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Anonymous

22 Aug 2019

Stocks

Question on automating Dollar cost Averaging vs doing it myself?

I’ve heard about automating your investment for example: $1000 will be deducted from your bank every month for investment (dollar cost averaging). However is it better for me to be in charge of my own investment instead of automating it? For example if the stock price goes down this month I would buy more shares with more money rather than just putting in $1000 every month and ignoring the stock prices.

Discussion (2)

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Eric Ong

22 Aug 2019

Project Analyst at 8Bit Global

Somewhat Agree with Elijah. For Dollar Cost Averaging, it works with the assumption when the assets that you invest fluctuate, but eventually, it will still appreciate in the long run.

So, the assets type is very important. I personally feel it would not be suitable for individual Companies. I think Dollar Cost Averaging for Index ETF is a good starting point for beginners.

But do take note of Fees that you have to pay.

Some other way you would be able to do it would be by Robo-Advisory.

Like StashAway or AutoWealth, they provide a platform to do dollar cost averaging.

Elijah Lee

21 Aug 2019

Senior Financial Services Manager at Phillip Securities (Jurong East)

My personal take is that I would dollar cost average in asset classes that have very low or even zero transaction costs, case in point, I DCA UTs myself as I know every cent is invested.

For stocks, I prefer to wait for a good entry price (what is a good price is however very subjective), unless you have a large amount to DCA every month, the brokerage costs may be significant.

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