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24 Dec 2019

How much should I dollar cost average each month if I’m looking to get about 5k into the markets?

I’m investing for the long term but am unsure as to how much i should put in each month.


    Discussion (1)

    What are your thoughts?

    Pang Zhe Liang

    Pang Zhe Liang

    24 Dec 2019

    Level 17·Senior Financial Services Consultant at AIA Singapore Private Limited

    Before you start investing, it will be best to understand your objective. Here are some questions to help you:

    1. What is your capital?

    2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

    3. How long will you want to stay invested? E.g. 10 years

    4. What is your risk appetite? E.g. How do you feel about short-term volatility?

    5. What is your objective for investing?

    Additionally, it will be valued to understand how dollar cost averaging works and whether it really works: https://www.blog.pzl.sg/dollar-cost-averaging-singapore-does-it-really-work/

    Now, with your investment capital and the instruments that you are interested to invest into, understand the price volatility involved and the risk that you are willing and able to undertake in order to achieve your investment objective.

    Additionally, decide whether you are going to do this monthly, quarterly, or even annually. All these makes a difference when it comes to dollar cost averaging. To help you, you may consider to do a simulation in an attempt to find out the optimal strategy to do this. While doing so, bear in mind that past performance is not an indicative measure for future performance.

    Furthermore, you will also need to know how many assets are you going to invest into? Is it a single share or a diversified fund? If you are confused at this point, then go back to the questions to find out your goals and limitations. Then work around it till you reach a point where you are confident to start.

    If you are open to understanding further on how I help my clients to grow their money, drop me a coffee invite: https://www.work.pzl.sg/#coffee

    Here is everything about me and what I do best.




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