Singapore’s Straits Times Index (SGX: ^STI) hit a new high on Monday.
This milestone achievement comes after the local index delivered a pleasing 24% in total returns in 2024.
Not to be outdone, the US-based S&P 500 (INDEXSP: .INX) index rose by more than 23% last year. The performance was topped by the tech-heavy NASDAQ Composite’s (INDEXSP: .INX) strong return of nearly 29%.
Said another way, investors today are spoilt for choice in choosing where they should invest their money.
More importantly, where should you invest money in 2025?
Singapore’s Magnificent 3 takes on the US’s Magnificent 7
It’s no secret that Singapore’s STI has benefitted from the growth of its three major banks.
The magnificent trio of DBS Group (SGX: D05), Oversea-Chinese Banking Corporation (SGX: O39) or OCBC and United Overseas Bank Ltd (SGX: U11) or UOB have gained from the higher interest rates over the past two years.
Currently, the “Big Three” banks account for over 52% of the index’s weight.
But if you are looking beyond the banking sector, the US stock market offers a wider variety of businesses.
Consider the Magnificent 7 stocks.
Amazon.com (NASDAQ: AMZN) is best known for its online retail site. But beyond its popular site, there’s a trio of fast-growing businesses, namely Amazon Web Services (AWS), advertising, and subscription services.
Speaking of brand recognition: when you think of Apple (NASDAQ: AAPL), the iPhone comes to mind.
Of course, the popular smartphone maker also manufactures other key devices such as iPads, MacBooks and the Apple Watch. That said, the fastest-growing piece of Apple’s empire is services revenue.
It’s a good thing too as services provide a source of recurring sales.
Next, Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META) form a duopoly in the digital advertising market.
Both companies exhibit their strength in different ways.
Meta’s family of apps including Facebook, WhatsApp, Instagram and Messenger, was used by over 3.3 billion people daily.
Alphabet, on the other hand, boasts seven products and platforms with over two billion users, anchored by its popular Google search engine.
YouTube and Google Cloud are also major revenue contributors.
Interestingly, Alphabet, Amazon, Meta, and Microsoft are all customers of Nvidia (NASDAQ: NVDA), in particular, its graphics processing unit (GPU).
Simply put: if AI is a race, then Nvidia is supplying the tools.
Nvidia GPUs have been selling like hotcakes as demand for generative AI (GenAI) solutions rises.
Speaking of customers, Tesla (NASDAQ: TSLA) makes most of its revenue from selling electric vehicles but is making a pivot into services where it will be able to earn higher gross margins.
In sum, there are plenty of US investment choices if you decide to wander behind Singapore shores.
More importantly, all of the above are recognisable brands.
Get Smart: It’s not about what you buy but what you want
The question remains: it is worth exploring beyond Singapore stocks?
In truth, it depends on your investment goals.
While Singaporean stocks offer attractive dividends, a world of investment opportunities exists beyond its borders, offering benefits the local market cannot provide.
If you choose the right stocks, the capital gains can be significant.
For instance, in the Smart All Stars Portfolio, three out of every 10 investments from 2022 have at least doubled in value.
That’s what’s possible when you take a leap into the world of US stocks.
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Disclosure: Chin Hui Leong owns shares of Alphabet, Amazon, Apple, DBS Group, Meta, Microsoft, OCBC, and UOB
