Biggest news of this week is that Trump will be the next president of US. I didn’t take any positions before or after the polling day. The markets are especially volatile and my portfolio & investing strategy are designed to try and navigate times like these more calmly. Sometimes by staying out and doing nothing. I have just been fine-tuning the auto-purchases of the ETFs in the Monthly Investment Plans (MIPs). As it turns out, the auto-purchase of 1 share of the SPDR Gold Shares (O87) under the Maybank KE MIP did not happen again for the month of Nov 2016.
- S$300 – ES3
- S$600 – Nikko AM Singapore STI ETF (G3B)
- S$100 – ABF Singapore Bond Index Fund (A35)
Which means that S$1,000 is auto-invested every month via the MIPs into local ETFs. Some in the first half of the month and the rest in the second half of the month. Purchase commission charges are at 1% of the invested amount i.e. I pay S$10 as fees every month for the MIPs.
I have to admit that this is high but acceptable to me when it comes to my dollar cost averaging strategy. Reason is simple – I expect to pay more when someone is doing the work for me. For the value cost averaging and dividend investing components of my strategy, I invest larger amounts and the commission charges drop to less than 0.50%.
I know I have to lower my transaction costs but I’m already doing that for the most part. The S$10 is not significant to me. I have already reduced our general spending slightly every month to make up for this S$10 so the net effect is zero. What’s important to me is the fact that I’m automatically diverting S$1,000 of my cash savings into Singapore ETF investments every month. In fact, when Smartly launches, I plan to divert another S$1,000 of my cash savings for the robo-advisor to allocate into an aggressive risk profile portfolio of overseas ETF investments every month.
Again at 1% annual fees initially before decreasing to 0.7% when the asset balance exceeds S$10,000. It could go down further to 0.5% if I decide to keep at it for several years. You see how the robo-advisor fee structure mirrors the transaction costs in my own portfolio?
It only starts to drop the more funds I can commit and the more experienced I become over time. This works for me as my preference is to spread out my investment cash through market cycles. It’s a slow and steady investing approach but the portfolio & strategy should weather market volatility and crashes more effectively.
Quick updates for the month of Nov 2016 so far:
- My wife received her annual performance bonus letter and the amount is okay considering how tough the market conditions were for the past year. Not forgetting how bad the impact on the profits of her bank is due to that.
- We will allocate the bonus when received into savings, spending and investments accordingly but I will not be reflecting the full amount on this blog.
- Averaged down on REIT ETF, Starhub and Vicom this week.
- Auto-purchases of G3B and A35 coming up in the next 2 weeks.