Number of Singaporean Investors Reaches Record High – Are You Part of It?

Singapore’s stock market operator and regulator, Singapore Exchange (SGX: S68), says more people are interested in the Singapore stock market scene nowadays.

According to an announcement released by the firm on Monday, more than 68,000 new Central Depository (CDP) accounts were opened in the 12 months ended 30 June 2014. This brought the total number of CDP accounts to 1.6 million. A CDP account is usually needed for an investor to invest in the local stock market, unless the investor elects to make his stock purchases through a custodian account.

Of the 1.6 million CDP accounts, a record-high of 844,000, or 52%, held securities such as equities, bonds or exchange-traded funds (ETFs). That’s an encouraging sign.

Another source of encouragement was reported by The Straits Times in conjunction with SGX’s announcement: More than 50% of the 68,000 new accounts opened in the last 12 months were opened by young adults in their 20s to early 30s.

Starting early for retirement always bodes well for a young person’s financial well-being as  time is an investor’s best friend.

The longer the investing time frame, the more the magical effects of compounding can take place. If you had invested S$10,000 in SembCorp Industries (SGX: U96) in 2004 and held on for the next 10 years, the investment would have ballooned to S$123,953 after accounting for reinvested dividends. Likewise, US$10,000 invested in Jardine Strategic Holdings (SGX: J37), would have turned into US$99,531.

This is not to say that SembCorp Industries or Jardine Strategic will necessarily be good investments going forward. The point to note is that by investing in fundamentally strong companies for the long-term, we can compound our way to retirement riches.

For the less risk averse, one could also possibly look into investing in the SDPR Straits Times Index ETF (SGX: ES3) as an easy way to own a basket of different shares. Over the decade ended 31 May 2014, the exchange-traded fund has generated annualised returns of 9.57% if dividends had been reinvested, turning a $10,000 investment into $24,491.

Despite having a record-high number of CDP account holders becoming investors, there’s still room for improvement. It was reported in the same announcement by SGX that “the proportion of Singaporeans invested in the stock market is low compared with other developed economies like Australia and Hong Kong, where issues like retirement savings are also of concern”.

This is where we at The Motley Fool Singapore come in. From investing in initial public offerings to investing in pawnshops, we have various articles for different taste buds that all fit our goal of “To Educate, Amuse, and Enrich.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.