facebookI have S$4000 to invest now. Should I put that money into a single stock, or divide it up and invest in different stocks? - Seedly

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Anonymous

27 Jul 2020

General Investing

I have S$4000 to invest now. Should I put that money into a single stock, or divide it up and invest in different stocks?

So I have been eyeing stocks such as Tesla and DBS now. I know many people say to invest around $4-5k per stock to make it worth, but should I divvy up the 4k I have into 2 different stocks, or invest in one stock first then wait till I have more capital to purchase other stocks?

Discussion (2)

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Kai Kiat

20 Jul 2020

Blogger at The Common Singaporean Millennial

Hi!

Given the high commission fees like mentioned in another answer, it might be a good idea to only start investing once you have sufficient capital to make commission fees worth it. That said, a broker to consider would be Tiger Brokers, of which they charge very low fees for both the US and Singaporean Markets.

That said, I wouldn't put all my money into a single stock given the current volatility of the market. It would be difficult to predict any upside or downside in the markets, and imagine seeing your entire portfolio fall just because the only stock you bought into dipped. As such, its always a good idea to diversify :)

You should also remember to do some risk allocation and portfolio sizing as well! For more information, do check out my personal blog that i started writing for only recently. The link here is: https://thecommonsgmillennial.com/

Hmu if you have any other questions and I will be pleased to discuss :)

Tan Wei Ming

19 Jul 2020

Founder and Writer at Frugal Youth Invests

The reason why we have this saying is because the commission of buying local stock is quite expensive. The cheapest commission to buy local stock is min $10 or 0.08% / 0.12% (FSM / DBSV Cash Upfront).

So naturally people will advice to only buy when you have enough capital to make the transaction worth. I think there's no right or wrong answer to it just whether you feel alright paying $10 for a $1000 trade value or $4000 trade value.

What's important is to look for cheap brokerage like Tiger Brokers where the cost is just US$1.99 for US stocks and 0.08% and no min comm for local stocks.

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