Feasibility of Dollar cost averaging in Philips Capital, and alternative trading platforms
Links
http://thecollegeinvestor.com/1332/invest-lump-sum-small-chunks-dollar-cost-averaging/
http://www.moneychimp.com/features/dollar_cost.htm
https://www.fool.com/how-to-invest/2014/11/12/dollar-cost-averaging-your-way-to-wealth.aspx
http://forums.hardwarezone.com.sg/stocks-shares-indices-92/%2Aofficial%2A-standard-chartered-bank-online-equities-trading-5287938.html
https://the-international-investor.com/investment-faq/stock-broker-account-safety
http://dollarsandsense.sg/standard-chartered-to-introduce-minimum-commission-fee-for-online-brokerage-trades/
https://heartlandboy.com/standard-chartered-brokerage/
https://the-international-investor.com/investment-faq/stock-broker-account-safety
http://dollarsandsense.sg/7947-2/
Pros
1) You Don't Have The Money Upfront
2) Psychological appeal: if the market dips, people will be happy because DCA will be saving them money; and if the market goes up, people will be happy regardless.
3) You don't believe in market timing. In volatile stock markets / stock counters, you don't believe you can time it well. Middle of the market cycle.
4) Your attention can be spent on things you view are more constructive rather than focusing on market timing. Minimizing the emotional toll of the stock market's price movements.
5) Dollar cost averaging into the market can help you psychologically get started investing. You don't have to conduct research and make a decision each time you plunk down money.
6) There are two unique scenarios where dollar-cost averaging wins every time, that you should be aware of. First, if you invest your lump sum right before a market crash (October 1987, October 2007), dollar cost averaging will outperform over time. Second, if you invest directly before a market slump (think summer of 2000), where there is no market crash, but a drastic decline over a longer period of time, dollar cost averaging will also outperform
Cons
1) It Hurts Diversification and Portfolio Allocation
2) It Doesn't Make Sense if you have a Lump Sum.
3) You are not fully exploiting market cycles. If you are absolutely certain you can buy at the market bottom or sell at top, you should do so.
4) If stock is going up, returns will generally lag behind when you can just invest lump sum.
5) You incur higher transaction costs.
6) You can simply hoard cash, then cash in when there is irrational movement in stock prices rather than reducing your base capital.
7) If the stock selected has poor fundamentals, it will continue to decline because of poor fundamentals. DCA removes market timing and emotional toll but not homework for stock selection.
Insights
CPF is a form of dollar cost averaging except that interest rate is consistent.
reverse dollar cost averaging - Withdrawal a fixed amount from your savings to encourage disciplined spending.
https://www.poems.com.sg/rsp/SBP%20Infosheet%2020170525.pdf
To reap the optimal award from using Philips SBP,
1)I should invest a minimum of $600 monthly into 2 stocks to keep the $6.42 expenses to one percent. To optimise expense ratio, I should invest just below $1000 via DCA.
2) I should also choose e-statement, and ensure generally keep my holdings within Philips to minimise transfer charges.
3) My dividend earnings must be more than $100 to keep dividend charges to 1%, and ideally reach above $5000 to ensure that I reap maximum benefit from the cap on dividend charges.
4) Scrip dividends and corporate actions are most likely one off.
Cost benefit analysis into Philips DCA plan
1) I believe I am unable to optimise the results I should be getting. It is rather inefficient to my needs and I cannot get the bang out of my buck.
2) I don't have a second stock I am interested in investing at the moment since I stopped my DCA into OCBC.
3) Philips DCA plan is superior to other brokers as it allows reinvestment of any excess funds present in the account (dividend payout, corporate action etc) without manual intervention. Basically I isolate all its holdings within this account and it will grow organically and it is truly passive.
3) Nonetheless, I am already very used to Philips trading platform and mobile app and it is hard to shift to a newer vendor. However, I can simply use the old platform for investment analysis and seminars and use a cheap vendor like SCB / SAXO to minimise transaction costs. I will never use the mobile platform to trade by the way so no harm done.
Philip Investment Accounts (Prepaid)(If I transit to one trade every quarter) https://www.poems.com.sg/012commission/
https://www.poems.com.sg/FinancialServices/CC_INFOSHEET.pdf
Strictly applicable for trades executed in the Phillip Investment Accounts (Prepaid) for the Promotional period of 2nd January 2017 till 31st December 2017
Rates Minimum
Cost Benefit Analysis of SCB
Working in a custodian bank made me realise the risks that it entails. SCB priority and SAXO (beyond my reach) essentially has the lowest charges in Singapore. I will be focusing on Personal Banking SCB account.
In most countries, there is no CDP as most shares and financial instruments are held in a storeroom, aka custodian bank. Custodian banks basically administer corporate actions and the movement of securities. They deal with similar issues and instruments like investment banks, but merely facilitate the movement rather than the creation of financial instruments.
Nominees are essentially a legal structure created to protect the investor securities. There are legal frameworks like Volker rule to prevent the co-mingling of the bank's and investor securities. Conducting of quarterly health check and creation of SOPs ensure that in the event of liquidation, the operating of the nominee could simply continue albeit under a different legal owner. There might be transition issues but generally in my humble opinion the custodian and nominees legal structure are fundamentally sound, albeit untested.
Electronic form with direct registration. The direct successor to traditional certificates. Shares are in dematerialised form, meaning their existence is recorded by the central securities depository in the country in which the stock is listed. Your name appears on the register of shareholders (or in some countries, on a sub-register operated by the central securities depository).
Pooled nominee accounts, also known as omnibus accounts. The shares are usually held in electronic form, but the name that appears in the records as the legal owner is a nominee company, which is usually owned by your stock broker (nominee companies are explained in more detail below). Stocks held in this way are referred to as being held ‘in nominee’ or ‘in street name’, depending on the country. Your name does not appear on the register of shareholders.
Designated nominee or sole nominee accounts are mainly for institutional investors to combine their pooled holdings into one box so that they can trade and manage holdings amongst many subsidiaries.
For my personal needs
1) Adhering to the Peter lynch and Warren buffet philosophy, I do not go for IPOs as it is a winner's curse. Companies are too untested and unproven and may be de-listed eventually if performance is poor. You are definitely overpaying for a company if you successfully bid for it.
2) I am a strong proponent of reducing transaction costs, and SCB is far superior
https://heartlandboy.com/standard-chartered-brokerage/
3) There is no charting tools on SCB. I dont't use charting anyway, and if I really need to there is Philips to fall back on.
4) SRS cannot be linked to SCB.
5) Can I attend AGM if I have shares in SCB? Yes, but you must call the SCB trading hotline to ask. Most likely you will not be able to, as you are not a large shareholder, and/or the company that SCB is liaising with rejected the request.
6) I don't contra trade, short sell or go for derivatives.
7) Investment Seminar 5th and 6th August at Suntec. Try to score for freebies and promotions at the investment services providers there.Learn to wait it out.
http://thecollegeinvestor.com/1332/invest-lump-sum-small-chunks-dollar-cost-averaging/
http://www.moneychimp.com/features/dollar_cost.htm
https://www.fool.com/how-to-invest/2014/11/12/dollar-cost-averaging-your-way-to-wealth.aspx
http://forums.hardwarezone.com.sg/stocks-shares-indices-92/%2Aofficial%2A-standard-chartered-bank-online-equities-trading-5287938.html
https://the-international-investor.com/investment-faq/stock-broker-account-safety
http://dollarsandsense.sg/standard-chartered-to-introduce-minimum-commission-fee-for-online-brokerage-trades/
https://heartlandboy.com/standard-chartered-brokerage/
https://the-international-investor.com/investment-faq/stock-broker-account-safety
http://dollarsandsense.sg/7947-2/
Pros
1) You Don't Have The Money Upfront
2) Psychological appeal: if the market dips, people will be happy because DCA will be saving them money; and if the market goes up, people will be happy regardless.
3) You don't believe in market timing. In volatile stock markets / stock counters, you don't believe you can time it well. Middle of the market cycle.
4) Your attention can be spent on things you view are more constructive rather than focusing on market timing. Minimizing the emotional toll of the stock market's price movements.
5) Dollar cost averaging into the market can help you psychologically get started investing. You don't have to conduct research and make a decision each time you plunk down money.
6) There are two unique scenarios where dollar-cost averaging wins every time, that you should be aware of. First, if you invest your lump sum right before a market crash (October 1987, October 2007), dollar cost averaging will outperform over time. Second, if you invest directly before a market slump (think summer of 2000), where there is no market crash, but a drastic decline over a longer period of time, dollar cost averaging will also outperform
Cons
1) It Hurts Diversification and Portfolio Allocation
2) It Doesn't Make Sense if you have a Lump Sum.
3) You are not fully exploiting market cycles. If you are absolutely certain you can buy at the market bottom or sell at top, you should do so.
4) If stock is going up, returns will generally lag behind when you can just invest lump sum.
5) You incur higher transaction costs.
6) You can simply hoard cash, then cash in when there is irrational movement in stock prices rather than reducing your base capital.
7) If the stock selected has poor fundamentals, it will continue to decline because of poor fundamentals. DCA removes market timing and emotional toll but not homework for stock selection.
Insights
CPF is a form of dollar cost averaging except that interest rate is consistent.
reverse dollar cost averaging - Withdrawal a fixed amount from your savings to encourage disciplined spending.
https://www.poems.com.sg/rsp/SBP%20Infosheet%2020170525.pdf
| Types of Service | Fees and Charges | |||||||||
| Handling fees |
|
|||||||||
| Dividend Charges | 1% on net dividend subject to min S$1 capped at S$50 | |||||||||
| Scrip Dividend | $10 | |||||||||
| Other Corporate action | $10 | |||||||||
| Share Transfer Charges | $10 per counter transfer fee charged by CDP and $10 per counter admin fee charged by Phillip Securities Pte Ltd | |||||||||
| Failed GIRO collection charge | $5 | |||||||||
| Hard Copy statement (if Opt-Out of E-Statement) | $2 | |||||||||
To reap the optimal award from using Philips SBP,
1)I should invest a minimum of $600 monthly into 2 stocks to keep the $6.42 expenses to one percent. To optimise expense ratio, I should invest just below $1000 via DCA.
2) I should also choose e-statement, and ensure generally keep my holdings within Philips to minimise transfer charges.
3) My dividend earnings must be more than $100 to keep dividend charges to 1%, and ideally reach above $5000 to ensure that I reap maximum benefit from the cap on dividend charges.
4) Scrip dividends and corporate actions are most likely one off.
Cost benefit analysis into Philips DCA plan
1) I believe I am unable to optimise the results I should be getting. It is rather inefficient to my needs and I cannot get the bang out of my buck.
2) I don't have a second stock I am interested in investing at the moment since I stopped my DCA into OCBC.
3) Philips DCA plan is superior to other brokers as it allows reinvestment of any excess funds present in the account (dividend payout, corporate action etc) without manual intervention. Basically I isolate all its holdings within this account and it will grow organically and it is truly passive.
3) Nonetheless, I am already very used to Philips trading platform and mobile app and it is hard to shift to a newer vendor. However, I can simply use the old platform for investment analysis and seminars and use a cheap vendor like SCB / SAXO to minimise transaction costs. I will never use the mobile platform to trade by the way so no harm done.
Philip Investment Accounts (Prepaid)(If I transit to one trade every quarter) https://www.poems.com.sg/012commission/
https://www.poems.com.sg/FinancialServices/CC_INFOSHEET.pdf
Strictly applicable for trades executed in the Phillip Investment Accounts (Prepaid) for the Promotional period of 2nd January 2017 till 31st December 2017
Rates Minimum
| Singapore | 0.12% | S$10 |
Cost Benefit Analysis of SCB
Working in a custodian bank made me realise the risks that it entails. SCB priority and SAXO (beyond my reach) essentially has the lowest charges in Singapore. I will be focusing on Personal Banking SCB account.
This image has been resized.Click to view original imageIn most countries, there is no CDP as most shares and financial instruments are held in a storeroom, aka custodian bank. Custodian banks basically administer corporate actions and the movement of securities. They deal with similar issues and instruments like investment banks, but merely facilitate the movement rather than the creation of financial instruments.
Nominees are essentially a legal structure created to protect the investor securities. There are legal frameworks like Volker rule to prevent the co-mingling of the bank's and investor securities. Conducting of quarterly health check and creation of SOPs ensure that in the event of liquidation, the operating of the nominee could simply continue albeit under a different legal owner. There might be transition issues but generally in my humble opinion the custodian and nominees legal structure are fundamentally sound, albeit untested.
Electronic form with direct registration. The direct successor to traditional certificates. Shares are in dematerialised form, meaning their existence is recorded by the central securities depository in the country in which the stock is listed. Your name appears on the register of shareholders (or in some countries, on a sub-register operated by the central securities depository).
Pooled nominee accounts, also known as omnibus accounts. The shares are usually held in electronic form, but the name that appears in the records as the legal owner is a nominee company, which is usually owned by your stock broker (nominee companies are explained in more detail below). Stocks held in this way are referred to as being held ‘in nominee’ or ‘in street name’, depending on the country. Your name does not appear on the register of shareholders.
Designated nominee or sole nominee accounts are mainly for institutional investors to combine their pooled holdings into one box so that they can trade and manage holdings amongst many subsidiaries.
For my personal needs
1) Adhering to the Peter lynch and Warren buffet philosophy, I do not go for IPOs as it is a winner's curse. Companies are too untested and unproven and may be de-listed eventually if performance is poor. You are definitely overpaying for a company if you successfully bid for it.
2) I am a strong proponent of reducing transaction costs, and SCB is far superior
https://heartlandboy.com/standard-chartered-brokerage/
3) There is no charting tools on SCB. I dont't use charting anyway, and if I really need to there is Philips to fall back on.
4) SRS cannot be linked to SCB.
5) Can I attend AGM if I have shares in SCB? Yes, but you must call the SCB trading hotline to ask. Most likely you will not be able to, as you are not a large shareholder, and/or the company that SCB is liaising with rejected the request.
6) I don't contra trade, short sell or go for derivatives.
7) Investment Seminar 5th and 6th August at Suntec. Try to score for freebies and promotions at the investment services providers there.Learn to wait it out.
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