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Monthly Stock Saving Plan a good idea?

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  1. #1

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    Monthly Stock Saving Plan a good idea?

    The Monthly Stock Saving Plan consists in buying the same stocks monthly, paying always the same amount (e.g. $1,000), rather than always the same number of shares (e.g. 1 lot). This way when the share prices are low you buy more, when it's high you pay less. Charges are low (hk$50, or 0.025%, whichever is highest).

    Is it a wise investment, for those who don't want to follow the market?


  2. #2

    That sounds like a terrible idea.
    Blindly throwing your money into an equity, without considering what share price is and what the companies out look is.... Sounds..... Well, cheepo.


  3. #3

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    What? No, you don't understand. One chooses the companies to buy, but then keeps buying every month (of course one can stop any time, but the idea is to keep the same companies) the same amount of money. So once you have selected the companies that you think have the greatest growth potential, you keep buying their shares, but every month the same amount, and not the same number of shares.


  4. #4
    Quote Originally Posted by cheepo:
    What? No, you don't understand. One chooses the companies to buy, but then keeps buying every month (of course one can stop any time, but the idea is to keep the same companies) the same amount of money. So once you have selected the companies that you think have the greatest growth potential, you keep buying their shares, but every month the same amount, and not the same number of shares.
    But then you are following the market...

    Either you blindly invest in company A every month, regardless of what share price and company outlook is... Or you monitor the market and invest in company A when you feel the share price/outlook align in your favor.

  5. #5

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    DCA, that's expensive.

    when you see several newspaper headlines " Panic like it's 1929 again" > buy

    when you walk into a restaurant and everybody is talking about stocks > sell


  6. #6

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    Buy the index instead.

    Sent from my GT-N7000 using GeoClicks mobile app

    cookie09 likes this.

  7. #7

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    Quote Originally Posted by BaconBreadBaker:
    But then you are following the market...

    Either you blindly invest in company A every month, regardless of what share price and company outlook is... Or you monitor the market and invest in company A when you feel the share price/outlook align in your favor.
    Isn't that what Warren Buffett does? Buy and hold?

  8. #8

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    Quote Originally Posted by MovingIn07:
    Buy the index instead.
    Aren't you also doing a Monthly Stock Saving Plan with the index?

  9. #9

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    Quote Originally Posted by cheepo:
    Aren't you also doing a Monthly Stock Saving Plan with the index?
    I do yes.

    Sent from my GT-N7000 using GeoClicks mobile app

  10. #10

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    DCA is a very good long term strategy, but min $50 per transaction is too expensive. I would save up the money until i have $20000 and then invest it.

    If you are going to do DCA then it is best to go with large blue chip companies. If you are just investing just the min $1000 each month any paying $50 fees each month then your stock price has to move up 5% just for you to break even. And for a large blue chip that will take a while.

    Just my thought.

    Last edited by desi78; 07-05-2013 at 01:05 PM.

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