ING DiBa 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 order fee.

Today, even single purchases of stocks are still very expensive with some brokers, making it often only worthwhile to place an order starting from $1,000. However, with the new neo-brokers, the whole situation has changed a bit. Many of them offer very low order fees and the execution of savings plans is even free.

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

Then you select the ING DiBa savings plan amount. Usually, it starts at $25, but this amount is often further reduced. This amount is now invested in Apple stocks, with the broker placing a portion of a whole share in the portfolio. This means that at a price of $150, you will 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 very worth buying? This question is answered by an ING DiBa savings plan, as the same amount is invested monthly, regardless of where the stock is at that time. So, one invests in both good and bad times and eventually obtains an average entry price.

For many retail investors, an ING DiBa savings plan provides emotional support, as it eliminates the risk of entering at a very bad time. Many retail investors put pressure on themselves and experience stress when stock prices fall. Many also become very nervous when they see a negative return in their portfolio shortly after a big purchase.

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

Advantages and disadvantages of savings plans

The positive aspects outweigh when investing in the long term. When considering the advantages and disadvantages, one must differentiate between whether one wants to invest a monthly portion of their income or a large one-time amount. If one wishes to invest a monthly portion of their income, they can either save over several months to make a large single purchase during possible market crashes. Alternatively, one can invest it directly through ING DiBa savings plan.

Statistically speaking, now is always the best time to invest if you assume 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. Firstly, you often end up buying at a much higher price anyway, as it is almost impossible to time the absolute bottom, and secondly, mindset plays a big role in investing when prices are falling.

So, the ING DiBa savings plan not only provides mental support, but also significantly more time, as one does not have to deal with when the right time is for a single purchase.

Now let's move on to the disadvantages. These are primarily due to the selection of investment plans. Not every stock is eligible for an ING DiBa savings plan, usually because the company is not large enough. However, the selection is still very extensive, and all major and mid-sized companies are eligible for an ING DiBa savings plan without any issues. Additionally, the offering is continually expanding.

As mentioned above, a certain point in time is predetermined. Therefore, one cannot invest at any time when using an ING DiBa savings plan. Additionally, the entire strategy is only worthwhile if one invests long-term.

ING DiBa savings plan strategies

ING DiBa ETF Savings Plan: Investing in an ETF on diversified indices allows you to benefit from the overall market performance. It provides broad diversification across multiple countries and sectors. This type of investor is focused on long-term investments and aims to regularly invest in the capital market.

Long-term ING DiBa Savings Plan: Invest regularly and long-term in a specific selection of stocks. No changes are made over extended periods, allowing for the benefit of an average entry price.

Alternating ING DiBa savings plan: You can rotate the selection on a monthly or quarterly basis if you want to invest in more companies but the 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 ING DiBa savings plan as a single purchase: This point is interesting for many private 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 an ING DiBa savings plan for $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 approximately $1,000 in size.

ING DiBa 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 pre-determined price. The advantage of savings plans is a low or even no order fee.

ING DiBa: How to create an ING DiBa savings plan?

Start. Once you have opened a brokerage account, you can start setting up savings plans right away. To do this, select the "Securities Savings" option in the toolbar at the top of the screen.

Search for securities. You select the respective stock or ETF that you want to invest in. If you are now on the stock page, click on the "Savings plan" button in the top right corner.

Set parameters. First, you choose the monthly savings rate that you want to invest in the stock or ETF, which must be at least $1. (On average, customers save $120 per share at ING DIBa). After that, you choose the month in which you want to start saving the stock or ETF. Then you choose the savings date, which can be executed monthly, twice a month, or quarterly, on the 1st or 15th of each month.

Complete ING DiBa savings plan. After setting the data, you will receive an overview of the selected settings and a breakdown of the costs resulting from the savings plan rate, purchase costs, commission, and sales costs. Then, you just need to press "Start approval". All savings plans can be found under the Direct Depot in the "Securities Savings" field and can be managed there.