Happy Index Investing in 2014

A feeling of deja vu. The Straits Times Index ETF roughly ended the same way it ended 2012, at $3.21.

As a real life case study, I have bought around 1,400 shares for Nikko AM STI ETF100 (G3B), at an average rate of roughly 100 shares each month. The average cost per share (excluding trading expenses) currently stands at S$3.2486, a little over a cent and a half higher than the price now (S$3.23) as I’m writing this post. Dividends collected came to a grand total of S$71.50 for 2013.

This is not Dollar Cost Averaging. I would have preferred to DCA, but we will have to wait for the Singapore Exchange (SGX) to reduce the standard board lot size to 1 unit before it is possible. Let’s keep our fingers crossed that we would be able to trade in lots of 100 units by this year, and in single units by 2015.

As you can see from my purchase log, I’m not too particularly about when I make the purchase in the month. Start of the month, end of the month, middle of the month – I’ve done it all. Heck, I’ve even forgotten during a month or two. As long as I have the discipline to stick my program, I’m guessing everything will average out over the course of my investment lifetime.

Here’s wishing you a Happy New Year! While wealth is important, there is nothing more important than good health, and happiness. May you have plenty of these two!

Nikko AM - Keeping Track of the STI

Part 4 of Nikko AM advertistment on Today newspaper on Dollar Cost Averaging (DCA).

Question

What is Dollar Cost Averaging?

Answer
Dollar cost averaging (DCA) is an investment strategy that involves investing of equal monetary amounts regularly and periodically over specific time periods in a particular investment or portfolio. By doing so, more shares are purchased when prices are low and fewer shares are purchased when prices are high. The point of this is to lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.