The 51-year-old believes that the club have made some shrewd acquisitions from the lower leagues in recent seasons which have more than proved value for money
The Royals approach has often been to acquire players from the lower divisions, granting them an opportunity to showcase their talents in a higher league, all while keeping a firm eye on their finances at the same time.
Evidence of this can best be found in the club's most recent signing Hope Akpan, who joined from Crawley Town earlier this month, with McDermott full of praise for the 21-year-old after he made his debut at Newcastle, while also pointing to the success of the likes of Adam Le Fondre and Adam Federici this term.
"People sometimes question our transfer policy – but we do what we have to do and work with the players that we’ve got," McDermott told the club's official website.
"I brought Hope Akpan on and I thought he was fabulous. We spent 300 grand on him and you could see the qualities he’s going to bring to us.
"He’s 21 years of age and hungry. We paid 300 grand for Adam Le Fondre, and you couldn’t buy his right sock for that now.
"We bring in the likes of Stephen Kelly, Daniel Carrico – they don’t have to cost five or six million.
"Genuinely, over the years – we’ve never had loads of money to spend. Look at Fedders (Adam Federici) who came to us for nothing, if you haven’t got the money you need to find another way.
"Don’t get me wrong, if I get given a load of money to spend then I’ll spend it. But in any case throwing money at things doesn’t guarantee success – there are plenty of examples of that.
"There are teams in this league who have signed players for a lot more money than us and it’s not necessarily helped.”
The 51-year-old also refused to rule out any further signings during the remainder of the current transfer window, arguing that any deal would have to be in the club's best interests for them to consider further investment.
He added, "We’ll do what we do. If there’s something that comes up for us and it’s right and proper, and the owner decides he wants to do that then we’ll have a look at it."