So, you have read through all the basics about investing from our investing 101 page. You are now ready to start dipping your toes into the stock market. That is wonderful news. However, how do you actually trade shares in the market? Here are the three easy steps to start investing.
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Open Your CDP Account
If you are in Singapore, you would need to open two accounts; a brokerage account and a Central Depository (CDP) account. A CDP account is basically a “bank account” for your stock, directly managed by the Singapore Exchange. Once you purchased a Singapore stock, it would be placed into your CDP account. This means that the stock will be directly under your name. You can even use a different brokerage account to sell your stocks in your CDP account.
In most cases, the brokerage firm can help you with opening a CDP account concurrently when you are applying for a brokerage account. However, if you would like to open the CDP account by yourself. Here is how to do it. According to the CDP’s website, you would need to complete its application form and mail the original signed copy back to CDP for processing. Click here to find out more.
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Open Your Brokerage Account
After that, you can set up a brokerage account with any of the local brokerage firms.
Here is a list of the more popular brokerage firms in Singapore
- CIMB Securities
- DBSVickers Securities
- Maybank Kim Eng Securities
- OCBC Securities
- UOB KayHian Securities
- Phillip Capital
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What To Look Out For?
Once you have your accounts ready, you should be all set to buy your first stock. Some of the things to look out to enable a smoother investing process are to check:
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Having both online and offline access:
Most brokerages would offer an online account now for you to trade directly from your mobile or PC. However, you might still want to note down how to reach your remisers or brokers directly without the help of the internet (Just in case).
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Commission fees:
Most of the brokerage firms are offering very similar brokerage fees. We would be wary to just go for the cheapest brokers in town. Most of the time, if we are investing for a very long term and not trading in & out of the market constantly, the commission fees is not a big burden for value investors.
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Access to which stock markets:
It is a globalised world now, having a brokerage account in Singapore does not mean you can only buy Singapore-listed stocks. In fact, the one key advantage of being an investor is that we can invest directly in the global marketplace effortlessly.
For most brokerage firms, you should be able to gain access to most of the neighbouring and major exchanges, i.e. Singapore Exchange, Hong Kong Exchange, NYSE, NASDAQ, Bursa Malaysia.
What’s Next: Start Building Your Watch List
We should not be investing into companies without some research on them first. A good practice to have is to just start building a watch list of companies that might be interesting to you. We can do that even when we are not investing. As long as we find the business of the company attractive, we can keep it on our watch list and wait for the right opportunity to invest in them.
Investing is a life-long journey and Value Invest Asia is here to provide you with the best resources about how to invest and the analysis of companies listed here in Asia. To stay up to date with the market, remember to subscribe to our mailing list. You would be able to get a free E-Book, Our Stock Guide 2017: Top 10 Companies In Our Watch List Today, if you sign up now!
