What is a good amount of units to buy from a company? I am thinking of setting aside $500 per month to invest in stocks, what are the best options? - Seedly
Seedly logo
Seedly logo
 

Stocks Discussion

Investments

Anonymous

Asked on 06 Mar 2020

What is a good amount of units to buy from a company? I am thinking of setting aside $500 per month to invest in stocks, what are the best options?

The $500 is purely for buying and will set aside $200 spare for any transaction fees and commissions fee. Also looking more towards the US and HK market

0 comments

8 answers

Answer Now

Answers (8)

Sort By

Hi anon,

Please don't do that. Transactional fees should be kept as low as possible. If you bought $500 worth of stock and paid $25 for the fees, then if your stock rises 10% and you sold off, you would still not make any money.

I'd recommend you to keep transactional fees to less than 0.5% of the contract value. In view of this, you might want to save a little more first before you buy. This applies regardless of which market you are looking at.

0 comments

👍 3
Wilson Nid A Break
Wilson Nid A Break
Level 8. Wizard
Answered 4w ago

Think better to invest every 3months, so total available sum be (500+200)*3 = $2,100. $2000 for investment, $100 is way more than enuf for transaction & comm fees (even 1% of $2000 is $20).

No good amount of units per counter, only X% weightage per counter of the portfolio, to ensure adequate diversification.

0 comments

👍 0
Yh.lens
Yh.lens
Level 5. Genius
Updated 4w ago

Its best to keep your commission fees as low as possible. If you were to use DBS Vickers Cashupfront (the one i currently use) there will be a fee of $10 per trade. I like to keep my fees to be <1% of the total investment so minimally invest at least $1000 per stock counter will be good. Of course if you can invest more it will be better. $500 is sub optimal and you are incurring too much fees. Even before a gain you already incurred a 2.2% loss. This is one of my first investing mistake when I first started, not knowing the significance of trading fees. I wanted to make a 90-10 stock bond distribution and bought a really small position of bonds which led to a bad average price. I learnt my mistake and now always invest more to cover the trading fee of 10% and keep it below 1% of the overall investment

0 comments

👍 0
Penny Chong
Penny Chong
Level 5. Genius
Answered 4w ago

I would recommend investing 50% in a market portfolio like S&P500 ETF as it historically yields 10% return and has a general upward trend. Another 50% can be other individual stocks that you like and see a potential of 10% return. Diversification is key. The most vital thing now is do not rush into buying popular stocks now in the COVID period! For example, airline stocks just because they're cheap. ​​​

0 comments

👍 0
MT2020
MT2020
Level 7. Grand Master
Answered on 07 Mar 2020

It will be good to keep your transaction charges to less than 1%. And do note that the US market is more volatile than SG market.

0 comments

👍 0
Rais M
Rais M
Level 7. Grand Master
Answered on 06 Mar 2020

Different stocks has different stock price. You may own 100 shares for a stock that cost $5… and you may own 10 shares for a stock that cost $50. Instead of looking at unit or stock prices, pay attention to the fundamentals of the business that you want to invest in.

As for the transaction and commission fees of $200, sorry I do not exactly understand what you meant by here. $200 as a fee is too high. Perhaps you want to tell us more what this fee is about.

0 comments

👍 0

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

Generally, you should set aside about 20% to 30% of your income on savings and investment. For the most part, this will form your diversified portfolio. Accordingly, you need to break it down further to calculate how much you can afford to spend on a single share without being overexposed to unnecessary risk.

Here is everything about me and what I do best.

0 comments

👍 0
Geraldo L.
Geraldo L.
Level 7. Grand Master
Updated on 06 Mar 2020

I dont think there's a 'good' number of units to buy for a stock because different stocks have different prices. Also, $200 for transaction and commission fees for a trade costing $500 is way to high. Keep the costs low (<1% at least) and it will benefit you will in the long run.

0 comments

👍 0