*Official* Shiny Things club - Part 2

[Shiny Things]

Does vhyl counter trade in usd?

Buying in pound but div is in usd.

I’m gonna reject the premise of your question: why are you buying a high-yield ETF in the first place? Are you retired, and you need the income?

anyone has any experience buying IWDA with POEM? Understand that the charge is higher than SCB trading account.

As i work in the banking industry, my bank's policy for staff to trade is that we must only trade through POEM.

If that is the case should i still buy IWDA ?

Yeah—I mean, IWDA is the right thing to buy no matter which broker you use.

it is now trading at 53.98. Just saying

And this is totally normal. I’ve told this story a few times before, but I first took the plunge in about December 2008, just when everything was imploding. I thought I was real clever because I bought after markets had dropped 30%... and then they dropped another 20% over the next three months. It wasn’t an auspicious start.

 

[Shiny Things]

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 ?

If you put a gun to my head and told me to answer this I’d say USDSGD goes up if equities go down; that’d be the reflex action.

I don’t think this makes much of a difference to IWDA, though. The stocks within IWDA have revenues all over the world, and they’re denominated in a range of different currencies. The net currency effect is probably that IWDA gets even cheaper, because other currencies will be dropping against the USD as well, and stocks denominated in those currencies will get even cheaper in USD terms.

That all said, I think you’re overthinking this a bit. Don’t try to pick where FX markets are headed.

 

[Shiny Things]

Hi Shiny,

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

Welcome aboard! It’s always good to have more people in the thread.

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’ll give you a tip - at your age, you can be a lot less in cash and a lot more in indices. That much cash just sitting there doing nothing is going to be a drag on returns.

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"?

1) IWDA + EIMI looks fine if you’re big enough (over six figures) that the EIMI allocation is meaningful. I think 20% EIMI is a bit much, though you’re definitely doing the right thing.
2) I’m not sure, but I think it does. Frankly, you’re better off flogging this and putting the money into IWDA + EIMI; do you have any reason to think China’s going to outperform the rest of the world? (And, more importantly, do you think you know something about China that the market doesn’t?)
3) Nope. We’re closer to the end of this hiking cycle than the beginning, so at this point there’s a lot of value in owning something like MBH that owns sensible, big, boring corporate bonds. That big lump of cash could be earning you 3%+ a year in coupons.
4) It’s not that you’re taking too much risk, it’s just that most people aren’t as good at picking stocks as they think they are, and they aren’t as good at trading stocks as they think they are. It’s a lot easier to just shove your cash in an index ETF and sit back and relax, than to monitor a portfolio of stocks every day. So you’re doing the right thing by selling down most of them; if a client came to me and said they were doing the same thing you’re doing, I wouldn’t fight them on keeping a couple of positions.

 

[revhappy]

I bit the bullet and bought 300 IWDA at 54.18 with my cash that I had raised recently. My current portfolio.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

 

[highsulphur]

I bit the bullet and bought 300 IWDA at 54.18 with my cash that I had raised recently. My current portfolio.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

Your eimi is more than your iwda?

 

[revhappy]

Your eimi is more than your iwda?

EIMI is 29% of the portfolio. There is CSSPX and VEUD also which are combined almost like IWDA.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

 

[raidorz]

What's the recommended allocation for IWDA + EIMI?

 

[Calpha K]

I bit the bullet and bought 300 IWDA at 54.18 with my cash that I had raised recently.

Is this an additional buy outside of your DCA model?

Also, would be great if you can share your thought process for this purchase

 

[Purplestars]

Just to keep up with my portfolio allocation I'll have to buy more than usual this month

Have not yet pulled the trigger though. It's starting to climb back up now, but it could very well be a bull trap. Last few minutes before market closes will tell the story.

 

[lawd2005]

Thanks for the reply Shiny. I have been going this alone so far - family and friends can't relate - so I really appreciate your comments.

A. I didn't know about MBH - first time i've seen or heard about it in these forums (I was probably not paying attention!) Quick look and it suits me down to the ground - cheers for the tip.
B. Yes, I am currently mid six figures.
C. "most people aren’t as good at picking stocks as they think they are" - will probably make this my mantra. I had to make individual stock picks to make me comfortable with investing, but is too much blood, sweat and tears for little return. I recently put a spreadsheet on my individual stock picks vs. IWDA and SGD-USD FX and I am like 1% ahead - not worth it (hours of listening to boring CEO quarterly cals)
D. I very literally bought MCHI from a recommendation from my drinking buddy in the pub (to be fair he is a $800m fund manager). His logic was that Trump would end the trade war before the congressional elections - def wrong. I absolutely have no special insight in to China.
D. I am happy with my journey- made many mistakes and am still unwinding them - but I think I am learning early.

Thanks again - has been a lonely road - I appreciate the guidance.

 

[lawd2005]

I’ll give you a tip - at your age, you can be a lot less in cash and a lot more in indices. That much cash just sitting there doing nothing is going to be a drag on returns.

Correct - I'm holding cash because I want to buy into the index when the market draws down, I am even rationalising taking money out of my rainy day fund when this magical drawdown happens. I am being stupid and hard-headed here.

Actions for Monday:
!. Sell the individual stock and buy IWDA
2. Sell MCHI and buy IWDA.
3. Put cash in to MBH

 

[ELKYme]

Bro,
Funds that needs to be utilised in the next 3 months should not be in the stock market.
The need for constant monitoring + inability to stomach temporary losses is just not worth the stress....unless you have the skills of Mr Canberra who’s amazing at scalping. (So shiok, everyday can afford to eat at Michelin restaurants with he’s profits)

That being said, those with SPARE cash to play, Nov-Jan traditionally is the best period for the stock market:
http://www.moneychimp.com/features/monthly_returns.htm

Whether it’s because of year end window-dressing or Santa Claus effect, I don’t know....Main thing is statistically there’s a better chance to make a profit during this period. (Still must have stop-loss discipline)

I bought it just a few days back at 57 a piece. Bought 350 of them. You're in a better position.

Now itching to go in again. but I have a renovation to fund in the next 3 months!

 

[ELKYme]

Bro,
Emergency fund is meant for emergencies. Buying shares is never an emergency because the share market will forever be there.

Maybe put into FD or another account with no internet banking, no ATM card. Forget about this account so that you’re not tempted to use unless it’s a real emergency like lost of job and need it for food, electric bills etc.

I’ll give you a tip - at your age, you can be a lot less in cash and a lot more in indices. That much cash just sitting there doing nothing is going to be a drag on returns.

Correct - I'm holding cash because I want to buy into the index when the market draws down, I am even rationalising taking money out of my rainy day fund when this magical drawdown happens. I am being stupid and hard-headed here.

Actions for Monday:
!. Sell the individual stock and buy IWDA
2. Sell MCHI and buy IWDA.
3. Put cash in to MBH

 

[lawd2005]

Bro,
Emergency fund is meant for emergencies. Buying shares is never an emergency because the share market will forever be there.

Maybe put into FD or another account with no internet banking, no ATM card. Forget about this account so that you’re not tempted to use unless it’s a real emergency like lost of job and need it for food, electric bills etc.

Thanks for the message.

The reason why I am okay to draw from rainy day fund is that I deliberately made it big. The idea was that I would not be afraid to invest, as rainy day is built like Noah's ark. It's built so if I lose my job tmr, I can buy food, pay electric et.c for around 1.5 years.(OCBC also pay me around 2.5% on it)

It has worked in terms of making me not have fear when comes to investing. But counter-intuitively it is always a big temptation to take from it and invest.

 

[ELKYme]

Maybe have a smaller emergency fund like 6 months. It is indeed doing little because it’s “lazy” money...doing little in wealth building. But it does serve a very very important purpose.

The balance of the funds can than be used for great investments like what guru shiny things suggested.

Thanks for the message.

The reason why I am okay to draw from rainy day fund is that I deliberately made it big. The idea was that I would not be afraid to invest, as rainy day is built like Noah's ark. It's built so if I lose my job tmr, I can buy food, pay electric et.c for around 1.5 years.(OCBC also pay me around 2.5% on it)

It has worked in terms of making me not have fear when comes to investing. But counter-intuitively it is always a big temptation to take from it and invest.

 

[Shiny Things]

What's the recommended allocation for IWDA + EIMI?

In most cases: 100/0. Emerging markets (which is what EIMI owns) are not a huge slice of global stock markets; if they were, they wouldn’t be “emerging” any more. And owning a few hundred dollars of EIMI, or even a few thousand dollars’ worth, is not going to make an appreciable difference to your portfolio performance compared to putting the same amount in IWDA.

My general rule of thumb is that if you’ve got a portfolio of six figures or more, you can have a 50/45/5 allocation between ES3/IWDA/EIMI. Smaller than $100k SGD, it’s not worth the extra brokerage costs and the extra headache of having an allocation to EIMI.

 

[lawd2005]

Maybe have a smaller emergency fund like 6 months. It is indeed doing little because it’s “lazy” money...doing little in wealth building. But it does serve a very very important purpose.

The balance of the funds can than be used for great investments like what guru shiny things suggested.

Yeah - I know it's probably a drag. But it does offer me emotional safety - which is priceless. I am also quite long cash, so I 'l rationalise my massive safety net later. I think first thing is to take the cash and put in MBH (as per Shiny tip)- next step, think about rainy day allocation (probably too much).

 

[kingboonz]

Hi guys. Will a floating rate bond ETF be relevant in this current climate if I want to put some spare USD to work?

Example FLOT

https://www.ishares.com/us/products/239534/ishares-floating-rate-bond-etf

Under description it says it will help me 3. Use to put cash to work and manage interest rate risk

I understand the downside is that it is corp bonds, which defeat the purpose of me putting into bonds to hedge against a recession.



Or are TIPS a better idea? But I don't really understand TIPS a single bit at all.

 

[ELKYme]

First thing should be set aside rainy day fund in a not so accessible account that pays interest. Next, than think through the investment options for the rest of the money.

Bro, your priorities is still wrong.

Yeah - I know it's probably a drag. But it does offer me emotional safety - which is priceless. I am also quite long cash, so I 'l rationalise my massive safety net later. I think first thing is to take the cash and put in MBH (as per Shiny tip)- next step, think about rainy day allocation (probably too much).

 

[kingboonz]

I would like to put my spare USD in IB to work while DCAing over a 3 year period into IWDA. What do you guys recommend I should do?

What bonds would be relevant for this short term, rising interest rates, recession looming environment?

https://www.ishares.com/uk/individual/en/products/etf-product-list#!type=emeaIshares&tab=overview&view=list&fac=43515

ishares offers too many fixed income ETFs and I am so confused.

My goal is to hedge against rising interest rates, and hedge against looming recession while maximising yield.