*Official* Shiny Things club - Part 2

[Converged]

Did y'all redeem the market live data in scb? Is it for a month or permanent

 

[hwckhs]

Did y'all redeem the market live data in scb? Is it for a month or permanent

In SC Online Trading, when I click "Terms & Conditions" for LSE Real Time Market Data, it says "Enter number of months in Quantity field". That means the stated reward points (2000) required to redeem LSE will only give you 1 month of live data.

The page also states "You receive 1 reward point for every SGD $1 of Total Fees. All fees in foreign currency will be converted to SGD.". Assuming you make 1 LSE trade (to buy IWDA) and pay the minimum commission of USD 10 (~SGD 14) each month, it will take you 12 years to earn sufficient reward points to redeem LSE live data for 1 month. It's ridiculous. If you really want LSE live data, IBKR charges only $0.03 per snapshot (and the first $1 each month is free), and live data costs only a few dollars per month.

If you are interested to get SGX live data (200 reward points required), just use other local brokers such as DBS Vickers or POEMS which give you SGX live data for free.

 

[ftpofmpo]

What's the effect of interest rate rise in the present climate?

it seems that bond prices will fall

stock prices will also fall due to
i. the high allocation to equities will fall as investors shift to park their funds under the higher yielding treasuries
ii. companies have to pay higher interests on their debt leading to lower profitability

if for some reasons, both a physical war in the middle east and a trade war breaks out, leading to inflation, interest rates may rise

seems as though there is no good way to park our funds

 

[Shiny Things]

I wanted to practice dollar cost averaging by investing monthly, hence made the following comparison and found that POEMS Share Builder's Plan may make sense to me, with a savings of 175.76 trading fees a year.

Does my comparison makes sense? Anything that I have missed or should take into consideration?

Yeah, two things you've missed:
1) Dividend handling fees are a rort and you should never use brokers that charge them. More importantly, though:
2) Poems doesn't give you access to IWDA, so you'd be all-in on Singapore stocks. A better bet would be to use Stanchart for local stocks (so, yes, you're paying $10 a month there), and then IBKR for IWDA.

Also, I'm assuming you're not going to be investing just a thousand bucks a month forever. As you go up, the charges rapidly get more expensive at POEMS.

 

[Shiny Things]

if for some reasons, both a physical war in the middle east and a trade war breaks out, leading to inflation, interest rates may rise

seems as though there is no good way to park our funds

I'm not sure what answer you want me to give, to be honest. You're saying "look, if these bad things happen then interest rates will rise and stocks will go down"... and yes, that's totally true, if bad things happen stocks will go down.

But generally, over the long run, stocks and bonds (and a balanced portfolio of the two) will make money, and it'll make more money than hiding under the bed. You have to deal with the occasional downturn in your portfolio, but the reward for riding out those downturns (and buying regularly!) is that you'll end up with more money and a better retirement than someone who hid under the bed.

Is vwra volume a concern? 292 units traded today while iwda has traded 102k units

Not really, no. The thing you care about is the volume you can trade - if there's an active market-maker in the stock, you're fine, even if it doesn't trade much.

 

[CWL84]

The national library board has finally bought several more copies of rich by retirement. There's still going to be some waiting time because there are 44 reservations for the book but still far better compared to last time where there were only 3 copies available for borrowing .

 

[intheendgame]

ETFs

I'm new here, so I don't know if this has been addressed.

I've read your book and thank you for sharing the ideas that I think have become much more commonplace now. I'd learned a lot from it.

Currently, however, I'm worried about the mechanics of ETFs, and would like to seek your advice on this.


(bloomberg ran an article on how total passive funds are now bigger than total mutual funds)

This is primarily because passive funds have eclipsed mutual funds I feel that it will continue to grow given that retail investors now cannot look to bonds to grow their wealth.

In value investing, ideally, you want to buy at 85% of the company's value so that you have room to grow and profit. We assume that investors do that and the majority of the investors, i.e. the market is right. But when there are less real value investors in the market, what exactly is the passive funds following? Increasingly, the expensive shares would just get proportionately more expensive, creating bubbles when the price is way over the actual value of the share.

Would like to hear your thoughts on how that might affect the market and our expected results of ETFs.

Given also that
1) When millions go out of job, or face a natural disaster, the ETFs will be affected and so will the whole market.
2) How leveraged our economy is, with rolling loans being so commonplace. Thereby multiplying the effects of a bubble burst.

 

[flowerpalms]

Why don't you just buy the hardcopy?

$30 for a lifetime and you get to keep it forever. Wise investment you know?

Forget abt other investing/trading books by Singaporeans.

The national library board has finally bought several more copies of rich by retirement. There's still going to be some waiting time because there are 44 reservations for the book but still far better compared to last time where there were only 3 copies available for borrowing .

 

[phingfanren]

Yeah, two things you've missed:
1) Dividend handling fees are a rort and you should never use brokers that charge them. More importantly, though:
2) Poems doesn't give you access to IWDA, so you'd be all-in on Singapore stocks. A better bet would be to use Stanchart for local stocks (so, yes, you're paying $10 a month there), and then IBKR for IWDA.

Also, I'm assuming you're not going to be investing just a thousand bucks a month forever. As you go up, the charges rapidly get more expensive at POEMS.

Thank you very much for your advice

 

[CWL84]

Why don't you just buy the hardcopy?

$30 for a lifetime and you get to keep it forever. Wise investment you know?

I have already bought a digital copy but I also support the library and that books should be widely available to everyone.

 

[chrisloh65]

Means there is very little interest in transacting vwra.
I am definitely concerned with such low volume though because when you want to buy, you buy at larger and much larger premiums (even if there is market-maker because they are not going to sell you cheap and they will sell at higher and higher prices after you bought out those at lower prices), and when you want to sell, you have to sell at lower and much lower price if you are selling large volume.

Is vwra volume a concern? 292 units traded today while iwda has traded 102k units

 

[Zink00]

Means there is very little interest in transacting vwra.
I am definitely concerned with such low volume though because when you want to buy, you buy at larger and much larger premiums (even if there is market-maker because they are not going to sell you cheap and they will sell at higher and higher prices after you bought out those at lower prices), and when you want to sell, you have to sell at lower and much lower price if you are selling large volume.

what about saying you buy cheaper because low demand and you can sell higher because low supply.

 

[chrisloh65]

You want to buy cheaper many more lots but who is selling? Hence low transaction volume.
You want to sell higher many more lots but who want to buy from you? Hence low transaction volume.

When we want to buy and sell large enough volume at any instance, we want to be able to do so at about same price, not paying very much more after first few lots (or selling very much less after first few lots).

what about saying you buy cheaper because low demand and you can sell higher because low supply.

 

[flowerpalms]

Yes it is available but i just prefer to have the hardcopy to keep forever and read to refresh myself

I have already bought a digital copy but I also support the library and that books should be widely available to everyone.

 

[Shiny Things]

I'm new here, so I don't know if this has been addressed.

No worries at all. This point came up a LOT after Michael Burry’s Bloomberg interview a couple of weeks back, and it pops up every so often.

This is primarily because passive funds have eclipsed mutual funds I feel that it will continue to grow given that retail investors now cannot look to bonds to grow their wealth.

I have to point out that this is a non-sequitur. ETFs can hold bonds, stocks, futures, commodities, whatever.

The reason that index investing is taking over from active investing (note - that’s different from ETFs vs mutual funds! Index mutual funds are a thing, and active ETFs are also a thing!) is that people are finally realizing that active fund managers aren’t magic. They can’t—mathematically can’t—deliver returns in aggregate that are better than the index; and after fees, that means the active fund managers will do worse than a low-cost index fund.

(Also, I’m just saying: “mutual fund” is an Americanism. I think the article you got this from might be writing about the American market, not the Singaporean market; the percentage of the Singaporean market held in index ETFs is, I’d guess, somewhere well below 10%.)

But when there are less real value investors in the market, what exactly is the passive funds following? Increasingly, the expensive shares would just get proportionately more expensive, creating bubbles when the price is way over the actual value of the share.

I see. So what you’re asking is “if everyone becomes an index-tracker, won’t that cause large-cap stocks - that tend to be held by more indices - to become more expensive?”

This is not an unreasonable question, but it’s not one I’m personally worried about. Firstly, we’re not anywhere near “everyone is indexing”. Half of US equity market assets being in index funds still means that the other half is being chucked around by overcaffeinated active-fund managers, and that’s plenty to drive proper price discovery.

Even if we were at “everyone is indexing”, though, that would be a self-correcting phenomenon: the remaining hedge funds and active managers would start making abnormally large profits from those “underpriced” stocks that aren’t in the index, and eventually everyone would run back to the active-management side of the boat.

In fact, “big, popular stocks are overpriced” is a thing that’s happened before, even before ETFs existed. I love pointing to the “Nifty Fifty” bubble in large-cap US stocks back in the sixties: it became trendy to buy large-cap US stocks, to the point where their valuations were inflated beyond all reason and they subsequently tanked. There were no ETFs around to help people with buying those stocks; they just called up their broker and bought them anyway.

And secondly, it seems to be the opposite of what’s actually happening. Looking at the American market at least, small-cap stocks (which are less commonly held in index funds) are expensive compared to large-cap stocks (which are more common in index funds).

Means there is very little interest in transacting vwra.
I am definitely concerned with such low volume though because when you want to buy, you buy at larger and much larger premiums (even if there is market-maker because they are not going to sell you cheap and they will sell at higher and higher prices after you bought out those at lower prices), and when you want to sell, you have to sell at lower and much lower price if you are selling large volume.

A couple of thoughts on this. Your points would apply to single-stocks, but they don’t really apply in the context of ETFs.

1) Firstly, that’s not really how ETF market-makers work. ETF market-makers can arbitrage between the fund and the underlying all day long. The underlying of VWRA is the MSCI World, and the market-maker will just keep posting bids and offers based on where the MSCI World index is.
2) You, and I, and everyone else on this board, are not ever going to do enough volume to materially move the market in anything.

 

[hwckhs]

Means there is very little interest in transacting vwra.
I am definitely concerned with such low volume...

Here is a screenshot comparing the spread of a few global ETFs: IWDA, EIMI, VWRD, VWRA

I had checked the spread of these ETFs a few times today. VWRD's spread was in the 0.3-0.5 range, comparable to IWDA's in terms of percentage to price.

However, it's interesting to see that even though VWRD and VWRA belong to the same fund (one is distributing, the other is accumulating) and probably have the same market makers, VWRA's spread is higher at 0.12-0.20.

I don't know if VWRA's spread is acceptable. Just sharing my observations. Maybe you need to monitor and decide.

 

[Rknight]

Just started to purchase my first ETF !
What is the google investment spreadsheet recommended to monitor the prices here ?

 

[Lasogette]

Just wondering if anyone can assist on this with holding tax query.

Wish to buy some shares of British land and realised it is listed in London stock exchange and also in nyse as an adr.

As a Singapore citizen am I right to say that I should be buying the London version to pay less withholding tax for it's dividends thanks.

 

[yellownova]

Hi all,

Need some advice regarding saving on the fees of monthly DCA. Reading this thread there was some advice on purchasing only 1 a month.

Current POSB IS:
RSP on ABF and STI
Every month IWDA in SC

Should I stop the ABF in IS, and alternate IWDA and ABF/MBH?

Sent from Samsung SM-G975F using GAGT

 

[linuskltan]

Just wondering if anyone can assist on this with holding tax query.

Wish to buy some shares of British land and realised it is listed in London stock exchange and also in nyse as an adr.

As a Singapore citizen am I right to say that I should be buying the London version to pay less withholding tax for it's dividends thanks.

I think it's based on where the fund/share is domiciled rather than where its traded?