I’m thinking of starting to invest $1.5k in STI ETF and $500 in S&P next month onwards using DCA. Is it wise considering that it’s bearish for STI ETF and yet all time high for S&P ? - Seedly
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STI ETF

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Anonymous

Asked on 21 Sep 2018

I’m thinking of starting to invest $1.5k in STI ETF and $500 in S&P next month onwards using DCA. Is it wise considering that it’s bearish for STI ETF and yet all time high for S&P ?

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 9. God of Wisdom
Answered on 25 Jan 2019

How do you intend to buy into the S&P through a DCA method? I'll assume you are referring the S27 SGX counter? There is no automatic way of buying into S27 and the minimum share lot is 10, which works out to be US$2650~ per transaction based on today's prices.

If you are buying to SPY, you are looking at perhaps 1 share a month based on your $500 contribution. Which doesn't make sense, as the brokerage fees will be quite high.

Unless you are thinking of buying into the Infinity S&P500 fund issued by LionGlobal, in which case I'll suggest you stay far away. The fees are rather high which will eat a big chunk of your paper gains over time.

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Kenny Tan

19 Feb 2020

I'm interested to know how you DCA into the S&P500 too. Thanks
Jonathan Chia Guangrong
Jonathan Chia Guangrong

19 Feb 2020

Hi Kenny. I don't dca into the S&P500. Don't have any active dca facilities at the moment. There is no passive way to dca into the S&P500. You need to manually do so.
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Geraldo L.
Geraldo L.
Level 7. Grand Master
Answered on 26 Feb 2020

Nobody knows where the market is going, that's why a DCA strategy is good because it gives you a plan to buy consistently regardless of whether the market is up or down. Personally, I would overweight more on the global indexes rather than STI ETF.

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MT2020
MT2020
Level 7. Grand Master
Answered on 26 Feb 2020

If you are doing dca, you should not time the market as you will be consistently buying every month and in the long term, it will average out.

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered on 17 Feb 2020

Diversification seems a good thing,

look what happened the last 10 years with STI versus S&P500 (chart)

more on my thinking

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

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Frankie Rappaport
Frankie Rappaport

29 Feb 2020

Maybe given the current spread of corona to the western economies, you possibly like to wait investing for 4 - 10 weeks, when unjustified media & public panic recovers, corona will not last, no
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Jason Sin
Jason Sin
Level 8. Wizard
Answered on 24 Sep 2018

Since you are using DCA, it does not really matters. However, if you are using lump sum, it makes a lot of difference and it is advisable to go into the market after a correction.

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Gabriel
Gabriel
Level 8. Wizard
Answered on 23 Sep 2018

It doesn't matter since you're using the dollar cost averaging method. Just note that this is a long term one, meaning you'll need quite a few years before seeing good results

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 23 Sep 2018

If you are using DCA, then time in the market is better than timing the market! Your costs will average out in the long run anyway!

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Jay Liu
Jay Liu, Diploma in Accountancy at KHEA
Level 7. Grand Master
Answered on 21 Sep 2018

If you're into DCA, it's works better when it's in bearish. As you purchase more units when it's bearish. When it's at the bottom and have analysis that's it's going to be bullish put a lump sum.

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Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 9. God of Wisdom
Answered on 21 Sep 2018

if you are using DCA, then the time you invest does not really matter. DCA is supposed to remove the aspect of market timing and keep you invested whether at market top or bottom.

The longer you hold the better

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