In this post, let me share with you my insights on investing in Singapore stocks. Insights which have been gleaned from my years of experience in investing in Singapore stocks.
1) Fast stage of growth for Singapore is becoming more challenging :the first thing that investors should note is that the stages of fast growth which Singapore has enjoyed during its industrialization phase is over. As such, compared to the previous days where investors in the so-called blue-chip stocks enjoyed good capital and dividend gains, it is now less easier for investors to do so likewise at a time where even some of the blue-chip stocks are trading at humble levels compared to the past. Singaporeans are also continuously reminded that we have to upgrade ourselves in skills to constantly keep our economy in pace with the vagaries of the world.
2) Limited size of home market and risks in diversification to international markets: this is an undeniable constraint of Singapore, the limited size of our local market. While in areas, this constraint has been turned into an area of strength and expertise through sheer willpower and hardwork (like in the case for Newater); by and large, Singapore is a small market for business. The natural thing for businesses is to expand their businesses beyond Singapore’s shores by bring their businesses internationally. But what I have noticed is that in the process of international diversification, some businesses do take up quite a lot of debt and become burdened by it in future. Many others simply could not manage the competition posed by their foreign counterparts with their home advantages. Indeed, a number of risks are faced by businesses venturing abroad.
3) Small to middle caps stocks are not doing well: I understand some investors are actually looking at small to middle cap Singapore stocks for more growth. But the reality is that as a whole, the small to middle caps front is not attractive to investors with its fair share of candidates on watchlist, corporate sagas and lacklustre share price over the years. There were also S-chip and penny stocks saga before which may have hurt investors’ confidence.
4) Lack of Attractive IPOs and Delistings : we are seeing some delistings of businesses, some of which are large-cap here on Singapore stocks market. And in parallel, we do not see big name IPOs here. The aforementioned does not augur well for Singapore stocks.
The above are just some of my many observations about the Singapore stocks markets in general. Beside the aforementioned Singapore-centric factors, there is no shying away of global factors like technology disruption, geopolitical factors and the possibility of a global recession facing all global equities.
In the face of all the aforementioned, how should Singapore investors invest sustainably?
Well, one way to invest sustainably is to form a core of your portfolio in Singapore’s STI ETF while allocating the other portions of your portfolio to international mutli-bagging candidates. There are just so many merits of doing the above to secure your investments for the long-term confidently and sustainably which is beyond what could summarized here. And I will explain more to readers in time to come!
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! I also run another blog Singapore Stocks Investing with similar useful insights! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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