Planning to invest $200 monthly using POEMS ($6 sale charge). Do you think this is worth it or I should wait until I can invest a larger amount monthly etc $400 a month since it’s the same $6 charge? - Seedly
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Anonymous

Asked on 13 May 2020

Planning to invest $200 monthly using POEMS ($6 sale charge). Do you think this is worth it or I should wait until I can invest a larger amount monthly etc $400 a month since it’s the same $6 charge?

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Updated on 13 May 2020

6 SGD / 200 SGD = 3% is a very disadvantageous 'trading fee'.

There is no rule, but 0.3% per trade is, I feel, an acceptable number in current times.

That would require 2000 SGD lump sum per investment, which shows that the POEMS fees for Your purpose generally are still high, when I know POEMS is a good and recommendable broker (my experience). Maybe 0.5 % per trade could still be O.K.

You could do it all by Yourself with cheap passive indexing ETFs, Ireland-domiciled on European stock exchanges via Your Singapore broker.

Still more important than any current fee is the optimum ETF selection (asset allocation).

Then try to avoid all the things I have written up here:

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

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Tay WenHao
Tay WenHao
Level 7. Grand Master
Answered on 13 May 2020

I would suggest saving the money in high interest saving account first. SCB Jumpstart 2% p.a.

Just think about it, even if your stocks give you 10% p.a.

The difference of 8% is only $16 for $200. Minus off the sales charge (buy is $6, there is charges to sell also), theres not much profit.

Another point to note, POEMS is custodian account. You buy from them, stocks are held under POEMS, you can only sell thru POEMS.

Back go my first point, save up the money and accumulate to 20k (cap for SCB Jumpstart) then spilt the fund into 3 (7k each) and invest lump sum in different sector. (I'll suggest blue chip for lower risk).

When investing, can consider using DBS Vickers Cash Upfront. Min sales charge is $10 but stocks are held in CDP whereby you can sell thru ANY platform.

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Hi Anon, what are you planning to buy? Individual securities I assume?

I would look at other platforms if there could be cheaper options but if not, then maybe invest quarterly or bi annually instead to reduce on the sales charge per investment. 6/200 is 3%, not good, 6/1200 is 0.5% which is much better.

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X

13 May 2020

Is 0.5% usually the number we should aim for our charge fee?
Hariz Arthur Maloy
Hariz Arthur Maloy

13 May 2020

Hi X, when paying for broker sales comms, the lower the better of course, because you're only paying for access and not advice. Advice costs more though so just take note.