If you live in Singapore and have some money to invest there are several options open to you. Many people will opt to trade stocks and shares on the Singapore Exchange where the top companies in the land are listed. With a market size of around S$.091 trillion in 2017, it is clear that this is one financial market that sees lots of investment.
But before you decide to put your hard earned Singapore Dollars to work, you need to understand what drives the financial markets you could invest in.
What affects any investment you make?
For any new investor in Singapore, the basic premise is the same. You are investing capital in the belief that it will rise in value and thus give a good return. It is the ability to make the right decisions on whether something will rise in value that makes understanding the drivers in the financial markets so important.
Here are some of the basic things that affect investment markets for beginners:
- Politics – one of the things that you need to keep an eye when thinking of investing money or managing your current investments is politics. Naturally, this should be on a local level in Singapore but also with an eye on all of Asia and the rest of the world. Big political events, like elections, can have an impact on how the market moves. Being able to factor this in to plan or act accordingly is crucial.
- Financial and company news – another driver of the financial markets is news. It may be figures released by a company that shows it has had a good year which makes the price rise, or a profit warning that causes it to fall. It could also be more general news on the financial situation in Singapore that could impact any investments you have made within the country. The markets really feed and respond to news, so you need to keep constantly updated.
- Market sentiment – one thing that many new investors forget is that the market is made up of other investors, all doing the same thing. This is where market sentiment comes in – you have to understand that sometimes other traders reacting to stories or events can make the market move in certain ways. If you can get to grips with gauging market sentiment, then it will help greatly in making the correct calls.
Get some specialist help
Although there are other factors to consider, the above are the main ones for new investors. But how do you get your head around them all and make sense of what the markets are doing? A great tip is to get specialist help from reputable news sources and other traders. Hammerstones “The Feed” is a great way to do this as it provides a regular feed on all the latest investment news to take on-board.
Knowledge is power
Knowing what makes the financial markets move and then being able to solidify that into actionable insights is what will make you a successful investor. When you are able to achieve that you will be able to not only predict where the markets may head but also react in the correct way to any breaking news.