*Official* Shiny Things club

[bobobob]

One thing to keep in mind: if you're about to retire, you'll need to be more conservative than the 110-minus-your-age rule would suggest. A bigger allocation to bonds, and a smaller allocation to stocks, will be important.

What kind of allocation should a retiree have?

 

[w1rbelw1nd]

@w1rbelw1nd, this seems to be a downside to our DIY IWDA/VWRD. Maintaining balance is rather troublesome when everything's moving if I need to check it more frquently.

Well that "issue" is not unknown to me in the first place, and I don't believe that rebalancing should be done to the extent of following the allocation ratios to a single decimal place accuracy throughout the year.

Cost and time spent have to be taken into consideration. I am glad that I managed to buy some vusd and sell some of my bonds on Monday.

 

[revhappy]

What kind of allocation should a retiree have?

It depends. If you have a huge networth, such that the dividend from stocks can take care of your expenses then by all means stay in equities. But for networth of less than 1 million, I would imagine, you have keep 10 years worth of expenses in fixed income and rest in equities.

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[ElDiavolo90]

Hi Guys, May i know what broker you guys use to invest in Vanguard Stocks? I find IB has a high entry point which is not suitable for small time investors like me. Also, for local SG ETF, is POEMS a good choice? I find only them do DCA to SPDR ETF. Other broker does the Nikko one.

 

[fr33d0m]

The ETF trade is getting "crowded". The ETFs are not the market. The ETFs are only a part of the market. As more money pours into the ETFs, the rest of the market dries up. That causes that the components of ETFs have higher valuation than the general market. Eventually, everything reverts to the mean and the "crowded" ETF trades lose to the market.

It is not unlike the tulip mania. No doubt the tulip is good(so are ETFs), however, when too much money pours into it, you all know what happens in the end.

The same can happen to ETFs. After all, SPY is only 500 stocks and heavily weighted towards the top few stocks. The same about other ETFs.

 

[Maeda_Toshiie]

Hi Guys, May i know what broker you guys use to invest in Vanguard Stocks? I find IB has a high entry point which is not suitable for small time investors like me.

Standard Chartered. Buy those domiciled in Ireland and listed in London

Also, for local SG ETF, is POEMS a good choice? I find only them do DCA to SPDR ETF. Other broker does the Nikko one.

ES3 and G3B track the same STI. The difference between them is small; either one is fine. Choose the broker which is cheapest for you.

 

[revhappy]

The ETF trade is getting "crowded". The ETFs are not the market. The ETFs are only a part of the market. As more money pours into the ETFs, the rest of the market dries up. That causes that the components of ETFs have higher valuation than the general market. Eventually, everything reverts to the mean and the "crowded" ETF trades lose to the market.

It is not unlike the tulip mania. No doubt the tulip is good(so are ETFs), however, when too much money pours into it, you all know what happens in the end.

The same can happen to ETFs. After all, SPY is only 500 stocks and heavily weighted towards the top few stocks. The same about other ETFs.

I don't find anything problematic about ETFs other than the fact that money is going in a fixed ratio towards each stock. In a market crash, assuming etf holders are selling and there are no buyers, the market maker has to sell the holdings, so the unwinding is in the same manner as the rise.

But, I think we always have this fad in the market, sometimes too much active/hedge fund types and now too much etf types. When everyone goes into etf, active strategies outperform. When everyone is into active, ETFs outperform.

So the success of etf depends on it being a minority. If it becomes a majority, its performance comes down, but I don't think ETFs themselves are cause for a bubble.

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[fr33d0m]

I don't find anything problematic about ETFs other than the fact that money is going in a fixed ratio towards each stock. In a market crash, assuming etf holders are selling and there are no buyers, the market maker has to sell the holdings, so the unwinding is in the same manner as the rise.

But, I think we always have this fad in the market, sometimes too much active/hedge fund types and now too much etf types. When everyone goes into etf, active strategies outperform. When everyone is into active, ETFs outperform.

So the success of etf depends on it being a minority. If it becomes a majority, its performance comes down, but I don't think ETFs themselves are cause for a bubble.

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Is tulip the cause of the bubble? Of course not. It is the "investors" behind the tulip.

 

[peipei1]

US dips at the end yesterday, Asia and Europe hobbling, so expect IWDA and EIMI bargains later?

Hey Shiny, for all my efforts to escape and reinstate EIMI over the past few days, i made a whopping USD250..i forgot about the T+3 settlement, i had to hawkish lookout while waiting for LSE send back the proceeds. Got it on T3 on the open

On a somehow good note, i converted SGD to USD at a good rate before that flew away. I made 3 times the FAST transfers over my plan.

It is quite some work to active monitor for 250, which makes me rethink of just holding to plan. I am lucky EIMI was still lower when i rebought.

Do you know what's the optimal iwda and eimi lots to transact to keep the commission at 1.90? When i one off sold my eimi holdings, commission was 10 times normal.

 

[ElDiavolo90]

Thanks man!

 

[revhappy]

US dips at the end yesterday, Asia and Europe hobbling, so expect IWDA and EIMI bargains later?

Hey Shiny, for all my efforts to escape and reinstate EIMI over the past few days, i made a whopping USD250..i forgot about the T+3 settlement, i had to hawkish lookout while waiting for LSE send back the proceeds. Got it on T3 on the open

On a somehow good note, i converted SGD to USD at a good rate before that flew away. I made 3 times the FAST transfers over my plan.

It is quite some work to active monitor for 250, which makes me rethink of just holding to plan. I am lucky EIMI was still lower when i rebought.

Do you know what's the optimal iwda and eimi lots to transact to keep the commission at 1.90? When i one off sold my eimi holdings, commission was 10 times normal.

Convert your account to Margin account you don't have to wait for T+3.

Regarding commission it is a linear percentage of the trade value. There is a maximum of $39 or something. I traded some 30K USD worth EIMI was charged around that amount.

Today EIMI is likely to fall because of Shanghai.

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[alexilaiho]

what caused the ES3 crash in 2015?

 

[revhappy]

what caused the ES3 crash in 2015?

China crashed. When China coughs Singapore catches a cold.

Today also CNY fell and SGD fell along with it.

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[revhappy]

Shiny, would be interested to know, are you trading at all the last few days, hedges or strategies to protect your profits?

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[Maeda_Toshiie]

what caused the ES3 crash in 2015?

I vividly recalled that the global oil price sank below $40 with massive consequences to the oil & gas industry, as well as the local banks who provided loans to the said countries. I suppose Sembcorp Marine falling out of the STI, Keppel halving in value, and the 3 banks sinking >30% was a small sideshow.

 

[proton91]

Hi guys, if I purchase a ETF listed on LSE but denominated in USD, will it incur the 30% withholding tax as opposed to 15%?

 

[Shiny Things]

What kind of allocation should a retiree have?

As a starting point, you can look at what a "110-minus-your-age" rule would imply for a 65-year-old. That's a pretty normal age to retire, though I tend to think that as people live longer, there's no reason you need to stop working at 65 if you still love your job. (That's a whole different discussion, though.) That'd put you at 45% stocks, 55% bonds.

As someone (I think it was revhappy?) mentioned upthread, though: the more money you have, the more conservative you can be. If you've got enough money that you can cover all your expenses just from the coupons on government bonds, then - do that!

Hi Guys, May i know what broker you guys use to invest in Vanguard Stocks? I find IB has a high entry point which is not suitable for small time investors like me. Also, for local SG ETF, is POEMS a good choice? I find only them do DCA to SPDR ETF. Other broker does the Nikko one.

If you're small (under about $100k or so), you'll want Standard Chartered for overseas stocks and ETFs, and POSB Invest-Saver for local ETFs. The Nikko and SPDR STI ETFs are basically the same thing.

The ETF trade is getting "crowded". The ETFs are not the market. The ETFs are only a part of the market. As more money pours into the ETFs, the rest of the market dries up. That causes that the components of ETFs have higher valuation than the general market. Eventually, everything reverts to the mean and the "crowded" ETF trades lose to the market.

You know there are a lot of ETFs out there, right? I think you'd have trouble finding a stock that's not an ETF component, at least in the USA. I think a better way to think of it is that ETFs are just another way to invest money that would have flowed into stocks anyway, and mostly into large-cap stocks.

I agree with you that stocks that are owned by a lot of ETFs tend to be valued higher than stocks that aren't; the fact that stock prices go up when they get included in heavily-tracked indices is proof enough of that.

But assuming that what you're saying is right, and that the valuations of ETF component stocks will eventually snap back into line with non-ETF component stocks... how is that going to happen? What's going to be the trigger? Prices don't magically move by themselves; what's going to make people sell their ETFs, and how do you know that they won't just go and buy the same stocks they already owned?

Frankly mate I think you're taking a very big leap here. Sure, index component stocks are systematically more expensive, but that's because people want to own them. For that to unwind, the index-tracking business would literally have to disappear.

what caused the ES3 crash in 2015?

Along with the things that other people have mentioned, late 2015-early 2016 saw a lot of people selling out of emerging markets and piling into developed markets. Fairly or unfairly, Singapore got caught in that selloff, because (like someone said upthread), Singapore's economy is tightly linked to the emerging-market economies in the rest of Asia.

Hi guys, if I purchase a ETF listed on LSE but denominated in USD, will it incur the 30% withholding tax as opposed to 15%?

The thing that matters is not the listing venue; it's not the currency; it's the domicile of the fund itself.

ETFs listed on the LSE are typically domiciled in Ireland. Ireland has the 15% tax treaty with the USA.

Do you know what's the optimal iwda and eimi lots to transact to keep the commission at 1.90? When i one off sold my eimi holdings, commission was 10 times normal.

You're thinking way too hard about this. The entire point of the strategy is that you don't actively trade; active traders, like you, just end up running up commissions for very little benefit.

Shiny, would be interested to know, are you trading at all the last few days, hedges or strategies to protect your profits?

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Nah, not really. I actually took off a couple of little punt trades that I had on, just so that I didn't accidentally get caught in any blowups.

On the whole, though, I've been a net buyer of stocks and bonds the last few days.

 

[jackieatbtu]

And a grandma being quoted saying she bought ocbc stock cause it’s 8.50 and a steal!

I vividly recalled that the global oil price sank below $40 with massive consequences to the oil & gas industry, as well as the local banks who provided loans to the said countries. I suppose Sembcorp Marine falling out of the STI, Keppel halving in value, and the 3 banks sinking >30% was a small sideshow.

 

[xyziop]

So what are the explanations to yesterday drop in S&P and dow? I see a lot of ppl are saying rising interest rate but interest rate has been rising steadily over 2017 and expected to continue in 2018. It’s not like people “suddenly” just realised interest rate are going to go up and start selling. And could portfolio insurance by big funds triggered off the sell off and make it worse than it should be?

Not a panic post btw, just trying to understand the mechanisms behind stock market.

 

[Maeda_Toshiie]

So what are the explanations to yesterday drop in S&P and dow? I see a lot of ppl are saying rising interest rate but interest rate has been rising steadily over 2017 and expected to continue in 2018. It’s not like people “suddenly” just realised interest rate are going to go up and start selling. And could portfolio insurance by big funds triggered off the sell off and make it worse than it should be?

Not a panic post btw, just trying to understand the mechanisms behind stock market.

Market sentiments? Trading algorithms triggering off? Profit taking? Herd behaviour?

The market is irrational over the short term.