What a Singapore investor needs to know about investing in the US stock markets

Grab Holdings and Sea Limited are familiar names in Singapore and while they are listed in the United States, investors here can still buy into them.

- Chor Khieng Yuit

If you want to invest in these stocks, you will need an account with one of the local brokerages such as CMC Invest, FSMOne, Phillip Securities, Interactive Brokers and Tiger Brokers.

US investments you make are held in a custodian account with the brokerage. This means the broker holds the stocks on your behalf, so while you can trade US shares, they are not held directly under your name.

Mr Christopher Forbes, head of Asia at investment platform CMC Markets, said the Singapore market consists of "yield-focused stocks", which are relatively more stable, making them "better suited for long-term compounding and dividend income".

These stocks pay dividends, which the investor can use to buy more shares in the company. This creates the compounding effect, as the investor will then get more dividends given his increased holdings.

But the US markets are "growth-oriented" and so are a "pure equity play", he noted.

Singapore investors looking to complement their local investments with US stocks could consider exchange-traded funds (ETFs).

ETFs, a class of investment products listed on stock exchanges, allow an individual to invest with ease in different regions, in a range of asset classes such as stocks, bonds, real estate investment trusts (Reits) and gold, or in themes such as sustainability.

Mr Forbes said: "ETFs are a very popular strategy in the US.