Query about DCA and other Investment Stuff

Hi SGdividends,

Greeting to you and your team, thanks for having such interesting blog to enlighten rookie like myself.

Been following your blog for the past couple months, decide to write to you as i wish to hear more about DCA, currently i'm buying STI ETF via poems SBP at $200 mthly.Appreciate if you can give me more views on such, i'm not sure if i am doing the right thing, however the admin charge of $10.70 is definitely expensive.

On top of STI ETF, i'm looking to get some penny stocks but only have limited capital. 3-4k Myself is a passive investor and since i'm young, time is to my advantage. I'm willing to buy and hold.

Due to the recent bull rally, i can't help thinking if i really miss out the bottom. Rather than waiting and waiting for the uncertainty bottom, i got to be a little pro-active.

I have shortlisted a couple of stocks, hope to hear from your views if you are comfortable.
Bio-treat
Boustead
Cambridge
Celestial
Epure
FJBen
FSL trust
Gen int
Hyflux water trust
Mercator lines
Midas
RafflesEdu

Your comment is purely taken as suggestion and hold no responsible or liable to whatever that may arise.

( a reader)
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Hi Dude,

Based on the above, if you are only buying 1 counter ( STI ETF 100) at $200 monthly, then it should not be $10.70 charge. It should be $6.42, since your investment fall into the category of less than $1000 and less than or equal to 2 counters.If that’s the case, your “sales” charge is 3.21% monthly. The most optimal amount via SBL is $1000 monthly which comes up to 0.64% “ sales” charge in this category. So if you wanna do DCA , $1000per month is good if you have the necessary cash inflow monthly. For POEMS SBL using DCA, the next optimum is $5300. ( but don’t think most people can afford a monthly DCA of $5300 right and one can already buy a lot.)Having said that, think if $200 is all you can spare a month, then your current situation of investing $200 is the cheapest option available in the market now and you should continue doing it since STI is still pretty attractive. You should stop your DCA when you see yield curves getting flat.( See our post on "how to predict a recession" under the how to links. Scroll below for the link under Related Articles.)

Just to let you know, our strategy now ( or rather for the past 5 months since) is to buy blue-chips which are collectively included in the portfolios of Fund Managers.(See our posts on "A Peek into Fund Manager's Holdings". Scroll below for the link under Related Articles.) We reasoned that funds faced much liquidation which contributed to the plunge. If and when they buy back, they will buy back such blue-chips again….since they generally have a set criteria of what kind of counters they are allowed to buy. Anyway, we don’t know the bottom and we should just plonk in some money every month.

Just a short comment with some links on the following counters from a “fundamental” perspective, not “technical” perspective, we rather you see for yourself and decide =). It’s your money…not ours. You might also want to check out their debt profile.

Bio-treat
Cashflow
Just feel that there are too many competitors doing waste treatment but they claim to have this BMS technology, don’t know what the heck is that..
Boustead
Cash Flow
You might want to hop over to this blog to look at the in-depth write up by MusicWhiz
Cambridge
Purely a dividend play.
Celestial ( Thanks La Papillion for pointing the mistake)
Check out Convertible Bonds warning
It’s a soybean , food and beverage maker which means its exposed to commodity prices as a raw material. As a fundamental investor, this is a huge risk as people are bullish on commodity prices in the long term. Might face profit margin reduction. For example Jim Rogers bullishness.
Epure
Check out their Cashflow
Another wastewater treatment!!
FJBen
Check out their Cashflow
The cashflow don’t look good. The FREE cash flow looks abysmal.
FSL trust
Check out Market Uncle
Gen int
No comments.
Hyflux water trust
Check out Market Uncle
Mercator lines
Check out their Cashflow
The cashflow don’t look good. The FREE cash flow looks abysmal. Fundamentally weak, personal opinion. Some people may reason that it would be a good idea to buy into cyclical stocks since the upturn will enhance the capital appreciation of such cyclical companies since it has a high beta. It’s your call…but we don’t buy into this reasoning
Midas
Check out their Cashflow
Recently (around 30 march 2009), many financial analysts such as Kim Eng (target : S$0.68)and DMG ( target: S$0.73) say it’s a buy. Reasons being:
1) One of the four entities with a licence to assemble/produce Metro train cars in China.
2) Direct beneficiary of the China stimulus package. Approximately RMB2t is budgeted by the Ministry of Railways (MOR) for expansion of China’s existing railway system between FY09 and FY12, mostly for intercity train systems.
The company has granted share options:
Exercise price of options granted: S$0.517 per share and insiders who have accepted them are:
1)Chan Soo Sen
2)Raymond Tong Wei Min
3)Chew Chin Hua
Validity period of the options: 9 February 2009 to 8 February 2014 which means they can exercise it anytime between. ( that’s how we interpret it).
You might one to look at the insider trades at Midas Website
Raffles Educations
No comments.

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Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team