You may have heard of a popular folk tale called “The Frog in the Well”.
The story is about a happy frog who lived in a small well and had enough to eat and drink.
In short, he felt like the king of the world.
But when a turtle from the great sea came to visit him, the frog realised that his perspective was limited and that there was a much larger world outside for him to explore.
My behaviour was similar to this frog when I started investing in the Singapore stock market way back in 2005.
The local stock market offered interesting stocks to invest in but all this time, I did not realise that my perspective was limited.
There was a whole big world of investment opportunities out there waiting to be seized.
The key is to expand your investment horizon and open your mind up to opportunities outside of Singapore.
Swimming with the familiar
When you first start your investment journey, it’s natural to stick with companies that are both familiar and accessible.
That was what I experienced when I first dipped my toes into the stock market nearly 20 years ago.
My first stock was the IPO of Suntec REIT (SGX: T82U) which I am still holding on to.
Along the way, I also picked up stocks of other solid REITs such as Keppel DC REIT (SGX: AJBU) and Mapletree Industrial Trust (SGX: ME8U).
Blue-chip names such as DBS Group (SGX: D05) and Singapore Exchange Limited (SGX: S68) also resonated with me and I included them in my expanding portfolio.
But even after all these additions, I felt that something was missing.
REITs are categorised as real estate stocks while Singapore’s Straits Times Index (SGX: ^STI) of blue-chip names has the three local banks making up slightly more than half of its total weightage.
This fact meant that the local market could only provide me with limited exposure to certain sectors.
Broadening my scope
Armed with this knowledge, I ventured forth to read up more on stocks outside of Singapore.
The first and most obvious destination was the US market as it is one of the largest in the world with an impressive range of businesses.
By broadening my scope, I was able to pick companies in wide-ranging sectors that I could never find in Singapore.
Although I started late in investing in the US market (2020), it is a case of “better late than never”.
My portfolio now contains stocks of Starbucks (NASDAQ: SBUX), a worldwide coffee chain, Visa (NYSE: V), a global payments provider, and Meta Platforms (NASDAQ: META), a social media behemoth.
These companies are in sectors that are not present within the Singapore stock market.
Hence, broadening my investment horizon has also given me additional choices to fill up my portfolio with different stocks to help further diversify it.
Into the unknown
Once I realised how limited I was in just focusing on local stocks, the sky became the limit.
I started reading up and researching stocks that I had not encountered before.
By venturing into the unknown, I could further open up my mind to different types of businesses and industries to which I could allocate my capital.
There are up-and-coming businesses such as Toast (NYSE: TOST) that run a software-as-a-service platform to supply food and beverage businesses with everything they need to operate smoothly.
Along the same lines, cybersecurity firm Zscaler (NASDAQ: ZS) operates a platform that protects its customers from cyberattacks and data loss.
It doesn’t have to be unfamiliar companies.
US-based Rollins (NYSE: ROL) which provides pest control services and protection against termites, rats, and insects to more than 2.8 million customers globally.
Termites are not only a problem overseas but also in Singapore.
Rollins entered the Singapore market via the acquisition of Aardwolf Pestkare (Singapore) Pte Ltd back in 2018.
The termite exterminator may be in Singapore, but there is no option to invest in its business on the Singapore exchange.
In fact, the above are just a few examples of businesses in sectors that you cannot invest in Singapore.
With this expanded scope, you can then find many more places to park your money to enjoy both growth and dividends.
Bountiful rewards await
It has been a rewarding journey for me since I started investing in US stocks.
My positions in both Apple (NASDAQ: AAPL) and Alphabet (NASDAQ: GOOGL) have more than doubled in share price since I purchased them.
Overall, my US portfolio is displaying a healthy capital gain while also enjoying increasing dividends from companies such as Nike (NYSE: NKE) and Tractor Supply Company (NASDAQ: TSCO).
What did I do to achieve the above?
It’s nothing different from what I have been doing all along with my Singapore stocks.
Buying and owning solid growth stocks with great long-term prospects that can help you to grow your portfolio at a faster clip.
Of course, you must select the right US stocks to include in your investment portfolio.
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Disclosure: Royston Yang owns shares of Suntec REIT, DBS Group, Singapore Exchange Limited, Keppel DC REIT, Mapletree Industrial Trust, Nike, Starbucks, Visa, Meta Platforms, Apple, Alphabet, and Tractor Supply Company.
