facebookHow much would I need to start investing in stocks? How much do I have to invest per stock for it to be worth the commission fees/other charges? - Seedly

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Anonymous

10 May 2020

General Investing

How much would I need to start investing in stocks? How much do I have to invest per stock for it to be worth the commission fees/other charges?

Discussion (12)

What are your thoughts?

Lim Boon Tat

Lim Boon Tat

10 May 2020

Level 10·Mathematics at Cambridge University

I wouldn't bother too much with commissions because given the competitive nature, the rates are all fairly low (<1% for sure), and it's once-off. When most people talk about "costs eroding returns", they are referring to recurring costs like management fees (one consideration if you're thinking robo-advisors).
If you're going for value-investing, even if you're buying $1000 of one stock, the commission you are going to get charged is maybe $10. But if you're doing your research, and investing in right companies, you should be doing 15% p.a. returns, so that initial once-off cost of 1% ($10) is not so critical. I would study the custodian fees since these are charged in perpetuity.

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Given the constantly dropping commission fees (U.S. already 0.00 USD reached for stocks and ETFs, f.ex. TD Ameritrade or Charles Schwab, no advertising from my part, I am only a very happy TD A customer), the absolute investing amount has almost no importance anymore. Perfect conditions for beginner retail investors, you could clearly experiment to find out what works.

my private strategy to successful equity investing is here, try to consider passive ETFs instead of single stock investing:

https://seedly.sg/questions/what-is-your-genera...

HC Tang

HC Tang

19 Sep 2018

Level 13·Financial Enthusiast, Budgeting at The Society

Dr. Wealth has covered this question before, let's read it from the expert:

https://www.drwealth.com/how-much-should-i-inve...

He shared that "

If you take the $10 cost and divide it by the minimum commission of 1%. This gives you a figure of $1,000.

This means that if you want to keep your cost within 1% of your investment capital, you should invest a minimum of $1,000 (assuming your cost is $10)."

I'm currently using Maybank Monthly Investment Plan which I signed up during a roadshow promo: $0 comission for 12 months

Jeff Yeo

Jeff Yeo

19 Sep 2018

Level 10· amateur Social contributor at School of social sharing

Fees

To get lower the initial buy in and sell out with

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