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wealth_farmer

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Most definitely. If you're truly holding long-term, and let's just assume the usual ballpark returns of 8% compounded annual returns over that "long-term", you should still come out ahead.

The alternative, which is simply to invest locally, is untenable and frankly quite irresponsible to you and your financial dependents' needs.

Bear in mind trading costs can and will probably change. And you can always leverage Salmonella's post on how to effect position transfer from SCB to IBKR in the future to reduce costs when drawing down your position.

ST - so IWDA even with SCB bad spreads is still worth it for Diversification + tapping international markets? For Long term the 1.5% is bearable?
 

wealth_farmer

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I think you should simplify and then simplify some more. Good investing is boring. And it's uncomplicated. Check out the Bogleheads forum. A solid three-fund portfolio should return enough on a risk-adjusted basis as compared to your endless picking and opinions. More effort doesn't usually equal more returns when it comes to investing, contrary to all the programming we've received since young from our education that results are commensurate with efforts.

Trading/speculation is a different (but still legitimate) story, though I'm not qualified to comment.

I was actually sort of following the straits time invest series together with your method. So in it they generally had overseas etfs (40% consisting of europe, us, china) (overall by adding china and malaysia I also increased the weightage of banks and industrials & utilities) and large caps in sgx (with reits and blue chips) as well as well as a commodity index (A0W) (therefore I considered XLE / XLB / GUNR)

I understand from your perspective that we should invest in our own country as well as somewhere we might consider migrating in the future and I feel malaysia is quite close to heart and thats the rationale for investment.

for noble and mmp wise, they have crashed from a huge high but i think you are right, I should just get rid of mmp and write it off as a loss.

would you recommend me removing the perp sec & retail bond and simply adding it to ABF bond? Or should I consider an overseas bond?
 
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Hippocrates

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I've started to invest periodically in IWDA via InteractiveBrokers. As my first three-month waiver of US$10 account fee is coming to an end, may I know if the monthly cycle for the account fee is starting from the account opening date or the first day of the month? Thanks!
 

revhappy

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I've started to invest periodically in IWDA via InteractiveBrokers. As my first three-month waiver of US$10 account fee is coming to an end, may I know if the monthly cycle for the account fee is starting from the account opening date or the first day of the month? Thanks!
You get the waiver for 3 full calendar months.

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revhappy

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Yes, but after that IB will charge a minimum of $10 account/brokerage fee each month. My question is whether that starts from the account opening date (for example 15th each month) or starts from 1st of the month regardless of when the account is opened? Thanks.
I am not sure, since I just opened my account too, but I would imagine the cycle should be calendar month wise and not depending on when you opened your account, that works only for credit cards.

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Shiny Things

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I understand from your perspective that we should invest in our own country as well as somewhere we might consider migrating in the future and I feel malaysia is quite close to heart and thats the rationale for investment.

I'd be a bit careful about "close to my heart". Investing with your heart—just because you like somewhere—is a recipe for making lousy investments and sticking with them long after they've turned bad. If you genuinely think there's a good chance you'll retire there, then that's different.


for noble and mmp wise, they have crashed from a huge high but i think you are right, I should just get rid of mmp and write it off as a loss.

I think you should get rid of both of them. It'll be cathartic; you'll get the busted-ass companies out of your portfolio; you won't be reminded of them every time you open your brokerage account; and you'll feel a lot better without them.

Noble, specifically, is pretty busted. They didn't respond adequately to concerns about their accounting, and now they can't get access to liquidity any more (and borrowing is the lifeblood of a commodities trading business); they're having to sell their most profitable businesses just to stave off bankruptcy. Even if they don't go down the tubes, they're never going to be as big or as profitable as they used to be. Book a loss on that one and move on.

would you recommend me removing the perp sec & retail bond and simply adding it to ABF bond?
Yep.

Hi ST,

Correct me if I am wrong, but using the DCA strategy, we would end up buying lesser amount of the etf if the prices increase over time.

Think about it in dollar terms, instead of number of shares, and you'll see you're buying the same amount, whether it's a distributing or reinvesting ETF.

If you use a distributing ETF, you're buying more shares, but at a lower price. If the ETF reinvests for you, you're effectively buying fewer shares at a higher price - but you're getting the same dollar value for your dividends.

Does the accumulating nature of iwda also mean that it is even more important to do a 1 time lump sum investing asap instead of dca over 3 or 4 months if I have a huge amount that I want to put in iwda?

Mmm - technically yes, but it really doesn't make that much of a difference. The reason to spread a lump sum investment over a few months is to reduce any buyers' remorse you might feel if you drop a huge lump of cash in and the market subsequently goes down.

I doubt that the fund manager reinvests dividends immediately as soon as one of IWDA's 1684 holdings distributes a dividend - that would mean that it would be reinvesting practically every day.

Nope, they do! Part of an index-fund portfolio manager's job is to handle inflows of new money—whether those come from a portfolio company paying a dividend, or from new investments—and figure out how much of each stock to buy to keep their portfolio tracking the index as closely as possible. And this happens every single day, because there's inflows and outflows every single day.

ST - so IWDA even with SCB bad spreads is still worth it for Diversification + tapping international markets? For Long term the 1.5% is bearable?

Yep. The 0.75% FX spread is a one-time thing. Less would always be better, but compared to the diversification benefits from 20 or 30 years of IWDA investment, it's pretty small.
 

beefjerky

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I'd be a bit careful about "close to my heart". Investing with your heart—just because you like somewhere—is a recipe for making lousy investments and sticking with them long after they've turned bad. If you genuinely think there's a good chance you'll retire there, then that's different.




I think you should get rid of both of them. It'll be cathartic; you'll get the busted-ass companies out of your portfolio; you won't be reminded of them every time you open your brokerage account; and you'll feel a lot better without them.

Noble, specifically, is pretty busted. They didn't respond adequately to concerns about their accounting, and now they can't get access to liquidity any more (and borrowing is the lifeblood of a commodities trading business); they're having to sell their most profitable businesses just to stave off bankruptcy. Even if they don't go down the tubes, they're never going to be as big or as profitable as they used to be. Book a loss on that one and move on.
Thanks for the advice. Will follow through. Have already sold both of them yesterday.
 

beefjerky

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For a35 if I do a lump sum investment of 9k now does it mean Im paying a premium of 18% since the price is 1.18 now? Or is this a wrong understanding
 

revhappy

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For a35 if I do a lump sum investment of 9k now does it mean Im paying a premium of 18% since the price is 1.18 now? Or is this a wrong understanding
You must never look at the absolute price of an ETF or unit trust, because it makes no sense it is just a relative number calculated using the total assets dividend by the number of units. You must look at the price on a relative basis, that is, see what the price was 1,2,5 years back v/s now. But even that is not so material for a bond fund, because what matters is what is the interest rate now and where it will go in the future.

In Singapore monetary policy is not controlled using interest rate but instead exchange rate is used. If SGD strengthens then sibor goes down and bond fund goes up usually and vice versa.

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salmonella

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For a35 if I do a lump sum investment of 9k now does it mean Im paying a premium of 18% since the price is 1.18 now? Or is this a wrong understanding

Look at the net asset value - the value per share of the assets held by the fund. http://www.nikkoam.com.sg/etf/abf - at this time of writing, the nav is 1.1623.

If you pay 1.18, it is a 1.5% premium, but I don't understand why that would be... Is that the closing price of yesterday?

According to sgx.com, the bid/ask price are currently 1.163 and 1.164. That looks a lot more reasonable to me.
 

wealth_farmer

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For a35 if I do a lump sum investment of 9k now does it mean Im paying a premium of 18% since the price is 1.18 now? Or is this a wrong understanding

I think I understand where your question is coming from, but please correct me if I'm wrong. You're taking the bond pricing concept and applying it to this bond ETF. So, you think that the face value of this ETF is SGD 1.00 (just like how the face value of a bond is 100), and because it is trading at 1.18, it is at a 18% premium, or if it is trading at 1.164, it is trading at a 16.4% premium? Is that the case? If so, then yeah, your understanding is not correct.

Instead you should look at the NAV of the ETF as salmonella has highlighted below:
Look at the net asset value - the value per share of the assets held by the fund. http://www.nikkoam.com.sg/etf/abf - at this time of writing, the nav is 1.1623.

Hope this clarifies!
 

wealth_farmer

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What's the downside of Shiny Thing strategy?
1.) It's a pretty boring way of investing. (If you want excitement, go to the casino.)

2.) You don't get the ego boost of picking your winners and bragging about it to your friends.

3.) In fact, your friends may laugh at you and say, "Why are you settling for average? Dream big, my friend!" (But the majority of so-called professional fund managers fail to consistently beat the index, what more for the average Beng on the street?)

4.) This method requires you to buy what you lack in your allocation, or rebalance your stocks from the outperforming ones to the under performers. This means that if there is a strong trend, you would continually be loading up on the "losers" and not picking up more units of the "winning" side that could drive your portfolio value higher. This is, of course, said with a very strong hindsight bias because at that point in time, you can't really predict where the market is going. (Also, there is a tendency for returns to mean-revert, so this isn't too serious although I can imagine your conviction could be sorely tested from time to time.)
 
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DeadshotX

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Very well said

1.) It's a pretty boring way of investing. (If you want excitement, go to the casino.)

2.) You don't get the ego boost of picking your winners and bragging about it to your friends.

3.) In fact, your friends may laugh at you and say, "Why are you settling for average? Dream big, my friend!" (But the majority of so-called professional fund managers fail to consistently beat the index, what more for the average Beng on the street?)

4.) This method requires you to buy what you lack in your allocation, or rebalance your stocks from the outperforming ones to the under performers. This means that if there is a strong trend, you would continually be loading up on the "losers" and not picking up more units of the "winning" side that could drive your portfolio value higher. This is, of course, said with a very strong hindsight bias because at that point in time, you can't really predict where the market is going. (Also, there is a tendency for returns to mean-revert, so this isn't too serious although I can imagine your conviction could be sorely tested from time to time.)
 

Morning Sunshine

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Purchasing ABF at NAV

Hi Shiny,

I have tried contacting POEMS and DBS Vickers brokers about purchasing the ABF ETF directly from the fund manager, Nikko, at the NAV instead of the open market. However, they were clueless.

I also called Nikko but they told me to go through the stockbroker. So, I have come to a dead end.

Please elaborate as to how we could purchase at NAV.
Thanks!
 

revhappy

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Hi Shiny,

I have tried contacting POEMS and DBS Vickers brokers about purchasing the ABF ETF directly from the fund manager, Nikko, at the NAV instead of the open market. However, they were clueless.

I also called Nikko but they told me to go through the stockbroker. So, I have come to a dead end.

Please elaborate as to how we could purchase at NAV.
Thanks!
I think you should call Nikko directly. I don't think Poems or DBS will be eager to provide you the info since they lose business.

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completenovice

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Am frustrated at having to leave my money idle in the bank because the timing of my dollar cost averaging plan does not coincide with the banks 30/60/90 day windows on term deposits.

Is there a financial instrument available on interactivebrokers where I can deposit money and earn interest like a term deposit but for a specified number of days eg 13 days, 23 days, whatever I desire?

Thanks in advance!
 
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