SG stocks vs US stocks
Singapore Stocks
Pros of investing in SG stocks
1.Currency risk - When we invest in Singapore stock market, we need not have to worry about forex or currency risk as the money used to invest is in SGD. Let me paint a simple example. If you invest in the US stock market, and your gain is 10%, but if SGD appreciates against USD, then your actual gain may not be 10%.
Just to share, back in 2003, 1 USD was able to give you $1.71 SGD, but as of today, 1 USD can only fetch you 1.35 SGD.
2.Familiarity – Warren Buffet once advised investors to “never invest in a business you cannot understand”.
So when it comes to familiarity, we will naturally look at the brands around us where we have first-hand experience with or we grew up with, such as DBS, Singtel, Capitaland etc. These are all household brands that every Singaporean would know, as we use their products or services almost on daily basis, which makes it easier to understand their core businesses and performance. And that definitely give us some vote of confidence to invest in them.
3.Tax - Finally, investors of Singapore-listed stocks are not taxed on their dividends gain. For instance you invest in DBS and Bank of America, and both give out dividends. For the latter, you will be charged a 30% withholding tax on all dividends paid out to you. To put it simply, every $10 that you received as dividend, $3 has to go back to US government. So this can dampen your overall investment returns.
Cons of investing in SG stocks
1.Minimum shares - investors need to buy a minimum of 100 shares for SG market. While in the US market, you are allowed to purchase only 1 share, or even fractional share
2.Limited growth and opportunity. SG stock market may not be able to generate huge returns and growth for one’s investment portfolio. Though there are many good companies in SG, but their upside is quite limited in my opinion, given the small SG market. Very few SG companies are able to make it really big on the world map.
US Stocks
On the other hand, US market offers high growth potential. For instance, companies like Apple, Google and Tesla are able to expand and reach far more people with their world class executions. They are almost dominating the world and are so influential to people’s lives.
US market also allows us to trade options, which offers passive income if you do it right. But of course the downside to this is one can lose a lot of money too. This brings me to the next point - risk. The risk and volatility are definitely higher in US stock market. Hence, if you prefer a more stable and steady market, SG market may be more suitable in this aspect.
$Apple(AAPL.US$ $Tesla(TSLA.US$ $Alphabet-A(GOOGL.US$ $Singtel(Z74.SG$ $DBS Group Holdings(D05.SG$ $OCBC Bank(O39.SG$ $CapitaLandInvest(9CI.SG$ $UOB(U11.SG$ $NIO Inc. USD OV(NIO.SG$ $Jumbo(42R.SG$ $Microsoft(MSFT.US$ $SPDR S&P 500 ETF(SPY.US$ $SIA Engineering(S59.SG$ $SIA(C6L.SG$ $SGX(S68.SG$
Pros of investing in SG stocks
1.Currency risk - When we invest in Singapore stock market, we need not have to worry about forex or currency risk as the money used to invest is in SGD. Let me paint a simple example. If you invest in the US stock market, and your gain is 10%, but if SGD appreciates against USD, then your actual gain may not be 10%.
Just to share, back in 2003, 1 USD was able to give you $1.71 SGD, but as of today, 1 USD can only fetch you 1.35 SGD.
2.Familiarity – Warren Buffet once advised investors to “never invest in a business you cannot understand”.
So when it comes to familiarity, we will naturally look at the brands around us where we have first-hand experience with or we grew up with, such as DBS, Singtel, Capitaland etc. These are all household brands that every Singaporean would know, as we use their products or services almost on daily basis, which makes it easier to understand their core businesses and performance. And that definitely give us some vote of confidence to invest in them.
3.Tax - Finally, investors of Singapore-listed stocks are not taxed on their dividends gain. For instance you invest in DBS and Bank of America, and both give out dividends. For the latter, you will be charged a 30% withholding tax on all dividends paid out to you. To put it simply, every $10 that you received as dividend, $3 has to go back to US government. So this can dampen your overall investment returns.
Cons of investing in SG stocks
1.Minimum shares - investors need to buy a minimum of 100 shares for SG market. While in the US market, you are allowed to purchase only 1 share, or even fractional share
2.Limited growth and opportunity. SG stock market may not be able to generate huge returns and growth for one’s investment portfolio. Though there are many good companies in SG, but their upside is quite limited in my opinion, given the small SG market. Very few SG companies are able to make it really big on the world map.
US Stocks
On the other hand, US market offers high growth potential. For instance, companies like Apple, Google and Tesla are able to expand and reach far more people with their world class executions. They are almost dominating the world and are so influential to people’s lives.
US market also allows us to trade options, which offers passive income if you do it right. But of course the downside to this is one can lose a lot of money too. This brings me to the next point - risk. The risk and volatility are definitely higher in US stock market. Hence, if you prefer a more stable and steady market, SG market may be more suitable in this aspect.
$Apple(AAPL.US$ $Tesla(TSLA.US$ $Alphabet-A(GOOGL.US$ $Singtel(Z74.SG$ $DBS Group Holdings(D05.SG$ $OCBC Bank(O39.SG$ $CapitaLandInvest(9CI.SG$ $UOB(U11.SG$ $NIO Inc. USD OV(NIO.SG$ $Jumbo(42R.SG$ $Microsoft(MSFT.US$ $SPDR S&P 500 ETF(SPY.US$ $SIA Engineering(S59.SG$ $SIA(C6L.SG$ $SGX(S68.SG$
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Moomoobo : How about Hong Kong? By the way why is it not many investing in Europe stock market?
Dante69 Moomoobo: are Chinese stock safe? Look at what happens to BABA,Meuitian cannot even recover
Ravi_Sharma : I tried but SG asking to buy min 1K share and can't buy less. I posted but no one replied so no choice to trade on US stocks.
LazyGirl_ Ravi_Sharma: Fyi..minimum of 100 shares for SG market
71094551 : good
kind Moose_4359 : So true about currency risk. I was so happy when the returns on my US stocks generate positive returns but after factoring the exchange rate…the USD 500 plus profits were literally gone…I only got SGD 50 added to my original investment amount. Was shocked as it it didn’t add up the maths.
Cow Moo-neyOP kind Moose_4359: USD500 became SGD50 due to exchange rate?
kind Moose_4359 : Yes I must have bought the stocks when the USD was at it highest…thus diluted my profits. But I am holding for long term. Just sad that the returns aren’t what the % was showing. I am still learning about investing and this is something that really hit me.
jkak Moomoobo: only certain brokarage platform provide europe stock trading and the commision fee is not favorable
jkak : its not a new or somoething that ppl are know of. But its good share for newbie who still hasnt clear where to invested in the long term
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