How/Why to setup Recurring Investments
Had a few dms from my previous post about how to DCA every month. So I decided to make a post to share about how I do it.
As an investor i’m more of a set and forget kinda person. If I can just invest a set amount of money every month, I would. Why spend time transferring money to your brokerage, converting that currency (if you’re buying a stock in a different currency) when you can automate that process? Furthermore, this takes away the market timing/ FOMO everyone feels when you see your stocks go up and down as it’s always a set date and time that you buy your stock.
How I did it.
1. Setting up recurring transfer from your bank
I use DBS (see second image). I set a recurring transfer of 1400 sgd every month on the 24th of each month. If you’re also using DBS, click local transfer > check recurring investment.
2. Setting up recurring transfer from your broker
I personally use IBKR. Click recurring transfer then select the ETF/ Stock you would like to buy. Note that for IBKR’s case if you buy in a different currency, they would auto convert it for you. Say want to buy 1000 USD worth of VWRA every month, they would convert an equivalent amount that is in my account from SGD. So because of this you kinda have to guesstimate (is that a word) your recurring transfer from your bank account. I used a more conservative figure of 1usd = 1.4 sgd, but you can always change this after.
Things to note:
For the recurring investment in IBKR, I set a later date of 25th Nov to allow the transfer transaction to process. Also if you have insufficient balance you would probably use margin to buy the stock. As always NFA and please double check whatever I’ve said.
To deepen the recurring investment practice, it's important to understand how automatic currency conversion works with Interactive Brokers (IBKR). Since IBKR converts currencies automatically when purchasing stocks or ETFs in foreign currency, you might want to estimate your bank transfer amount conservatively—using a fixed exchange rate—to avoid shortfalls or margin use. For example, I use 1 SGD = 1.4 USD as my rough guide. Another useful tip is scheduling your bank transfer a day or two before your brokerage purchase date to ensure your funds are available and avoid any delays or need for margin borrowing. Additionally, many brokers allow you to set a number of installments or an end date for your recurring investments, so you can plan your investment horizon effectively and adjust it as your financial goals evolve. Finally, while the "set and forget" approach is convenient, I recommend occasionally reviewing your investment plan and performance. Market conditions and personal finances change, so adjusting your amounts or the ETFs you invest in from time to time can keep your strategy aligned with your goals. In my own experience, automating recurring investments has helped me stay disciplined and reduce emotional decision-making. It has simplified the process, alleviated FOMO, and ensured steady portfolio growth over time.
