*Official* Shiny Things club - Part 2

[Johnpierpontmorgan]

"The Fed hiked four times before the TCJA was signed in Nov ’17: end-2015, end-2016, and March and June 2017. " quote from ST.



Just look at the old dot plots and market expectations when they first started the taper talk long 4-5 years ago. Going by the pace they were initially setting, interest rates would have been 5-6% by now so that the fed has sufficient ammo to counter next recession. The first hike caused a taper tantrum which led to a long hiatus before the second.

Without for the tax cuts juicing the stock market, they could never have raise four times last year. They were rushing to normalise as much as possible at the late stage of the cycle. Coupled with the message Jerome Powell said the shrinking of balance sheet will be on autopilot caused the sell off last December. Shortly after, they did a 180 and conclude patience again. Now we r officially back into a easing cycle. No more sales of bonds after September. Bernanke said the extraordinary measures are temporary and will sell off all the subprime bonds shortly after and hence this operation is not debt monetisation. I'm surprise people believe that Santa exist.. they merely sold off around 10-15%

Balance sheet is still close to 4 trillion which grew rom the 800 billion before qe programs. Rates at ultra Low territory. Why would anyone still think the Keynesian qe programs are a success? It's become obvious the whole recovery is based on artificial stimulus.

Let's discuss...

 

[effkewkew]

Hi guys, I bought the rich by retirement e book previously, just wondering if there’s an updated version of it? And if there’s a need for me to repurchase the book or is there any way to update it?

 

[Dearboy87]

Hi guys, I bought the rich by retirement e book previously, just wondering if there’s an updated version of it? And if there’s a need for me to repurchase the book or is there any way to update it?

if u get from amazon previously, the update will just cost u 2.99. correct me if im wrong.

 

[Shiny Things]

Ah yes. But I am currently a uni student with about 2 years to graduate and little to no income. I do however have a lump sum war chest that I've been DCA-ing about USD500/mth with which I'm also adding in whenever I have savings from my allowance, part-time jobs and internships and I'm using IBKR.

Ahh, I get you. Then I'd probably move a little faster - having a lump sum just sitting around in cash isn't a great idea.

It's become obvious the whole recovery is based on artificial stimulus.

Let's discuss...

I don't really think there's much point in "discussing", because I don't think either of us are going to change our minds. You're going to end up saying "it's all fake!" and I'm going to end up saying "you've been saying that for the last 10,000 Dow points, you have to admit you're wrong at some point!" and it's not going to be productive.

I think it might be better to let the market do the talking.

Tell me: what is the market implication of your view that "the recovery is fake"? Is it bonds lower, bonds higher, stocks lower, stocks higher, gold lower, gold higher, what? Tell me what you think your view implies, and we can invest or make a bet based on that.

(And I'm good for my bets, as people on here will tell you; I still owe someone a beer for a casual bet we had on Uber's profitability.)

 

[Shiny Things]

How will you recommend investing in gold other than gldm? That's so slow.

What's wrong with "slow"? The market's not a get-rich-quick machine.

If you want to invest in gold, GLDM is the right answer.

Hi ST, any good ETfs for Aussie market to recommend? My siblings are there, thought can recommend them to look into it.

Oh yeah. The equivalent to ES3 in Australia is VAS; the equivalent to MBH is VAF; and the equivalent to IWDA LN is VGS. You can get all three on the ASX, it's pretty great.

Hi BBCWatcher and Shiny, thanks for advice...if I use local broker to buy LSE/HK ETFs, I will incur custodian charges?

Probably, if you use anyone other than Stanchart. Just use Stanchart.

Does IB charge custodian fees?

No. But, as mentioned upthread, they do charge a $10 minimum monthly brokerage if you have less than $100k in your account.

 

[ChinoGirl]

Hi ShinyThings,

My IBKR account was set up in Jul 2019 so I have first 3 months free unless I incur commission. I have started buying IWDA through IBKR since July 2019. As I will be buying around USD1000-3000 (from my lump sum savings) for a start each month, should I convert my lump sum of SGDX(less than SGD100k) all at once or just convert it to USD as and when I want to buy IWDA?

 

[hwckhs]

Hi ShinyThings,

My IBKR account was set up in Jul 2019 so I have first 3 months free unless I incur commission. I have started buying IWDA through IBKR since July 2019. As I will be buying around USD1000-3000 (from my lump sum savings) for a start each month, should I convert my lump sum of SGDX(less than SGD100k) all at once or just convert it to USD as and when I want to buy IWDA?

I only convert before buying USD quoted ETFs. I think that's what most people do.

There is no benefits in converting earlier. You don't know if the USD.SGD rate next month is going to be better or worse. Just convert when needed, and you get the average rate over time.

 

[BBCWatcher]

My IBKR account was set up in Jul 2019 so I have first 3 months free unless I incur commission.

I only convert before buying USD quoted ETFs.... There is no benefits in converting earlier.

Except during the first 3 months after account opening when there is a benefit: avoidance of currency conversion commission that is not absorbed within a monthly minimum commission.

It's up to you, ChinoGirl.

 

[ChinoGirl]

Thanks hwchks and BBCWatcher

 

[ChinoGirl]

Hi BBCWatcher, do you mean that the currency conversion commission is not counted towards the monthly activity fee of USD10?

 

[KeytoFreedom]

Hi Shiny,
How does GLD in S'pore compare to GLDM...GLD is also ok?

Sent from OnePlus ONEPLUS A5010 using GAGT

 

[BBCWatcher]

Hi BBCWatcher, do you mean that the currency conversion commission is not counted towards the monthly activity fee of USD10?

No. Currency conversion commissions are counted toward the monthly minimum.

 

[Tony_Melb]

Hi BBCWatcher

I've been following your advice for some time. A while back (January this year), you recommended that it might make sense moving from solely IWDA to a combination of IWDA + EIMI once one gets to about six figures.

In May of this year, you also advised "diversify at least reasonably well, that's all. I don't recommend having all or most of your wealth at Interactive Brokers, as one (only one) example."

I'm finally at six figures in terms of what I have sitting in my IB account. How do I take this to the next level and implement your advice? Ie...

- How do you recommend allocating ratios between IWDA and EIMI and would you purchase them in alternating batches to save on commissions?

- If we shouldn't be putting all our investments into IB, what would be the next best platform(s) to use and how many should we be spreading ourselves across?

 

[crystalfire]

I bought a stock based on a call and then did my research. I bought using Interactive Broker and made some profit. Need your advice for the below thread that I open on Elliot & Jones.

 

[ftpofmpo]

why should we dca now when buffett is holding on to record amount of cash?

 

[Thoreldan]

why should we dca now when buffett is holding on to record amount of cash?

Because we are not him

 

[Shiny Things]

Hi Shiny,
How does GLD in S'pore compare to GLDM...GLD is also ok?

No. The GLD ETF in Singapore is weirdly terrible and doesn't have very good market-makers for some reason. Just use GLDM in the USA.

I bought a stock based on a call and then did my research. I bought using Interactive Broker and made some profit. Need your advice for the below thread that I open on Elliot & Jones.

You bought a stock that was recommended to you by a cold-calling boiler room; it's frankly a miracle that it didn't immediately go to zero. You got lucky. Never pick up the phone for those idiots again; how the scam usually works is that the next stock they put you into is going to be a pump-and-dump and they'll take you for all your money.

why should we dca now when buffett is holding on to record amount of cash?

Because, as was pointed out upthread, you are not Warren Buffett.

Warren Buffett is sitting on cash because Berkshire needs BIG acquisitions to make a meaningful difference to his returns, and there aren't many big acquisitions out there to be had.

You, on the other hand, can buy small clips of IWDA or ES3 or MBH. You don't need to wait for the next Kraft Heinz.

- How do you recommend allocating ratios between IWDA and EIMI and would you purchase them in alternating batches to save on commissions?

90/10 IWDA/EIMI is fine; that's about the correct ratio of DM to EM equity market cap.

- If we shouldn't be putting all our investments into IB, what would be the next best platform(s) to use and how many should we be spreading ourselves across?

I actually strongly disagree with this.

The point of spreading your assets across multiple brokers is to reduce the losses if a broker fails. But:
1) Investments up to $500k USD in a US broker are insured by SIPC, and IBKR carries extra insurance above and beyond that. So if you're only holding low- to mid-six-figures, you're fully insured anyway.
2) Having assets at multiple brokers is a GIANT PAIN IN THE @RSE. I have two brokerage accounts because I have to (Chase made me move my brokerage assets to them in return for a better rate on my mortgage) and it's a huge goddamn pain to manage my positions across both.

The amount of extra cognitive load you'll have to take on to manage multiple brokerage accounts isn't worth it. Just keep everything at Interactive.

 

[highsulphur]

No. The GLD ETF in Singapore is weirdly terrible and doesn't have very good market-makers for some reason. Just use GLDM in the USA.

You bought a stock that was recommended to you by a cold-calling boiler room; it's frankly a miracle that it didn't immediately go to zero. You got lucky. Never pick up the phone for those idiots again; how the scam usually works is that the next stock they put you into is going to be a pump-and-dump and they'll take you for all your money.

Because, as was pointed out upthread, you are not Warren Buffett.

Warren Buffett is sitting on cash because Berkshire needs BIG acquisitions to make a meaningful difference to his returns, and there aren't many big acquisitions out there to be had.

You, on the other hand, can buy small clips of IWDA or ES3 or MBH. You don't need to wait for the next Kraft Heinz.

90/10 IWDA/EIMI is fine; that's about the correct ratio of DM to EM equity market cap.

I actually strongly disagree with this.

The point of spreading your assets across multiple brokers is to reduce the losses if a broker fails. But:
1) Investments up to $500k USD in a US broker are insured by SIPC, and IBKR carries extra insurance above and beyond that. So if you're only holding low- to mid-six-figures, you're fully insured anyway.
2) Having assets at multiple brokers is a GIANT PAIN IN THE @RSE. I have two brokerage accounts because I have to (Chase made me move my brokerage assets to them in return for a better rate on my mortgage) and it's a huge goddamn pain to manage my positions across both.

The amount of extra cognitive load you'll have to take on to manage multiple brokerage accounts isn't worth it. Just keep everything at Interactive.

Beyond 500k, what's your next best recommendation after IB?

 

[BBCWatcher]

The point of spreading your assets across multiple brokers is to reduce the losses if a broker fails.

That’s not the only point. Considering the worst case scenario (MF Global), account holders were made whole, but that took some time, even for initial payments. There is some value in preserving adequate liquidity, especially in or near retirement, via broker/custodian diversification. Two brokers works, and those who follow your general advice would have that: typically IB for a global stock fund and Standard Chartered for ES3/MBH.

2) Having assets at multiple brokers is a GIANT PAIN IN THE @RSE.

Not giant, and it’s a natural consequence of your general advice anyway.

I do business mainly with three brokers, and none of them are holding more than half of total household wealth. And they’re all pretty much on autopilot. I barely look at them, and then only every couple months or so. One of them is a pure custodian now with no additions, so it’s really quiet. (A simple case where a better, lower cost mutual fund came along, but it didn’t make sense to liquidate previous buys — capital gains tax, notably. So I just stand pat with that broker.)

I have two brokerage accounts because I have to (Chase made me move my brokerage assets to them in return for a better rate on my mortgage) and it's a huge goddamn pain to manage my positions across both.

OK, but you’re doing more than a typical long-term investor would.

The amount of extra cognitive load you'll have to take on to manage multiple brokerage accounts isn't worth it. Just keep everything at Interactive.

You cannot if you’re a resident of Singapore, expect to retire in Singapore, and want to buy/hold some MBH and ES3 (or G3B). IB doesn’t offer those funds to residents of Singapore.

 

[BBCWatcher]

Beyond 500k, what's your next best recommendation after IB?

As mentioned, you’re naturally going to have two brokers in “typical” scenarios.

If you want a third, it’d probably be Schwab but only for U.S. listed securities such as GLDM, U.S. Treasuries, and ESPP shares that you want to transfer and sell periodically to keep your single stock exposure in check. (Schwab offers reasonable U.S. stock commissions, lower than what ESPP administrators typically charge. Just be careful to transfer only “aged” ESPP shares that wouldn’t disqualify you from continued ESPP participation.) Schwab isn’t going to work for the London listed stuff. I don’t recommend GLDM, and holding U.S. Treasuries is really only for those occasions when you’ve got some fairly temporary U.S. dollar cashflow to park. For example, if you’re trying to pay someone’s tuition bill at a U.S. university next year, U.S. Treasuries (via Schwab) might be a reasonable way to park that cash.