Thanks ST.
Quick question.
Any reason why you mentioned POSB IB?
It’s because a) it’s pretty hard to go wrong, there’s only two options you can invest in and both are good; and b) the fees are relatively low, so it’s great for investors who are just starting out.
There are other RSPs out there, but honestly, POSB IB is good enough.
I'm in a bit of a peculiar spot at the moment, with a lump sum around ~200k SGD spread between a high interest rate (2-2.5%) savings account (34.5%) and SSBs (2%+) (65.5%). I put my funds into those investment vehicles first (still a student without salary income) to read up in order to decide what strategy is best moving forward. I want to gradually shift into the 3 fund portfolio as described in your book.
This confuses me a little -- "OR you're doing > $1,000 a clip" seems to suggest that if you're allocating $400/mth to IWDA, and you batch it up into quarters to $1200/quarter, then you should use IBKR? For that case, SCB would be around $80/year (4x USD 10.70 + forex spread on $4800) while IBKR would be $160/year (12x USD 10), so it's a bit odd.
Hold on, then I’m mis-stating it a bit. Don’t forget, you should really only be buying one counter each month (to minimize transaction costs).
If you’re investing one grand a month, buying one counter each month, then you’ll be buying a $1k clip of IWDA about every two months or so (a little less, depending on what your allocation is). That works out to:
At Stanchart: 6xUSD10.70 + 0.5% * 6000 SGD = about $120 SGD
At IBKR: about $160 SGD.
I’ll grant you this is a bit low, and the cutover point is closer to $1300 a month, but $1k is a nice round number and people’s investments tend to grow pretty quickly, especially when they’re just starting out.
So, the way I should phrase it is: “if you’re investing $1k SGD a month or more, OR if you have a >$200k lump sum, use SC / IBKR. If neither of those apply, use POSB / SC.”
Does that make more sense?
So i just started using IB to buy IWDA.
I got the message:
"Confirm Mandatory Cap Price
To avoid trading at a price that is not consistent with a fair and orderly market, IB may set a cap (for a buy order) or floor (for a sell order).
THIS MAY CAUSE AN ORDER THAT WOULD OTHERWISE BE MARKETABLE NOT TO BE TRADED,
Cancel or OK"
I clicked OK, and nothing happens.
I think that means you're trying to send a market order (or a limit order with the price a long way through the market), and IB is just letting you know that they're going to limit the price you get filled at. If you click OK on that, I think the order will get sent straight to the exchange?
I have some friends who have been advocating the Permanent Portfolio by Harry Browne. They recommend it to use this portfolio approach for retirement. What are your thoughts on this? At least in the Singapore context.
This is a fun one. I think the Permanent Portfolio is a great idea in some ways, but in other ways it's absolute paranoid lunacy.
For anyone who hasn't run across it - the Permanent Portfolio is just a buy-and-hold-and-rebalance strategy as well, not a million miles off the three-fund strategy that I prefer. My problem is with the actual allocations: the Permanent Portfolio advocates a 25-25-25-25 mix of cash, long bonds, gold(!!!), and stocks.
Now that allocation is WAY too conservative for most people! 25% in stocks is the sort of allocation you'd expect to see in the portfolio of an 85-year-old. 25% in cash is a nightmare - cash is the lowest-performing asset imaginable. The reason you don't want to hold more cash than you need to is because the return-on-investment of cash is so anemic.
And the only investment worse than cash is the yellow rock. It has zero yield (actually a negative yield, because you've gotta pay to store it); it's an entirely speculative asset; and the only environment where it tends to do well is an environment of high inflation... but if you're trying to hedge against inflation, in that and every other environment, you'd do a lot better with an allocation to international stocks.
Gold is a dumb investment.
I think Shiny is just presenting the easiest low fuss method of regular investing.
Yeah, basically. "I want to teach my kid good investing habits" is a sliiiightly different use case from "I want to save up for my kid's college fees", and it needs a slightly different end product.
Just a thought: Would it make more sense to hold 100% equities long term if we're discussing this for a kid? The idea that we should diversify as we get older because we are more risk-adverse.
Fair question. I think a 100% equities allocation only really makes sense if
you're saving for
your kid's retirement, just from a risk-horizon point of view. I think y'd rather teach them the value of diversification (which means giving them some bonds as well as stonks) and also, they might want to pull the money for college (which means a more conservative allocation).
Am considering a Robo that would automate regular investing. The fees probably aren't too different from a RSS with DBS/OCBC and it gives more global exposure.
Still reading up and shopping for opinions/ ideas. Will decide and take action before the year is out.
I don't think there are any roboadvisors in Singapore that are quite up to scratch, and you'd be surprised how high some of the fees are.
HRecently I've decided I want to get accumulate some Hong Kong ETF.
So I say this a lot, but: ETFs aren't Pokemon, you don't need to own 'em all. There's not really a good reason to have a specific allocation to HK equities, unless you actually plan to retire in HK... and do you want to do that?
Hi everyone, I've just bought 12 units of IWDA at USD 59.05. The commission is USD 5. I expected it to be USD 1.70 with exchange fees. Did I do something wrong? Thanks!
You've probably got the commission set to fixed instead of tiered. Flip that switch and you should get the cheaper commission.
which pays better int compared to ssb now