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Old 13-09-2018, 12:28 AM   #4
Shiny Things
Supremacy Member
Join Date: Dec 2009
Posts: 7,827
Hi experts,

I have S$1M cash. I also have S$1M in stocks and S$1M in wholesale bonds. If it is relevant, I have a S$2M investment property I will be selling and keeping the sale proceeds as cash. I am waiting for an opportunity to deploy the cash and will not use them for now.

I would like to ask which bank can I park these assets to receive the most benefits, whether tangible or intangible. They may not be significant but I like to feel good. I don't want to pay for any upkeep fees because I am not paying any at my current bank. My present RM is excellent and very responsive but I am wondering if I am missing anything out there because I haven't really done any bank shopping. I have been busy with work and am not proficient with financial matters.

Thank you for any help.
Boy oh boy, $3 million SGD in cash?

I mean, I strongly disagree with the idea of parking all that in cash and waiting for a crash that may not come, mostly because piling into the market after a huge crash is hard! Ask anyone who said in 2015-2016 "oh I'll wait for the dip"; the dip came in early 2016 but buying the market when it's plunging goes counter to every instinct that humans have.

But if you're absolutely hellbent on it, a couple of notes:
  1. If you genuinely think the Singaporean market's going to dump a further 20%, those wholesale corporate bonds may not be a great idea. A spew that big is going to spill up the capital structure from equities into corporate bonds, and the bonds won't be worth 100 when you go to sell them.
  2. The right trade for what you're trying to do is not to put it in a bank; the right move is to put the whole lot into 5- to 10-year Singapore government bonds. If the Singaporean economy tanks that badly, interest rates will collapse and govvy bonds will soar in price; you'll be able to sell the bonds for a profit and spend it on stocks. If the economy doesn't tank and it never gets to your 2600 level, at least you'll have picked up a few years of 2.2-2.4% interest. On your amount of cash, that's over $300,000 over five years!
  3. You could express your view more explicitly by parking the cash in govvy bonds and also selling 2600-strike put options on the STI. I don't think this is a great idea though; it removes all your flexibility and the banks will rip you off blind on long-dated options like that.
  4. Don't leave it as cash in the bank. You won't get anywhere near the same yields.

Last edited by Shiny Things; 13-09-2018 at 12:53 AM..
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