*Official* Shiny Things club

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wahkao3

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Hi Shiny Things,

What is your advise for a person starting index investing, should he adopt the DCA method of buying the stock and bond etf as and when he gets his salary, or should he save up and buy the stock and bond etf with a lump sum?

i give my sincere advise
wait for crash then buy.

its low risk, high return

right now no crash no buy.





of course if you are good in cherry picking stocks, anytime is a good time to buy :o
 

Shiny Things

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What is your advise for a person starting index investing, should he adopt the DCA method of buying the stock and bond etf as and when he gets his salary...

With DCA, one could average up the price of purchase and he doesn't time the market, but the cost of buying every month/quarterly will eat into his returns.

If you've got a lump sum already you can chuck it all in at once, but if you're just investing your salary you should dollar-cost-average; don't save it up and try to time the market.

You are not a market timer. Neither am I. You don't know when (or if) a crash is going to come, so there's no point waiting around for one to happen. Just buy with every paycheck when it comes in (or save up until you can afford one round lot of whatever).

And the costs of investing aren't a problem if you use a low-cost broker like Standard Chartered.

Just wondering ah how many % did you allocate for Asian growth funds?

Zero. My only allocation to Asian anything is through VWO, the Vanguard emerging markets ETF, and that's only 5% of my portfolio. You don't need a specific allocation to "Asian growth" or any sort of growth, and you definitely shouldn't do it through some high-cost unit trust.
 

SpeedingBullet

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Need your expertise again.

This is abt the SPDR® Blackstone / GSO Senior Loan ETF. Quite a well-diversified sr loan ETF. What's the difference between this and regular bonds?

Not just talking abt this ETF in particular but the entire loan ETFs as an asset class. Can use SNLN too (for the tracker, leveraged loan index)
 

PippingCafe

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Yep, VWRD (listed on the LSE) is the right answer here. (The reason why it's the right answer is sort of convoluted, but it's basically to do with tax.)

somehow couldn't find this ticker in standard chartered LSE, only the VRWL version is there? Just check which brokerage have VRWD?
 

PippingCafe

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somehow couldn't find this ticker in standard chartered LSE, only the VRWL version is there? Just check which brokerage have VRWD?

problem solved. Somehow the scb search function can't find this ticker. But you can buy if if you enter it directly without searching. :)
 

Shiny Things

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Need your expertise again.

This is abt the SPDR® Blackstone / GSO Senior Loan ETF. Quite a well-diversified sr loan ETF. What's the difference between this and regular bonds?

Not just talking abt this ETF in particular but the entire loan ETFs as an asset class. Can use SNLN too (for the tracker, leveraged loan index)

So for anyone who's confused, bank loans (BKLN is the really big ETF in this space, rather than SNLN) have been white-hot for the last couple of years, mostly because they're usually floating-rate rather than fixed rate. So the sales pitch is "if rates go up you won't lose money, you'll get more income!".

There are a couple of problems, though:

1) The huge wall of money into loans has compressed their spreads to the point where you're probably not being adequately compensated for the default risk;
2) Loans have a big liquidity problem - it can take as much as two weeks to settle the trade if you sell them. This is potentially quite a big issue for ETFs - nobody knows what's going to happen if there's a huge rush of selling in leveraged loan ETFs.

I don't particularly like leveraged loans as an investment, mostly because I don't understand them particularly well. If you're worried about rising interest rates, buy short-dated bonds instead.
 

SpeedingBullet

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So for anyone who's confused, bank loans (BKLN is the really big ETF in this space, rather than SNLN) have been white-hot for the last couple of years, mostly because they're usually floating-rate rather than fixed rate. So the sales pitch is "if rates go up you won't lose money, you'll get more income!".

There are a couple of problems, though:

1) The huge wall of money into loans has compressed their spreads to the point where you're probably not being adequately compensated for the default risk;
2) Loans have a big liquidity problem - it can take as much as two weeks to settle the trade if you sell them. This is potentially quite a big issue for ETFs - nobody knows what's going to happen if there's a huge rush of selling in leveraged loan ETFs.

I don't particularly like leveraged loans as an investment, mostly because I don't understand them particularly well. If you're worried about rising interest rates, buy short-dated bonds instead.

Yeah that was my mindset too, that floating rate loans = perfect investment if fed raises rates. I guess it's too gd to be true.

Thanks again!
 

jgyy1990

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Well... on the one hand, like I said, I don't do single stocks.

On the other hand, I think the oil production sector's going to be kind of French-Connection-UK-ed for the foreseeable future. Low oil prices look like they're here to stay - Saudi Arabia, who are the ones keeping the oil price down, are very much playing the long game. This is good news for downstream companies - manufacturers who use oil, transport companies and airlines that use refined products, basically everyone - but it's bad news for upstream companies like oil producers and rigbuilders and shipbuilders.

On the whole, low oil prices are great for the world economy, but like every economic development there'll be some losers alongside the winners.

Personally I work for rig building company and the price of oil mainly affects the stock price of the company. Potential clients will still approach rig builders regardless of the oil price. I do believe that oil price is there to stay for at most 5 years. Afterwards the price will jack up simply due to operation costs of extracting oil from deeper.
 

PippingCafe

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Just a query. My stock % now is 75% sti 25% vrwd should I balance it to 50-50 or this percentage is good enough?
 

platopus

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Pipping,

Depends on your individual appetite for currency risk and exposure towards USD.
The boglehead three fund portfolio recommended would suggest ur equities to be 50-50
 

BiGhaPPyJer

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Personally I work for rig building company and the price of oil mainly affects the stock price of the company. Potential clients will still approach rig builders regardless of the oil price. I do believe that oil price is there to stay for at most 5 years. Afterwards the price will jack up simply due to operation costs of extracting oil from deeper.

i disagree simply because no exchange traded commodity is priced at a cost plus basis - ultimately fundamental driver is SnD

in fact what we see is as margins decrease, production rates tend to go up to max for cash flow purposes
 
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ktyandkyc

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Just a query. My stock % now is 75% sti 25% vrwd should I balance it to 50-50 or this percentage is good enough?

for me i prefer lesser of sti and more of vwrd because im less confident of our home country's economy potential in the mid-term future.
 

Shiny Things

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Just a query. My stock % now is 75% sti 25% vrwd should I balance it to 50-50 or this percentage is good enough?

This one's a bit tougher. If you're young (say, under 35), then, yep, an equal mix of STI and VWRD is fine. If you're getting closer to retirement (say, over 60), you'd want it all in the STI so that you're not taking any currency risk. Between those two points - just draw a straight line.
 

SpeedingBullet

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Merry Christmas everyone, heres an asset return tree for y'all courtesy of Credit Suisse

Screen-Shot-2014-12-18-at-12.41.45.png
 

jgyy1990

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i disagree simply because no exchange traded commodity is priced at a cost plus basis - ultimately fundamental driver is SnD

in fact what we see is as margins decrease, production rates tend to go up to max for cash flow purposes

I do not know future ratio of supply and demand. Productivity to me is more based on the company expenses and management capabilities rather than directly based on market value. 1 example I know of is keppel rejected quite a few rig building project due to limitation in their productivity.
 

kebinu

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Hello Shiny,

Is it illegal if one were to manipulate the real stock and make use of the spread to profit from CFD MM?

Is it fair if the CFD MM were to clawback the profit thereafter?
 

CookieMonsta88

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Hello Shiny,

Is it illegal if one were to manipulate the real stock and make use of the spread to profit from CFD MM?

Is it fair if the CFD MM were to clawback the profit thereafter?

If its a regulated exchange, yes if got evidence against u, but if u manipulate them, later they manipulate u also, if like bitcoin unregulated, u want to manipulate how long nobody can say a thing
 

focus1974

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Shiny MASter! :) HAppy new year!

someone posted this on facebook sgx group.. don't understand sh.t about what he is saying... what is the downside? so easy meh?

250k, get a leverage position, leverage 50 times, that'll give u 12.5mil. Take the 12.5 mil exchange and buy russian ruble(17%). In the same time calculate and hedge back a forward position and for russian ruble back to SGD. Pay interest of 3-4% for leverage. Net off and get 12-13%(based on 12.5mil). Walah, 1.5mil in your pocket
 
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