Thursday, March 9, 2017

Optimizing my POSB Invest-Saver Plan

I started out my investing journey in March 2015. Back then, I was very much influenced by the works of commercial financial bloggers.

"Buy STI ETF" they say.

"You sure can't go wrong with this. 8% returns per annum! Furthermore, you get instant diversification with 30 brand name counters which everyone knows!"

Books I read seemed to lend credence to this sentiment. After further research and being marginally aware of the drawbacks of passive indexing, I started plonking down $200 each month into the POSB Invest-Saver Plan.

Fast forward to now. The economy is not good and yet the market is going higher and higher. I ask myself. Am I going to mindlessly dollar cost average (DCA) my Nikko AM STI ETF investment higher, or should I take a more active approach in my passive indexing?

As it is nearing the 12th of the month (debit date for the POSB Invest-Saver), I have come up with a tentative plan:

If Nikko AM STI ETF > $3.00, invest $100 per month

Else, invest $200 per month

(I intend to use some technical indicators to provide a less arbitrary/more granular approach, but it's still on the drawing board.)

As Nikko AM STI ETF is currently at $3.19, here are the steps which I have taken to effect the change in monthly contribution:

1). Via DBS iBanking, select "More Investment Services" in the "Invest" header. You will see something like the screenshot below.

2). Select "Set Up Exchange Traded Fund Regular Savings Plan (RSP)." It's alright even if you have an existing Invest-Saver Plan. Your new application will supersede the previous arrangement you have with the bank. In the screenshot below, you can see me applying for a $100/month plan.'s done!

P.S. I just learned that any changes to the monthly investment amount only takes effect on the next next month (e.g. I'll pay $200 and $100 on March and April, respectively). Ugh, so much for "optimizing." Time to learn how to time the market. >.<

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