Some questions on IBKR

[Lss]

yep, but the point I was making is the auto convert isn't "free" at all you just don't see it in a commission line,
so the "guru" youtube video quoted here is actually misleading.

ibkr applies a 0,.03% spread automatically . so assume constant exchange rate, here's the actually cost:

Scenario A Lump-sum convert 25K SGD first

Convert once, then DCA in USD.
USD 2 commission
≈ 2.7 SGD

Scenario B Leave SGD, auto-convert each DCA (0.03% spread)

Each month IBKR auto-converts 2,500 SGD at 0.03% worse rate.

FX cost per DCA
2,500 × 0.03% = 0.75 SGD
Total over 10 DCAs
0.75 × 10= 7.50 SGD

​

If keep the money as cash is there any difference in ibkr interest rate for USD Vs SGD?

 

[biting]

Yes, selling in batches will help to minimise regret. Selling is so much more difficult than buying. nobody knows where the top is in real time.

 

[Thoreldan]

I dun think @Thoreldan was trying to flex. He is just stating the definition of DCA which is correct.

If you choose to buy on a red day every month, then technically it's timing the market aldy.

Cos how will you know which red day is the lowest. Or what if there are no red days in the month? Then skip for the month?

DCA means fixed investment every interval (eg. monthly) regardless of price performance

But everyone chill, just enjoy exchange of ideas dun need work up

Thanks for helping to explain further

 

[Mephist0pheLes]

yep, but the point I was making is the auto convert isn't "free" at all you just don't see it in a commission line,
so the "guru" youtube video quoted here is actually misleading.

ibkr applies a 0,.03% spread automatically . so assume constant exchange rate, here's the actually cost:

Scenario A Lump-sum convert 25K SGD first

Convert once, then DCA in USD.
USD 2 commission
≈ 2.7 SGD

Scenario B Leave SGD, auto-convert each DCA (0.03% spread)

Each month IBKR auto-converts 2,500 SGD at 0.03% worse rate.

FX cost per DCA
2,500 × 0.03% = 0.75 SGD
Total over 10 DCAs
0.75 × 10= 7.50 SGD

​

i didnt know this, good info.

but have to consider there's no interest for money in ibkr if NAV is below certain amount.

if ur money sits outside ibkr earning just 1% p.a. instead and u deploy them in over 10 intervals, that's additional $95 of interest, much more than the auto-conversion cost.

 

[VEF888]

If keep the money as cash is there any difference in ibkr interest rate for USD Vs SGD?

only USD can earn interest and only above a certain threshold.

i didnt know this, good info.

but have to consider there's no interest for money in ibkr if NAV is below certain amount.

if ur money sits outside ibkr earning just 1% p.a. instead and u deploy them in over 10 intervals, that's additional $95 of interest, much more than the auto-conversion cost.

yep, so best is to lump sum convert to USD, earn interest and deploy for DCA over months even years.
there an exchange rate risk as SGD has proven to be one of the strongest over the years, but assuming the S&P500 gains will more than offset any of that risk.

 

[radioshack]

My strategy is to use FSMOne for SGX listed Investment and IBKR for NYSE/LSE Exchanges Investments.

 

[radioshack]

yep, but the point I was making is the auto convert isn't "free" at all you just don't see it in a commission line,
so the "guru" youtube video quoted here is actually misleading.

ibkr applies a 0,.03% spread automatically . so assume constant exchange rate, here's the actually cost:

Scenario A Lump-sum convert 25K SGD first

Convert once, then DCA in USD.
USD 2 commission
≈ 2.7 SGD

Scenario B Leave SGD, auto-convert each DCA (0.03% spread)

Each month IBKR auto-converts 2,500 SGD at 0.03% worse rate.

FX cost per DCA
2,500 × 0.03% = 0.75 SGD
Total over 10 DCAs
0.75 × 10= 7.50 SGD

​

I think I will auto convert 800 USD (1015SGD) each recurring investment instead of 30k lump sum cause IBKR cash balance need to have high NAV to have interest

 

[VEF888]

I think I will auto convert 800 USD (1015SGD) each recurring investment instead of 30k lump sum cause IBKR cash balance need to have high NAV to have interest

yeah, go for it. just make sure you sift through the forums and available information carefully and make an informed decision. there is a lot of half truths out there, and that is true almost everywhere. transaction costs are relatively trivial in the bigger picture. what really matters is setting up a sound process and refining the system as you go.