It seems that there are more and more Singaporeans turning into investors. There were more than 68,000 new CDP accounts opened in the past 12 months. Apparently, the number of people who now hold securities is at an all time high of 844,000 people. So out of the 5.4 million people in Singapore, at least 15.6% are now investors of sorts.
Now, that’s a good sign as it shows that there is now greater awareness among Singaporeans of the need to plan, save and invest for retirement. Another interesting trend is that more than half the the new CDP accounts were opened by people in their 20s to early 30s. This is also a trend we observe at Dr Wealth as young Singaporeans take a more proactive stance in planning their financials.
This is definitely a good trend and Dr Wealth serves as a one stop financial planning portal where Singaporeans can not only monitor their investments, but also compare the stock portfolio against the benchmark such as the STI ETF or S&P 500 ETF.
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However, there is generally a lot more focus on stock picking as opposed to investing in a diversified portfolio. This could be attributed as well to younger investors who tend to have higher risk appetite and aim for higher returns through concentrated portfolios. While it is good to study the investments before investing in them, investors should not neglect having a diversified portfolio allocation.
Dr Wealth helps to automatically categorize the stocks into relevant asset classes to make portfolio asset allocation a breeze. This allows investors to focus more on getting the desired portfolio instead of spending time and effort trying to track their portfolios.
Having a diversified portfolio will help reduce volatility in the portfolio and also give a more consistent return over time. A diversified portfolio also has lower risks of getting impacted heavily by a single investment going bad.