Entering the US Stock Market: What You Need to Know & How to Do It From Just US$1

trade US stocks from US$1 with Syfe Trade

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Most Singaporeans start investing by buying shares such as CapitaLand or DBS on the Singapore stock exchange. These SGX-listed blue chip stocks seem safe, tend to be stable, and can offer passive income in the form of dividends.

However, as we become increasingly financially savvy, a lot “graduate” into investing in the US stock market.

The US stock market is where mega-companies like Apple, Tesla and Google are listed, and can fast-track the growth of your investment portfolio compared to investing only locally.

Plus, investing in broad-based ETFs (exchange-traded funds) tracking the S&P500 and total US stock market is a cornerstone in the FIRE (Financial Independence, Retire Early) scene. Comprising hundreds of companies doing business all over the world, these US-listed ETFs offer extreme diversification, perfect for passive (or just lazy) investors.

 

So… what’s holding us back?

Whether we’re looking to go big with the world’s tech giants, or want an ultra-diversified portfolio for long-term investing, entering the US market should be a priority for us Singapore investors.

But when I ask my friends if they invest in the US market, I get non-committal replies like “yeah I should… but…” or “erm maybe next year…”

Here are some common barriers to investing in US stocks and ETFs:

  • Fear of the unknown (as opposed to the Singapore market)
  • No idea how to start investing in the US market
  • The US market is too huge, don’t know what to buy
  • Lazy to learn “cheem” new investment platforms or investing SOPs
  • Worried about losing money to currency conversion
  • Unsure if there are hidden fees and taxes
  • Put off by the high prices of coveted US stocks and ETFs
  • Don’t want to invest at odd hours due to the timezone differences

For me, fear of the unknown was the biggest hurdle. I only gained the confidence to invest in the US market after doing copious research from influencers like Mr Money Moustache and the Frugalwoods, and books like John Bogle’s The Little Book of Common Sense Investing.

But even after I was convinced, there was still a lot to get around. There wasn’t a lot of info when I first started investing, so I had to figure out how to buy US stocks in Singapore and learn to use a brokerage platform.

And deciding which stocks and ETFs to buy took months and months of research. With at least 4 versions of the S&P500 ETF on the US stock market, and countless more if you’re looking into total US market index ETFs and other indices like the MSCI World Index, researching US ETFs is practically a full-time job.

Even after all that fuss, I still had to puzzle my way around US trading hours, dividend withholding tax, currency conversion, hidden fees, and so on. I also went through some trial and error with commission fees before finding the sweet spot for making my investments cost-efficient. 

 

Syfe Trade could be the key to the US market

Syfe Trade

If Syfe Trade were an option back when I first got interested in investing in the US stock market, it would have saved me so much time and effort, not to mention the “tuition fees” I paid from making mistakes.

As Singapore’s first “neobroker”, Syfe Trade differs from other investment brokerages in the following ways:

  • Allows fractional investing from US$1
  • Free trades each month (and low commission fees thereafter)
  • No hidden fees like inactivity fees or platform fees
  • No withdrawal fees
  • Individual accounts protected up to US$500,000
  • Real-time stock quotes (no surprises when you get round to buying!)
  • Easy-to-use interface that doesn’t bombard you with info
  • Integrates nicely with Syfe’s robo advisor portfolios

If I could turn back time, here’s what I would do to start investing in the US market with Syfe Trade

While reading up on US stocks and ETFs, I’d concurrently test the waters by funding my Syfe Trade account with just a small amount of cash and getting familiar with its easy-to-use interface.

Since I can get 5 commission-free trades a month during the 3-month introductory offer period, I would buy a few shortlisted stocks and ETFs each month, knowing that if they didn’t work out, I can simply sell them next month. Because Syfe allows fractional investing, I don’t even have to worry about saving for expensive stocks like Google (US$2,740) or Amazon (US$3,251). I could start investing in these stocks with as little as US$1.

As I get comfy with investing in the US stock market and firm up my investment strategy, I can then go ahead and invest larger amounts.

Because the commission is only US$0.99 per trade, I don’t have to wait until I have at least S$5,000 or so to make the commission fee worthwhile. Instead, I can invest consistently with a small monthly amount, building good investment habits along the way.

After Syfe Trade’s introductory offer period, I’ll still get 2 free trades each month. From the third trade onwards, the fee is just US$1.49 per trade, one of the lowest in the market for US stocks and ETFs.

With no inactivity, no withdrawal and no platform fees, plus the fact that Syfe is regulated by the Monetary Authority of Singapore and individual accounts are protected up to US$500,000,

I would also feel confident about building up my investment portfolio until I attain my FIRE goals.

Don’t get me wrong: I don’t regret going down the US investment research rabbit hole one bit. But there’s a difference between “mugging” to avoid costly financial mistakes vs learning out of pure curiosity. Given the choice, I’d rather opt for the latter — which is possible now that Syfe Trade makes investing in the US market so easy and accessible for everyone.

 

Sign up for Syfe Trade to receive more than S$200 in cash credits

Keen to give fractional investing a whirl? Here’s a summary of the costs of investing with Syfe Trade:

Promotional period After promo period
No. of free trades 5 per month 2 per month
Commission fee US$0.99 per trade US$1.49 per trade
Minimum investment US$1 (fractional shares) US$1 (fractional shares)
Inactivity, withdrawal or platform fees None None

Syfe Trade is offering some attractive cash credit deals when you sign up.

  • Get S$60 (~US$44) cash credit when you open your Syfe Trade account, fund it with a minimum of S$1,000 and make your first trade of any amount
  • Get $$30 (~US$22) cash credit for each friend you successfully refer to Syfe Trade
  • Cash credits can be used to buy any stock or ETF on Syfe Trade
  • Cash credits are given in USD to avoid additional foreign currency conversion

Syfe Trade’s welcome promotion is available to both new and existing Syfe users.

Syfe logo
MoneySmart Exclusive
No hidden fees
Min. Commission Fee for US Stocks
US$0
Stock Holding Type
Custodian
Min. Funding
US$0
MoneySmart Exclusive:

Sign up with Syfe Trade with promo code: MSTRADE to get S$70 in Cash Credits* AND a S$15 GrabFood Voucher! Limited to first 100 sign ups. (Exclusively for MoneySmart users only)T&Cs apply.

Valid until 30 Sep 2022

Signing up for a Syfe account through MoneySmart is quick and easy and can be done with SingPass. Still thinking about it? Learn more about Syfe Trade here.

 

Disclaimer:  Not financial advice. All opinions are my own. Reference to specific security are meant to illustrate the concept of fractionalisation and neither intended nor to be construed as a recommendation or advice to buy any specific security. Please do your own research before making any investments at your own risk. Any form of investment carries risks and you should not interpret my returns as what you’ll get. This advertisement has not been reviewed by the Monetary Authority of Singapore. This article was written in collaboration with Syfe Pte. Ltd.