Invest In Stocks Using A Monthly Investment Plan
Use a dollar-cost averaging while reducing your commission fee. What is there not to like?
Just a year ago, investing in blue chip stocks listed on the Singapore Exchange (SGX) seems like a rich man’s game not meant for everyone. That was because board lot sizes were only available for purchase in multiples of 1,000. In those days, it was difficult for retail investors to invest in all companies, since some stocks such as OCBC would cost roughly S$10,000 per lot.
Since then, minimum lot size have been reduced significantly to 100 units allowing your favorite blue chip counter to be within reach.
While the above mentioned is helpful for investors who would like to get started without a sizable capital, it poses yet another problem, and that is, the high commission cost that one incurs when buying stocks in small units. Frequently, retail investors still have to pay a minimum fee of about $25 per transaction regardless of the value of the stocks that they are purchasing.
Some stock brokerage houses have introduced monthly investment plans as a way to help offset the problem of incurring significant commission cost. As the name suggests, these investment plans allow you to invest a fixed amount of funds each month into buying the stocks of your choice.
They provide an affordable and hassle-free way for those who want a relatively easy way to invest. In addition, investors are also able to effectively take advantage of "dollar-cost averaging" thus benefiting those who do not have the time or the patience to be monitoring the stock market regularly and react accordingly to fluctuations.
Where to go for Monthly Investment Plans ...
