facebookUnderstand that SG market is pretty dead compared to the US. Since I'm still young, should I sell all of my holdings in SG and move over to the US? - Seedly
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Anonymous

15 Apr 2021

Understand that SG market is pretty dead compared to the US. Since I'm still young, should I sell all of my holdings in SG and move over to the US?

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    What are your thoughts?

    Tim Phillips (ProsperUs)

    Tim Phillips (ProsperUs)

    15 Apr 2021

    Level 7Β·Head of Content at ProsperUs, CGS-CIMB Securities

    It's always worth having some exposure to your home market so, in Singapore's case, it would be in "yield" names that are highly liquid, such as REITs or the leading banks.

    As for the US, you're young and you definitely need exposure. First off, it's important to understand why. Take the total market cap (so the value of all shares combined) of the respective stock markets. In the US, the total market cap is about US$45 trillion. Singapore? It's close to US$600 billion.

    That illustrates the size and breadth of the market (as well as opportunity set) in the US. It's also because global companies list shares in the US - you'll find Alibaba, Nestle, JD.com, TSMC, Toyota, Sony, Nintendo to name just a few.

    In Singapore, that international slant just doesn't exist. Then you move on to liquidity of the stock markets, so basically the total value of all shares traded on a daily basis. Liqudiuty supports bigger price action/movement so it should be seen as a positive, overall.

    In the US, the average daily volume (ADV) in 2020 of the Nasdaq + NYSE was around US$195 billion. On the Singapore exchange, in 2020 the ADV was US$2.1 billion.

    The above plays out in all sorts of ways but, crucially, it also means institutional and pension fund money just doesn't flow into Singapore on the level that you want because the markets aren't deep or liquid enough.

    Bottom line? Definitely have more overall exposure to the US but don't completely discount Singapore because the opportunity set here serves a purpose. However, keep it limited to highly liquid, quality and large cap companies that pay sustainable dividends.

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      I started off investing in the SG market as well. Majority of it were REITs. Over the years, I realised it doesn't meet my investment goals in terms of growth, etc., and dividend yields are too "stable". I recalled selling off STI ETF at almost a 30% loss and never regretted my decision after. Of course, you should ascertain if you would like to wait it out for things to stablise to mitigate your losses/profits. Perhaps take this time to understand what's your investment strategy when investing in Us. US markets are way exciting when it comes to growth over the long term horizon, but super volatile as well. You need to manage your emotions if markets go bearish (at one time my portfolio was negative 50%). There's also a ton of competitive brokers out there offering zero or low commission trades (TD, Saxo, etc.) for US stocks.

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        Hi there!

        I'm personally all for US over Singapore market.

        However, I feel it is unfair to say SG...

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