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Advice for new investor on local RSPs and possible overseas investing via DCA

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Old 15-07-2019, 01:01 AM   #1
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Advice for new investor on local RSPs and possible overseas investing via DCA

Hi I'm a new investor looking for some advice on RSPs and possibly DCA investing into overseas markets


Currently I'm serving NS, I'm planning on starting an RSP saving about $400 per month from next month onward till next year starts when I'll start saving around $700 monthly. I'm planning to keep the RSP going till the end of my NS and possibly as I work after ORDing, before uni begins. I'll likely hold it till my university ends which is around 2025. Afterwards, I will probably try investing in more stocks as by then I'll have more capital to work with and more time to research. Originally, I was planning on starting with POEMs SBP and going into SPDR STI ETF & possibly a REIT. However, reading around the forums I saw that many people commented on the higher fees for SBP compared to POSB IS or OCBC BCIP. From what I've seen their prices seem pretty similar. However, I'm comparing the performance of the SPDR STI ETF offered by Philips vs the Nikko AM STI ETF offered by POSB & OCBC and wondering if that'll make a meaningful difference in impacting the slight difference in cost?


While surfing the forums I also saw threads about using IB and SCB to invest in overseas markets and DCA into US ETFs and etc. Would it be advisable to split between SG ETFs and overseas ETFs (for some diversification & better returns?) with such a small monthly investing amount? If so which broker would be the best to start off with?
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Old 15-07-2019, 04:37 AM   #2
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However, I'm comparing the performance of the SPDR STI ETF offered by Philips vs the Nikko AM STI ETF offered by POSB & OCBC and wondering if that'll make a meaningful difference in impacting the slight difference in cost?
Nope. Thereís no meaningful difference between the two.

While surfing the forums I also saw threads about using IB and SCB to invest in overseas markets and DCA into US ETFs and etc. Would it be advisable to split between SG ETFs and overseas ETFs (for some diversification & better returns?) with such a small monthly investing amount? If so which broker would be the best to start off with?
Oh yeah, absolutely - itís never too early to diversify.

The rule for smaller investors is that youíll want to use POSB IS for your local shares, and Stanchart for global shares.
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Old 16-07-2019, 12:02 AM   #3
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Nope. Thereís no meaningful difference between the two.



Oh yeah, absolutely - itís never too early to diversify.

The rule for smaller investors is that youíll want to use POSB IS for your local shares, and Stanchart for global shares.
I will likely be going with OCBC BCIP due to their new promotion at 0.88% fees for those under 30. How does selling shares on their platform work? If after holding for 6 years I decide to sell will they credit the proceeds directly to my OCBC account or do I have to transfer to my cdp then sell from there, is there any selling fee (either when selling from ocbc directly or after transferring to cdp) ? I tried reading the tncs but it doesn't seem to be written can any know with experience update this +




With regards to investing in overseas etfs what would be a recomended way to split, 50% in SG and 50% in US? Why is SCB preferred over IB? I understand that IB has a monthly USD 10 fee unless you have over 100k but it seems like SCB has the same fees considering it charges minimum USD 10 per trade as well, and to be free from the minimum commission one needs to have over 200k. Both are pretty far out amounts for what I'm investing but IB seems far easier to reach in the future compared to SCB. I also heard about SCB charging 3% for currency spread compared to IB. Wouldn't this make IB cheaper for investors starting out?


Financialhorse.com/stock-brokers/amp/

I don't see Saxo being recommended as much despite the above link saying that it is potentially the cheapest (compared to the minimum commissions of SCB and monthly fee of IB), is there any explanation for this? Or is it actually more expensive in some other manner unexplained above?


I also read that FSM has an RSP with 0% fees for overseas markets, would this be better for investing overseas compared to going through IB, SCB or potentially Saxo? Does anyone have any recommendations for overseas etfs to invest in via any of their preferred brokers (IB, SCB, FSM, SAXO) for a beginner investor with low monthly investment?
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Old 16-07-2019, 07:06 AM   #4
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I will likely be going with OCBC BCIP due to their new promotion at 0.88% fees for those under 30. How does selling shares on their platform work? If after holding for 6 years I decide to sell will they credit the proceeds directly to my OCBC account or do I have to transfer to my cdp then sell from there, is there any selling fee (either when selling from ocbc directly or after transferring to cdp) ? I tried reading the tncs but it doesn't seem to be written can any know with experience update this +




With regards to investing in overseas etfs what would be a recomended way to split, 50% in SG and 50% in US? Why is SCB preferred over IB? I understand that IB has a monthly USD 10 fee unless you have over 100k but it seems like SCB has the same fees considering it charges minimum USD 10 per trade as well, and to be free from the minimum commission one needs to have over 200k. Both are pretty far out amounts for what I'm investing but IB seems far easier to reach in the future compared to SCB. I also heard about SCB charging 3% for currency spread compared to IB. Wouldn't this make IB cheaper for investors starting out?


Financialhorse.com/stock-brokers/amp/

I don't see Saxo being recommended as much despite the above link saying that it is potentially the cheapest (compared to the minimum commissions of SCB and monthly fee of IB), is there any explanation for this? Or is it actually more expensive in some other manner unexplained above?


I also read that FSM has an RSP with 0% fees for overseas markets, would this be better for investing overseas compared to going through IB, SCB or potentially Saxo? Does anyone have any recommendations for overseas etfs to invest in via any of their preferred brokers (IB, SCB, FSM, SAXO) for a beginner investor with low monthly investment?
1) POSB Invest Saver for the last 2 years is 0.82% for G3B...

2) POSB Invest Saver does not charge you a single cent when you want to redeem or sell your holdings...OCBC charges 0.88% for selling if you are under 30 or 0.3% of the total sales proceeds or S$5 per counter, whichever is higher...

3) Why SCB is preferred is because it is easier to hit S$200k vs US$100k as the S$200k can include your savings, local stocks and bonds purchased through SCB...The spread is 0.5% to 0.6% for FX not 3%...
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Old 16-07-2019, 09:35 AM   #5
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I also heard about SCB charging 3% for currency spread compared to IB. Wouldn't this make IB cheaper for investors starting out?

Financialhorse.com/stock-brokers/amp/
Like someone pointed out, your 3% is totally wrong. I'm interested to know which blogger or finance advice website is spreading this misinformation, can you share the link? They might have some ulterior motive.

What is stranger is that you quote the financialhorse website, yet when I go to the link, it states that SCB spread is "up to 1%" which is technically correct since there was a point when the spread went up to 1%. It now hovers between 0.6-0.8%. So how come you cite a website that says the spread is 1% then you go and say you 'heard it is 3%'?
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Old 16-07-2019, 05:31 PM   #6
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1) POSB Invest Saver for the last 2 years is 0.82% for G3B...

2) POSB Invest Saver does not charge you a single cent when you want to redeem or sell your holdings...OCBC charges 0.88% for selling if you are under 30 or 0.3% of the total sales proceeds or S$5 per counter, whichever is higher...

3) Why SCB is preferred is because it is easier to hit S$200k vs US$100k as the S$200k can include your savings, local stocks and bonds purchased through SCB...The spread is 0.5% to 0.6% for FX not 3%...
1) POSB states on their website that they charge 1% fees for G3B if I'm not mistaken?

2)I see. In that case I might go with POSB IS instead since it looks like buying and selling will eventually cost at least 1.76% or even more.

3)I feel even with my savings, local stocks/bonds I'll be unlikely to hit 200k anytime soon. As for the spread I saw the 3% from another post on the forum but on closer inspection it was from last year so my bad
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Old 16-07-2019, 06:28 PM   #7
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Like someone pointed out, your 3% is totally wrong. I'm interested to know which blogger or finance advice website is spreading this misinformation, can you share the link? They might have some ulterior motive.

What is stranger is that you quote the financialhorse website, yet when I go to the link, it states that SCB spread is "up to 1%" which is technically correct since there was a point when the spread went up to 1%. It now hovers between 0.6-0.8%. So how come you cite a website that says the spread is 1% then you go and say you 'heard it is 3%'?
Like I replied earlier, the 3% was from another post, my bad I didn't pay attention to the date posted. The reason I posted the link to the financialhorse was more related to asking why SCB might be recommended over SAXO despite the lower minimum commissions. It might be cheaper since I won't be investing that much. I'll admit I didn't pay enough attention to it mentioning the current spread is around 1%
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Old 16-07-2019, 08:09 PM   #8
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Like I replied earlier, the 3% was from another post, my bad I didn't pay attention to the date posted. The reason I posted the link to the financialhorse was more related to asking why SCB might be recommended over SAXO despite the lower minimum commissions. It might be cheaper since I won't be investing that much. I'll admit I didn't pay enough attention to it mentioning the current spread is around 1%
sad there's all this misinformation going around. guess its a warning not to trust everything you read.

In 2016 I already posted that the SCB forex premium was 1.1%. It has slowly dropped. But even 1.1% is not a dealbreaker for buy and hold investors.

Saxo, you can see this thread: https://forums.hardwarezone.com.sg/m...s-5715939.html
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Old 16-07-2019, 08:55 PM   #9
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1) POSB states on their website that they charge 1% fees for G3B if I'm not mistaken?
0.82% was a promotional rate, supposedly. Till now it's still 0.82% so enjoy while it last.

3)I feel even with my savings, local stocks/bonds I'll be unlikely to hit 200k anytime soon. As for the spread I saw the 3% from another post on the forum but on closer inspection it was from last year so my bad
Open up excel or google sheet and do a simple simulation exercise for all the brokerages you're interested in, you'll then be able to derive your conclusion and learn something in the process.
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Old 20-07-2019, 07:06 AM   #10
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sad there's all this misinformation going around. guess its a warning not to trust everything you read.

In 2016 I already posted that the SCB forex premium was 1.1%. It has slowly dropped. But even 1.1% is not a dealbreaker for buy and hold investors.

Saxo, you can see this thread:
Damn I didn't know that Saxo had such a bad track record, I'll steer clear of them then.
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Old 20-07-2019, 07:07 AM   #11
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0.82% was a promotional rate, supposedly. Till now it's still 0.82% so enjoy while it last.

Ah I see well.

Open up excel or google sheet and do a simple simulation exercise for all the brokerages you're interested in, you'll then be able to derive your conclusion and learn something in the process.
Alright thank you for the advice.
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Old 20-07-2019, 07:17 AM   #12
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I just checked SCB terms & conditions. It looks like there's a minimum age of 21 to open an account with them to trade. I'm currently 19 this year so looks like that won't be possible. IB on the other hand has minimum age of 18. Would it be better just to start diversifying now and go into overseas markets via IB, or should I save and wait till I'm 21 to go in via SCB? Also is there any way to DCA into SCB stocks like via RSP, or is it just find a stock you want and buy monthly. I feel like if it's the latter, with the amount I'm investing everytime I buy the minimum fees will just stack up, is it just better then to just save and lump sum into it? Also has anyone had experience with FSM 0% fee RSPs, they seem like a good opportunity to invest overseas and it seems they have no fees other than a quarterly platform fee of 0.0875%.
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Old 20-07-2019, 01:48 PM   #13
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One thing great about IBKR is that if you are 25 or below, the monthly activity fee is only USD 3 instead of USD 10. You should take advantage of that if you can.

https://interactivebrokers.com/en/index.php?f=4969
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Old 20-07-2019, 10:10 PM   #14
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[QUOTE=CWL84;121831699]One thing great about IBKR is that if you are 25 or below, the monthly activity fee is only USD 3 instead of USD 10. You should take advantage of that if you can.

Oh I did not know about this, this is really helpful, thank you
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