US stocks and ETFs are a great investment option for anyone looking to diversify their portfolio.
They also offer stability and lots of growth potential.
And now you’re wondering, how do you buy US stocks and ETFs if you’re in Singapore?
Lucky for you, we’ve got you covered.
Step 1: Decide on the US stocks you’d like to buy
You can buy US stocks in Singapore either through individual stock picking, ETFs, or unit trusts. The most popular way of buying US stocks is through the purchase of Exchange Traded Funds (ETFs).
The best way to buy US stocks in Singapore is through the purchase of exchange-traded funds (ETFs) which are traded on stock exchanges.
The main advantage of using ETFs is that they allow investors to gain exposure to the US market without having to actually own any of the underlying assets that make up the index.
For example, if you want to invest in the technology sector, you do not need to purchase Apple shares and Google shares; instead, you can simply buy an ETF that tracks the performance of the technology sector.
This allows you to have exposure to this asset class without having to worry about its daily fluctuations.
- Guide to ETFs in Singapore
- 14 Best US ETFs for Singapore Investors to Buy: NASDAQ, S&P500, and More!
Individual Stock Picks
The second option for buying US stocks in Singapore is by purchasing individual stocks.
This method requires you to be more hands-on with your investments as you would need to research each company’s fundamentals to determine whether it is a good long term investment.
However, since you will be investing directly into companies, you’ll benefit from better liquidity and lower transaction costs when compared to ETFs.
Another method of buying US stocks in Singapore is through unit trusts. Unit trusts are pooled investments that group together multiple smaller investors in order to minimise risk.
Because unit trusts are managed by professional fund managers, they often charge higher fees than ETFs.
The good thing about unit trusts is that they try to beat the performance of the index, unlike ETFs which try to replicate them.
Step 2: Learn more about what you’re buying
Once you’ve decided on your preferred method of investing in US stocks, you will then need to learn more about the company itself.
You should look at a few key metrics such as the company’s revenue growth rate, profit margins, return on equity, etc.
These metrics will help you understand how well the company is performing and whether or not it is worth investing in.
This step is the most important step because you’ll need to know what you’re investing in and whether your investment will grow in value over time.
Step 3: Choose your broker
After researching the different methods of buying US stocks in SG, you will then need to decide on which one suits your needs.
There are plenty of brokers out there who specialise in trading US stocks and ETFs.
But before choosing one, you should consider some factors such as:
1. Fees – You don’t want to pay too much for the privilege of investing in US stocks. So choose a broker that charges low fees.
2. Liquidity – If you plan to sell off your holdings quickly, then choose a broker that offers quick settlement times.
3. Customer service – Choose a broker that has a friendly customer service team who will answer all your questions promptly.
4. Trading platform – Some brokers offer their clients access to online platforms where they can trade their stocks instantly. This makes it easier to monitor the market and execute trades.
5. Account opening process – The account opening process should be simple and straightforward so that you can get started right away.
6. Security features – Ensure that your brokerage firm provides adequate security measures to protect your money. These include things like multi-signature accounts and two-factor authentication.
7. Brokerage firm reputation – Look at reviews and ratings of various brokerage firms to see how other customers feel about them.
8. Investment options – Check out the variety of investment options available to you. For instance, some brokers may only provide stocks and ETFs while others may also offer unit trusts.
9. Research tools – Find out if the brokerage firm has tools that you can use for doing research.
10. Currency exchange rates – Many foreign exchange traders prefer to invest in US stocks because of the strong dollar. However, this means that your profits might be subject to currency fluctuations. Choose a broker with the best currency exchange rates as your SGD will need to be converted to USD.
But you’re free to choose the best broker account based on your needs.
Since you’re interested in the US market, make sure that the platform of your choice has access to the various stock exchanges in the US.
Step 4: Fund your account
Now that you have opened an account with a brokerage firm, it is time to fund your account.
This means depositing money into your account.
Having money transferred from your bank account is the easiest way to do this – depending on your bank and your broker, it can take anywhere from an hour to a few days.
It is quite straightforward, but depending on the type of account offered or the fees charged, it can be quite costly.
Therefore, make sure to check which broker offers the cheapest and easiest way to transfer money into your account.
Step 5: Find out when to buy
After learning everything you could possibly know about the company, it is time to find out when to buy. There are 2 ways to determine when to buy: technical analysis and fundamental analysis.
Technical analysis is the study of price movements over time. It involves looking at charts of past prices and identifying certain indicators within the chart pattern.
Technical analysts use these indicators to predict future price movements.
Fundamental analysis is the process of analysing a company from a financial perspective. It involves studying a company’s balance sheet, income statement, cash flow statements, etc. to identify strengths and weaknesses.
Step 6: Start trading
You now have all the information you need to begin trading. All you have to do is select one of the available assets (stocks) and decide if you want to buy or sell.
If you are selling, you simply click “sell” and the market will immediately take care of the rest.
If you are buying, you’ll see the current price and you’ll either like what you see or not.
You’ll also need to understand the differences between limit and market orders.
A limit order will specify the maximum amount you are willing to pay for the asset. The system will automatically execute the order once the price reaches your specified level.
On the other hand, a market order has no upper limit. This means that you are paying whatever the current bid/ask is at the moment.
Step 7: Check your account wallet!
Once you’ve placed your first trade, you should receive an email confirming the transaction. You should then go back to your account page and look at your account wallet.
Your account wallet shows you how much you’ve paid or sold your stocks for.
It’ll also show any profit or loss you made during the transaction.
Your account wallet will also show you any pending orders. Pending orders are orders that haven’t been executed yet. You can cancel them by clicking on the corresponding link.
That’s it! Now that you know everything about how to buy US stocks in Singapore, you can start investing in the stock markets.
Remember though, there is always more than just one way to invest in the stock market.
The method above just highlights how you can do it yourself!
So don’t hesitate to experiment and find out what works best for you.
Frequently Asked Questions
Yes, US stocks are taxable in Singapore. However, you do not need to declare any capital gains when you sell shares in the United States as only dividends are subjected to 30% withholding tax.
You can buy US stocks in Singapore anytime between 9.30 pm to 4 am local time as this is the time US markets open on their end.
When daylight savings is on, this time changes between 10.30 pm and 5 am in Singapore time.
You will have to buy a minimum of 1 share in a single trade if you’re buying US stocks and ETFs. However, some brokers offer fractional shares, which means you can buy even lesser than that!
We recommend Syfe Trade for fractional shares in the US market.
Looking for a financial advisor? We partner with the best financial advisors in Singapore to help you with your investing needs.