Micro-investing: A Complete Guide to Beginners & Budget Investors

Looking to invest in stocks but have limited funds? You now have a new opportunity to grow your wealth through micro-investing services offered by investing apps. Can you make money from micro-investing? The answer is yes! You can create and manage an investment portfolio with even a tiny sum of dollars and gradually build wealth over time. 

Additionally, micro-investing enables you to purchase high-growth stocks like Netflix and Google at a fraction of their stock values. Regardless of how much you have, you can start your journey to wealth today with fractional share services. To learn more about micro-investing and how to grow your wealth, keep reading.

What Is Micro-Investing?

Micro-investing is a new approach to investing that allows investors to invest small amounts of money in stocks or ETFs with high share prices.

Stocks like Netflix, Nvidia (NVDA), and ETFs, such as Vanguard Value ETF, whose denominations exceed USD100 or more, are now available to investors at a fraction of their prices. With a fractional share service, you can buy a portion of a Netflix (NFLX) for USD25 instead of a whole share of about USD300.

• Convenience and Efficiency

Besides, you can buy stocks through investing apps like Webull and Interactive Brokers, saving time and effort on regular investing. Most investing apps allow you to pre-set an autopilot order on how frequently, for instance, monthly or quarterly, you invest once you link up an app with a bank account.

• Robo-Advisor and Portfolio Management Services

Contrary to traditional investing, most micro-investing platforms offer Robo-advisor and investment portfolio services to make investing more manageable and efficient. 

A Robo-advisor on a micro-investing app can tailor an investment portfolio based on your criteria and risk appetite, monitor, and periodically rebalance your investments so that you can walk hassle-free in investing.

If you like managing your investments actively, micro-investing apps provide a portfolio management service allowing you to allocate and monitor your assets instantly.

Popular Micro-Investing Platforms

The following online trading apps are the most popular trading apps in Singapore you should not skip in deciding one suitable for your situation.

At a Glance:

1. Interactive Brokers for advanced investors for Fractional Share Investing and Advanced Investors

Features

• Low commission and margin rates
• Option trading services across 150 markets
• Advanced features for sophisticated investors
• No minimum balance

Fees

• S$2.5 per order for SGX; S$1 per order for US stocks
• Inactivity fee: 0

Reviews

• Fractional share service
• Broad ranges of products
• Complicated pricing structures
• Complex trading interface

User experience

• Difficult to use
• Hotlines are inaccessible
• A specified exchange not allowed on its app

2. Tiger Brokers for Love-Bonus and Low-cost Investors

Features

• Access to markets, such as the US, Singapore, Hong Kong, China, and Australia
• Wide range of investment products
• Competitive commission

Fees

• S$1.99 per order
• Inactivity fee: 0

Reviews

• Low commission
• Access to more markets
• Sign-up incentives
• Few funding methods

User experience

• The app crashes all the time
• Hard to navigate on the app

3. PhillipCapital (POEMS) for Conventional Investors

Features

• Various investment options and market access
• Over 30 trading tools
• Offering CPD-linked or custodian account
• Multiple funding methods

Fees

• 0.08% per trade value (SGX)
• USD3.88 per trade value (US)
• Inactivity fee: 0

Reviews

• Well-established brokerage in Singapore
• Lack of adequate customer support
• High commission and brokerage fees

User experience

• Hard to contact customer service representatives
• High commission

4. Moomoo for Low-cost and Analytical Investors

Features

• Access to US, Singapore, & Hong Kong
• Level 2 market data
• Advanced analytical tools
• 24-hour newsfeed
• Low commission

Fees

• Lifetime commission-free trades on US market
• No custodian fee
• S$0.99 per order for SGX
• USD0.99 per order for US
• Inactivity fee: 0

Reviews

• User-friendly interface on navigating charts and bars
• Broad range of investment choices

User experience

• The interface runs smooth and the functions are comprehensive
• The customer service is not responsive

5. Syfe for Fractional Share or Robo-investing Investors

Features

• Up to 5-free trades per month for US stocks
• Customized personal watchlist
• Fractional share service
• Robo-investing on the same investment platform

Fees

• S$1,98 per trade for SGX
• 2 free trades per month and USD1.49 per trade after that for US market
• Inactivity fee: 0
• No platform, withdrawal or custodian fees
• No minimum investment account balance

Reviews

• Consult with a licensed investment professional for investment advice
• Not allow for CPF or SRS funds for investing
• Invest in mobile app only

User experience

• The user-interface isn’t friendly
• Comprehensive aids for investing like dark mode, pie charts

6. Saxo Capital Markets for Global Investors

Features

• Global access like Italy, Tokyo, and Frankfurt, besides Singapore, Hong Kong & US
• Various products, such as stocks, CFDs, Forex, Futures, and ETFs
• Abundant educational resources
• Incentives for active traders

Fees

• S$5 for SGX
• S$4 for US stocks
• Inactivity fee: 0

Reviews

• Access to over 50 markets worldwide
• Active referral programs
• Do not support the most popular “Meta Trader” platform
• High commission
• Lack of 24/07 support services

User experience

• Not user-friendly
• The user interface is old-fashioned

See Also: Moomoo vs Tiger Broker and ETF vs Mutual Fund vs Unit Trust

Benefits of Micro-Investing

Micro-investing popularizes the investing concept to the public. Below are benefits: 

• Investment popularization: Micro-investing allows beginners and small-sum investors to participate in rapid-growth companies in the stock market, which was only available to institutional and high-net-worth investors in the past.
• Low entry bar: Micro-investing permits you to begin investing with a few dollars. With small amounts of money, you can start investing in ETFs and fractional shares of stock and buy traditional funds or stock, requiring several hundred or thousand dollars each time.
• Consistent wealth build-up: Creating wealth is much easier and more accessible than before. Micro-investing platforms allow you to contribute to investments through their apps regularly. An autopilot function allows you to instruct an automatic program to let your money invest without any hassle.
• Better asset management: Investing apps let you better manage your investments anytime and anywhere. An app’s pre-set portfolio management program allows you to monitor and make changes, like rebalancing your portfolio to align with your goals.
• Diversifying investments: You can use micro-investing to diversify investment risks. Assets like ETFs, once reserved for high-net-worth investors, are now available to small-sum investors.
• Product varieties: You have more investment choices now because vast quantities of investment tools are available, like ETFs and mutual funds besides stocks. An ETF or mutual fund comprises numerous stocks, bonds, or other assets you can invest with a small amount of cash.

Risks and Considerations

Micro-investing involves risks, particularly during market turmoil. You should consider the following when making investment decisions:

• Market volatility and investment risks: Unlike depositing in a savings account, stock investing is far-from-guaranteed. An up to 15% market adjustment in one day is not unusual during a crisis. Besides, investors should brace for regular ups and downs in investment markets. 
• Risk tolerance level: Realistically evaluating your risk acceptance level and investment goal helps you understand your capability to handle market fluctuations. A trustworthy financial advisor is one you should look for valuable information about this.
• Potential fees and investment costs: Though legally required to disclose fees related to investing, investment companies collect charges in other aspects like asset custody, dividend collection, platform fees, and withdrawal frequency. 

You should go through the agreements with a lawyer or financial advisor’s aid and understand how investment accounts from a company charge clients.

• Understanding goals and strategies: An investment plan with clearly defined investment goals and objectives is crucial in making successful investments.
• Professional advice: A trusted financial advisor can give you valuable input in drafting a successful roadmap and avoiding pitfalls in the investment process.
• Tax about investing: Tax may influence investors’ decisions regarding markets and investment tools. Fortunately, Singapore investors need not pay taxes when investing in Singapore and US markets. 

Under the current tax laws of both countries, Singapore has no rules or regulations requiring taxes on capital gains and dividend payments from companies. 

In contrast, the US government only requires non-American citizens to pay the withholding tax of ⅓ of dividends received. The capital gains are free from taxes.

Tips for Successful Micro-Investing

Micro-investing offers access to investment markets; however, investing involves risks, going side-by-side with returns. The following tips give you guides on making decisions.

• Setting realistic investment goals: With a clearly defined and achievable investment goal, you can formulate an inclusive plan, thus increasing the success chance of achieving the objectives. 
• Dollar-cost-averaging: The strategy involves lowering stock prices through constantly purchasing stocks and reaching an overall lower cost basis no matter the stock price. Over time, investors can profit from a rising stock trend from a much lower base.
• Creating a diversified investment portfolio: You should create a well-diversified investment portfolio and reduce the falling price risk by avoiding a few stocks in a portfolio, thus making the investment more stable.
• Exchange-traded funds and mutual funds: Instead of buying stocks and further reducing risks, you can invest in ETFs or mutual funds comprising hundreds of stocks. An ETF or mutual fund is a collective investment scheme held by numerous investors to invest in stocks with plentiful financial resources. With ETF and mutual fund investing, you reduce your risk to a greater extent.
• Always keep an eye on your portfolio: Regularly monitoring your portfolio and adjusting relevant changes like rebalancing are more critical than others. No doubt information does decide our way of thinking in the modern world. Market changes and trends can alter investment courses. Learning to invest is the best strategy to outperform.

Final Thoughts

Micro-investing allows beginners and budget investors to participate in stocking investing. Integrating it with investment techniques, you can achieve financial well-being by investing in ETFs and stocks in line with your risk tolerance level.

Key Takeaways

• Micro-investing allows beginners and budget investors to invest in ETFs and stocks.
• Investors can use dollar-cost-averaging skills to increase wealth.
• Robo-investing aids investors by auto-investing and managing portfolios.
• You should examine terms and conditions, especially fee schedules, before choosing an investing platform.
• Regular monitoring and adjusting your portfolio are a must.

If you’re interested in exploring investment opportunities but need low-cost financing to maximize your chances of success, Instant Loan can help. We compare loan quotes from top banks to save you time and effort. Plus, our service is free and there’s no obligation to apply. Request free loan quotes today to compare your options and take the first step towards achieving your investment goals.