*Official* Shiny Things club - Part 2

[revhappy]

Anybody buying IWDA today? I placed an order for 500 shares at 52.5, didn't get transacted.

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[yoha03]

Anybody buying IWDA today? I placed an order for 500 shares at 52.5, didn't get transacted.

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maybe at that time LSE not yet opened

 

[limster]

Anybody buying IWDA today? I placed an order for 500 shares at 52.5, didn't get transacted.

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is there something wrong with your data?

IWDA opening price today was $54.08 and the current bid/offer according to my delayed data is around 54.20/54.21

Its obvious why your 52.50 order is not filled

 

[revhappy]

is there something wrong with your data?

IWDA opening price today was $54.08 and the current bid/offer according to my delayed data is around 54.20/54.21

Its obvious why your 52.50 order is not filled

I know. I placed the order before market open and was hoping it will get filled by a sharp gap down.

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[limster]

I know. I placed the order before market open and was hoping it will get filled by a sharp gap down.

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like that i might as well say i placed an order for STI ETF at $2.99 but it didn't get transacted.

 

[Listopad]

Couple of thoughts:
1) That's a REALLY heavy ratio of Singapore to global stocks. I think Singapore's a screaming buy but even I think that's too much ES3.

in your view, do you reckon STI is currently undervalued? I have sold off most of my ES3 earlier part of the year, and purchased IWDA ,etc. Looking at the sell off now, was thinking might be better buy back ES3, rather than to add on to IWDA (where prices has just come off a tad) .

 

[goldnut]

Guys should I panic? Seems like the worst recession in a lifetime is coming

Yes you should totally panic and start hoarding ammo and baked beans. Hide most of your guns because that's the first thing they'll come for.

 

[SpringCleaner]

Guys should I panic? Seems like the worst recession in a lifetime is coming

Remember to stock up sardines and instant noodles!

 

[311290]

Oh, don’t worry about that either way. It’s just one month. We’re talking about decades ahead here.

Should i be selling away the 1 month of investment in G3B.

Currently just unsure if have kids will live in Singapore or Thailand.

So will invest SGD700 in IWDA or split into G3B & IWDA.
Mainly to ensure the returns is higher than 2.9% home loan rate

 

[spartan117]

TLT appears to hold bonds with 20 year durations. That means every 1% increase in interest rates will result in roughly 20% drop in the bond price. Why take on so much interest rate risk in the current environment? I would only recommend very short duration bond exposure right now. And if going for treasuries, consider buying direct rather than through a fund, that way you can at least hold to maturity and not realize bond price losses if interest rates rise.

Yeah, if you're saving for retirement and you're not planning to retire in Singapore, then you should be looking at a global bond ETF instead of a Singapore bond ETF.

A good pick is CORP, listed in London. Corporate bonds give you a slightly higher yield; it holds a wider range of maturities, as opposed to TLT which aggressively owns the long-end; and because it's not US-listed you don't have any potential weird tax corner cases.

Thanks for the input celtosaxon and ST.

However, won't corporate bonds will take a hit during a market downturn? As such would it be a good choice if one were to rebalance the portfolio during a downturn?

Also, What are your thoughts on LQDE? Similar to CORP but about 20% more weight to US corp bonds.

 

[highsulphur]

like that i might as well say i placed an order for STI ETF at $2.99 but it didn't get transacted.

Precisely


Anyway I placed a gtc order with IB at 54.50. Was filled at 54.08 at the opening.

Buy the dip!

 

[peipei1]

S&p500 corrections of > 5% since Mar 2009. There were 23 of them and all of them seemed like the end of the world. So this will also pass.

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Is this one a case for fast drop fast recovery again? 5% in 2 weeks is of great magnitude, do we bring forward our DCA and buy the dip! Surely we cannot have another 20% drop over 155 days?? This is not a bad thing for new DCA investors, keep accumulating lower and enjoy the fruits of recovery!

My short term plan is to sell some IWDA when it is running upwards and buy the dip. The sound of things is unstable until trade wars die down and China economy show signs of traction. It is good time to accumulate EIMI?

 

[Johnlinn]

VWRD

Dear Shiny,

I would like to ask if lets say USA is no longer the super power and it goes down, will VWRD(currently contain 50+% of USA stocks) replaces the USA where more weightage will go to other countries during rebalancing?
Or it will always maintain the 50+% on USA stocks?

 

[CupcakedCrusader]

Just made my monthly investment into IWDA again. Was lucky to have bought today when the market came down slightly. Which brings me to my question: When do you guys buy into your monthly investment. Start, middle or end of month?

 

[Shiny Things]

Money where my mouth is: I sold some bonds and bought some stocks this morning.

Guys should I panic? Seems like the worst recession in a lifetime is coming

No, you should not panic, and frankly there's no reason to think the "worst recession in a lifetime" is coming, either in the USA or Singapore.

A 5% drawdown in stock indexes, like what we're seeing right now, happens a few times a year in normal markets. It's a buying opportunity. Even a 10% selloff happens once a year or so.

And the US economy is looking quite healthy; inflation is under control, unemployment is low, this looks like a pretty great economy to be quite frank. (The dude running it is a nutjob, but that's a different matter.)

anyone thinks it’s a good idea to buy -ve etf ? http://www.proshares.com/funds/sh.html Until after elections haha

No. Two reasons:

1) Leveraged and inverse ETFs are absolutely not long-term investments. If you ever hold them overnight, you're doing it wrong.

The upshot is that when you hold a short ETF, you're paying away the dividends, paying away funding costs... and the market generally goes up. Over time, you're guaranteed to end up losing money.

2) Also, separately, why are you looking at shorting the market AFTER it's dropped? If you were going to short it, the time to do that was before it dropped 5%. If you do it now you're just panic-selling.

Is no one salivating over the US 1-Year T yielding a thicc 2.6%?

Damn man, even post-WHT, that beats several companies’ divvy yields (if you’re a total yield ho and are not into cap gains).

I'm salivating more over synthetically lending out my dollars over the turn through the forwards market, but I'm a weirdo like that. 3-month USD through JPY is yielding a shade over 3%, if you're lucky enough to have the USD floating around doing nothing.

Just made my monthly investment into IWDA again. Was lucky to have bought today when the market came down slightly. Which brings me to my question: When do you guys buy into your monthly investment. Start, middle or end of month?

This is a really good question! I just invest whenever my paycheck hits.

Dear Shiny,

I would like to ask if lets say USA is no longer the super power and it goes down, will VWRD(currently contain 50+% of USA stocks) replaces the USA where more weightage will go to other countries during rebalancing?
Or it will always maintain the 50+% on USA stocks?

That's a little apocalyptic, isn't it?

Stock indices just follow the respective weighting of the companies that they track. If a stock (or a country) goes down, its index weighting will drop.

My short term plan is to sell some IWDA when it is running upwards and buy the dip. The sound of things is unstable until trade wars die down and China economy show signs of traction. It is good time to accumulate EIMI?

Hey, Peipei, I asked you really nicely to take your posts to a different thread. I really don't want to have to be less polite.

You don't, and you shouldn't, pay attention to every little twitch of the markets, otherwise you'll end up overtrading - selling after the market goes down, and buying it when it goes up.

Thanks for the input celtosaxon and ST.

However, won't corporate bonds will take a hit during a market downturn? As such would it be a good choice if one were to rebalance the portfolio during a downturn?

Also, What are your thoughts on LQDE? Similar to CORP but about 20% more weight to US corp bonds.

1) Yeah, but investment-grade corporate bonds will get hit a lot less than equities or junk bonds, and they'll rally back relatively quickly;
2) The difference between LQDE and CORP is that LQDE only owns USD-denominated bonds; CORP owns bonds denominated in all currencies. I personally prefer LQDE, though that's more of a trading view, because corporate bonds in currencies other than USD have really atrocious yields; you don't get all that well compensated for all the currency risk of negative-yielding currencies like EUR and CHF and JPY.

in your view, do you reckon STI is currently undervalued? I have sold off most of my ES3 earlier part of the year, and purchased IWDA ,etc. Looking at the sell off now, was thinking might be better buy back ES3, rather than to add on to IWDA (where prices has just come off a tad) .

So yes, I do think the STI is undervalued, but also I've had that view for a few years now. And there are structural reasons for it, as well; the STI is heavy on banks and financials which have been trading at a low PE ever since the financial crisis. That's a very long-term view, not a short-term view.

 

[lawd2005]

Hi Shiny,

Have been lurking for a few months - and so have decided to get involved and try to contribute.

Long story short - came in to a windfall almost 2 years ago. Set up an OCBC trading account, but felt too overwhelmed to use. Months later, I bought a small amount of cryptocurrency - rollercoaster experience, came out with a small profit - but broke my duck and started to invest in stocks.

Started to invest in "what I know" - individual stocks in companies in my industry, based on knowledge I have accumulated over years. I acknowledge I have probably made all of the newbie mistakes, but I am happy that the experience killed my fear of investing. Then finally I realised that I need to invest in indexing - thanks to this forum and a book I stumbled upon at the airport by Andrew Hallam.

I have high tolerance for risk (31, no commitments). I am currently 36% cash; 42% low-cost index etfs; 22% individual stocks (6 tickers). I am bought in to index investing and I am rotating out of the individual tickers in to the ETFs. I also have ample rainy day funds not included in the above.

Few Qs:
1. In ETFs - I own IWDA, EIMI, MCHI (70/20/10). Is this too elaborate? Should I switch all to IWDA or pretty ok as is?
2. MCHI is the only ETF I have not on LSE (NASDAQ) - does that attract 30% tax on dividends? Dividend is 1% and is only 4% of my portfolio - so probably not anything to think about. If it was bigger is there an LSE Irish domiciled equivalent? I researched quite a bit when I bought but couldn't find anything.
3. I am holding cash 36% instead of a bond fund. In current environment of steeply increasing bond yields, is this ok? Andrew Hallam's book said to just go for ES3 - but I think I am right TO be holding cash here - what do you think?
4. On the 6 tickers (22%) - 2 I am holding for life (11%). One is a total gamble (2.5%) - but I am comfortable with this risk. Gonna sell the other 8.5% - although it pains me as I think they are under-priced. Q - am I taking too much risk here? I realise impossible Q without knowing the context or my insight - but is it crazy to keep 13.5% in what "you know"?

Sorry that my first contribution was only questions - look forward to sharing some of my own insights in the future.

 

[BBCWatcher]

So yes, I do think the STI is undervalued, but also I've had that view for a few years now. And there are structural reasons for it, as well; the STI is heavy on banks and financials which have been trading at a low PE ever since the financial crisis. That's a very long-term view, not a short-term view.

It's also real estate heavy, and that's probably not helpful.

I would like to ask if lets say USA is no longer the super power and it goes down, will VWRD(currently contain 50+% of USA stocks) replaces the USA where more weightage will go to other countries during rebalancing? Or it will always maintain the 50+% on USA stocks?

To expand on Shiny Things's comment, don't conflate country of corporate stock domicile with country(ies) of business activities. There's a big divergence between those two concepts, and the divergence is growing over time.

The United States is the world's largest economy, true, and it's also "home" to lots of global multi-national corporations. Let's pick a couple examples. McDonald's (MCD), headquartered in Chicago, earns about 65% of its revenues from outside the United States. When you buy the Samurai Burger at a McDonald's restaurant in Jurong, you're probably getting Australian beef with sauce made in Korea (not Japan; probably too expensive, so a reasonable copy will do) between two pieces of bread baked in Singapore from Canadian wheat, prepared by Singaporeans who are paid in Singapore dollars. We live in a very international world now.

As another example, IBM, headquartered in New York, earns about 70% of its revenues outside the United States, and IBM's biggest employee headcount country is India. And I could spin through example after example after example. The U.S. markets just aren't like the SGX, and even the SGX has some growing international flavor. Singtel's business is majority Australian determined now, as an example. The only thing more Singaporean than Australian about Singtel is its name.

Anyway, what would happen if the United States were to experience a recession that's an outlier, that's more severe than what the rest of the world (including Singapore) experiences? Well, 30% of IBM's business might be under extra pressure (might -- IBM has been counter cyclical to some degree in past recessions), and the other 70% wouldn't. The fact IBM is headquartered in New York, listed and traded on the New York Stock Exchange, and has its share price quoted in U.S. dollars really doesn't matter much. Its business and business activities are what matter.

Be very, very careful extrapolating "small country" thinking to something that's much more globally oriented, and getting progressively more globally oriented: the United States and its financial markets.

 

[MrHighlander]

I am wondering what would happen to USD when equity markets crash worldwide. Will it go up or down (vis-a-vis) SGD during that time ? I guess folks are pulling money from US stock markets but piling into US treasuries. USD is after all a safe haven asset, The reason why I am asking is that the global ETFs I would like to buy ((IWDA/EIMI) are denominated in USD, and I don’t want to be stuck with low ETF price but high USD conversion cost at that time, so wondering what is the usual USD behaviour during that time.

 

[BBCWatcher]

I am wondering what would happen to USD when equity markets crash worldwide. Will it go up or down (vis-a-vis) SGD during that time ?

I don't know. Why would a fall in global stock prices necessarily be correlated with any material movement in the specific USD-SGD currency pair?

....OK, I suppose if lots of global stocks are quoted in U.S. dollars, and if the U.S. dollar rises in value relative to other currencies (including the Singapore dollar), and if there are no other changes, then the quoted prices of all those U.S. dollar quoted stocks should fall. A stock that's quoted at US$10.00 per share should fall to US$9.50 per share if the U.S. dollar suddenly becomes more valuable relative to other currencies, for example. (The exchange rate would have to move more than that for a $0.50 change, since some investors are U.S. dollar oriented. So it's a little more complicated, but only a little.)

....Look, if you're concerned about preserving Singapore dollar denominated wealth, then that's easy: buy high quality Singapore dollar bonds, such as NY07100X which is coming to auction this month (October, 2018). But stocks are not cash nor currency-denominated bonds. They're stocks; they're shares of real businesses doing real business activities.

The reason why I am asking is that the global ETFs I would like to buy ((IWDA/EIMI) are denominated in USD, and I don’t want to be stuck with low ETF price but high USD conversion cost at that time, so wondering what is the usual USD behaviour during that time.

But IWDA and EIMI are not U.S. dollars. They are stock funds, holding stocks. IWDA, EIMI, and any other stock fund could arbitrarily be quoted in British pounds, euro, yen, Turkish lira -- it doesn't matter. So can gold, oil, wheat, and toothbrushes.

 

[revhappy]

I am wondering what would happen to USD when equity markets crash worldwide. Will it go up or down (vis-a-vis) SGD during that time ? I guess folks are pulling money from US stock markets but piling into US treasuries. USD is after all a safe haven asset, The reason why I am asking is that the global ETFs I would like to buy ((IWDA/EIMI) are denominated in USD, and I don’t want to be stuck with low ETF price but high USD conversion cost at that time, so wondering what is the usual USD behaviour during that time.

Nobody can tell for sure. It is all guess work. My guess is there won't be any crash of 2008 style in equity markets in our lifetime. We might have 20-30% pull backs.

USD strength is currently the trend but this will reverse in about 5 years time. Other currencies will step up as US hegemony will start reducing.

You don't have to worry about ETFs currency. It doesn't matter much.

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