A good investor diversifies their portfolio.
And as a citizen of Singapore, the opportunities for diversification are plenty. With booming trade and strong links with China, the opportunities for Singaporean investors are vast.
For the first time, retail investors can reap the benefits of growing businesses, the way private equity professionals can.
In this article we cover the most popular investments for Singaporeans in 2018.
Singapore Saving Bonds
Singapore savings bonds is issued by the government. The principle is guaranteed and it’s an investment without any risk. It’s a low cost investment with a minimum sum of S$500. It also provides better returns than fixed deposits in the long term.
Now that I have your attention. Let’s focus on the details.
Low cost : Singapore government securities needs a minimum investment of S$1000 and corporate bonds a minimum of S$250,000. Looking at this, the saving bonds is way less.
Growing Interest rate : The interest rate for SSB’s keep growing. So if for the first year it’s a 0.9% return, then it grows to 1.5% for the next year and so on. It’s a long term investment and over time it beats fixed deposits.
Highest Interest rates for 2018 : There’s a big rush for Singapore savings bonds because for the first time since its inception in 2015, the first year and second year returns are 1.55% and 1.59% respectively. This is the highest in the history of the instrument.
For risk-averse investors, this is a solid investment.
Read also: Business Grants Singapore 2018
Banks make money through interests earned and now you can too.
These companies enable retail investors to give loans to business owners at very lucrative rates of 10% to 12% depending on the time frame.
Process : It’s pretty simple. A retail investor register on the website and their application gets verified in a few days. They are then showcased a few businesses from various industries like constructions, restaurant. These due diligence of these businesses are already done and hence the risk is factored in.
As an investor if you are feeling left out from all the investments available, fret not. Like P2P lending sites there are equity crowdfunding sites like Funded Here.
For a minimum investment of $25,000 you can get stake in a range of companies that are vetted and verified. A lot of these platforms also invest in these companies along with the retail investors which increases the trust factor.
Real Estate has been sluggish for almost half a decade in Singapore. But now, things are changing and changing for the good. In the past few years investment in real estate just yielded a little rental income, but now they are also giving capital appreciation.
So investing in real estate in 2018 will be lucrative. Here are the major reasons why.
Rental Income : Singapore’s economy is booming and that means locations around the city center give solid rental income which is passive for the investor.
Transit-Linked Developments : The new age real estate projects are called transit linked developments which basically means housing properties and commercial properties banded together that is also closely linked to a MRT or in some cases directly linked.
This does wonders because, people will throng to these locations because they can save time commuting and also close access to establishments like malls, grocery stores will save them traveling costs and time. Buying properties like this will be lucrative and will earn solid rental income.
Capital Appreciation : For these reasons, the property prices will go up which will give solid appreciation on capital.
If direct real estate investment if out of your budget, there’s still a way you can get a piece of the action. Thanks to REIT’s. What are they?
Real Estate Investment Trusts(REIT) are listed companies that invest in properties and ear rental income. You can get in on the action by purchasing shares from REIT’s.
One of the prime example is Soilbuild Business Space REIT. It has a distribution yield of 9.2% You can buy these based on units. So for the Investor who is focused on real estate but doesn’t have the capital required, REIT’s are a perfect entry to the real estate space.
A booming economy generally means a booming stock market. And in the long term, one of the best investments one can make is in equity. You don’t have to pick stocks and do value investing, but just investing in a traded fund will do.
Some of the top ETF’s are
- Straits Time Index ETF – This has the top 30 blue chip stock in the Singapore market. It’s guaranteed to be a top performer.
- Indonesia Index UCITS ETF – Indonesia has a growing economy and a booming middle class. Pumping money into companies in this country is sure to give solid returns in the future.
Start a Business
Investing your money and in some cases Investing your time are the same thing. As a salaried employee, the time you spend is the amount you earn. So what if you can earn much more for the time you spend?
Starting a business has never been easy. There’s access to capital with new opportunities like P2P lending, there’s access to top talent, with Singapore being the top talent attracter for the fifth year in a row in the Asia pacific.
There’s also ample opportunities internationally as Singapore is a hub in terms of location with all the growing asian economies like Philippines, Cambodia, Thailand and India are around it. Just a few hours away by flight, it’s a good time to start a business in Singapore.
These are the different investments a retail investor can make. Have we left out anything? Let us know in the comments.
Post by Investollo.
Disclaimer : These are personal opinions of the author. Investollo will not be liable for any loss incurred on the investment because of the contents of this article.