Technically you can do it monthly, quarterly or semi annually. Whichever you prefer. Each of them have it's own pros and cons.
Basically, the main reason why ppl do it on a less frequent rate is to ensure cost effectiveness.
Charges for OCBC BCIP is as follows:
0.30% of the total investment amount or $5 per counter, whichever is higher.
This means that if you invest $500 monthly, each month the charge is $5. Which is equivalent to 1% of your investments. Over 1 year, the total cost is $60
If you saved up that $500 every month and do it once a year, $6000 in 1 trade will cost you $18 (@ 0.30%). Thus, you "saved/earned" $42 from commission fees/charges.
However, in the 2nd scenario, the DCA will not be effective since you only buy once a year. You will also lose out on dividends that are paid quarterly or semi annually. (As you saved your $500/mth in your bank account for 12 months before buying 1 shot $6000) Which may be around 3-5% p.a. for blue chips stocks.
The idea is to strike a balance. Thus if you want to go cost effective, the most cost effective way is to 'match' the min value to the percentage of charges.
In simpler terms, make sure every trade is around $1700. 0.3% charge of $1700 is $5.10. So for your case of $500 savings per month, you can aim for quarterly DCA @ around $1700.
FYI: You can also check out other platforms for lower fees. Particularly FSMone as Im using it.
Technically you can do it monthly, quarterly or semi annually. Whichever you prefer. Each of them have it's own pros and cons.
Basically, the main reason why ppl do it on a less frequent rate is to ensure cost effectiveness.
Charges for OCBC BCIP is as follows:
0.30% of the total investment amount or $5 per counter, whichever is higher.
This means that if you invest $500 monthly, each month the charge is $5. Which is equivalent to 1% of your investments. Over 1 year, the total cost is $60
If you saved up that $500 every month and do it once a year, $6000 in 1 trade will cost you $18 (@ 0.30%). Thus, you "saved/earned" $42 from commission fees/charges.
However, in the 2nd scenario, the DCA will not be effective since you only buy once a year. You will also lose out on dividends that are paid quarterly or semi annually. (As you saved your $500/mth in your bank account for 12 months before buying 1 shot $6000) Which may be around 3-5% p.a. for blue chips stocks.
The idea is to strike a balance. Thus if you want to go cost effective, the most cost effective way is to 'match' the min value to the percentage of charges.
In simpler terms, make sure every trade is around $1700. 0.3% charge of $1700 is $5.10. So for your case of $500 savings per month, you can aim for quarterly DCA @ around $1700.
FYI: You can also check out other platforms for lower fees. Particularly FSMone as Im using it.