Comdirect Savings Plan as Autopilot

Automated Investing. For several years, many brokers have offered the option to set up a savings plan for stocks or ETFs. This involves regularly purchasing securities at a predetermined price. The advantage of savings plans is a low or even no commission fee.

Even today, individual stock purchases are still very expensive with some brokers, which often only becomes worthwhile from $1,000 onwards to place an order. With the new neo-brokers, this has changed somewhat. Many offer very low transaction fees and even the execution of savings plans is free.

To explain this with an example, let's assume that we want to set up a Comdirect savings plan on Apple stock. First, we determine when the Comdirect savings plan should be executed. Here, we are somewhat limited because most brokers only offer the beginning or middle of the month. If you want to invest at larger intervals, you can also choose quarterly.

Then you select the Comdirect savings plan amount. Usually, it starts from 25$, although it is often lowered further. This amount is now invested in Apple stocks, as the broker places shares of a whole stock into the portfolio. This means that at a price of 150$, you would receive 0.166 shares worth 25$.

Good entry point for beginners.

Easy way for private investors. For many beginners, it is a big problem to know when to enter. Is the stock now too expensive or worth buying? This question is preceded by a Comdirect savings plan, as the same amount is invested monthly, regardless of where the stock is at that time. Thus, one invests in both good and bad times and obtains an average entry price in the long run.

For many retail investors, a Comdirect savings plan provides psychological support, as it eliminates the risk of entering at a very bad time. Many retail investors put pressure on themselves and stress out when prices fall. Many become very nervous when they see a negative balance in their portfolio shortly after a large purchase.

The Comdirect savings plan ensures that one does not become too nervous in bad times, but also benefits from the good entry opportunities through regular investing, without having to determine whether the lowest point will be reached now or only in a few weeks.

Advantages and Disadvantages of Savings Plans

Positive points outweigh when investing long term. When it comes to the advantages and disadvantages, one needs to differentiate whether they want to invest a monthly portion of their income or a large one-time amount. If you prefer investing a monthly portion of your income, you can either save over several months to make a big single purchase during possible market crashes. Alternatively, you can invest it directly through a Comdirect savings plan.

Statistically speaking, now is always the best time to invest if one assumes that prices will rise in the long term. Many individual investors often wait for a crash to make a purchase, but they miss out on all the price gains and dividends beforehand. On the one hand, one still often buys at a significantly higher price because it is almost impossible to time the absolute low point, and on the other hand, one's mindset plays a significant role in investing during falling prices.

So the Comdirect savings plan not only provides psychological support but also significantly more time, as you do not have to deal with when the right time is for individual purchases.

Now let's move on to the disadvantages. These are led by the selection of investment plans available. Not every stock is eligible for a savings plan with the broker Comdirect, which is usually due to the company not being large enough. However, the selection is very wide, and all major and medium-sized companies are eligible for a savings plan with Comdirect without any problems. Additionally, the offering is continuously expanding.

As mentioned above, a certain point in time is predetermined. So it is not possible to invest at any random point in time when using a Comdirect savings plan. Additionally, the entire strategy is only worthwhile if one invests for the long term.

Comdirect Savings Plan Strategies

Comdirect ETF Savings Plan: Invest in an ETF on broadly diversified indices and thus benefit from the general market performance. It offers broad diversification across many countries and sectors. This is a long-term investment approach for investors who want to regularly invest in the capital market.

Long-term Comdirect savings plan: Regularly and long-term invest in a certain selection of stocks. Here, no changes are made over longer periods of time and one benefits from an average entry price.

Alternating Comdirect savings plan: You can rotate the selection on a monthly or quarterly basis if you want to invest in more companies but your savings amount is not sufficient. For example, you could invest in one list of stocks every even month and in the other list every odd month.

Use Comdirect savings plan as a single purchase: This point is interesting for many individual investors who would like to buy individual stocks but do not have enough capital to, for example, buy a whole Amazon share (2,800 $). In this case, you could set up the Comdirect savings plan at 1,000 $ and terminate it after execution. This way, you have Amazon as a single position in your portfolio, but it is not overweighted if all other positions are also around 1,000 $ in size.

Savings plan as autopilot

Automated Investing. Since several years, many brokers offer the option to set up a savings plan for stocks or ETFs. This involves regular purchases of securities at a pre-determined price. The advantage of savings plans is a low to even no order fee.

Comdirect: How to create a Comdirect savings plan?

Start. Once you have opened an account, you can immediately start setting up investment plans. To do this, navigate to the personal area and find the subcategory "Securities Investment" under the menu item "Investment".

Search for securities. First, enter either the WKN or the ISIN to select the security. Alternatively, you can also tap on "Search Securities" to manually search for the stock or ETF.

Set parameters. Once you have selected the stock or ETF, you can set the amount on the right-hand side, which must be at least $25. On the far right, the commission is displayed. With Comdirect, it is 1.5%. Tip: In this initial overview, you can also select multiple securities that you want to invest in.

Complete Comdirect savings plan. In the next window, you will be asked about the interval. Here you can choose between monthly, every two months, quarterly, semi-annually, or annually. For the purchase day, you can select the 1st, 7th, 15th, or 23rd. Additionally, you can also choose the first execution date, which is not possible with all brokers. Finally, you will receive a summary and can then press "Release".