So… you want to be with the big boys.
You’ve graduated from the tiny SGX market and you want to compete against the bigger players.
But it’s not just about how to buy US stocks in Singapore, but how to buy it, so you won’t lose.
Make no mistake.
The US Market is a completely different beast. With it being the world’s biggest stock market, you’re not fishing with the ikan bilis in Singapore anymore.
You’re fishing with the sharks.
Here’s some things you should take note, before you dip your toes in.
You’re not going to have a natural advantage
When you were in Singapore, you could use the Peter Lynch method of ‘understanding what you buy’.
As a stock enthusiast, you would probably remember yourself going to listed stocks in Singapore, and trying to figure out if they were a good buy.
You don’t do that? Well I do.
I remember going to Sheng Siong, a listed grocery chain here, and trying to figure out why they had such insane profit margins.
I went up and down their escalators, walked through the aisles, flipped their live prawns… and realised that maybe the secret lay in their live prawns.
They themselves admit in their 2022 financial report that their higher profit margins were driven by an increase in the sale of livestock, which tend to command a higher margin than frozen foods.
But in the US, how are you going to tell if one stock is better than the other? Sure, you might see Apple selling millions of phones, but what’s the difference between that and another retail investor?
Not unless you had specific industry knowledge. Say you’re a software engineer. And you see most engineers using Apple’s Swift to code.
You’re not going to have juicy dividends
Part of the love for Singapore stocks is the juicy dividends they pay out. After all, there’s no tax on dividends here, which has made Singapore a haven for REITs.
Not so in the US. There’s a 17% withholding tax there, which means that it’s not the company’s best interests to pay out dividends.
How to choose an online broker
We will cut to the chase here and recommend you what we use ourselves.
I remember the first time I used Firstrade, a leading online broker in the US which offers $0 fees.
My experience with Firstrade was scary
I had to do a remit to the US bank account, and I spent the next 3 days trying to get their customer support to reply me as to why it took so long for my funds to appear in my account.
There’s no greater fear than thinking that your $3000, has gone into some random account in the US, never to be found again.
You might not want that to happen for you.
Save yourself the sleepless nights.
Here’s why we love Syfe
Just use Syfe.
With Syfe, the funds appear in your account almost within 2 hours (from Monday to Fridays, even past 6pm).
They have a simple PayNow UEN code that you can key in, transfer, and TADA! The money is in your account.
No need for copying of strange SWIFT codes, trying to find the bank’s name in the US, and then trying even harder to locate when your money will come.
But you may think that Syfe may not be as great compared to other brokers that offer unlimited trades for free.
|$0, but only for 3 trades. Every trade after is $1.49
Here, I want to warn you.
That might not be a good thing.
It might cause you to trade more than you should, resulting in you losing more than you want to.
Whilst Syfe only offers 2 free trades a month, and $1.49 for every trade after, this might introduce needed friction into your trading process, encouraging you to hold for the longer term, rather than desperately trading in and out of positions.
So you need to save your money for your date.
You might not want to tell your date that you’ve just spent $2000 on Apple stock and couldn’t afford that Swarovski jewellery.
She will probably smack you with the fancy soufflés you’re enjoying at the restaurant.
But Syfe also offers fractional trading, which has been a real game changer in terms of how much you need to even start investing.
Investing in US needs you to up your game
Don’t play play, as Phua Chu Kang would say.
Graduating to the big boys in the US is tempting, but it can also be fraught with danger.
Don’t put all your eggs there.
But then again, what do I know?
You might make a 100 bagger.