Personal Finance 101
Asked 3w ago
In other words, how much money should I be pumping into a single stock . Should I stop once I have 10k, 50k or maybe even 100k invested into the stock?
In my view, if your available cashflow is enough to sustain the DCA with a transactional cost of less than 0.5%, then you can consider doing it. It's not really cost efficient if your transactional costs eat up too much of your capital.
As for how long you should invest, there is really no fixed answer. Of course, we would want to have more invested in stocks which we deem good, but there is also concentration risk, so you really should ensure that you work towards a portfolio of at around 10 counters. Each stock should not take up more than 15% of your portfolio as a guideline, so that you aren't overly concentrated. Just note that buying DBS, OCBC and UOB and having that take up 40% of your portfolio, is not diversification.
TLDR Version: With over 60,000 firms and stock data, the best performing 811 firms (1.33% of total) accounted for all of the net global wealth creation.
On Dollar Cost Averaging and Lump Sum Investing:
TLDR Version: Most people should not be following a DCA strategy if they have a pot of gold. DCA strategy works best for people who want to invest from their monthly cash-flow.
The lower the trading fees, the more often You could.
pragmatic approach: monthly, quarterly or semiannually all fine
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