Not much downside. I just don’t like fractional shares and wish I can do this. Too bad I cannot.
How are the inventory of fractional shares handled by IBKR? Do they add up to a full share?
If you buy 0,5 fractional shares up to a quantity of 5 shares, does it mean that you own 5 full shares or 10 fractions of 0,5 shares?
Is it possible to set up recurrent selling on IBKR?
Hello,
I’ve read several times that investing daily can help smooth out market fluctuations. However, I don’t have the time or motivation to place trades every day manually.
I use Interactive Brokers as my broker. Is it possible to set up an automatic recurring order to invest, for example, 50 CHF per day? If so, how can I configure such an order?
Also, do you think this strategy is effective, or is it not really worth it?
Thanks in advance for your insights!
I’d only consider it on a no-commission broker. Daily is really overkill (monthly on a predefined day is much less hassle and probably has the same results)
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Never used it, but IBKR seems to have that feature. Check out this page, there is a video too:
Yeah, i also would steer clear of daily investments to much work to keep track of it come tax season… Monthly (or semi monthly) is what i would go for, still plenty frequent in the big scheme.
As mentioned by others. IBKR offers this feature and it’s also fairly cheap if you’re using the tiered pricing model (i buy VT and it costs around 0.35).
go to “Trade” and then “reccuring investments”. You can choose from daily, weekly, bi-weekly, monthly, quarterly, semi-annually and annually.
Cheers!
Only if your regular contributions are significant in comparison to the portfolio size. Once they are in the order of 1%, the precise timing of contributions hardly matters, the portfolio’s performance will be mostly determined by the market development.
From my point of view, contributing once per month is a natural thing to do, because you are getting your salary monthly. Once in 3 months is also fine.
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Apart from being a bit overkill to invest daily, note that even with recurring investment you stll pay 1US$ per trade (US ETFs) on IBKR.
So basically you are losing around 20$ a month compared to investing 1000$ once a month. While it might make sense in theory, it’s not in your best interest in the real world.
I’ve moved away from recurring investments. My monthly expenses vary too much for that. There are big bills to be paid end of December (health insurance paid yearly, plus other insurance), then I begin to pay into 3a for two months until at the end of March, federal taxes are due. Then I finish maxing out 3a. Around June/July I need to start paying state taxes to have them paid off by end of Sept.
So there are basically only two windows where I’m able to invest into non-3a, early summer and in the fall.
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Totally fine if you can avoid behavioral mistakes and keep on no matter what.
With the tiered pricing model, the minimum commission is only $0.35 for US ETFs.
That said, I agreed that daily investing is overkill. Assuming monthly income, monthly investing shortly after receiving your salary makes most sense to me to maximize the time in the market.
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I’ve optimized my payments to reduce variations from month to month. I.e., I pay everything monthly (or at least quarterly) instead of yearly, where possible without penalty. I pay health insurance and contribute to 3a both monthly. I have a monthly standing order for my approximate tax to a separate savings account (from there I pay state taxes as early as possible if the interest rate is beneficial, and federal taxes I pay when the bill arrives).
I like the lower variance in payments to have a better overview how my expenses compare to my budget (without having to track every single expense).
That said, I don’t use recurring investments as I invest in multiple funds and I steer fund purchases to bring my portfolio closer to my strategic allocation. And my income varies from month to month.
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