*Official* Shiny Things club - Part 2

[Dividends Warrior]

Received an email from MBKE that there will be fees effective 1 August for corporate action/CDP sub account maintenance. These are new right? Guess it’s time to close the prefunded account for good (opened for MIP but was discontinued).

Good things never last

 

[limster]

Good things never last

I've always wondered how come some firms have to charge fees while some don't. Whether its custody fee for shares or platform fee for unit trusts.

it is because they have a lousier cost structure, their IT system cost more money to develop and maintain? their managers' salary too high?

 

[allan_nalla]

Hi ST,

Quick question. I have been buying A35 before MBH was introduced.

Now, do I sell those A35 shares that I've accumulated and start buying into MBH? Or do I just keep them but start buying MBH instead and lump them altogether towards my local-bonds portion of my portfolio?

 

[justwakeup]

Received an email from MBKE that there will be fees effective 1 August for corporate action/CDP sub account maintenance. These are new right? Guess it’s time to close the prefunded account for good (opened for MIP but was discontinued).

Maybe this is one reason to have multiple brokers?

 

[Shiny Things]

Maybe this is one reason to have multiple brokers?

You don't need to have multiple brokers. Even in this case, you could save yourself a lot of headache by just opening a new account, moving your positions over, and then closing the old account. Multiple brokerage accounts is almost always an unnecessary waste.

Hi ST,

Quick question. I have been buying A35 before MBH was introduced.

Now, do I sell those A35 shares that I've accumulated and start buying into MBH? Or do I just keep them but start buying MBH instead and lump them altogether towards my local-bonds portion of my portfolio?

Nah, I'd keep the A35. It's still perfectly good; just that MBH has a higher yield.

I've always wondered how come some firms have to charge fees while some don't. Whether its custody fee for shares or platform fee for unit trusts.

it is because they have a lousier cost structure, their IT system cost more money to develop and maintain? their managers' salary too high?

Honestly yeah, all of the above. A well-run brokerage shouldn't need to charge these fees; I'm very much in favour of bundling these fees into the brokerage cost.

 

[311290]

Currently having this in CPF.
Thinking of using OA (less 20k) to purchase ES3.
Whats some of the items (fees + quarterly fee) i have to take note to ensure im earning more than 2.5%

As in the future doesnt know if i will be buying hdb thus doesnt want to transfer into SA.

Ordinary Account (OA)*$56,597.37
Special Account (SA)*$16,479.86

 

[stresskiddo]

You are missing the FX conversion which is about 0.5% one way. If you intend to have the units remain in SC all the way until you sell, you will have to count both ways.

If you are investing $1200 every 4-5 months into IWDA, then SCB may be better. If you are buffering up $1200 per month to invest every 4-5 months into IWDA, then IBKR will be better.

The rule of thumb is to estimate whether you can reach US$100k value (inclusive of capital gain) in less than 7-8 years.

For SC Priority is it possible to save on the forex charges by opening USD account
https://www.sc.com/sg/save/current-accounts/usd-high-account/
and depositing USD over counter ?

 

[BBCWatcher]

Currently having this in CPF.
Thinking of using OA (less 20k) to purchase ES3.
Whats some of the items (fees + quarterly fee) i have to take note to ensure im earning more than 2.5%
As in the future doesnt know if i will be buying hdb thus doesnt want to transfer into SA.

If you're going to be using OA dollars for housing within the next several years then the CPF Investment Scheme really doesn't make sense for you. ES3 is geared toward long-term investing.

 

[limster]

For SC Priority is it possible to save on the forex charges by opening USD account
https://www.sc.com/sg/save/current-accounts/usd-high-account/
and depositing USD over counter ?

You can also deposit locally issued US$ cheque without any charges - eg: if you have a US$ account with another local bank.

Depositing US$ cash from moneychanger in the High account saves you about $4 for every $1000 deposited, so frankly i haven't bothered... having to queue up at popular moneychanger with the best rate, then queuing up at bank to deposit the cash, my time is more valuable than that.

 

[stu4rt86]

i have been reading alot on the shiny things thread and even set up ibkr already..

now i am kinda conflicted on whether to get IWDA (mostly by the monthly 10 usd fee and the fact that its share price is already sky high now and i hate that dividends are reinvested)

so i am wondering why dividend warriors (such a savvy investor) did not invest in global shares and yet manage to do so well..

Disclaimer: i believe in the strategy in the book rich by retirement but i really dont know if i can stomach the incurring monthly fee- and i am quite fickle not sure if i can stay disciplined without seeing money coming in haha

anyone share their thoughts on both strategies?

 

[crystalnox]

i have been reading alot on the shiny things thread and even set up ibkr already..

now i am kinda conflicted on whether to get IWDA (mostly by the monthly 10 usd fee and the fact that its share price is already sky high now and i hate that dividends are reinvested)

so i am wondering why dividend warriors (such a savvy investor) did not invest in global shares and yet manage to do so well..

Disclaimer: i believe in the strategy in the book rich by retirement but i really dont know if i can stomach the incurring monthly fee- and i am quite fickle not sure if i can stay disciplined without seeing money coming in haha

anyone share their thoughts on both strategies?

He spends hours studying companies and tracking their performance. Buying IWDA takes only 5 mins of your time every month.

If you bought anything else monthly, it would also cost you a min. of $10 a month. If you followed DW and trade multiple positions a month, it would cost you wayyy more in fees than $10x12 a year.

You could buy something else similar like VWRD to get dividends.

 

[stu4rt86]

oh yes yes that’s a good point i didnt thought of the commision cost for every trade.. thanks!!!

VWRD is too expensive i went to check like 80+ usd compared to iwda which only cost 50+ and i read somewhere in this thread abt the spread being wider and all though i don really und hahahaha

He spends hours studying companies and tracking their performance. Buying IWDA takes only 5 mins of your time every month.

If you bought anything else monthly, it would also cost you a min. of $10 a month. If you followed DW and trade multiple positions a month, it would cost you wayyy more in fees than $10x12 a year.

You could buy something else similar like VWRD to get dividends.

 

[dullthings]

@ST and all, Maybank says during a phone call that they will be reviewing the fees they planned to apply to prefunded accounts (CDP Sub-Account Maintenance Fee). They will update by email once they have a decision.

Meanwhile, MBH doesn’t seem very liquid, the odd lots are at about 70% discount.

I have a few queries.

(1) It appears from the discussion so far that the most sensible option for STI ETF and local bond now is still POSB for <S$1000 per month (sum of STI ETF and local bond)?

(2) For overseas ETF, it would be IB if >S$1000 per month, and SC if <S$1000 per month?

It seems that POSB IS purchase fees are 0.82% for G3B STI ETF and 0.5% for A35 bond.

(3) Are POSB IS fees absolute zero when we sell the etfs?
(4) Or do we still incur the stock exchange fees when we sell the ETFs from POSB IS?

(5) I am somewhat curious about the performance of IWDA vs locally available Roboadvisors (AutoWealth/Stashaway). I recognise that there are holding fees involved, but is there a way to backcast/forecast their performances against IWDA? I am just wondering why wouldn’t the robos just simply use IWDA, since it would also make sense to the robos operating cost and also the investors’ pockets?

 

[Ilovemathstutor]

Maybe this is one reason to have multiple brokers?

hi, u need more than 1 broker if u have more than the sum assured amount for each broker's insurance limit.

and take note, only US brokers have insurance on the money you placed in their brokerage.

Sillypore brokerages, all, has nada... yes, zee-rooo.

 

[Ilovemathstutor]

This deserves a non-facetious answer, and the answer is that ETFs are better.

You’re saving for retirement, and for most of us that’s going to be a horizon of twenty or thirty years, or even more. Over that time, it’s easy to ride out the swings and roundabouts of equity markets; and the tradeoff for the higher volatility of equities is that they have higher returns than you could get from a boring insurance policy.



Really they should cut the lot size to 1. It’s no more complicated for the exchange’s computers to process a 1-share trade than it is to process a 10-share trade.



Hmm - don’t forget the FX spread on the Stanchart trades. You’ve got the fees right, but the Stanchart side is going to have some extra hidden costs from FX that won’t be reflected in the fees.



Not a prob at all! These longer questions are always the interesting ones.

I agree the lower expense ratio on SWRD makes it more appealing, your math is right on the money there. The fund size is a little smaller than I’d like, though, and it is quite new. If it had a bit more history I’d feel a lot better about it.



Ugh, yeah. It’s a shame that MBKE have trashed their product offering like this.



… I’d even say that if you’re considering a term-to-99 plan you’re missing the point of insurance.

Term-to-65 makes sense if you have, for example, kids’ college expenses or mortgage expenses that you’d need to fund if you got hit by a bus. The point of term life there is that if you get hit by the proverbial bus, the term life policy will cover your kids’ and your family’s costs until the kids are old enough to support themselves.

But once you turn 65, your kids have moved out and everyone should be able to support themselves. You don’t need life insurance after that point, because you can fund yourself by selling down the stocks and bonds that you’ve bought over the previous 40 years.

Whole-life is a waste; term-to-99 is basically the same as whole-life, and it’s a waste as well.

Agree with ST on this point.

I would always urge Sillyporeans to buy Aviva SAF Term Insurance, max it out at 2m sgd coverage first... then consider other brands.

As long as u did NS or have a spouse who did NS, you are qualified to buy Aviva SAF Term Insurance.

Of all the things that SAF is crap about, Aviva SAF Term Insurance is one of the rare good thing about serving your NS...

 

[Johnpierpontmorgan]

That's the opposite of what the article says. Dalio argues that interest rates are going to collapse, which would mean that credit's going to get even cheaper.

Anyway honestly Ray Dalio must be doing something right because boy oh boy does he run a lot of money, but this reads to me like crankery. His thesis is "buy gold because governments are going to monetise their debts and blah blah hyperinflation", which was what people were shouting about nonstop from about 2010 and look how gold's done since then. If I was invested in a Bridgewater fund and Mr D was charging two-and-twenty to invest my money in shiny yellow rocks I'd be calling him up and demanding my cash back.

Not excluding Jeff gundlach, Stanley drunkenmiller and Paul Tudor jones.. big names all buying your so called shiny yellow rocks (it's metal btw).. doubt anyone here is wiser than them

 

[Ilovemathstutor]

Not excluding Jeff gundlach, Stanley drunkenmiller and Paul Tudor jones.. big names all buying your so called shiny yellow rocks (it's metal btw).. doubt anyone here is wiser than them

at this point, if u still need convincing... it's ok.
most people are dumb anyway.

that's why what Jack Bogle does or what ST wrote for SG's context is priceless.

 

[limster]

Disclaimer: i believe in the strategy in the book rich by retirement but i really dont know if i can stomach the incurring monthly fee- and i am quite fickle not sure if i can stay disciplined without seeing money coming in haha

anyone share their thoughts on both strategies?

SCB does not have any monthly fee.

 

[hellfire88]

Saw 2 more new robo-advisors being launched recently:
Syfe
SquirrelSave


Anybody trying out?
Syfe seems to have only 0.65% p.a management fee (lowest among other robo-advisors?) while squirrelSave currently have a fitbit versa giveaway promo.

Anyone currently using any robo-advisors and how's the experience?

 

[KeytoFreedom]

Anyone has Stashaway ? is a way to get global exposure with SRS funds...but wondering what are the returns like...

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