Want to diversify your portfolio but unsure how? Or do you simply want to try doing things differently? Here are four investing ideas in Singapore that you can consider to spice up your portfolio!
1. Government bonds/treasury bills
What are Government Bonds and Treasury bills?: In short, government bonds and treasury bills are the loans of a government used to raise revenue for government spending. Those issued by developed countries are often considered “risk-free” investments, because the chances of default is low. Realistically, there is not investment that is completely risk free, but the relatively lower risk associated with these investments appeal to those that are extremely risk-averse. Of course, lower risk will typically garner only lower returns. Recent issues of the Singapore Government Treasury Bills offered only a median yield of 0.28% p.a., while Singapore Government Bonds have yields between 0.36% to 1.86% per annum.
What are REITs?: REITs, short for Real Estate Investment Trust, is a company that owns, operates or finances real estate. The company will bundle real estate together to form an investment product, and investors pool their money to form capital. By law, 90% of the income from the rent of these properties will have to be paid out to investors in the form of dividends. REITs are an especially good option for those looking to retire or are already retired, because its relatively stable dividend payouts are a good fit for those with a smaller risk appetite. They are also suited to those looking for exposure to Singapore’s thriving real estate market. Take note however, that because REITs can be traded on the stock market, their value can also fluctuate with it.
3. Alternative Investments
What are some alternatives available?: Investors can finance business loans through digital funding programs in exchange for relatively high interest rates. This is a steadily growing space as it disrupts the traditional bank model, helping borrowers access loans more quickly and easily. While there is a lot of potential to gain high returns on these investments, the risk of borrower defaulting on loans is also there, which is why it is important to choose a reputable platform licensed by the Monetary Authority of Singapore (MAS) to minimize the risk you are exposed to. Minterest is the only MAS-certified platform that provides exposure to not only private investments in businesses but also to institutional-grade real estate.
What are robo-advisors?: Robo-advisors are digital financial platforms that use algorithms to manage their investors’ portfolios with little to no human intervention. The proliferation of technology today has been the main driver behind the recent rise of robo-advisors. In Singapore, some notable players include Stashaway and Syfe. These robo-advisers are largely targeted at those with limited financial knowledge or limited time to manage their portfolio themselves, providing a fuss-free solution for consumers to turn into investors. However, they may not be so suitable for those who prefer to have a say in what is in their portfolio or those who wish to have a more personal relationship with their relationship managers. They are also unable to provide advisory services for those who need financial help with the rest of their finances like taxes or real estate.
Ultimately, every form of investment will come with its own risk and returns. Some may not be suitable for every type of investor across the board, so investors should still do their own due diligence to find the product best suited to their needs.