How much would I need to start investing in stocks? How much do I have to invest per stock for it to be worth the commission fees/other charges? - Seedly
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Anonymous

Asked on 15 Aug 2018

How much would I need to start investing in stocks? How much do I have to invest per stock for it to be worth the commission fees/other charges?

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Lim Boon Tat
Lim Boon Tat, Mathematics at Cambridge University
Level 6. Master
Answered on 10 May 2020

I wouldn't bother too much with commissions because given the competitive nature, the rates are all fairly low (<1% for sure), and it's once-off. When most people talk about "costs eroding returns", they are referring to recurring costs like management fees (one consideration if you're thinking robo-advisors).

If you're going for value-investing, even if you're buying $1000 of one stock, the commission you are going to get charged is maybe $10. But if you're doing your research, and investing in right companies, you should be doing 15% p.a. returns, so that initial once-off cost of 1% ($10) is not so critical. I would study the custodian fees since these are charged in perpetuity.

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Frankie Rappaport
Frankie Rappaport

10 May 2020

For an aggregate portfolio 15 % p.a. over longterm (> 10 y) seems a bit high though
Frankie Rappaport
Frankie Rappaport

10 May 2020

Yes managing fees important, at least often hey are capped then
Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Answered on 27 Feb 2020

Given the constantly dropping commission fees (U.S. already 0.00 USD reached for stocks and ETFs, f.ex. TD Ameritrade or Charles Schwab, no advertising from my part, I am only a very happy TD A customer), the absolute investing amount has almost no importance anymore. Perfect conditions for beginner retail investors, you could clearly experiment to find out what works.

my private strategy to successful equity investing is here, try to consider passive ETFs instead of single stock investing:

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 9. God of Wisdom
Answered on 19 Sep 2018

Dr. Wealth has covered this question before, let's read it from the expert:

https://www.drwealth.com/how-much-should-i-invest-in-1-stock/

He shared that "

If you take the $10 cost and divide it by the minimum commission of 1%. This gives you a figure of $1,000.

This means that if you want to keep your cost within 1% of your investment capital, you should invest a minimum of $1,000 (assuming your cost is $10)." ​​​

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JianHao Soo
JianHao Soo
Level 5. Genius
Answered on 19 Sep 2018

I'm currently using Maybank Monthly Investment Plan which I signed up during a roadshow promo: $0 comission for 12 months

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Jeff Yeo
Jeff Yeo, amateur Social contributor at School of social sharing
Level 7. Grand Master
Answered on 19 Sep 2018

Fees

To get lower the initial buy in and sell out with

  • DBS cash upfront

  • standard charted bank

Dollar cost averaging

  • you can try Rsp with OCBC, DBS, maybank etc

if you got capital invest on your own

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Jay Liu
Jay Liu, Diploma in Accountancy at KHEA
Level 7. Grand Master
Answered on 18 Sep 2018

You can start investing with $100 by doing RSP. As the commission for single trade can cost usually $25 commission. So only do that if you have high capital. But there are pros and cons. RSP transact once a month. While the other can invest anytime you want.

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 18 Sep 2018

$100 per month is enough to start investing! you can check out the POSB regular savings plan, which can be found here: https://blog.seedly.sg/which-regular-savings-plan-is-the-cheapest/

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Zeeeee
Zeeeee
Level 5. Genius
Answered on 18 Sep 2018

Well for DBS and OCBC they charge $25 worth of transaction fee so I kinda calculate the potential dividends I can receive in the first year and ensure it is more than the commission fee. Thereafter it's a matter of letting it grow + accumulating more dividends!

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James Yeo
James Yeo, Founder at SmallCapAsia.com
Level 5. Genius
Answered on 16 Aug 2018

Lowest comm out there is $10 + some gst etc. = $12+. (Fundsupermart, Stanchart)

Usual brokerage comm is $25 + gst, svc fees etc. = $28+

I would recommend investing at least $3 - 5k one shot to make it worthwhile. Comm should not be shaving off >3% of your returns at the initial start.​​​

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Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 16 Aug 2018

You can start investing with as low as a few hundred dollars, depending on how expensive the stock you like to purchase is.

Stock exchange platform has fees range between $10 to $25 per transaction with a maximum percentage tagged to the transaction amount. To maximise the percentage, you'll need about $5000 to $10000 in each transaction.

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