*Official* Shiny Things club - Part 2

[CupcakedCrusader]

Thanks BBCWatcher for the fast reply Another question, I have 10k worth of sti etf, 15k worth of IWDA, 5k worth of EIMI. Currently using Interactive Brokers. Based on the current market, I have been adding sti etf and have not touched my IB account for amount 4 years. I'm concerned that the monthly 10 dollars fee incurred by IB will eat into any gains that I have made. Could you enlighten me on this?

 

[Shiny Things]

anyone got lobang to buy foreign etfs, heard either blackrock or intereactivebrokers good. but don't know which commission or service fee more expensive

I think you might be a little too focused on the lobang and not enough on what you're actually trying to do.

Blackrock is a fund manager. You can't (generally) buy ETF shares directly through them.

Interactive Brokers and Standard Chartered are brokers. You can buy ETF shares through them.

What are you trying to achieve? Tell us a bit more about your financial situation and we can tell you the best way to do it.

Hi guys, need some help, what is LTV % and LTV Value?

I bought 1400 shares of STI ETF which is around $4456, but when I checked my portfolio today there's two column with values I don't understand, they are LTV % and LTV Value, with value of 70 and 3142.86 respectively. Can any kind souls here shed some light on this for me?

Thank you.

LTV usually stands for "loan-to-value". Looks like you did this in a margin account?

Thanks BBCWatcher for the fast reply Another question, I have 10k worth of sti etf, 15k worth of IWDA, 5k worth of EIMI. Currently using Interactive Brokers. Based on the current market, I have been adding sti etf and have not touched my IB account for amount 4 years. I'm concerned that the monthly 10 dollars fee incurred by IB will eat into any gains that I have made. Could you enlighten me on this?

Yeah, I mean, parking $20k in an IBKR account and not trading it is not a brilliant strategy. You're effectively paying a shade under a 1% brokerage fee for something you're not using. I'd either transfer those out to Stanchart, or start using your IBKR account.

I’ll repeat: It is not reasonable to forecast that LQDA will beat the CPF Special Account over the long term. If you want to go buy LQDA for yourself, that’s up to you of course.

Oh mate, let's not give Ervino any oxygen. The dude just wants to fight.

 

[jacky817]

Yeah, I mean, parking $20k in an IBKR account and not trading it is not a brilliant strategy. You're effectively paying a shade under a 1% brokerage fee for something you're not using. I'd either transfer those out to Stanchart, or start using your IBKR account.

On the topic of transferring shares from one account to another, ie. Stan chart to IB or vice versa, what are the fees involved?

 

[BBCWatcher]

I don’t think IB can transfer any non-U.S. securities in kind. So the process would be to liquidate assets at IB, remit the funds to Standard Chartered (the currency choice is an interesting one), then reacquire the positions.

If you’re going to be accumulating more assets, then it’d be fine (or better than fine) to stick with IB. Or, if you can transfer assets in such that your IB account value rises to at least US$100K, that’s fine — then IB can hold those assets without any minimum monthly activity fees. But IB is not well suited to holding <US$100K without any activity. Other brokers are less terrific in other ways, so you have to “pick your poison.” (IB still might win a comparison; it depends.)

 

[CupcakedCrusader]

Thanks for the clarification. I will be holding these stocks for long term so I'll still continue with IB!

May I also know whats the recommended allocation between sti etf, iwda and eimi.

 

[ipwntnoobs]

Thanks for the clarification. I will be holding these stocks for long term so I'll still continue with IB!

May I also know whats the recommended allocation between sti etf, iwda and eimi.

Assuming you intend to retire in SG, you can do a 50:50 split between SG and non-SG etfs.

And you can weight the EIMI according to the market cap of developing markets against developed markets. Right now its agreed that its about 10% (Please correct me if I'm wrong). So out of the 50, 45 goes into IWDA and 5 into EIMI.

STI: IWDA: EIMI
50: 45 : 5

 

[BBCWatcher]

Assuming you intend to retire in SG, you can do a 50:50 split between SG and non-SG etfs.

That’s one idea. I’m not a fan and suggest avoiding any more than 20% (one fifth of stock investing) in any one country’s stock market until you get within 7 to 10 years of drawdown age. Then you’d start gradually, steadily adjusting your portfolio for retirement.

During accumulatin phase I’d be in this sort of posture:

~20% bonds/bond-likes (CPF, SSBs, MBH, possibly a bit of CORP for a large portfolio)
~80% stocks/stock-likes (including the equity in your home), of which
no more than 20% (16% of total) is the lowest cost stock index fund in your expected retirement country (ES3 if Singapore)
the rest in IWDA or VWRD
but if IWDA, you may wish to add a small percentage (10% of IWDA) in EIMI

The above assumes non-U.S. personhood.

Starting 7+ years before drawdown age (10 if you’re an ultra conservative investor), gradually and steadily adjust your portfolio so it converges to this portfolio at your drawdown age:

~70% bonds/bond-likes (with a small portion in international bonds, such as CORP)
~30% stocks/stock-likes, of which
50% is the lowest cost stock index fund in your retirement country (ES3 if Singapore)
50% is IWDA(+EIMI) or VWRD

You can exclude your fully paid primary residence from drawdown portfolio consideration if you wish. It is stock-like, but I’d be OK with that posture even without counting the primary residence.

These are all my “rules of thumb,” with a lot of professionals backing the basic concepts behind them. Rules of thumb should be adjusted if your situation is peculiar in some way. For example, if you expect to split your time evenly between two retirement countries in two different currency zones — half in Europe and half in Singapore, for example — then your investment posture should be adjusted to reflect that expectation. As another example, if your country’s bond market is terrible (because its currency is terrible, for example), then boost the global bond holding portion to compensate. (Singapore has a quality currency and a small but functional investment grade and high quality sovereign bond market.)

 

[Listopad]

Starting 7+ years before drawdown age (10 if you’re an ultra conservative investor), gradually and steadily adjust your portfolio so it converges to this portfolio at your drawdown age:

~70% bonds/bond-likes (with a small portion in international bonds, such as CORP)
~30% stocks/stock-likes, of which
50% is the lowest cost stock index fund in your retirement country (ES3 if Singapore)
50% is IWDA(+EIMI) or VWRD

you reckon your suggestion re: 50% ES3 /50% IWDA would differ if one's bond portion is large enough to sustain drawdown for good number of years. would you then perhaps suggest having a much smaller% of ES3 or maybe not even having it ?

 

[BBCWatcher]

you reckon your suggestion re: 50% ES3 /50% IWDA would differ if one's bond portion is large enough to sustain drawdown for good number of years. would you then perhaps suggest having a much smaller% of ES3 or maybe not even having it ?

These "rules of thumb" implicitly assume modest to medium wealth. Fabulously wealthy retirees can prudently afford a more aggressive investment posture, particularly if they are expecting to pass most wealth to heirs (with longer time horizons) in gifts and bequests.

 

[Listopad]

These "rules of thumb" implicitly assume modest to medium wealth. Fabulously wealthy retirees can prudently afford a more aggressive investment posture, particularly if they are expecting to pass most wealth to heirs (with longer time horizons) in gifts and bequests.

reason for asking partly coz I sold off my ES3 positions at high of 3.5+. thinking of whether to now accumulate some positions at its much lower prices , given that at this juncture, my retirement plans is still primarily SG ....

 

[wannabelazy]

Hi Shiny Things, I picked up your ebook this morning and enjoyed reading it! thanks for sharing your knowledge. I'm keen to get started with your method of ETF investing. The problem right now for me is that I'm overexposed to the SG market.

I have about 110k worth of stock of which 16k is STI ETF. Accumulating that by DCA with Poems' savings plan(unfortunately). I also have an interactive brokers account that I forgot about for some years. If i consider my cpf as my bond portfolio, what's the best way to get into IWDA? Should I sell my stock and start from scratch? I don't have a huge amount for investment every month, about 7-800.

Would appreciate any opinions from the other experts here too. Thanks in advance!

 

[888888888888]

you reckon your suggestion re: 50% ES3 /50% IWDA would differ if one's bond portion is large enough to sustain drawdown for good number of years. would you then perhaps suggest having a much smaller% of ES3 or maybe not even having it ?

Look at the risk rewards tradeoff. Consider also capping your exposure. Ideally diversify outside SG. Sharpe ratio = (Rp-Rf)/sigma p
If the returns of this outperforms the benchmark index. Would you consider the portfolio as having outperformed the benchmark for instance? Holding a larger proportion when the market outperforms a risk free asset and a smaller proportion when the market underperforms the Rf asset.

Considering dividends, as good for cash flow, with dividends forming a component of portfolio and to extract cashflow.

If you are looking at both capital n stable income, then it would be Balanced. Average returns, aver income, and average risk assumed.

And derive your risk tolerance score, and compute the percentage of funds invested in equities.

 

[gantan88]

Hi all gurus here,
I have been spending time reading this thread and there are simply way too much good info in here and i am still trying to digest in baby steps. From what i gathered in here as well as website, the POSB-IS does not allow a single lump sum investment right, but i can log in to change the RSP amount (to the amount that i want, say $100,000) temporarily for that month, and after the deduction, i switch it back to the regular saving amount (of say, $100)?

Have the following questions:
1. the POSB-IS sales charge is 1% (for G3B). If i set my RSP amount to $100,000 for a particular month, 1% is $1000, is this what i am going to pay? Or is there a cap if my RSP amount exceeds a certain threshold?

2. The nikkio STI ETF G3B has been around for about 9 years, and the average return is about 10.81% from factsheet, does that means that the average return per year is 10.81%. I am afraid i may get some of the basics wrong, please correct me. Or do we need to minus off any admin or expenses charges, so in effect, the return (to us retail investors) is actually less than 10.81%? i am trying to project how much money i need to invest and how much i will be getting back in X no. of years.

I might be asking the basics, appreciate your patience and help especially those gurus who could have been repeating the same things over and over again when different people posted the same questions.

 

[888888888888]

reason for asking partly coz I sold off my ES3 positions at high of 3.5+. thinking of whether to now accumulate some positions at its much lower prices , given that at this juncture, my retirement plans is still primarily SG ....

Markowitz optimization is used to maximize E(R) subject to a constant variance of returns constraint. you want to find the cap allocation vector, covariance matrix as well as the column matrix of your ETF's E(R), and find the tangency portfolio to maximize Sharpe ratio.

While Sharpe ratio is a type of risk-adjusted return however it also assumes returns distribution is gaussian but we know it has fat tails risks or abnormally larger returns than you would anticipate. Then you would want to look at max drawdown for tail risks.

Portfolio rebalancing can be very dynamic; risk-reward ratio has changed, or intrinsic value has changed; your % exposure does not exceed a certain threshold level, whether you would like to increase or decrease the weightage.

 

[sks888]

Hi ,
I am 43 and I will be planning retiring in 20 years and after reading here, I find that I am a little bit late into the game. I came across this forum while I am wandering what am I going to do with my funds lying in the bank and my retirement. I am surprised that the people here are generous giving free invaluable advice. I read some the pages but could not finish extensive materials in short span of time. And I already order the book by Shiny (Thanks for showing the path and starting this thread!) and on the way..
So to cut things short, here are my questions:
Sorry that some of the questions might have been repeated. I will retire in sp. I looking at 65stks/35bonds portfolio. Had bought 63k singapore saving bonds in span of 6 months. Another 150k on hand. I had opened a scb trading acc but thought ib might be better?
Looking into Iwda(24.7%),eimi12%of develop mkt(7.8%),sti(32.5%),bonds(35%) with the 65/35 portfolio? I intend to top up the stock and bonds till 65/35 and then subsequently put in 833/mth. Then at 7 years before draw down, gradually move to 35/65. I will be buying mbh after i get my portfolio right and price settled down. Then my sti and bonds will give my 3%/mth in dividends when i retired provided my porfolio is 600k in 20 years time. Is my chain of thoughts relevant to what you all discussing? Am I too overweight for iwda since it has running high for 10 years? Can set less to iwda and more percent to eimi (20%) and sti(60%) instead of 15 n 50 from the stock portion since its beaten down at this junction and rebalance back 12 n 50 when iwda has major correction or sti and eimi run up? How am I going to invest this 150k in since market has run up and I dun wish to be caught when I buying high and the market tanks in few years. Also is it alright to omit sti as for now and buy only when i am 7 years before drawdown or I need to include sti now? How should I go about dissipating my funds into sti,iwda,eimi and mbh throughout the different platforms? Sorry for so many qns.

 

[havetheveryfun]

Hi ,
I am 43 and I will be planning retiring in 20 years and after reading here, I find that I am a little bit late into the game. I came across this forum while I am wandering what am I going to do with my funds lying in the bank and my retirement. I am surprised that the people here are generous giving free invaluable advice. I read some the pages but could not finish extensive materials in short span of time. And I already order the book by Shiny (Thanks for showing the path and starting this thread!) and on the way..
So to cut things short, here are my questions:
Sorry that some of the questions might have been repeated. I will retire in sp. I looking at 65stks/35bonds portfolio. Had bought 63k singapore saving bonds in span of 6 months. Another 150k on hand. I had opened a scb trading acc but thought ib might be better?
Looking into Iwda(24.7%),eimi12%of develop mkt(7.8%),sti(32.5%),bonds(35%) with the 65/35 portfolio? I intend to top up the stock and bonds till 65/35 and then subsequently put in 833/mth. Then at 7 years before draw down, gradually move to 35/65. I will be buying mbh after i get my portfolio right and price settled down. Then my sti and bonds will give my 3%/mth in dividends when i retired provided my porfolio is 600k in 20 years time. Is my chain of thoughts relevant to what you all discussing? Am I too overweight for iwda since it has running high for 10 years? Can set less to iwda and more percent to eimi (20%) and sti(60%) instead of 15 n 50 from the stock portion since its beaten down at this junction and rebalance back 12 n 50 when iwda has major correction or sti and eimi run up? How am I going to invest this 150k in since market has run up and I dun wish to be caught when I buying high and the market tanks in few years. Also is it alright to omit sti as for now and buy only when i am 7 years before drawdown or I need to include sti now? How should I go about dissipating my funds into sti,iwda,eimi and mbh throughout the different platforms? Sorry for so many qns.

some ppl may be against it but if you are 43 and planning to retire only in 20 years time and you have not maxed out your CPF SA to the ERS, you should consider doing so.

CPF SA gives you a risk free 4% annually and you do not have to worry about the market tanking or what. Some people claim the government might shift goalposts etc but considering that you are already 43, it is basically just a 12 year bond at 4% p.a. as you can withdraw the excess after age 55 whenever you want to, and it is highly unlikely any major changes to the CPF will be done in the next 10 years at least (due to ground sentiments and seeking for the successor of PM, have to make the ground happy).

 

[BBCWatcher]

some ppl may be against it but if you are 43 and planning to retire only in 20 years time and you have not maxed out your CPF SA to the ERS, you should consider doing so.

Unfortunately CPF is against it: SA top-ups are limited to the Full Retirement Sum (FRS). On sks888's 55th birthday a Retirement Account top-up to the Enhanced Retirement Sum (ERS) is possible. But that won't be available for another 11+ years.

I do think sks888 is plenty "big enough" for Interactive Brokers. I'll ponder some answers to the other bits in due course.

 

[BBCWatcher]

Looking into Iwda(24.7%),eimi12%of develop mkt(7.8%),sti(32.5%),bonds(35%) with the 65/35 portfolio?

My usual reaction, especially when you add in CPF and any equity in your home, is that I’d pull the global part up as a percentage. So something like this (my preference):

12% ES3
47% IWDA
6% EIMI
35% bonds

Am I too overweight for iwda since it has running high for 10 years?

You’re going to be buying stocks over the next 12 years or so, i.e. much longer than the amazing bull market has been running. If there is a lower price in IWDA coming, in the future, you’ll get it. So I think you just choose an optimum long-term portfolio allocation and proceed from there.

Fundamentally you’re asking whether you can time the markets. Probably not is the direct answer, but with a regular savings flow you’ll automatically buy some more shares of funds when they’re lower cost and fewer shares they’re higher cost. Even if a fund bounces around but moves sideways — like ES3 in recent years, really — you can still make money if you just making consistently boring buys at regular intervals.

Since you’re starting in your 40s and have clearer visibility on your retirement country, I would include some measure of ES3 (the STI fund) as outlined above. Those percentages look pretty good to me over the next 12 years. Then, at about age 55 (with age 63 retirement expected), you’d begin gradual adjustment. You’re a little more bond heavy than ‘textbooks” suggest, but I think that part is OK if you’re a conservative investor and especially if you’re counting CPF toward that percentage. And you’ve got concerns about global stocks and whether they’re too hot right now, so fair enough, maybe you’re a little more cautious in that way.

 

[sks888]

My usual reaction, especially when you add in CPF and any equity in your home, is that I’d pull the global part up as a percentage. So something like this (my preference):

12% ES3
47% IWDA
6% EIMI
35% bonds


You’re going to be buying stocks over the next 12 years or so, i.e. much longer than the amazing bull market has been running. If there is a lower price in IWDA coming, in the future, you’ll get it. So I think you just choose an optimum long-term portfolio allocation and proceed from there.

Fundamentally you’re asking whether you can time the markets. Probably not is the direct answer, but with a regular savings flow you’ll automatically buy some more shares of funds when they’re lower cost and fewer shares they’re higher cost. Even if a fund bounces around but moves sideways — like ES3 in recent years, really — you can still make money if you just making consistently boring buys at regular intervals.

Since you’re starting in your 40s and have clearer visibility on your retirement country, I would include some measure of ES3 (the STI fund) as outlined above. Those percentages look pretty good to me over the next 12 years. Then, at about age 55 (with age 63 retirement expected), you’d begin gradual adjustment. You’re a little more bond heavy than ‘textbooks” suggest, but I think that part is OK if you’re a conservative investor and especially if you’re counting CPF toward that percentage. And you’ve got concerns about global stocks and whether they’re too hot right now, so fair enough, maybe you’re a little more cautious in that way.

Hi,thanks for prompt suggestions! Initially I am worrying whether i will be able to meet the es3 32.5% after setting for 100kusd for ib for the waiver of 10usd/mth. Your suggestion seems to have solve the problem. But I would like to eliminate eimi due to its small allocation that will make managing difficult and the extra cost involve. So I will put in 150k into iwda and es3 only in period of 6 months or ?? Do u think it a good duration and plan? Therefter after the 65/35 is met, I will continue to put in 833/mth into iwda(ib),es3(maybank),mbh(maybank). What do mean by im a little bond heavy? Then whats is the textbk suggestion? So good to go?

 

[sks888]

some ppl may be against it but if you are 43 and planning to retire only in 20 years time and you have not maxed out your CPF SA to the ERS, you should consider doing so.

CPF SA gives you a risk free 4% annually and you do not have to worry about the market tanking or what. Some people claim the government might shift goalposts etc but considering that you are already 43, it is basically just a 12 year bond at 4% p.a. as you can withdraw the excess after age 55 whenever you want to, and it is highly unlikely any major changes to the CPF will be done in the next 10 years at least (due to ground sentiments and seeking for the successor of PM, have to make the ground happy).

Thanks for your suggestion. I definitely look into it after I kickstart my investment portfolio..Have a good night!