Why I Would Continue Buying SGX-Listed Shares

Investing in the Singapore Exchange (SGX) may not offer the same high-growth potential as markets like the US, but it remains a solid choice for conservative investors seeking stability, passive income, and steady growth. Here’s why I would continue investing in SGX-listed shares, along with some key considerations.

3 Key Reasons to Continue Investing in SGX

1. Parent Currency – No Forex Risk

One of the biggest advantages of investing in SGX-listed stocks is that they are denominated in Singapore Dollars (SGD). For Singaporean investors, this eliminates foreign exchange (forex) risk. When investing in US stocks, currency fluctuations can significantly impact returns. A strengthening SGD against the USD could erode gains, even if the stock performs well. By sticking to SGX-listed shares, I avoid this uncertainty and enjoy more predictable returns.

2. Dividend Play for Passive Income

Many SGX-listed companies, particularly REITs (Real Estate Investment Trusts), banks, and blue-chip stocks, are known for their consistent dividend payouts. Unlike growth stocks that rely on capital appreciation, dividend-paying stocks provide regular passive income, which is ideal for retirees or income-focused investors. The SGX has a strong dividend culture, with some REITs offering yields of 5-7% annually, making it a reliable source of cash flow.

3. Steady (Though Slow) Growth

While SGX-listed stocks may not deliver explosive growth like US tech stocks, many companies exhibit steady, sustainable growth. Businesses have resilient business models that perform well over the long term. Additionally, sectors like banking, healthcare, and infrastructure tend to grow gradually but reliably, reducing volatility in a portfolio.

The Cons of Investing in SGX

1. Lower Growth Compared to US Markets

The biggest drawback of SGX-listed stocks is their slower growth trajectory compared to US markets. The US has tech giants that deliver multi-bagger returns, while Singapore’s market is dominated by traditional industries (banking, real estate, commodities). Picking high-growth stocks in the US requires strong research and risk tolerance, whereas SGX investing is more about stability and dividends.

2. Slow Recovery After Market Crashes

SGX-listed stocks, particularly those in the Straits Times Index (STI), tend to recover much slower after global downturns compared to US markets.

Example: The 2008 Financial Crisis

STI ETF Performance:

Pre-Crash Peak (Oct 2007): ~3,800 points

Post-Crash Low (Mar 2009): ~1,600 points (~58% drop)

Time to Recover: The STI took almost 17 years (until 2025) to break previous high. 

This shows that while SGX provides stability, it may lag in rebound speed after major crashes. Investors must be patient and hold for the long term.

Conclusion: SGX is Ideal for Stability & Income

While the SGX may not offer the high-octane growth of US markets, it remains a safe, dividend-rich, and forex-risk-free investment option. For investors seeking passive income, capital preservation, and steady growth, SGX-listed shares are still a strong choice. However, those chasing rapid capital appreciation may need to diversify into US or global markets.

Final Takeaway:

Stay in SGX for dividends, stability, and low forex risk.

Diversify into US markets if seeking higher growth (but accept higher volatility).

Be patient—SGX investments may take longer to recover, but they provide consistent returns over time.

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