*Official* Shiny Things club - Part 2

[iperiodic]

I selected 100 dollars and it shows me monthly fee as 5 dollars. its quite costly!

Ocbc min comm is $5. To reduce costs u need to invest at least $500 to lower the cost to 1%

 

[ChinoGirl]

Hi,
I need some clarity on rebalancing of portfolio. If rebalancing is done every mid May and mid November, do we still pump fresh funds during May and November?

 

[BBCWatcher]

Ocbc min comm is $5. To reduce costs u need to invest at least $500 to lower the cost to 1%

If you cannot afford $500/month then you could try quarterly or even half yearly purchases. OCBC’s BCIP can do that, but it requires well timed instructions to OCBC for every purchase — one instruction to buy, another to shut off the monthly buys. It can be done, as long as you understand and consistently follow the order deadlines.

 

[decibel.]

I don't think so, no. ES3 (or G3B) already contains significant exposure to the real estate sector in and near Singapore, and of course your own home would be that, too (real estate).

Thanks bro make sense. So should I go for this proportion?

50% IWDA 3000 every 6 months

1000 per month
30% G3B
20% MBH

Sent from Samsung SM-G920I using GAGT

 

[Ilovemathstutor]

Hi,
I need some clarity on rebalancing of portfolio. If rebalancing is done every mid May and mid November, do we still pump fresh funds during May and November?

no. it just means to sell off and then buy in the proportion as per your age-formula.

 

[Shiny Things]

Thanks bro make sense. So should I go for this proportion?

50% IWDA 3000 every 6 months

1000 per month
30% G3B
20% MBH

No. You don't need to buy every counter every month. Just buy whichever one you're short of, relative to your benchmark; I thought I banged on this pretty hard in the book?

If you want a 40-40-20 ratio between IWDA-G3B-MBH, here's a shortcut:
Month 1: buy $1k of G3B
Month 2: buy $1k of IWDA
Month 3: buy $1k of G3B
Month 4: buy $1k of IWDA
Month 5: buy $1k of MBH
Month 6: repeat.

Hi,
I need some clarity on rebalancing of portfolio. If rebalancing is done every mid May and mid November, do we still pump fresh funds during May and November?

Yep. You invest like normal; rebalancing is just an extra thing you do twice a year.

 

[ah_teck81]

No. You don't need to buy every counter every month. Just buy whichever one you're short of, relative to your benchmark; I thought I banged on this pretty hard in the book?

If you want a 40-40-20 ratio between IWDA-G3B-MBH, here's a shortcut:
Month 1: buy $1k of G3B
Month 2: buy $1k of IWDA
Month 3: buy $1k of G3B
Month 4: buy $1k of IWDA
Month 5: buy $1k of MBH
Month 6: repeat.



Yep. You invest like normal; rebalancing is just an extra thing you do twice a year.

Hi,

Sorry I'm not very clear what do you mean by rebalancing twice a year.

I am buying ES3 and IWDA monthly, what do I need to do during rebalancing?

 

[IAmZTX]

Is there a way to calculate annual returns
rate for etf? Can't decide which bond etf to invest

 

[Investnewbie82]

Hi all,

I'm now about 20% ES3 40% IWDA 40% cash(mostly in usd). Not planning to do much except DCA monthly. Just want to check how impt is the bond (lack of) component? Really don't feel like MBH yield will increase proportionally when stocks go down. Or am I wrong?

Thanks!

 

[littleredboy]

Do we have tax treaty on dividends with the UK? I read online now confused. 0%? 10%? 15%?

 

[Shiny Things]

Let's talk about what happened in US markets today, before any fear-mongers get in and start... mongering... their fear... or whatever it is that fearmongers do. I assume they're like fishmongers, but without the fish?

US employment numbers came in surprisingly weak - and stock and bond markets both went up. A diversified portfolio had a great day!

This might seem a bit counterintuitive, but let's think about it for a sec.

Bonds went up because people now think the Fed is more likely to cut interest rates, and cut them sooner. Lower interest rates means higher bond prices, so bonds went up.

Stocks went up because... well, this one's a little fuzzier. You could argue that it's because people think the positive effect of cuts will outweigh the negative effect of an economic slowdown; or because people think that Donny Two Scoops is going to fold like a cheap umbrella on his threat to impose tariffs on Mexican imports; or whatever you like. The point is that I don't really know, neither does anyone else, and even if you'd had the employment number leaked to you in advance you'd still probably have lost money trying to trade it.

Moral of the story: trying to trade the market is too hard. You're a lot better off just buying a diversified stock-and-bond portfolio, sitting back, and waiting. I know I bang on about this a lot, but on days like this it really shows its benefits.

(And don't forget: all of this news is from America, not Singapore. They're two different countries, with two very different economies. People freaking out about a recession in America can go and get their jollies trading American stocks instead of Singaporean stocks, but you're all Singaporean investors in here.)

Do we have tax treaty on dividends with the UK? I read online now confused. 0%? 10%? 15%?

The UK doesn't impose any dividend tax for there to be a treaty on, so it doesn't matter. The UK tax rate, for Singaporean investors buying UK ETFs, is zero.

Hi,

Sorry I'm not very clear what do you mean by rebalancing twice a year.

I am buying ES3 and IWDA monthly, what do I need to do during rebalancing?

Are you buying MBH (or another bond fund) as well?

When you rebalance, you sell whatever you have too much of (compared to your target percentage), and then spend that money buying whatever you don't have enough of (again, compared to your target percentage).

Hi all,

I'm now about 20% ES3 40% IWDA 40% cash(mostly in usd). Not planning to do much except DCA monthly. Just want to check how impt is the bond (lack of) component?

You're giving up a lot of yield by parking money in cash instead of a bond ETF. (Also, because it's in USD, you've got a whole truckload of currency risk right there! How comfortable do you feel having an FX bet that amounts to 40% of your portfolio?)

Really don't feel like MBH yield will increase proportionally when stocks go down. Or am I wrong?

Thanks!

I'm a bit confused by this statement. Nobody says that the yield of MBH (or any bond ETF) will go up when stocks go down.

Do you mean to say that the price of MBH will go up when stocks go down? If so, that's a little closer to the truth, though it isn't a rule.

The point of owning bonds is that they're not perfectly correlated with stocks: they don't have to go up every day that stocks go down, they just have to not be 100% correlated. A bond fund that just slowly grinds upward every day, or even just goes sideways, is a great diversification from a volatile stock prortfolio.

And to be blunt, investing based on "feels" leads to making bad decisions, especially when your feels are wrong.

 

[Ilovemathstutor]

hi ST,

pls let me know your thoughts if this thought is correct in your view.

I realised that the daily upheavals of the market or economics-at-large are not an important factor to the stock prices, as stocks are linked to the biz growth of the company.

I have learnt to ignore the noise in the market/economy and focus on the company's growth potential and it's portfolio.

your thoughts, pls?

 

[Trader11]

Let's talk about what happened in US markets today, before any fear-mongers get in and start... mongering... their fear... or whatever it is that fearmongers do. I assume they're like fishmongers, but without the fish?

US employment numbers came in surprisingly weak - and stock and bond markets both went up. A diversified portfolio had a great day!

This might seem a bit counterintuitive, but let's think about it for a sec.

Bonds went up because people now think the Fed is more likely to cut interest rates, and cut them sooner. Lower interest rates means higher bond prices, so bonds went up.

Stocks went up because... well, this one's a little fuzzier. You could argue that it's because people think the positive effect of cuts will outweigh the negative effect of an economic slowdown; or because people think that Donny Two Scoops is going to fold like a cheap umbrella on his threat to impose tariffs on Mexican imports; or whatever you like. The point is that I don't really know, neither does anyone else, and even if you'd had the employment number leaked to you in advance you'd still probably have lost money trying to trade it.

Moral of the story: trying to trade the market is too hard. You're a lot better off just buying a diversified stock-and-bond portfolio, sitting back, and waiting. I know I bang on about this a lot, but on days like this it really shows its benefits.

(And don't forget: all of this news is from America, not Singapore. They're two different countries, with two very different economies. People freaking out about a recession in America can go and get their jollies trading American stocks instead of Singaporean stocks, but you're all Singaporean investors in here.)



The UK doesn't impose any dividend tax for there to be a treaty on, so it doesn't matter. The UK tax rate, for Singaporean investors buying UK ETFs, is zero.



Are you buying MBH (or another bond fund) as well?

When you rebalance, you sell whatever you have too much of (compared to your target percentage), and then spend that money buying whatever you don't have enough of (again, compared to your target percentage).



You're giving up a lot of yield by parking money in cash instead of a bond ETF. (Also, because it's in USD, you've got a whole truckload of currency risk right there! How comfortable do you feel having an FX bet that amounts to 40% of your portfolio?)



I'm a bit confused by this statement. Nobody says that the yield of MBH (or any bond ETF) will go up when stocks go down.

Do you mean to say that the price of MBH will go up when stocks go down? If so, that's a little closer to the truth, though it isn't a rule.

The point of owning bonds is that they're not perfectly correlated with stocks: they don't have to go up every day that stocks go down, they just have to not be 100% correlated. A bond fund that just slowly grinds upward every day, or even just goes sideways, is a great diversification from a volatile stock prortfolio.

And to be blunt, investing based on "feels" leads to making bad decisions, especially when your feels are wrong.

LOL so complex. By the time you figure out, the market already priced in with algorithms reacting faster than you

 

[Zink00]

Hi ST, u mentioned about him keeping usd cash exposes him to fx risk, and im wondering since iwda is traded in usd, arent investors exposed to fx risk as well? We will all cash out at some point right?

 

[pmstudent]

Hi ST, u mentioned about him keeping usd cash exposes him to fx risk, and im wondering since iwda is traded in usd, arent investors exposed to fx risk as well? We will all cash out at some point right?

Hmm.. Many still don't understand this, when you buy an ETF, the denominated currency doesn't matter, you are buying the underlying shares, a fraction of global corporations. You are NOT buying a currency, unlike FX trading.

 

[revhappy]

Let's talk about what happened in US markets today, before any fear-mongers get in and start... mongering... their fear... or whatever it is that fearmongers do. I assume they're like fishmongers, but without the fish?

US employment numbers came in surprisingly weak - and stock and bond markets both went up. A diversified portfolio had a great day!

This might seem a bit counterintuitive, but let's think about it for a sec.

Bonds went up because people now think the Fed is more likely to cut interest rates, and cut them sooner. Lower interest rates means higher bond prices, so bonds went up.

Stocks went up because... well, this one's a little fuzzier. You could argue that it's because people think the positive effect of cuts will outweigh the negative effect of an economic slowdown;

Why would fear mongers come in now, when markets are like what 1 or 2% below ATH? BTW, your comment does nothing to allay any fear mongering.

So this part 'Stocks went up because...You could argue that it's because people think the positive effect of cuts will outweigh the negative effect of an economic slowdown'

If you see the last 2 times when Fed was cutting rates this is what happened:

 

[Zink00]

Hmm.. Many still don't understand this, when you buy an ETF, the denominated currency doesn't matter, you are buying the underlying shares, a fraction of global corporations. You are NOT buying a currency, unlike FX trading.

I understand, but when u cash out, the usd will be converted back to sgd?

 

[eD1s0n]

I understand, but when u cash out, the usd will be converted back to sgd?

And the amount of SGD after conversation from USD is (theoretically) the same as if the etf is denominated in SGD in the first place, minus off FX Comms and spread

 

[Investnewbie82]

The point of owning bonds is that they're not perfectly correlated with stocks: they don't have to go up every day that stocks go down, they just have to not be 100% correlated. A bond fund that just slowly grinds upward every day, or even just goes sideways, is a great diversification from a volatile stock prortfolio.

And to be blunt, investing based on "feels" leads to making bad decisions, especially when your feels are wrong.

Thanks ST! Ive read your book and always thought the bonds component is a hedge against stocks.

Another Q I have is whether there is a Irish domiciled ETF equivalent for RSP? What do you think about RSP vs SPY.

 

[Trader11]

Why would fear mongers come in now, when markets are like what 1 or 2% below ATH? BTW, your comment does nothing to allay any fear mongering.

So this part 'Stocks went up because...You could argue that it's because people think the positive effect of cuts will outweigh the negative effect of an economic slowdown'

If you see the last 2 times when Fed was cutting rates this is what happened:

Which assets benefit from rate cut?