Is there a recommended quantity to buy for a single REIT such that brokerage fees do not eat so much into dividends gained?

Hi anon,

If it's a flat rate, I'll try to keep transactional costs to less than 0.5% of the contract value. Ideally closer to 0.3% or so.

If it's a "percentage or minimum" type of rate, I would take the minimum dollar value of the brokerage and divide it by the percentage to see the 'break-even' contract value, and try to keep to that or exceed it.

For example, if it is 0.28% or minimum S$25 (usually the case for Singapore shares), then taking S$25 and dividing by 0.28% gives $8928, so I will usually trade in contract values of at least $9K.

There are no fixed rules. currently in the U.S. the trading fees have reached 0.00 USD and there will be times when we could get paid for buying stocks (then the brokers make their money by different methods like lending away our cash in the account).

Answer to your question: total fees of 1% of the trading value would be very expensive, by todays standards, 0.12-0.18% (like often today in SG) would be very O.K. So try to trade in lots so that 0.20% - 0.30% are not exceeded. If you invest long/term, like you should, these one time fees could be seen as averaging out over the years. On the other hand, aggressive reduction of any costs is very important to successful investing.

I would recommend not to invest in single REITs but cheap & large REIT ETFs like the Lion-Phillip one.

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