investing only in stocks
Fixed Income Funds, investing only in bonds
Balanced Funds, investing in a mix of both
How a unit trust performs and the success of its returns largely depends on the expertise and experience of the company the manages it.
Not to forget, the associated management fees, sales charges, commissions, and taxes do start to eat up your earnings.
Here’s a glimpse of its Pros and Cons:


  • Managed by Professionals
  • Risk mitigation due to diversification 
  • Liquidity, as trusts can be redeemed daily
  • Easy and Affordable to Invest
  • Cannot be borrowed, effecting potential returns
  • Price fluctuations
  • Not good for people looking for short term investments
  • Not good for people avoiding risks at all costs


You might have heard at some point in life that investing in property is an easy path to getting rich.
Well, it’s not an exaggerated statement.
In Singapore, one of the adopted ways to grow your wealth is investing in property.
The value of a property is expected to increase considerably over time—this what benefits an investor the most.
The surge in value is known as capital appreciation, but this is not the only way to earn from the property.
You can also consider selling your property at a price higher than you initially paid and can enjoy the capital gains.
For a more stable and passive income, you can also opt for renting out your property and benefit from the rental income every month for as long as you decide to keep it before selling.
To ensure maximum benefit from the property investment, it is always wise to buy at a reasonable price or when prices are low and sell when they are at their expected highest.
However, one should always be considerate and take all factors into account, which can affect capital appreciation.
The key things to look for when investing in a property are:
Prime Location
Improved infrastructure, for example, closer to an MRT station
Good or renovated condition of the property
Freehold property as compared to on lease
Stable economic conditions
Lower interest rates
All of these factors have a direct impact on increasing the value of a property you are investing in and will significantly benefit you in times to come.
Here are some Pros and Cons to consider before investing in property


  • Stable investment as compared to others
  • Less volatile as compared to others
  • A stable income stream from rental income
  • A secure long term investment
  • It is not very liquid
  • Significantly high entry cost in comparison to others 
  • May require a lot of maintenance
  • Bad tenants can be a problem 

5. Singapore REITs

Singapore Real Estate Investment Trust (REITs) is your best shot at owning property through investment.
For a young investor lacking profound knowledge in real estate and anxious about huge capital requirements and house mortgages, REIT investment is a great opportunity.
Singapore REITs consists of a list of companies that have pooled in money from various investors to invest in, own, and operate real estate properties.
Investors become the co-owners of the REIT.
The properties are rented out to the suitable tenants, and the rental income is distributed regularly to the investors. It is called the distribution yield.
Apart from this, investors also benefit from the Capital gain as the value of the property goes up. REITs are considered as a preferred alternative to buying physical properties.
They provide an opportunity for a professionally managed portfolio with a stable stream of income.
Some common types of REITs include:
Retail REITs
Office REITs
Residential REITs
Hospitality REITs
Industrial REITs
Healthcare REITs
Here’s a list of Pros and Cons


  • Managed by Professionals
  • High liquidity
  • East to buy and Sell
  • Low capital requirement
  • Can allow you to invest in commercial areas, increasing diversification
  • Price fluctuations subjected to market volatility
  • Includes management fees

6.CPF Investment

If you are far away from even the basics of investing, you can still benefit from the Central Provident Fund investment.
There is no risk, and the government practically manages everything
CPF investment is a mandatory investment preparing working Singaporean citizens for retirement.
It is a social security system in which you set aside certain funds for retirement.
There are four types of accounts under this:
Ordinary Account (OA) – for housing, insurance, investment, and education
Special Account (SA) – for old age and investment in retirement-related financial products
Medisave Account (MA) – For hospitalization expenses and other approved healthcare
Retirement Account (RA) – This is made available on your 55th birthday
Interest rates are also applied to this account which is usually 2.5% on the ordinary account and 4% on the other three.
You can also be a part of the CPF investment scheme which allows you to invest your Ordinary Account and Special Account savings in a diversity of investments to boost your retirement nest egg.
Here are some Pros and Cons


  • Highly reliable 
  • Ensure good return
  • Safe from creditors
  • Option to diversify with various accounts
  • Funds are usually locked and cannot be used for a down payment
  • Interest rates are prone to change in future 

7. Singapore Bonds

If you are looking for risk-free and foreseeable investment, with a side of a stable form of passive income, I would straightaway recommend you to invest in Singapore Bonds.
Investing in bonds means lending money to the government or various corporate companies.
The investor receives coupon payments based on the interest rate throughout the holding period of the bond.
In addition to this, at the end of the predetermined holding period, also known as maturity, the investor gets full capital repayment.
In Singapore, you have the following options:
Singapore Savings Bond
Singapore savings bond (SSB) offers a step-up interest every year up till the tenth year.
It means that the investors who are likely to hold the bond for a longer period will evidently benefit more.
It starts with a relatively lower return but increases it each year, enticing the investors for longer holding periods.
These bonds are the best options for people with a long-term financial goal in mind.
However, the investor still has the convenience of redeeming at any point in time the desire.
Singapore Government Securities
These bonds are issued and regulated by the Monetary Authority of Singapore (MAS) on behalf of the Singaporean government.
The interest rate is 2-3% for a typical 10-year period.
Usually, with these bonds, the higher the holding period, the higher the yield is.
You also have the option to buy and sell the SGS bonds on the secondary market before maturity.
Similarly, you can trade these bonds on Singapore Exchange (SGX) with the assistance of a broker.
Look’s take a glimpse of what’s the catch here and what should be a concern.


  • Fixed coupon rate during the holding period
  • Less volatile as compared to stocks
  • Low risk
  • Can redeem at the par value even when the bond prices go down
  • Short term selling can be challenging so they are somewhat illiquid
  • The bond price is inversely related to the government interest rate hence interest rate risks are involved


Relatively new and not widely accepted worldwide as of yet, cryptocurrency is known as digital or virtual currency.
It can be exchanged online in return for goods or services, as a form of payment.
They have an element of strong protection associated with it owing to highly sophisticated algorithms, and the cryptography used, making it almost impossible to counterfeit.
A fine technology called Blockchain is behind its successful functioning.
This technology manages and keeps a record of all cryptocurrency transactions for the crypto network and distributes secure online ledgers of every transaction across a network of disparate computers.
One of the most famous cryptocurrencies we have all heard of is Bitcoin.
More and more people are attracted to this non-traditional form of investment since the value of Bitcoin reached its all-time high recently.
However, when should always start small and never go off-board with the investment they know little about.
Singapore has always been keen on welcoming new technologies and is said to be becoming the hub of cryptocurrency and Blockchain as well.
Here are some Pros and Cons we found:


  • Highly accessible and available all the time
  • Ensure maximum transparency
  • Anonymity maintained  
  • Relatively new, difficult to understand
  • No security in case of loss
  • Prone to market fluctuations

Still Confused? Try Out Robo-Advisors
If you are still confused about evaluating your options, or you feel like investing is not our strong suit, but you wish to capitalize on your wealth, your best shot is to hunt for Robo-Advisors.
Robo-advisors are digital platforms that provide automated, algorithm-driven investment services with little to no human supervision.
They start with collecting as much information as they can get from you on your financial status through a survey and then uses those facts to offer advice and find the best investment options fully catered to your needs.
If you are a first-time investor, do not have much capital to invest for and want to avert from risk as much as possible, Robo advisors typically offer very low opening balance and are quite inexpensive.
Not only this, but they are also highly accessible, available 24/7, just an internet connection away.
We have mapped out the best Robo-advisors available to you in Singapore.
Robo-Advisors can also help you learn how to invest if you are interested and want to speed things up.
You can observe how to construct your investment portfolios and learn from educational tools and content provided by them.
Concluding Remarks
Investment now has so many options that it can be intimidating at a glance.
We are often led to believe that investment requires a comprehensive knowledge together with hefty amounts to start with.
We also seem to be impatient of the long wait for beneficial returns.
But remember, the day you plant the seed is not the day you eat the fruit.
Don’t let the fallacious beliefs to become a hurdle in your financial journey.
The earlier you start, the more you are going to reap later, and the better you can tackle the risks that may appear from time to time.
With your debts paid, an emergency fund set aside and financial goal in mind, you can devise the right investment strategies for yourself even with the basic know-how of investment products.
For professional assistance, you can always turn to Robo-Advisors, the best brokers in Singapore, and more conveniently to financial advisors.
Remember, successful investing starts with courage!



Jun Sing Tan

I help young adults and working professionals achieve their financial goals with a full suite of risk management and wealth accumulation solutions. I firmly believe that financial education should be easy and achievable for all. I am committed to service and hope to be your one stop financial solution.


Jun Sing Tan

November 18, 2020