There are a lot of people who wants to invest, but do not know how to start their investment. I personally think that the best way to start to learn is to read investment books and online forums and there are many investing strategies, value investing, dividend investing, dollar-cost averaging. This is confusing for many people, myself included. And how does one really start?
For myself, I cannot commit a huge amount of money at one go and am not experienced in analysis. Therefore, I think dollar-cost-averaging (DCA) is a good way to start off. One of the key factor for DCA is to find a broker which has the lowest commission. But most of the brokers in Singapore has a minimum charge per trade, usually S$25, and this will add up to a huge costs.
From my research, there are 3 ways for Singapore investors to do DCA.
i. OCBC’s Blue Chip Investor Plan (link) – 19 blue chip counters & 1 ETF (Nikko AM STI ETF)
ii. Philips Capital’s Share Builders Plan (link) – 20 counters
iii. POSB’s Invest-Saver (link) – 1 ETF (Nikko AM STI ETF)
My DCA method
Personally I like blue chip counters and the Nikko AM ETF. Blue chip counters have strong fundamentals and will grow steadily under a good management team. For blue chip DCA, I will be using the OCBC Blue Chip Investor Plan as it has lower fees than Philips Capital. Furthermore, I have a few OCBC bank accounts which makes it easier for me to manage. I believe this will allow me to own blue chip counters at a lower cost slowly. (Eg, each lot of Keppel Corp costs more than S$10k as of my time of writing now). Furthermore, DCA will allow me to reduce my timing risk.
For the Nikko AM STI ETF, I will be using Standard Chartered’s equity trading platform (link). This is because each lot of Nikko AM STI ETF is 100 units and is more manageable and Standard Chartered’s fees is very low. So, I can purchase Nikko AM STI ETF whenever I want to.
Hopefully, with the above method, I will be able to build up a portfolio of blue chip counters and ETF over time.
Please feel free to comment on my above method.