How to Start Investing in Singapore for Beginners: Getting Started with $1,000

Are you a new or potential investor, wondering if now is the time to dip your toes into the stock market? You might feel held back by the misconception that you need thousands of dollars to get started or the belief that you don’t have the time to track your investments. But the reality is, you don’t need a fortune or hours of your day to begin building wealth—just $1,000 can set you on the right path.

Whether you're juggling rent, utility bills, or other financial commitments, starting small can still make a big impact on your financial future. In fact, it’s never been easier to start investing, and with the right strategy, even a modest sum can grow over time. This guide will show you the best ways to invest $1,000 and get started on your investment journey.

Here are five steps to start investing this year:

Step 1: Start Early and Build Smarter Investment Habits

Getting started with investing as early as possible is one of the best ways to grow your wealth over time. The earlier you begin, the more you can take advantage of compounding returns, where your money grows not just from the amount you invest, but from the returns on those investments.

The Power of Compounding

Compounding allows your returns to generate their own returns, creating a snowball effect. Even if you start small, regular contributions can add up significantly over time. For instance, if you invest $200 every month for 10 years at an average 6% annual return, you'll end up with about $33,300. Of that, $9,100 is earned from the interest on your investments—just from being consistent!

To see how compounding can work for you, use this compound interest calculator to calculate the potential growth of your investments.

Starting Small is OK

Many new investors hesitate, thinking they need tens of thousands of dollars to start. However, with modern investment platforms offering low or no minimums, zero commission fees, and fractional shares, you can easily begin with $1,000—or even less.

 A great option for beginners is robo-advisors like StashAway, which are perfect for those with busy schedules, as they handle your portfolio for you at low fees, automatically investing based on your goals and risk tolerance. This allows you to start investing with minimal effort and build your wealth over time.

Make Regular Contributions

When investing, the key is not necessarily the amount you contribute but the consistency of your contributions. Whether you’re able to invest $50 or $200 per month, regular contributions help build momentum in your portfolio, allowing compounding to work in your favor over time.

Smart Spending and Choosing the Right Platform

Investing also helps build smarter financial habits. By setting aside money for investments, you’ll naturally think more carefully about unnecessary expenses. To maximize your returns, it’s important to choose the right online brokerage with low fees. Compare different platforms to find the one that best suits your needs and avoid hidden charges.

Save for Big Financial Goals

Investing isn’t just about growing wealth—it’s a tool to help you achieve specific financial goals. Whether you’re saving for a wedding, your child’s education, or retirement, investments can help your savings grow faster than relying on salary alone.

By starting early and consistently contributing to your investments, you’ll not only develop good financial habits but also grow your wealth steadily over time. Even with a small amount, the key is to stay disciplined, allowing your money to work for you.

Step 2: Deciding How Much to Invest

Deciding how much to invest is a crucial step in your financial journey. How much you should invest depends on your financial situation, investment goals, and the timeline you have to achieve them.

Start with What You Can Afford

You don’t need to commit a large portion of your income to start investing. Ideally, many experts recommend aiming to invest between 10% to 15% of your income annually. However, if that feels overwhelming, start smaller and build up gradually. 

The key is consistency. Even small, regular contributions can grow significantly over time due to compounding.

Consider Your Financial Situation

Before determining how much to invest, take a close look at your financial position. Make sure you have enough cash flow to cover essential expenses and handle any high-interest debt. 

Also, ensure you have an emergency fund—ideally, three to six months of living expenses—before investing larger sums. This helps safeguard your finances in case unexpected expenses arise.

Set Clear Investment Goals

Your investment goals will heavily influence how much you should invest. If you're investing for retirement, for instance, you might have decades to allow your investments to grow, giving you more flexibility. 

However, if you're saving for a home or other short-term goals, you might need to invest more aggressively and increase your contributions to meet your target sooner.

Consider Time Horizon and Risk Tolerance

Your time horizon—how long you plan to keep your money invested—plays a significant role in deciding how much to invest. The longer your time horizon, the more flexibility you have to start with smaller amounts and increase contributions as your income grows. 

Also, assess your risk tolerance. Some investors are comfortable with more volatility for higher potential returns, while others prefer safer, more stable investments.

Adjust and Reevaluate Regularly

As your income or financial circumstances change, it’s essential to regularly revisit your investment strategy. Over time, you might find that you can increase your investment contributions, or you may need to pause them during times of financial hardship. 

It’s a good idea to periodically evaluate your progress and adjust your strategy to ensure you're on track to meet your financial goals.

Step 3: Choose the Right Investment Strategy for Your Goals

Your investment strategy should align with your financial goals, time horizon, risk tolerance, and the type of investment products you're interested in. In Singapore, there are several popular investment strategies that cater to different needs, each offering unique benefits and risks.

1. Passive Investing

If you're looking for a hands-off, long-term approach, passive investing is ideal. This strategy works best for investments like ETFs, robo-advisors, and regular savings plans. With passive investing, you focus on broad market indexes rather than picking individual stocks. 

It’s a great option if you want steady growth over time with minimal involvement. Robo-advisors, in particular, make this process even easier by automatically managing and rebalancing your portfolio.

2. Dividend Investing

For those seeking regular income from their investments, dividend investing is a strong strategy. This approach focuses on assets like blue-chip stocks, REITs, and bonds that offer consistent dividend payouts. 

Dividend investing is ideal for investors who prefer a lower-risk strategy and want to receive income while potentially benefiting from capital appreciation over time.

3. Hands-off Investing

If you prefer minimal involvement but still want access to a diversified portfolio, hands-off investing through unit trusts or insurance-linked products is a good option. These are great if you're looking for a balanced, long-term investment without the need to actively manage your portfolio.

4. Active Stock Picking

For more experienced investors or those willing to put in the time and research, active stock picking allows you to directly invest in individual stocks. While this strategy can offer high returns, it comes with higher risk and requires a solid understanding of the market. 

If you're willing to actively manage your portfolio and make informed decisions, this strategy can yield significant rewards.

5. Speculative Investing

Speculation is a high-risk, high-reward strategy often used for assets like cryptocurrency and forex trading. This approach involves short-term investments aimed at taking advantage of price volatility. 

It’s suitable for those who have a higher risk tolerance and are looking to capitalize on market fluctuations quickly. However, it’s important to note that speculative investing can lead to significant losses if the market moves against you.

How to Pick the Right Strategy

When choosing your investment strategy, it’s important to consider your financial goals and time horizon. For long-term goals like retirement, stocks, ETFs, and robo-advisors may offer the growth you need. However, if you’re saving for a short-term goal like a house deposit or travel, safer options like bonds or cash management accounts may be better suited for preserving capital.

If you're unsure where to start or don’t have the time to actively manage your investments, robo-advisors are a great solution. They build portfolios based on your risk tolerance and automatically adjust them as the market shifts. This hands-off approach allows you to start investing with ease and at a low cost, typically charging less than than 1% of your account balance for management.

Step 4: Open the Right Account Based on Your Strategy

Once you’ve picked your investment strategy, it’s time to open the appropriate account. Here’s how to choose and set up the right account for your needs:

1. Brokerage Account

If your strategy involves buying individual stocks or ETFs, you’ll need a brokerage account. In Singapore, you can choose between a CDP-linked account, which holds stocks under your name, or a custodian account through brokerages like:

• Local bank brokerage like DBS Vickers, Maybank Kim Eng, OCBC securities and more
• Foreign online trading platforms like SAXO, Tiger Brokers, Moomoo, Webull and more.

When opening a brokerage account, consider the fees involved, including:

• Commission fees that often includes minimum commission fees.
• Platform charges such as platform fee and charges for fractional shares trading.
• Singapore stocks market level fees such as trading fee, clearing fee, and GST.
• Foreign stocks market level fees such as exchange/trading fee, transaction levy, stamp duty, GST, withholding tax, and capital gains tax.

Each brokerage offers different commission structures, minimum fees, and additional charges, so it's essential to compare them based on your trading frequency and goals. If you're an active trader, custodian accounts might save on fees, whereas long-term investors may prefer CDP-linked accounts for full ownership.

Read more: How to Buy Your First Stock in Singapore

2. Robo-Advisors Account

If you’re opting for a hands-off approach with robo-advisors, the process of opening an account is straightforward. Simply sign up on the robo-advisor platform, input your financial goals and risk tolerance, and the platform will then suggest pre-built, diversified portfolios for you to choose from, tailored to your needs.

How to Open a Robo-Advisor Account:

1. Sign-Up: Create an account on a platform like StashAway, Syfe, or Endowus.
2. Input Your Goals: Specify your financial goals (e.g., retirement, wealth building) and risk tolerance.
3. Portfolio Creation: The robo-advisor will use algorithms to create a diversified portfolio, typically investing in ETFs.
4. Management: The platform handles rebalancing, buying, and selling automatically.

Robo-advisors typically charge lower fees compared to traditional financial advisors, making them a cost-effective solution for beginners or those with limited time. For example, platforms like StashAway have no minimum investment requirements, while others may require a minimum investment amount.

Read more: Best Robo-Advisors in Singapore

3. Regular Savings Plan (RSP) Account

For those looking to invest consistently over time with small amounts, a Regular Savings Plan (RSP) account is ideal. Starting with as little as $100 per month, you can invest in a diversified portfolio through regular contributions. RSPs use Dollar-Cost Averaging (DCA), which reduces the impact of market volatility by spreading out your investments over time. 

They’re a great option for long-term investors who want to steadily build wealth without having to invest large sums upfront. You can set up an RSP through banks or brokers, and they will automatically invest your fixed amount on a monthly basis. 

Read more: Singapore Best Regular Savings Plan

Step 5: Explore Your Investment Options

Each investment comes with its own level of risk, and it's essential to understand how each asset aligns with your financial goals and risk tolerance. For beginner investors, selecting the right mix of investment options can help build a balanced portfolio and mitigate risk. Some of the most popular investment options for those starting out in Singapore include:

1. Stocks

Investing in blue chip stocks offers stability and long-term growth potential. These stocks represent large, established companies with a strong track record of weathering economic downturns. Known for their consistent performance, blue chip stocks often pay regular dividends, making them attractive for investors seeking income and capital appreciation.

In Singapore, blue chip stocks are often associated with the Straits Times Index (STI), which includes top companies like DBS, OCBC, UOB, and Singtel. These companies operate across various sectors, providing diversification and reducing risk.

Blue chip stocks are ideal for investors who prefer more stable, lower-risk investments compared to smaller or more volatile stocks. By investing in well-established companies, you benefit from consistent performance, dividend income, and diversified revenue streams across different industries.

Read more: Best Dividend Stocks in Singapore

2. Bonds

Bonds are a popular choice for conservative investors looking for stable returns with lower risk than stocks. When you invest in a bond, you're essentially lending money to the government or a company in exchange for periodic interest payments (called coupons), and the repayment of the principal at maturity. 

How Bonds Work

Bonds are debt securities where you lend money to an issuer—either a corporation or government. In return, the issuer agrees to pay you interest, usually on a semi-annual basis, until the bond reaches maturity. 

At that point, you’ll receive your initial investment back. Bonds are typically seen as lower-risk than stocks because they offer a fixed return and a clear end date.

Types of Bonds in Singapore

1. Singapore Savings Bonds (SSBs): These bonds are backed by the Singapore government and are almost risk-free. With an average yield of 2.86% over 10 years in the latest allotment, SSBs are popular for those looking for secure, long-term investments. 
2. Treasury Bills (T-bills): These short-term government bonds have maturities of 6 or 12 months and provide a fixed return. T-bills are ideal for investors looking for a secure place to park their money for the short term, with recent yields around 3% per year for the 6-month option.
3. Corporate Bonds: These bonds are issued by corporations, offering higher yields (around 3.5% to 4%) compared to government bonds, but they come with slightly higher risk. 

While bonds offer stability, they carry risks like default, interest rate fluctuations, liquidity issues, and early redemption. Overall, bonds offer a safer investment compared to stocks, making them attractive for those nearing retirement or seeking steady, reliable income with less market volatility.

3. Exchange-Traded Funds (ETFs)

Exchange-Traded Funds (ETFs) are investment vehicles that combine the flexibility of individual stocks with the diversification of mutual funds. ETFs hold a basket of assets such as stocks, bonds, or commodities, allowing investors to gain exposure to various asset classes with a single purchase. 

Types of ETFs

1. Equity ETFs: Track stock indices or sectors. Example: SPDR STI ETF (Singapore’s top 30 companies).
2. Bond ETFs: Focus on government or corporate bonds. Example: ABF Singapore Bond Index Fund.
3. Commodity ETFs: Invest in physical commodities like gold or oil. Example: SPDR Gold Shares ETF.
4. REIT ETFs: Invest in real estate investment trusts. Example: Lion-Phillip S-REIT ETF.
5. Sector-Specific ETFs: Track specific sectors like tech or healthcare. Example: Lion-OCBC Securities Hang Seng Tech ETF.
6. Thematic ETFs: Focus on themes like ESG (environmental, social, governance). Example: UOB Asia Pacific Green REIT ETF.
7. Currency ETFs: Track currencies or baskets of currencies for forex exposure.

Do note that ETFs often follow an index, meaning they aim to match the market rather than outperform it, making them conservative options for investors looking for steady returns rather than aggressive gains. Despite their lower risk, ETFs still carry market risk, especially during downturns.

Read more: Exploring Best ETFs in Singapore

4. Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) are investment vehicles that allow individuals to invest in large-scale, income-generating real estate without directly managing the properties. Listed on the stock exchange, REITs pool capital from multiple investors to acquire and manage diversified property portfolios like malls, offices, hotels, and more. 

In Singapore, REITs are required to distribute over 90% of taxable income to shareholders, providing regular dividends. REITs are a cost-effective way to gain exposure to real estate with a lower capital commitment.

Types of REITs in Singapore

1. Retail REITs: Invest in shopping malls and retail outlets, with performance tied to consumer spending (e.g., Frasers Centrepoint Trust).
2. Office REITs: Focus on commercial spaces and office buildings, providing steady income through long-term leases (e.g., Keppel REIT).
3. Industrial REITs: Invest in warehouses, logistics centers, and factories, sensitive to global economic trends (e.g., CapitaLand Ascendas REIT).
4. Hospitality REITs: Own hotels and resorts, influenced by tourism and seasonal demand (e.g., CapitaLand Ascott Trust).
5. Healthcare REITs: Invest in hospitals and healthcare facilities, benefiting from stable demand (e.g., Parkway Life REIT).
6. Diversified REITs: Hold a mix of property types to mitigate risk across sectors (e.g., CapitaLand Integrated Commercial Trust).
7. Data Centre REITs: Focus on facilities that store critical IT infrastructure, driven by digital demand (e.g., Keppel DC REIT).
8. REIT ETFs: ETFs that aggregate multiple REITs into a single investment, offering diversification (e.g., Lion-Phillip S-REIT ETF).

REITs provide an accessible and liquid way to invest in real estate with lower capital requirements, along with the benefit of regular income distributions. Each type of REIT targets different sectors, offering flexibility based on investor preferences.

Read more: Complete Guide to REITs Investing in Singapore

5. Cryptocurrencies

Singapore is known for its progressive stance on cryptocurrency, with regulations that balance innovation and investor protection. 

To buy cryptocurrency in Singapore, you can use platforms like Kraken, KuCoin, or Coinbase. Simply register on your chosen exchange, complete the KYC process, and fund your account. From there, you can select and purchase cryptocurrencies like Bitcoin, Ethereum, or other altcoins based on your investment goals.

In addition to exchanges, alternatives such as Bitcoin ATMs and peer-to-peer (P2P) trading also provide ways to buy crypto. 

Security is essential in crypto investing. Ensure that you protect your holdings using secure wallets like hardware wallets (e.g., Ledger Nano X) or software wallets with two-factor authentication. Also, stay vigilant against scams and phishing attacks, which have affected the crypto market globally, including Singapore.

Despite the potential for high returns, cryptocurrency investments carry risks such as market volatility and regulatory changes. Therefore, it’s crucial to stay informed, diversify your investments, and practice responsible trading habits to mitigate risks.

6. Forex

Forex trading is considered high-risk due to its reliance on leverage, which means borrowing money from brokers to trade currencies. It requires real-time monitoring of market fluctuations and is more suitable for speculative strategies than for "buy and hold" approaches. 

Success in forex trading depends on having a solid plan, recognizing entry and exit points, and choosing the right platform. 

Popular forex platforms in Singapore include Oanda, Interactive Brokers, and POEMS, with trading pairs like USD/EUR and USD/SGD offering various opportunities for traders.

7. Robo-Advisors

Robo-advisors are digital investment platforms that leverage algorithms to manage portfolios, offering users an accessible, hands-off way to invest. These platforms design personalized investment strategies based on factors such as risk tolerance and financial goals, automating tasks that traditionally require a financial advisor.

A key feature of robo-advisors is their low fees, making them cost-effective compared to traditional advisors. They also provide diversification, typically investing in ETFs and a variety of assets to minimize risk.

In Singapore, StashAway stands out as a leading robo-advisor. It uses a unique Economic Regime-based Asset Allocation (ERAA®) framework to adjust portfolios based on economic changes. With no minimum investment required and fees ranging from 0.2% to 0.8%, StashAway makes wealth management accessible to a broad range of investors.

Read more: Best Robo-Advisors in Singapore

Tips for Maximizing Returns with $1,000

Maximizing returns on a $1,000 investment starts with Dollar-Cost Averaging (DCA). Instead of investing the entire amount at once, spread it out over time, allowing you to buy at different price points and reduce the risk of entering the market during highs. This approach balances your cost and minimizes volatility.

Reinvesting dividends is another critical strategy. When your investments earn dividends, reinvest them back into the market rather than withdrawing. Over time, this compounds your returns, enhancing the growth of your portfolio.

Lastly, ensure you diversify your portfolio by spreading your investment across different asset classes like stocks, bonds, and ETFs. This reduces your exposure to any single investment, balancing the risk and potential returns.

Common Mistakes to Avoid

One of the most common mistakes investors make is emotional investing—letting fear or excitement drive decisions. Market swings are inevitable, but sticking to a solid plan prevents rash decisions that could result in significant losses.

Another pitfall is ignoring fees. High trading or platform fees may seem small but can accumulate and erode your returns over time. Always factor in these costs when choosing investments or platforms to avoid diminishing your gains.

Lastly, lack of diversification is a critical mistake. Placing all your funds into one stock or asset class can lead to significant losses if that particular investment performs poorly. Spread your investment across multiple sectors to minimize risk and stabilize returns.