*Official* Shiny Things club - Part 2

[BlackRozeInc]

Hi all~ have been lurking this thread since my uni days, leeched lots of awesome info from you guys hehe.

Just graduated and starting to figure out how to manage my money.

Planning to BTO next year's Nov launch. Just a quick question:
> I'm very very certain that it's safe to put my (our) BTO savings into SSB just to earn that small bit, both for the downpayment as well as the future renovations.
We've decided to put in all our BTO savings into SSB every year or so, and that's including the amount we're setting aside for when the flat is completed and we need to pay for renovations (~4/5 year timeline). That's a sound plan, right?

I'd just like reassurance from anyone who's familiar with such stuff about our plan really.

Hi I'm also doing this but mainly for renovation costs since the missus and I have been working for a while and enough CPF stored away for downpayment. However we are buying SSB every month (sort of like setting up a bond ladder) because of the interest rate difference with each issue.

 

[archcherub]

I don't believe in having bonds unless you are in the withdrawal phase.
Full Equities portfolio will most certainly perform better for a 20 years investment horizon.
Also, your questions seem very off tangent to the philosophy of this thread. If you really want a textbook answer: bank Equities are the best investment for a rising interest rate environment.

Sent from Ilovennp using GAGT

hmmm.. maybe i shld switch out my bond fund in DBS to equity fund instead.

 

[limster]

hmmm.. maybe i shld switch out my bond fund in DBS to equity fund instead.

there are many here who only started investing after the GFC and have zero experience with market crash.

As their only experience is in one of the longest bull markets ever where stocks only go up, of course they believe that 100% equities is the best.

I was investing during the GFC and I know exactly what the bond component is for. It helped me rebalance my portfolio and let me purchase stocks at super cheap prices.

I also lucky that I had a large warchest during GFC because i was actually saving up money to purchase a property to stay in, so I didn't have much equities. In the end used the money to buy shares and postponed my property purchase for a couple of years.

 

[jtec14]

Thanks for the lead. In fact, I got this Yahoo info from my iphone “Stocks” app. Thought I can trust Yahoo Finance!

haha, I think I remembered this. I thought it was a good time to accumulate iwda when I saw the price in Yahoo Finance that day.

Went in SCB trading, but strange the price was much higher! Realised the price was indicated wrongly in Yahoo finance after comparing with google finance.

 

[kehyi4]

Saw this interesting infographic:

source: https://www.weforum.org/agenda/2018/10/the-80-trillion-world-economy-in-one-chart

 

[revhappy]

Saw this interesting infographic:

source: https://www.weforum.org/agenda/2018/10/the-80-trillion-world-economy-in-one-chart

I remember not too long ago, like 2006 or something Japan was the second large economy. It is amazing how much China has grown in lead over Japan since then. They have created another 1 and 1/2 Japans.

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

 

[vince123123]

I'm intending to buy S$150k of IWDA (+EIMI?) to start off my IB account once it gets approved. The main reason is to avoid having to pay the monthly subscription fees.

Few questions:

(1) Some folks say to buy at one shot whilst others say to spread it out over 3 months for psychological comfort. Does IB's $10 monthly fee start from the first month of funding, or is there some grace period? If the former, then the psychological comfort may come at some cost.

(2) I vaguely recall reading about this concept called "cash subscription" that can be used to buy large quantities without having to cross the spread or buy from the market. What I've read relate mainly to local ES3 where we have to ask the bank/broker to see if they know how to do this.

Specifically for IWDA (+EIMI?), who do we approach to do a cash subscription? Can IB handle this?

(3A) I recall reading that at this sum, 10% should go into EIMI as it is now "more than 6 figures". Would this be correct?

(3B) I anticipate buying between $3,000 to $6,000 every month moving forward, and I presume this is also a good reason to also go into EIMI as it has now reached critical mass?

Thanks!

 

[Lasogette]

Cool cool - I like that you know what you're doing and you're trying to put an explicit market view in place.

OK, couple of options for you, and BBCW might want to chime in here if I've missed any extremely obvious tax implications:

1. Buy US treasury-bond futures, instead of buying the ETFs. You could buy the 10s or even the 30-year futures, not worry about dividend tax (because everything comes in as capital gains), and just roll the futures every few months.
2. If you'd rather not do futures, look at DTLA LN - it's the UK-listed (and thus no-withholding-tax-worries) version of TLT. I'm personally comfortable taking investment-grade credit risk at the moment, so I'd be inclined to look at VCLT US - Vanguard's long-term corporate bond ETF (again, though, haven't checked the tax treatment on this one.
3. If you really want to yolo it up, you can buy 30-year STRIPS. These are Treasury bonds with all the interest payments stripped off, so they become textbook zero-coupon bonds. It's literally just "you pay x today, you get y >>> x in 30 years' time". These have maximum exposure to interest rates (because bond math), maximum losses if the Fed keeps hiking... also because there's no coupon payments there's no WHT worries.

VCLT US would be my pick, assuming there's no unfavourable WHT treatment, just because I'm comfortable taking investment-grade corporate risk but not comfortable yoloing it up in 30-year zeroes. Your call, though.

Update: I had a look at this for my own curiosity. The longest STRIPS with a price that I can see are the 15-May-2048s, offered at about $37.125 for $100 face (you pay $37-ish now, you get $100 in 29-and-a-half years' time). That's a yield of about 3.38%, and a duration of (obviously) 29.5—so a one-percentage-point move in long-end yields gives you a 29.5% move in the price of the bond. You feeling lucky?

Thanks Shiny, really appreciate your input. Just curious on the STRIPS. Is EDV ETF the same as what you are describing over here?

1% move will give a 29.5% movement in this price, lol Does seemed abit too heavy for my risk appetite, so I'll probably be sitting this one out, however would like to know more info on it so I can learn more. Thanks.

 

[revhappy]

I'm intending to buy S$150k of IWDA (+EIMI?) to start off my IB account once it gets approved. The main reason is to avoid having to pay the monthly subscription fees.

Few questions:

(1) Some folks say to buy at one shot whilst others say to spread it out over 3 months for psychological comfort. Does IB's $10 monthly fee start from the first month of funding, or is there some grace period? If the former, then the psychological comfort may come at some cost.

(2) I vaguely recall reading about this concept called "cash subscription" that can be used to buy large quantities without having to cross the spread or buy from the market. What I've read relate mainly to local ES3 where we have to ask the bank/broker to see if they know how to do this.

Specifically for IWDA (+EIMI?), who do we approach to do a cash subscription? Can IB handle this?

(3A) I recall reading that at this sum, 10% should go into EIMI as it is now "more than 6 figures". Would this be correct?

(3B) I anticipate buying between $3,000 to $6,000 every month moving forward, and I presume this is also a good reason to also go into EIMI as it has now reached critical mass?

Thanks!

Whatever you do, don't let the $10 per month commission cloud your judgement. $10 per month is like $120 per year that is like 0.1% of the amount you are planning to invest. On a regular day, you portfolio could easily move 1% or $1500. So the $120 in commission should be the least of your worries.

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

 

[nekoarc]

Does IB's $10 monthly fee start from the first month of funding, or is there some grace period? If the former, then the psychological comfort may come at some cost.

Here u go.
Waiver
The first three full calendar months (The waiver will be applicable for the first three full calendar months after initial account funding, regardless of whether such funding amount meets the minimum deposit required to open an account.
) or Accounts whose Net Liquidation Value >= USD 100,000 (or non-USD equivalent)

See: https://www.interactivebrokers.com/en/index.php?f=4969

 

[churnmaster]

Yup they will be paying out dividends.

Thanks crystalnox.

 

[churnmaster]

Hi Churnmaster, welcome to the forum!
(To the rest of the guys, I know Churnmaster from the Fundsupermart forum )

Hi revhappy ... This surely seems to be very active forum. Thanks for informing me about this forum.

 

[churnmaster]

I'm intending to buy S$150k of IWDA (+EIMI?) to start off my IB account once it gets approved. The main reason is to avoid having to pay the monthly subscription fees.

Few questions:

(1) Some folks say to buy at one shot whilst others say to spread it out over 3 months for psychological comfort. Does IB's $10 monthly fee start from the first month of funding, or is there some grace period? If the former, then the psychological comfort may come at some cost.

(2) I vaguely recall reading about this concept called "cash subscription" that can be used to buy large quantities without having to cross the spread or buy from the market. What I've read relate mainly to local ES3 where we have to ask the bank/broker to see if they know how to do this.

Specifically for IWDA (+EIMI?), who do we approach to do a cash subscription? Can IB handle this?

(3A) I recall reading that at this sum, 10% should go into EIMI as it is now "more than 6 figures". Would this be correct?

(3B) I anticipate buying between $3,000 to $6,000 every month moving forward, and I presume this is also a good reason to also go into EIMI as it has now reached critical mass?

Thanks!

What's your return expectation?

If I have to invest S$150K, I would sell an out of money (OTM) put option at a strike price where I'm comfortable being long incase the option gets exercised. This way you earn a premium which helps you reduce the acquisition cost.

 

[tan175777]

help need transfer wrong currency D:

hi, shinythings, I am a 22 year old new to investing, recently I wanted to buy some IWDA etf stocks but I transferred money into GBP standard charted settlements account instead of the USD account (i thought trading in the london stock exchange means GBP T T) Should i just transfer(lose 150sgd) or buy other etf?

 

[kingboonz]

hi, shinythings, I am a 22 year old new to investing, recently I wanted to buy some IWDA etf stocks but I transferred money into GBP standard charted settlements account instead of the USD account (i thought trading in the london stock exchange means GBP T T) Should i just transfer(lose 150sgd) or buy other etf?

Would this work? IWDG

 

[tan175777]

Would this work? IWDG

sorry for being a noob, but that's the same ETF, right? Just in GBP, also why is it so much more expensive?

 

[vince123123]

I'm not sure what you mean. How would my judgment be clouded?
I'm going to be buying IWDA anyway.

Whatever you do, don't let the $10 per month commission cloud your judgement. $10 per month is like $120 per year that is like 0.1% of the amount you are planning to invest. On a regular day, you portfolio could easily move 1% or $1500. So the $120 in commission should be the least of your worries.

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

 

[vince123123]

Thanks! This is helpful. So I can spread it out into 3 months which would be great.

Here u go.
Waiver
The first three full calendar months (The waiver will be applicable for the first three full calendar months after initial account funding, regardless of whether such funding amount meets the minimum deposit required to open an account.
) or Accounts whose Net Liquidation Value >= USD 100,000 (or non-USD equivalent)

See: https://www.interactivebrokers.com/en/index.php?f=4969

 

[vince123123]

I'm a noob and I'm just following Shiny Thing's recommendations.

Not too sure what an OTM put option is....

What's your return expectation?

If I have to invest S$150K, I would sell an out of money (OTM) put option at a strike price where I'm comfortable being long incase the option gets exercised. This way you earn a premium which helps you reduce the acquisition cost.

 

[vince123123]

Hi BBCWatcher, could I trouble you to point me to the thread where you discussed the "one new way" to invest SRS dollars into globally well diversified assets?

Now, there is a possible exception that might cause you to bend this retirement diversification "rule" a little: Singapore's Supplementary Retirement Scheme (SRS). SRS is designed for retirement savings, at least primarily. And there can be a decent income tax break if you open and contribute to a SRS account. However, it's somewhat more difficult to invest SRS dollars into globally well diversified assets. I've discussed one new way you can, with reasonably (for Singapore) low costs in some other threads.