Step by step walkthrough on Maybank Kim Eng's Monthly Investment Plan

Step-by-step guide to invest in Monthly Investment Plans

In our previous article on monthly investment plans, we compared the various services offered by banks and brokerage houses and how these plans could help retail investors enter into the stock market via dollar-cost averaging without paying high commission charges.

For today, we will take an example of one such monthly investment plan offered by Maybank Kim Eng and provide a step-by-step walkthrough of the platform to explain how you could use it.

Step-by-step guide to invest in Monthly Investment Plans

1. Open a Maybank Kim Eng KE Trade Prefunded Account.

2. Log in to yourKE Trade Account.

3. Click on "e-Services" tab as shown below.

4. Select your prefunded account (completed previously in step 1), key in the amount to invest and key in the name of the counter you wish to purchase.

5. Alternatively, you may also click on the “List of Eligible Securities” (the 3rd tab on the top) to view or search for all counters available offered under their monthly investment plan.

6. You may search by markets, or search by counter code or counter name. You may also choose to display all eligible securities by clicking “ALL” markets and hit the “Search” button.

Maybank Kim Eng’s Monthly Investment Plandoes offerdistinctive features that we like.

Lots of companies to choose from

The platform allows users to select from 225 counters over 5 different markets (Singapore, US, Hong Kong, Malaysia, Thailand). From what we know, they offer by far the largest amount of stocks that you can select from.

Low commission charges

Even if you were to invest as little as $100 a month, the sales charges still stick at 1%.

Our Take On Monthly Investment Plan

Whether you choose to use Maybank Kim Eng’sMonthly Investment Plan or those offered by other financial institutions such as OCBC, POSB or POEMS, the same value proposition holds true and that is the fact that these plans allow retails investors to gain access to dollar-cost averaging when buying stocks. 

As long as the commission charges remain low and the selections of stock counters are adequate, this will be aneasy and affordable way to get started in stock investments.

Article was first published on K.I.S.S Investing, a website aiming to keep stock investing simple.

4 unassuming Jokes on Accountants

Accountants are often branded as boring people doing routine work day in day out. Now for a change during this relaxing weekend, we take a look at 4 jokes on accountants (no pun intended as I am one myself!).

Story #1

A lady goes to see her doctor. After examining her, he says, "I'm terribly sorry to tell you this, but you only have six months to live." The lady is very distraught, "Oh doctor, what should I do?" she asks. The doctor says, "I advise you to marry a CPA."

"Will that make me live longer?" she asks, hopefully. "No," says the doctor. "But it will SEEM longer."

Story #2

A businessman was interviewing job applications for the position of manager of a large division. He quickly devised a test for choosing the most suitable candidate. He simply asked each applicant this question, "What is two plus two?"

• The first was a social worker. She said, "I don't know the answer but I'm very glad that we had the opportunity to discuss it."
• Next came an attorney. He stated that "in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four."
• Finally, the businessman interviewed an accountant. When he asked him what two plus two was, the accountant got up from his chair, went over to the door, closed it, came back and sat down. Leaning across the desk, he said in a low voice, "How much do you want it to be?" He got the job.

Story #3

An accountant dies and goes to heaven. St. Peter, of course, is there, looking through the files and asking a few quick questions. "What sort of accountant were you?" "Oh, I was a CPA", was the reply. "Name?" asks St. Pete. The accountant gives his name and St. Peter finds his file. "Oh yes, we've been expecting you. 

You've reached your allotted time span." The accountant says, "But I'm only 48 years old." St. Peter looks again at the file and says, "Well, that's impossible." "Why do you say that?" asks the accountant.

"Well," says St. Peter, "we've been looking over your time sheets and, based on the hours you've charged your clients, you must be at least 117 years old!"

Story #4

Two accountants are in bank together when armed robbers burst in.

“Everyone empty your pockets! Give us your wallets!” They shout out as they begin collecting wallets, purses, and watches.

The first accountant turns and jams something into the hand of the second accountant.

The second accountant asks “What is this?”

“It’s the $50 I owe you,” responds the first accountant.

Invest In Stocks Using A Monthly Investment Plan

Utilize the dollar-cost averaging method while reducing your commission fee. What is there not to like?

Just a year ago, investing in blue chip stocks listed on the Singapore Exchange (SGX) seems like a rich man's game not meant for everyone. That was because board lot sizes were only available for purchase in multiples of 1,000. In those days, it was difficult for retail investors to invest in all companies, since some stocks such as OCBC would cost roughly S$10,000 per lot.

Since then, minimum lot size have been reduced significantly to 100 units allowingyour favourite blue chip counter to be within reach.

Read also: Reasons to begin investing in 2015

While the above mentioned is helpful for investors who would like to get started without a sizable capital, it poses yet another problem, and that is, the high commission cost that one incurs when buying stocks in small units. Frequently, retail investors still have to pay a minimum fee of about $25 per transaction regardless of the value of the stocks that they are purchasing.

Some stock brokerage houses have introduced monthly investment plansas a way to help offset the problem of incurring significant commission cost. As the name suggests, these investment plans allow you to invest a fixed amount of funds each month into buying the stocks of your choice.

They provide an affordable and hassle-free way for those who want a relatively easy way to invest. In addition, investors are also able to effectively take advantage of "dollar-cost averaging" thus benefitting thosewho do not have the time or the patience to be monitoring the stock market regularly and react accordingly to fluctuations.

Where to go for Monthly Investment Plans

There are currently 4 major players offering monthly investment plans namely: POSB Invest-Saver, OCBC Blue Chip Investment Plan, POEMS Share Builders Plan andMaybank Kim Eng Monthly Investment Plan. Since all of them allow investors to kickstart investing with as little as $100 a month, we will do a minor comparison of the other features with the chart below to understand the differences and similarities. 

	POSB	OCBC	Poems	Maybank Kim Eng
Share counters available	ABF Singapore Bond Index Fund & Nikko AM Singapore STI ETF	18 local share counters & Nikko AM STI ETF	19 local share counters	225 share counters across 5 markets (Singapore, USA, Hong Kong, Malaysia and Thailand)
Fees	0.5% sales charge per transaction for the ABF Singapore Bond Index Fund	0.30% of the total investment amount OR S$5 per counter, whichever is higher	≤ 2 share counters: $6 for inv. of $1,000 and below, the higher of 0.2% or $10 for inv. above $1,000	1% sales charge for inv. < S$1,000
	1% sales charge per transaction for the Nikko AM Singapore STI ETF		≥ 3 share counters: $10 for inv. of $1,000 and below, the higher of 0.2% or $10 for inv. above $1,000	0.18% sales charge for inv. ≥ S$1,000; subject to min. of S$10
Dividends	Cash credited to DBS/POSB debiting account	Cash dividends credited to OCBC account; Stock dividends or bonuses safe-kept with OCBC Securities	Dividends are being reinvested but charged 1% on net dividend capped at $50	Dividends are credited into the Maybank Kim Eng account directly.

At first glance, POSB and Maybank Kim Eng stood out from the rest in the "Share counters available" category. The former is able to put forward the opportunity to diversify into bonds while the latter has more than 10 times of the counters as compared to OCBC and POEMS. In fact, being a newcomer to this market, Maybank Kim Eng is now offering zero commission for the period from 1 March 2015 to 31 August 2015!

As for the fees, assuming we invest S$1,000 monthly in just the Singapore STI ETF, OCBC turns up as the winner for its fees of S$5, equivalent to only 0.5% charge. Then again, considering a quantum of S$200 monthly, POSB and Maybank Kim Eng turn out to be better options due to their standard 1% sales charge; which would translate into S$2 as compared to S$5 and S$6 for OCBC and Poems respectively.

Last but not least, the dividends are usually credited to each bank's own account except for POEMS, which would reinvest it back back with a 1% charge on the net dividends (after tax if any).

Conclusion

Monthly investment plans are a relatively new approach to investing which is suitable for people who would like to adopt a long-term view in investing due to the beauty behind dollar-cost averaging.

Do you think a monthly investment plan will help you better invest in stocks? Discuss it with us on Facebook.

DollarsAndSense.sg is a website that aims to provide interesting, bite-sized financial articles which is relevant to the average Singaporean.

Written By: James Yeo

5 things to look out for when opening a stock account

For most people who are interested in investing, deciding to open a stock brokerage account is typically the first step to take in the investment journey. However, with the numerous stock brokerage firms available out there, selecting one over another could prove a daunting task.

Here is a simple guide on what to take note of when opening a stock brokerage account and the questions you should be asking.

Opening a CDP account

Before you can start trading, you have to first open a Direct Securities Account with The Central Depository (CDP).

The CDP account is owned by the Singapore Exchange and basically acts like a central storage place where all the local shares that you have bought are ‘kept’. To open a CDP account, you must be at least 18 years old and not be an un-discharged bankrupt.

There are 2 ways to open an account. 

(i) One, when you open your first brokerage account, the brokerage firm will assist you in opening a CDP account and automatically linking it to the trading account. 

(ii) Another way is to open an account directly with CDP itself via their online platform. Any subsequent accounts that you start with other brokerage firms will be linked to the same CDP account.

5 Key things to look out for when choosing a stock brokerage account

This brings us to the next question: which stock brokerage firm should you consider? A brokerage account is an account through which you will do the buying and selling of shares. It is usually tagged with a brokerage firm (e.g. UOB Kay Hian, Maybank Kim Eng), which will transact trades on behalf of the instructions of its clients.

Here are some important considerations to take not of when opening a brokerage account.

1. Fund Transfers:

If there is a need to transfer funds to the brokerage company where you purchase shares, some readers might find it more convenient to open a brokerage account with a bank that they already have a saving account with. For example, if you have aDBS account, it may be more convenient for you to open a brokerage account with DBS Vickers.

2. Level of Support:

The level of support received is important. We think it is essential to have someone whom we can call to when we have queries, whether technical or otherwise. Most of the brokerage firmshould provide this service, though the level of service received depends very much on the trading representative that is assigned to you.

3. Starters Pack:

If you are new to trading, you will need to start from somewhere. Some of the brokerage firms have introduced starter packs for investors who are new. For example, OCBC Securities have the OCBC Young Investor Pack, which offers commission rebate for the first trade and other support services. The CIMB Securities Youth Engagement is another such service worth considering.

4. Risk of Default:

Your brokerage firm defaulting is definitely an issue you DO NOT WANT to be concerned about. We can safely say that the risks of brokerage houses defaulting are very slim due to stringent regulations that MAS imposes. Nonetheless,a low probability does not equate to zero chance of the incident happening, as seen from the failure of MF Global.

One suggestion is to choose local brokerages that are generally safer as their regulatory standards are typically more stringent.

5. Commission Fee:

When an investor purchase shares, they have to pay a commission fee for the brokerage company to transact on their behalf. Bear in mind that this is a two-way charge. A commission charge is payable during both the purchase and sale of shares. 

Because the industry is so competitive, most of the rates offered by brokerage companies are quite similar and you shouldcheck out the rates offered from the different brokerage house.

6. Other Services:

In recent years, it has become more common for brokerage firms to offer affordable investment plans that enable customers to choose and invest in stocks via a regular monthly investment plan that could be as little as $100 monthly. Most of these investment plans are only accessible to those who already have a brokerage account with the firm. 

Hence, if your intention is to tap on some of these features, it will be good to consider a brokerage firm that offers this service. Example includes the newly introduced Maybank Kim Eng Monthly Investment Plan, which allows users to select from up to 225 stocks across 5 different markets. 

Singapore O&G Balloting Results (Public Tranche 332 times OVER-Subscribed!)

As I have mentioned in my previous post, I said that SOG (Singapore O&G) is pretty much going to be a great hit. and how true it is; just take a look at the balloting results below:

A total of 730 million shares are applied for only 2.2 million shares, a whooping 332 times subscription rate!

On a side note, it seems the higher chances of getting a successful allocation goes to those who ballot for 1 lot. For those who do not know how to read the ratio; take for example for the 10 to 49 lots band, the chances of successful allocation is 7.07% (7/99).

Good luck to those who are successful in the application, the stock will definitely get a pop in the morning 9am.. As for me, I will be waiting by the side to await a chance to get in again through the open market then...