A Balanced Approach: Trading Both Singapore And US Markets

A friend once told me that investing in Singapore stocks was boring, that it was easier to make money in the US market. My friend was right.

The price of Nvidia was $272 at end March '22, $121 at end September '22, and $277 at end March '23. Nvidia was not the only US stock to see price declines of 50% in half a year, and 100% increases in the other half. Barring penny stocks or distressed companies, it is very rare for Singapore stocks to have volatility of this magnitude. Whether one's position is long or short, it is indeed easier to make a profit (or a loss) in the US market.

But volatility works both ways, doesn't it? Investing in Singapore stocks may be boring, but their lower volatility means one can build an investment portfolio that is more stable, enabling one to sleep better at night.

Singapore is a global financial center; has a stable political environment and excellent infrastructure for the conduct of business. It boasts a world renowned airport and a port which is among the busiest in the world. Singapore is also, of course, home to some home-grown companies that have gained recognition abroad, companies the likes of SIA, Singtel or ST Engineering.

Conservative investors wishing to invest in Singapore stocks can consider Real Estate Investment Trusts (REITs). REITs offer good dividend income, plus the opportunity (or risk) for capital appreciation (or loss). As always, one should do one's own due diligence before investing, as some REITs are riskier than others. REITs are for those who aspire to be landlords. If one aspires to become a banker, one can check out the three local banks - DBS, OCBC, UOB. These three Singapore banks are among the safest in the world.

But let's face it. Prices of Singapore stocks will probably not fluctuate as quickly or wildly as those of US stocks. For investors who seek more excitement and know what they are doing, the US market is a better playground. Better still, why not have the best of both worlds and invest in both Singapore and US stocks?

Disclaimer: Investing entails risk. Always do your due diligence before investing. When in doubt, seek professional advice from your broker or financial advisor.