With Singapore’s reopening, malls and food and beverage outlets are seeing higher foot traffic.
Customers are spending once again as air travel resumes and more people take a long-awaited holiday.
But even as countries open up, some new worries have surfaced.
United Overseas Bank Ltd (SGX: U11), or UOB, published its ASEAN Consumer Sentiment Study 2022 early last week and the results tell a story.
Around two-thirds of Singaporean respondents were meaningfully concerned about finances.
To break things down further, two-thirds were concerned with rising household expenses while 61% were worried about rising financial commitments.
Singapore residents have the highest income among ASEAN countries, yet the proportion of Singaporeans who were worried exceeded the regional average of 55%.
Don’t dream it’s over
Despite the deluge of negative news, there is something you can do if you want to secure your financial future.
Yes, I am talking about investing your money.
2023 will see the GST rate rise from the current 7% to 8%.
Meanwhile, the cost of owning a car has hit a new record high, while HDB resale prices have increased for 26 consecutive months.
The Monetary Authority of Singapore expects full-year overall inflation to come in at between 5% and 6%, with global inflation is likely to remain elevated as commodity markets face supply constraints.
The need to do something to buffer against inflation, no doubt, is urgent.
Investing has, given time, proven to grow your money above the long-term inflation rate.
Using the US S&P 500 as an example, it has provided a total return of 10% per annum over the past five decades.
The total return comprises capital gains from rising share prices as well as the dividend yield you receive on the shares you own.
Taking baby steps
But if you have not yet invested, there is no need to fret.
You can take baby steps by slowly allocating your money to strong, dependable businesses.
Three types of stocks are suitable for a beginner investor.
The first is large, blue-chip companies with long track records of weathering economic storms and recessions.
Some examples include Singapore’s largest bank, DBS Group (SGX: D05) and also the country’s sole bourse operator Singapore Exchange Limited (SGX: S68).
Both these companies also pay attractive quarterly dividends with yields of 4.3% and 3.4%, respectively.
The second is REITs with strong sponsors and a history of raising their DPU, such as Mapletree Industrial Trust (SGX: ME8U) and Keppel DC REIT (SGX: AJBU).
The former provides an attractive yield of 5.7% while the latter’s distribution yield is 5.5%.
Finally, you can consider parking some money in recession-resistant industries such as healthcare.
Raffles Medical Group (SGX: BSL) and IHH Healthcare Berhad (SGX: Q0F) are two candidates that qualify.
Get Smart: Locking in a secure financial future
As the saying goes, when the going gets tough, the tough get going.
There’s a tried and tested way to secure your financial future, and that’s to start investing your money if you have not already done so.
The world will always be full of worries, but you can dispel them by committing to a pattern of investment that stands the test of time.
By socking away some money regularly into blue chips, REITs and resilient stocks, you can build a portfolio that can carry you through to your retirement.
Is it a good time to buy into Singapore REITs? If you’ve thought about it, then our latest REITs guide will be an essential read. This exclusive pdf report shows you why REITs are still excellent assets, what sectors to look out for and how to find good REITs today. The info inside can help you build a solid retirement portfolio. Click here to download it for FREE.
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Disclaimer: Royston Yang owns shares of DBS Group, Singapore Exchange Limited, Mapletree Industrial Trust, Keppel DC REIT and Raffles Medical Group.
