*Official* Shiny Things club - Part 2

[revhappy]

can the public invest in private equity funds without large sums and with low management fees?

https://www.economist.com/finance-a...-mature-the-way-they-buy-and-sell-is-changing

I think you need to be an accredited investor, so cannot.

Sent from Xiaomi REDMI NOTE 4 using GAGT

 

[executor114]

I have started on G3B and A35 with POSB investsaver.

Now i am only left with buying IWDA. After reading through Shiny Things book and this thread, i understand that for <$1000/month, go for SCB. Anything more, go for IB.

I have a few questions to ask from the regulars/experts here:

1) Do i have to go down to the SCB branch to open the trading account or can it be done online?

2) What instructions do i have to tell them for me to gain access to IWDA? i understand that IWDA is in LSE and USD denominated.

3) is it recommended that i do the transactions quarterly or monthly? as for me i am only able to afford <$500/month into IWDA.

4) is there an idiot proof guide that i can refer to when figuring out how to buy IWDA on the SCB trading platform? as i have no prior experience in trading before.

Thanks alot in advance guys.

 

[SpringCleaner]

I have started on G3B and A35 with POSB investsaver.

Now i am only left with buying IWDA. After reading through Shiny Things book and this thread, i understand that for <$1000/month, go for SCB. Anything more, go for IB.

I have a few questions to ask from the regulars/experts here:

1) Do i have to go down to the SCB branch to open the trading account or can it be done online?

2) What instructions do i have to tell them for me to gain access to IWDA? i understand that IWDA is in LSE and USD denominated.

3) is it recommended that i do the transactions quarterly or monthly? as for me i am only able to afford <$500/month into IWDA.

4) is there an idiot proof guide that i can refer to when figuring out how to buy IWDA on the SCB trading platform? as i have no prior experience in trading before.

Thanks alot in advance guys.

1) IIRC, when my friend opened the account a year ago, he was told to go down to the branch personally to do it.

2) When you apply for the trading account, you will also have to open settlement account(s) simultaneously. Each settlement account is denominated in a single currency. For example, if you have a Bonus Saver savings account and you want to buy AAPL shares, you have to transfer your SGD savings to the USD settlement account (at that spot rate dictated by SCB) before you start trading. Last time when I opened my account, they asked me which market I plan to trade in and I told them to open all the available currencies' settlement accounts just in case I might buy non-US shares in future.

3) If you want to save on the trading costs, you can do it quarterly.

4) Once you logged in, just go to Menu and look for Invest (Online Trading). It will bring you to a different page. On the right hand side of the page, there is a "Place Order" layout. In the Counter Code field, you can type in "IWDA". If there is no search result returned automatically, click on "Refine Search" and enable the "LSE - London SE" market and save settings. Now, type in "IWDA" again and you should be able to see it in the drop down. After that, in the Action field, click "Buy" and in the Order Quantity field, type in your desired number of shares. You can choose either Limit or Market order, then submit it and wait for the confirmation of the execution. [Note: At the bottom of the layout, there is an "Account Info" which shows you whether you have enough money in your settlement account to place an order.]

 

[executor114]

1) IIRC, when my friend opened the account a year ago, he was told to go down to the branch personally to do it.

2) When you apply for the trading account, you will also have to open settlement account(s) simultaneously. Each settlement account is denominated in a single currency. For example, if you have a Bonus Saver savings account and you want to buy AAPL shares, you have to transfer your SGD savings to the USD settlement account (at that spot rate dictated by SCB) before you start trading. Last time when I opened my account, they asked me which market I plan to trade in and I told them to open all the available currencies' settlement accounts just in case I might buy non-US shares in future.

3) If you want to save on the trading costs, you can do it quarterly.

4) Once you logged in, just go to Menu and look for Invest (Online Trading). It will bring you to a different page. On the right hand side of the page, there is a "Place Order" layout. In the Counter Code field, you can type in "IWDA". If there is no search result returned automatically, click on "Refine Search" and enable the "LSE - London SE" market and save settings. Now, type in "IWDA" again and you should be able to see it in the drop down. After that, in the Action field, click "Buy" and in the Order Quantity field, type in your desired number of shares. You can choose either Limit or Market order, then submit it and wait for the confirmation of the execution. [Note: At the bottom of the layout, there is an "Account Info" which shows you whether you have enough money in your settlement account to place an order.]

Thank you very much for your detailed and comprehensive response. For 4), may i ask whether will you choose Limit or Market order?

For the GTD, if i chose a date that is 5 days from the date of order, does it count as a single transaction? meaning i am only charge $10usd or does the brokerage fees count for each day?

 

[SpringCleaner]

Thank you very much for your detailed and comprehensive response. For 4), may i ask whether will you choose Limit or Market order?

For the GTD, if i chose a date that is 5 days from the date of order, does it count as a single transaction? meaning i am only charge $10usd or does the brokerage fees count for each day?

I habitually use limit orders but I don't think it matters too much since I buy to hold anyway.

The charge is per transaction/trade, not daily.

 

[Maeda_Toshiie]

Thank you very much for your detailed and comprehensive response. For 4), may i ask whether will you choose Limit or Market order?

For the GTD, if i chose a date that is 5 days from the date of order, does it count as a single transaction? meaning i am only charge $10usd or does the brokerage fees count for each day?

Always choose limit order.

 

[appl888]

Limit order as experts here pointed out
Do not use GTD
If Low volume counter, you are screwed
Buy what you need and close shop

Thank you very much for your detailed and comprehensive response. For 4), may i ask whether will you choose Limit or Market order?

For the GTD, if i chose a date that is 5 days from the date of order, does it count as a single transaction? meaning i am only charge $10usd or does the brokerage fees count for each day?

 

[executor114]

Limit order as experts here pointed out
Do not use GTD
If Low volume counter, you are screwed
Buy what you need and close shop

Kindly enlighten me on this as i am not familiar with the technical terms. What do you mean by low volume counter? and is it possible to not key in a GTD?

 

[Shiny Things]

Hi Shiny Things,

I read a number of your posts and am now quite convinced to put some of my savings in UCITS ETFs such as CSPX and EIMI.

Hey, glad you enjoyed the posts!

So I think you might be missing the point a little. Unless you're specifically looking for exposure to the USA (CSPX) or emerging markets (EIMI), you shouldn't be looking at those country-specific ETFs. You're better off with a global ETF like IWDA.

Just one quick question, how do I hedge the USD exposure from those UCITS ETFs? I'm afraid the movement of USD/SGD can easily wipe out or lessen your S&P 500 gains if the FX rates move against you. As a retail investor I can only think of CFDs on Oanda, but that is not a perfect hedge...any idea on this?

Don't bother. Hedging the FX is surprisingly expensive, for one; and for another, having some SGD assets (your A35 and ES3) is the natural hedge. If SGD strengthens over the time you're investing, then your SGD assets will help you out; if SGD weakens, then your overseas assets will help you out.

can the public invest in private equity funds without large sums and with low management fees?

Not really, no.

There are "listed private equity" funds, that claim to let you "invest in private equity", but that's a lie. The holdings of the biggest listed private equity fund (it's a US mutual fund, you don't want it) are mostly private equity companies, not the investments themselves: it's got Blackstone, Carlyle—and, inexplicably, a 5% allocation to IAC, I guess because they think that retail mug punters want exposure to Tinder?

Thank you very much for your detailed and comprehensive response. For 4), may i ask whether will you choose Limit or Market order?

For the GTD, if i chose a date that is 5 days from the date of order, does it count as a single transaction? meaning i am only charge $10usd or does the brokerage fees count for each day?

1) Use a limit order.

A limit order is like saying "I want to buy this stock at this price, or cheaper". A market order is like saying "I MUST BUY THIS STOCK IMMEDIATELY AT ANY PRICE, GIVE IT TO ME NOW NOW NOW", which is probably not what you meant to say.

If you're entering a buy order, set your limit a bit above the last traded price - like 1% above it, if the market's open at the time. That should guarantee you get filled immediately, as long as the market's open. (For a sell order, put it a bit below the last traded price.)

2) You only get charged brokerage when your order executes. If it sits around for a few days, you won't get charged - but because you put your limit buy price above the market, it should get filled immediately anyway.

Kindly enlighten me on this as i am not familiar with the technical terms. What do you mean by low volume counter? and is it possible to not key in a GTD?

1) You can ignore the "low volume counter" bit. It doesn't apply to IWDA.
2) You can ignore the GTD bit. It doesn't matter, since you want your order to be filled immediately.

 

[tangent314]

Now i am only left with buying IWDA. After reading through Shiny Things book and this thread, i understand that for <$1000/month, go for SCB. Anything more, go for IB.

This is obviously wrong. As long as you are buying IWDA every month, it is always better to go with IB. If you want to buy every 3 months, SCB may be a better option, depending on how much you are going to buy and how much you already have inside.

Here's the illustration.

For IB, you will simply pay US$10/month. This will cover the commission for one forex (US$2) and buying up to US$16k worth of IWDA (using fixed pricing). Note: For amounts less than US$6250 you should use tiered pricing instead of fixed pricing.

For SCB, the minimum commission is US$10, and at 0.25% commission this covers up to US$4000. However, the forex fees is pretty hefty at around 0.54% *one way*. Eventually you have to convert back when you start your draw down and incur another forex fee at the appreciated price of your stocks.

With your $500/month, it may be slightly better going with SCB if you buy in every quarter, but really at this point I would rather just go with IB and try to reach US$100k as soon as possible by ignoring Singapore equities/bonds first until I get there, and to lump sum in as much as I can first.

 

[Shiny Things]

This is obviously wrong. As long as you are buying IWDA every month, it is always better to go with IB. If you want to buy every 3 months, SCB may be a better option, depending on how much you are going to buy and how much you already have inside.

I will say, most people won't be buying IWDA every month. More likely is that you're going to be buying, for example, ES3 one month, then IWDA, then ES3, then IWDA, then A35, etc etc etc. That way, you get to your target allocation pretty quickly (within a few months) and you don't have to pay three sets of brokerage fees every month.

 

[SpringCleaner]

I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?

 

[EagleToThesSky]

Hoe does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit

Are you 25 or younger? If so, you only need USD 3k equivalent to activate your IBKR account. Speaking from personal experience (and I was over 25 when I opened my account), I was able to activate my account with SGD 6k and start investing with IBKR. It's just that I didn't have the option to withdraw any cash from my account until I had in excess of USD 10k equivalent in assets with them.

If you can commit to buying IWDA every month, then you should just start off with IBKR because the monthly cost is the same to you whether IBKR or SCB: USD 10 each month. Unless you have other assets with SCB that can push you into priority banking, that is; at 0.18% with no minimum commission, your SGD 2k investment, or about USD 1,526 will generate commissions of USD 2.74 a month per transaction with SCB. This is before factoring in the USDSGD spread, which based on what forummers who use SCB here have said in the past, runs at about 0.5%.

 

[tangent314]

I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?

IWDA covers only developed markets. Normally, you would combine IWDA with EIMI which covers the emerging markets. Recommended would be about 10-20% of your portfolio in EIMI and the rest in IWDA.

Make sure you are using tiered pricing, or you will incur US$12 of commission per month instead of US$5.40

Hoe does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit

Exchange rate is about the same, but min commission is $25 with Vickers. Before GST. Should probably check if SCB also charges GST on their commissions.

 

[kehyi4]

How does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit

Let's see...

DBSV (for trading on LSE):
Commission - Minimum GBP 25 / USD 36 / EUR 33; or 0.35% of trading principal
Dividend Collection - 1% of Net Dividend (Minimum GBP 3, Maximum GBP 30)
Corporate Action Service Fee - GBP 15 per counter
Custody Fee (charged quarterly) - SGD 2 per counter per month, capped at SGD 150.00 per quarter. Waiver based on combination of Singapore & foreign market transactions: (a) 2 x transactions per month or (b) 6 x transactions per quarter

SCB (for trading on LSE):
Commission - 0.25% (0.20% with Priority Banking), minimum GBP 10, USD 10 or EUR 10 (no minimum for Priority)
Dividend Collection - 0
Corporate Action Service Fee - 0
Custody Fee (charged quarterly) - 0

If you still insist on using DBSV, sure go ahead. As a small, small shareholder of DBS, i thank you

 

[Shiny Things]

I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?

You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.

 

[BBCWatcher]

You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.

It could be a good idea. “It depends.”

Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).

IWDA includes a small component of Singapore-listed stocks since Singapore (the SGX) is classified as a developed market. If by some miracle the next Apple or Amazon is SGX listed, IWDA will ride it.

 

[FrostWurm]

Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).

It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.

What Shiny Things has posted is meant to be a generic guide, geared to the average Singaporean who is just starting out on his investment journey. Obviously his life direction and goals may also change along the way.

If you would like to post about retirement in the Bahamas, perhaps a US-based forum would be more suitable for you

 

[BBCWatcher]

It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.

I try not to assume anything absent evidence. SpringCleaner hasn’t indicated her/his investment objectives, and nobody bothered to ask first. Shall we ask first, or would that be “bewildering”?

 

[SpringCleaner]

Thank you for all the useful replies!

IWDA covers only developed markets. Normally, you would combine IWDA with EIMI which covers the emerging markets. Recommended would be about 10-20% of your portfolio in EIMI and the rest in IWDA.

Make sure you are using tiered pricing, or you will incur US$12 of commission per month instead of US$5.40

I will be opening an IB account soon. If I want to select tiered pricing, do I choose it upfront during the application process or is there an option for me to convert from fixed to tiered pricing in the account settings?

You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.

I do understand the need to diversify but if my investment objective is capital appreciation and can stomach a medium to high risk, would it still make sense to put money in SG stocks and bonds?

It could be a good idea. “It depends.”

Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).

IWDA includes a small component of Singapore-listed stocks since Singapore (the SGX) is classified as a developed market. If by some miracle the next Apple or Amazon is SGX listed, IWDA will ride it.

Pardon me for not giving more details. I am in my early 30s, single with no dependencies or debts. What I am trying to achieve is financial independence as early as possible so of course, besides saving the bulk of my salary, increasing my earnings is also one of the things in the pipeline. I am not adverse to the idea of retiring in a country other than Singapore. In fact, I had been giving it a serious consideration and may actively pursue the thought. If I truly can retire early one day, I do see the need to move to a lower cost country in order to lengthen the drawdown horizon.

Of course, my objectives may completely change if I do get married one day and have kids but at this point of time, I am okay to have as little SG stocks exposure as possible.

It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.

What Shiny Things has posted is meant to be a generic guide, geared to the average Singaporean who is just starting out on his investment journey. Obviously his life direction and goals may also change along the way.

If you would like to post about retirement in the Bahamas, perhaps a US-based forum would be more suitable for you

As mentioned above, I am entertaining the idea of retiring in another country.