Accessible Investing
Investing today looks nothing like it did twenty years ago. In the past, investors placed trades by calling a broker over the phone and paying high brokerage fees. It was slow, expensive and, as a result, largely dominated by institutions and wealthy investors.
Today, technological advancements and competition have transformed the brokerage industry and reshaped the investment landscape. Mobile investing apps and online trading platforms now provide retail investors with real-time market access, lower transaction costs, and more convenience. Investing is now accessible to anyone with a smartphone.
Understanding Dollar-Cost Averaging
As more people begin their investment journey, many face the challenge of deciding when to enter the market. One of the many popular strategies that helps address this uncertainty is dollar-cost averaging (DCA).
DCA is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of market conditions. Rather than trying to time the market, you stay consistent by investing the same amount every month, whether prices are rising or falling.
Example: Investing US$500 monthly into the S&P 500
| Month | Amount Invested | S&P 500 Price | Units Bought |
| Jan | $500 | $500 | 1.00 |
| Feb | $500 | $400 (dip) | 1.25 |
| Mar | $500 | $600 (rally) | 0.83 |
The amount invested remains constant each month, but the number of units purchased varies with market prices. When prices fall, the same investment amount buys more units; when prices rise, fewer units are bought. This helps investors accumulate more units during market downturns and fewer during market rallies, potentially lowering the average cost per unit over time.
Historically, the S&P 500 has delivered average annualised returns of around 8% to 10% over the long run. Hence, investors who remain disciplined and continue investing through market fluctuations have generally been rewarded over time. However, investors should note that past performance is not necessarily indicative of future results.
For a worked example using STI ETF, refer to POEMS’ article on DCA here
Benefits of DCA:
- Reduces emotional decision-making
- Lowers the risk of investing a lump sum at the wrong time
- Reduces the average cost per share over time
- Encourages consistency and discipline
For investors focused on long-term wealth accumulation, consistent contributions can add up to more than most people realise.
If you are new to investing, are risk-averse, prefer a hands-off approach, or do not have time to monitor markets daily, the DCA strategy may be worth considering.
POEMS offers a Regular Savings Plan (RSP) that automates DCA across a range of stocks and ETFs — find out more here
Costs Matter More Than You Think
Transaction costs are easy to overlook. Each fee appears small, but they accumulate over time.
Traditional brokerage accounts in Singapore typically charge a commission per transaction, subject to a minimum fee. As an example, a standard rate of 0.16% with a minimum fee of US$27.25 means a US$500 trade ends up costing approximately 5.5% in commission. Although the stated commission is 0.16%, the minimum fee dominates for small trades, resulting in a disproportionately high effective cost. For anyone practising DCA with regular contributions into US markets, this recurring cost creates a significant drag on every transaction.
Consider a comparison of investing US$500 monthly over 10 years:
| With US$27.25 Commission | Zero Commission | |
| Monthly Investment | US$500 | US$500 |
| Annual Fees Paid | US$327 (1 Monthly Trade) | US$0 |
| Capital Invested (10 Years) | US$56,730 | US$60,000 |
Assuming an 8% annual return, that US$3,270 in saved fees grows to approximately US$7,100 over 10 years. The opportunity cost of paying commissions is therefore not just US$3,270, but also the potential gains that it could have generated.
While each commission may seem small, every transaction adds to the overall cost of investing. For a high-frequency intra-day trader executing approximately 10 to 20 trades per day, each charged at US$2 to US$4 per trade, total fees would amount to US$20 to US$80 per day. Over time, these costs accumulate and reduce the amount of capital that stays invested and compounding. Lower fees allow more capital to remain invested and benefit from compounding over the long term.
Zero-Commission Investing
The investing landscape has changed significantly over the past decade. One of the biggest developments has been the rise of zero-commission trading, which has removed a major cost barrier and made investing more accessible to retail investors.
This shift has transformed how retail investors participate in the market by making features more accessible:
- Fractional shares became more viable when commissions were removed. Previously, a flat trading fee on a small fractional purchase could consume a significant portion of the investment, making it impractical for smaller investors.
- Recurring orders allow investors to automate regular purchases and practise DCA. Under the old fee structure, each transaction would incur charges, making frequent small investments costly and less effective.
- Lower barriers for younger investors. With no commissions, investors with limited capital can start investing without fees eroding their principal.
With the growth of mobile investing platforms, zero-commission trading has made investing more accessible than ever. POEMS recently launched US$0 brokerage commissions on US stocks through its Cash Plus Account, making it the first full-service brokerage firm in Singapore to offer true zero-commission US equities.
Investors can manage their portfolios and place trades directly from their phones, while real-time market access allows them to monitor price movements and react instantly to market developments. Without commissions, investors can take advantage of market opportunities without fees eating into smaller trades.
Why Zero-Cost DCA Matters for Retail Investors
Zero-cost DCA is a game-changer for retail investors because it eliminates transaction fees that disproportionately affect portfolios. Removing these costs allows contributions to be fully invested.
For retail investors:
- Low barrier of entry, making it easier to start with smaller amounts
- Supports disciplined investing habits
- Enables recurring investment strategies without fees affecting each contribution
- Reduces hesitation and emotional resistance during volatile market periods
For long-term investors:
- Better capital efficiency, as more money remains invested and able to compound over time
- Encourages consistency, rather than relying on market timing
Overall, zero-cost investing combined with DCA reduces two key barriers for retail investors: cost and complexity. It replaces them with a simple and repeatable strategy that supports long-term investing discipline.
True Zero Commission
Geography, high fees, or access to platforms no longer constrain investing. Today, anyone with a smartphone can start investing with ease.
For retail investors, zero-cost DCA offers a straightforward way to take advantage of this shift. With commissions at US$0, investors can invest consistently, build positions over time, and allow compounding to work without small fees quietly eating into returns.
DCA remains one of the simplest long-term strategies. With POEMS Cash Plus offering US$0 commission, no platform fees and no settlement fees on US stocks, it removes barriers that previously made regular investing more difficult.
However, zero-cost DCA is not a one-size-fits-all solution. Investors should consider their financial goals and risk tolerance before incorporating DCA into their investment strategy.
In today’s market, consistency and discipline often matter more than trying to time the perfect entry. Start your zero-commission DCA journey with POEMS Cash Plus today.
Appendix/Sources
- [1]https://financialhorse.com/is-dca-the-best-way-to-buy-stocks/
- [2] https://www.investopedia.com/terms/d/dollarcostaveraging.asp
- [3]https://www.poems.com.sg/market-journal/simple-but-powerful-strategies-behind-dca-and-dva/
- [4]https://www.home.saxo/content/articles/macro/worried-about-investing-at-market-highs-dollar-cost-averaging-dca-can-help-10122024
- [5] https://www.stashaway.sg/r/singapore-best-online-brokerages-trading-platforms
- [6]https://www.dbsvickers.com/vickers/pricing/individualaccount?pid=sg-vickers-en-trade-heroblock-individual-account-learnmorebtn
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