Investing for the first time is intimidating.
With countless financial products, from stocks and real estate investment trusts (REITs), to exchange-traded funds (ETFs) and bonds, new investors often get lost trying to find the “next big thing”.
Many investing mistakes are only obvious after money is lost.
Save yourself from expensive mistakes with these ten things that I wish I knew before I started investing:
1. Investing Is a Long Game
Short-term share price swings are usually noise.
Investment performance is driven by the underlying business’s ability to grow earnings, cash flow, and dividends.
The real win comes from staying invested in strong businesses long enough for compounding to work.
At a hypothetical 6% annual return, a 30-year investment of S$10,000 with dividends reinvested will give you about S$57,000.
By starting 10 years later, you will only have approximately S$32,000.
2. A Good Company Isn’t Always a Good Investment
A strong brand with competitive advantages does not eliminate valuation risk.
Overpaying for a great business can still produce disappointing results when much of the optimism has been priced in.
Checking metrics like price-to-earnings (P/E), price-to-book (P/B), and free cash flow helps assess whether the current price is reasonable.
3. High Dividend Yields Can Be Traps
High dividend yields are attractive.
However, abnormally high yields of 7% to 10% often hide red flags like falling share prices, high debt, or an unsustainable payout ratio.
Rather than obsessing over large payouts, look at what’s driving the dividends.
Focus on companies with steady cash flow, reasonable debt, and a reliable dividend history.
Regardless of economic conditions, Singapore’s three big banks, DBS Group Holdings Ltd (SGX: D05), United Overseas Bank Limited (SGX: U11), or UOB, and Oversea-Chinese Banking Corporation Limited (SGX: O39), or OCBC, have never stopped paying dividends.
4. Dividend Reinvestment Is a Compounding Engine
Spending your dividends feels great.
But reinvesting them turns these payments into more shares without additional capital from you.
These shares not only pay more dividends in the future, but also increase your total returns with capital appreciation.
5. 10 Holdings Aren’t Automatically “Diversified”
Having a lot of different stocks does not automatically mean you are diversified.
Owning DBS, OCBC, and UOB gives you three tickers, but they are 100% concentrated in Singapore and the banking sector.
As banks and REITs offer substantial dividends, Singapore investors tend to have the bulk of their portfolios in these sectors, increasing concentration risk.
True diversification is owning quality assets across sectors, countries, business models, and asset types.
Consider a portfolio that includes a Singapore bank as a dividend anchor, a consumer defensive stock like Sheng Siong Group Ltd (SGX: OV8), a strong REIT like CapitaLand Integrated Commercial Trust (SGX: C38U), and a US growth stock like NVIDIA (NASDAQ: NVDA).
6. Singapore Investors Don’t Have to Stay Local
Unlike the Singapore market, which offers dividends from mature businesses, the US stock market offers opportunities in high-growth listed companies that often do not have a local equivalent.
Your Singapore stocks can be your source of steady income, while investments in US stocks or global ETFs are your key to broad growth.
Be wary of currency risks and tax considerations when you invest overseas.
7. Market Crashes Are Features, Not Bugs
Market corrections are a normal part of investing.
Economic uncertainty, unexpected global events, and investor sentiment can all cause market fluctuations.
Look beyond share prices and examine metrics such as revenue and earnings growth, free cash flow, and balance-sheet strength to evaluate whether the investment thesis still holds.
8. Trading Too Often Destroys Compound Returns
Taking a quick 15% gain feels like winning.
After all, the profit is only guaranteed when it’s cashed out.
However, trading too often can cut long-term winners short and incur unnecessary transaction costs.
If prices keep climbing, you might have to buy back at a higher price or miss dividend payouts while waiting on the sidelines.
Sell based on deteriorating fundamentals or extreme overvaluation, not minor price spikes.
9. Your Behaviour Is Your Biggest Risk
Emotional investing is a trap.
When you chase surging stocks due to the fear of missing out (FOMO), panic-sell during market fluctuations, or blindly follow social media and “insider” tips, you can lose more than any market crash would cost you.
Establish a structured, rule-based process such as clear criteria for when you buy and sell to protect your capital.
10. Starting Early Beats Starting Perfectly
Small, consistent investments beat sitting on cash as you wait for the “perfect” stock or for that market bottom that might never come.
You might have thought OCBC hit its peak when it traded at approximately S$20 per share in January 2026 and wanted to wait for a correction.
However, its shares have continued to climb and traded at S$32.01 as of 25 September 2026.
Those who waited on the sidelines for a correction that didn’t come missed a 60% share price gain and a total of S$1.05 per share in dividends.
Instead of waiting, start with a small investment of S$1,000 to S$5,000 in quality companies.
Thereafter, use dollar-cost averaging to invest regularly and let time do the heavy lifting.
Checklist Before Buying A Stock
Before buying a stock, take time and go through these four points:
- Business: Do I understand how this company makes money?
- Health: Is debt manageable and backed by positive free cash flow? Are dividends sustainable?
- Valuation: Is the P/E or P/B ratio reasonable relative to its historical average? Is the share price too high or a steal?
- Portfolio: Where does this holding fit in my existing portfolio? Will it increase concentration risk, or does it help to diversify my investments?
Get Smart: Your First Investment Is Really a Lesson in Patience
Singapore investors have access to a wide range of investment opportunities, from local dividend stocks and REITs to global growth companies and ETFs.
There’s always the next correction, hot stock, and investment trend.
Rather than chasing trends, start early and understand what you own to stay invested through different market cycles and enjoy the power of compounding.
If the market falls further, will you be ready… or fully invested?
This is where most investors get it wrong. Our FREE report shows how to stay prepared for what comes next. Get it free here.
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Disclosure: Wenting A. does not own any stocks mentioned.
