*Official* Shiny Things club - Part 2

[kingboonz]

Hi,

I am currently 35 years old and plan to retire in 30 years time. I have saved up a lump sum of $200 000 and on top of that I plan to invest $1000 every month to invest towards retirement.

I have calculated that to meet my investment objective I need reach a return of around 4.5 to 5% per annum.

My plan is use dollar cost averaging to invest my money into the following ETFs. The allocation of the portfolio I am planning for is as follows,

* 35% ES3
* 35% IWDA
* 10% Technology ETF (VGT,FTEC, IXN?)
* 20% A35

I intend to slowly invest my lump sum money of $200 000 over the span of 3 years. Which I calculated to be $5555 per month over the next 36 months on top of my monthly investment of $1000. Do you think it is a good idea?

However I would like to seek some views about the ETF selection, do you think it is a good idea invest in Technology ETFs such as VGT or FTEC or IXN, my intention for investing in technology ETFs is because I think it is the upcoming things for the next 20 to 30 years and I hope to use it boost my returns. Or do you think it will be better to allocate it to invest in a S&P 500 ETFs?

Lastly, I would like to find out how should I craft out my exit plan eventually when I reach closer to my retirement age. Is there a website or books or guideline?

Your plan will incur a lot of buy in costs.

 

[Lasogette]

Hi,

I am currently 35 years old and plan to retire in 30 years time. I have saved up a lump sum of $200 000 and on top of that I plan to invest $1000 every month to invest towards retirement.

I have calculated that to meet my investment objective I need reach a return of around 4.5 to 5% per annum.

My plan is use dollar cost averaging to invest my money into the following ETFs. The allocation of the portfolio I am planning for is as follows,

* 35% ES3
* 35% IWDA
* 10% Technology ETF (VGT,FTEC, IXN?)
* 20% A35

I intend to slowly invest my lump sum money of $200 000 over the span of 3 years. Which I calculated to be $5555 per month over the next 36 months on top of my monthly investment of $1000. Do you think it is a good idea?

However I would like to seek some views about the ETF selection, do you think it is a good idea invest in Technology ETFs such as VGT or FTEC or IXN, my intention for investing in technology ETFs is because I think it is the upcoming things for the next 20 to 30 years and I hope to use it boost my returns. Or do you think it will be better to allocate it to invest in a S&P 500 ETFs?

Lastly, I would like to find out how should I craft out my exit plan eventually when I reach closer to my retirement age. Is there a website or books or guideline?

Shiny has an ebook u can consider.

 

[utterdisrespect]

Hey guys I have a quick question about $IWDA.
I know it's an accumulating fund that does not pay a dividend, does that mean it can bypass the 15% DWT, and investors like us can retain the entire yield?

Or more logically, the amount that it internally invests has already been subjected to the 15% DWT?

Which is the case?

 

[bobobob]

Hey guys I have a quick question about $IWDA.
I know it's an accumulating fund that does not pay a dividend, does that mean it can bypass the 15% DWT, and investors like us can retain the entire yield?

Or more logically, the amount that it internally invests has already been subjected to the 15% DWT?

Which is the case?

Second case.

 

[revhappy]

Hey guys I have a quick question about $IWDA.
I know it's an accumulating fund that does not pay a dividend, does that mean it can bypass the 15% DWT, and investors like us can retain the entire yield?

Or more logically, the amount that it internally invests has already been subjected to the 15% DWT?

Which is the case?

It is the latter. The DWT is on, what the constituent stocks inside the ETF pays out to the ETF. They will be hit with 15% DWT.

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

 

[utterdisrespect]

Second case.

Haha I figured so, where got such good thing right? Thanks for the quick reply

 

[utterdisrespect]

It is the latter. The DWT is on, what the constituent stocks inside the ETF pays out to the ETF. They will be hit with 15% DWT.

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

Thanks for the explanation!

 

[utterdisrespect]

Another question, I'm considering VUSD and IWDA, other than their respective coverage, wouldn't VUSD be a more favourable pick as it has higher AUM of 25B and average trading volume of 183k, as compared to IWDA of 16B AUM and 80k average trading volume?

VUSD has a higher annualised return as well, granted, it's just less diversified.

 

[archcherub]

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.

lol so i am glad I have been holding bonds since august to wait for this correction.
now planning to switch to equities. must wait for storm to pass

 

[smart_alex]

Oh well. But the thought of burning 3.6k for nothing still hurts.

15 years actually very short

if it is capital guarantee just bear it for 15 years for it to mature

get back the amount + some interest (although not much but ard 2%), u can take it as side investment

but if u need money VERY URGENTLY

then cut the endowment plan

 

[Wishdom]

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.

Generally, bonds are for income while Equities are for growth.

Sure, you bought at '' cheap prices'' during GFC but that's at the expense of sacrificing the return deferential between Equities and bonds before the GFC. That could be a period of 10 years (?).

I haven't done the math, but I will think that a full Equities will fare better now, if not at least comparably well *even if* you had cashed in during GFC.

Also, might I remind you that bonds also had a great run for the past 10-20 years; so your judgement could have been clouded as much as mine have been with Equities.

You could argue that it is a great psychological safety net with decreased volatility, but it will not be fair to say that it gives better returns.

Sent from Ilovennp using GAGT

 

[BBCWatcher]

It is the latter. The DWT is on, what the constituent stocks inside the ETF pays out to the ETF. They will be hit with 15% DWT.

It's a little more complicated than that.

U.S. listed and traded stocks held within IWDA that pay dividends will experience a 15% Dividend Withholding Tax, the U.S.-Ireland treaty rate, and internal to the fund -- you don't even see it or worry about it. Before dividends are paid to the fund custodian (Blackrock), the tax is withheld. Then the net dividends are reinvested, automatically.

Stocks listed and traded in other jurisdictions are subject to whatever dividend and other taxes apply between that jurisdiction and Ireland. That could be anything, really -- it's whatever the jurisdiction charges. Same thing, though: all those details are handled for you, and the net dividends are reinvested.

Stock splits, spinoffs, scrip dividends, etc., etc. are all handled by the fund manager, net of taxes, and reinvested.

Finally, you might be personally subject to tax in a particular jurisdiction depending on where you live and/or your immigration status/citizenship. For example, hypothetically, tomorrow, Singapore could (re)introduce income, wealth, estate, inheritance, or some other tax that applies to your holding of IWDA or any other investment. IWDA is a tax inappropriate holding for U.S. persons, as a notable example. For now, though, non-U.S. persons who are exclusively tax residents of Singapore (not tax residents of any other jurisdictions, where the tax rules may be different) and who are personally, individually holding IWDA are not subject to any additional tax in Singapore.

 

[revhappy]

Generally, bonds are for income while Equities are for growth.

Sure, you bought at '' cheap prices'' during GFC but that's at the expense of sacrificing the return deferential between Equities and bonds before the GFC. That could be a period of 10 years (?).

I haven't done the math, but I will think that a full Equities will fare better now, if not at least comparably well *even if* you had cashed in during GFC.

Also, might I remind you that bonds also had a great run for the past 10-20 years; so your judgement could have been clouded as much as mine have been with Equities.

You could argue that it is a great psychological safety net with decreased volatility, but it will not be fair to say that it gives better returns.

Sent from Ilovennp using GAGT

Wow! That is a great post! I think the utility of bonds in a portfolio is to make you sleep well at night, during falls like today. My portfolio is down more than 4k today, just one day, but it is comforting to know that I have fixed income in my portfolio that is steady.

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

 

[limster]

Wow! That is a great post! I think the utility of bonds in a portfolio is to make you sleep well at night, during falls like today. My portfolio is down more than 4k today, just one day, but it is comforting to know that I have fixed income in my portfolio that is steady.

A famous investor once said that you should be greedy when others are fearful.

But if others are fearful and you got no warchest, how to be greedy and grab all those cheap stocks? Thats where bonds and bond equivalents come into play, you can sell them (or if your bond is CPF, you can use it straightaway) to buy cheap stocks.

 

[coastfire]

IWDA is a tax inappropriate holding for U.S. persons, as a notable example. For now, though, non-U.S. persons who are exclusively tax residents of Singapore (not tax residents of any other jurisdictions, where the tax rules may be different) and who are personally, individually holding IWDA are not subject to any additional tax in Singapore.

Let's say a Singaporean is going to stay in the U.S. long enough such that he becomes a tax resident. Does it make sense to set up a Singapore holding company to avoid taxes until he is no longer a U.S. tax resident?

 

[Maeda_Toshiie]

Another question, I'm considering VUSD and IWDA, other than their respective coverage, wouldn't VUSD be a more favourable pick as it has higher AUM of 25B and average trading volume of 183k, as compared to IWDA of 16B AUM and 80k average trading volume?

VUSD has a higher annualised return as well, granted, it's just less diversified.

VUSD is purely S&P500. IWDA covers the developed world market, including the US (~50%). Yes, the US market has/had outperformed the rest of the developed world over the past 10 years or so, but that does not imply that it will continue to do so for the next 5-10 years. Buying VUSD means that a bet that the US market will perform as well the rest of the developed world market or outperform.

 

[revhappy]

A famous investor once said that you should be greedy when others are fearful.

But if others are fearful and you got no warchest, how to be greedy and grab all those cheap stocks? Thats where bonds and bond equivalents come into play, you can sell them (or if your bond is CPF, you can use it straightaway) to buy cheap stocks.

This goes against the theme of time in the markets. If you are holding bonds in order to buy stocks for cheap, then where do you draw the line? How do you determine how much bonds Vs stocks you are going to hold? Then you get into stuff like PE ratios, bond yeilds etc, which ultimately means timing the markets.

If you believe in timing the markets and that you can do it well, then yes, holding bonds makes sense. Otherwise it's only utility is of a portfolio stabilizer.

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

 

[limster]

This goes against the theme of time in the markets. If you are holding bonds in order to buy stocks for cheap, then where do you draw the line? How do you determine how much bonds Vs stocks you are going to hold? Then you get into stuff like PE ratios, bond yeilds etc, which ultimately means timing the markets.

If you believe in timing the markets and that you can do it well, then yes, holding bonds makes sense. Otherwise it's only utility is of a portfolio stabilizer.

Not everyone agrees with the famous investor i quoted. But I think there is great wisdom in his advice to be fearful when others are greedy and greedy when others are fearful.

Whenever STI ETF heads towards $3, I start getting interested in the Singapore market again. All my CPF (aka my bond component) is ready to be deployed to start averaging down STI ETF once it hits $2.99

 

[peipei1]

Yep, that's a good plan. If that's cash you're going to need in three years or less, it should be in a high-interest bank account or in SSBs, not in stocks.

I missed this ST hints!

Co-relates with the statements put out by Vanguard, Blackrock VIPs about lower 4-5% annualised returns for the next decade. Moving forward, we can expect a negative returns year, a flat year or a spectacular one! 2018 appears to end flat.

Should we redeem our bonds, as such SSB now and prepare to buy more equities! How long do such dips turn worse? I seen some years, the correction is slow over few months? Early this year, it crash downwards in days, before see-saw up and down, good to buy the dips! The last bear market took around 18 markets to bottom...

Trump really needs to get away from his trade rhetoric, stop blaming the Fed! It is such an unnecessary anchor! We can hope this dip causes unhappiness, from many 401K retirement funds being affected!

 

[Shiny Things]

I have calculated that to meet my investment objective I need reach a return of around 4.5 to 5% per annum.

I intend to slowly invest my lump sum money of $200 000 over the span of 3 years. Which I calculated to be $5555 per month over the next 36 months on top of my monthly investment of $1000. Do you think it is a good idea?

Great, your return goals are pretty achievable; it's good to see.

I think you're dollar-cost-averaging too slowly, though; you're going to be leaving a lot of cash sitting in the bank doing nothing. I'd do it over six months, or nine months, instead of three years. Once you get the first few investments done, you'll be comfortable speeding it up.

However I would like to seek some views about the ETF selection, do you think it is a good idea invest in Technology ETFs such as VGT or FTEC or IXN, my intention for investing in technology ETFs is because I think it is the upcoming things for the next 20 to 30 years and I hope to use it boost my returns. Or do you think it will be better to allocate it to invest in a S&P 500 ETFs?

None of the above.

Technology in general, and the S&P 500, are already trading at very rich valuations compared to the rest of the market. They need to deliver pretty spectacular growth just to maintain their current prices.

Put it in IWDA instead. That way you'll get exposure to cheaper, less trendy stocks from all around the world.

Lastly, I would like to find out how should I craft out my exit plan eventually when I reach closer to my retirement age. Is there a website or books or guideline?

So, the first thing: if you're using a "110 minus your age" rule or something like it, you'll automatically shift into bonds as you get older, which solves your asset mix questions.

In terms of how to withdraw—the easiest way is just to sell down 2-3% of your portfolio each year, once a year, when you'd normally rebalance anyway.

Hey guys I have a quick question about $IWDA.
I know it's an accumulating fund that does not pay a dividend, does that mean it can bypass the 15% DWT, and investors like us can retain the entire yield?

Or more logically, the amount that it internally invests has already been subjected to the 15% DWT?

Which is the case?

The latter. As always, BBCW has the gory details.

Hey need some help here. I've recently bought an endowment plan and I realised it was a big mistake.

The projected 3.25% and 4.75% is a lie.

[...]

I intent to terminate it but it's been a few days past their 7 days posting + 14 days freelook. Anyone have any experiences of terminating and actually getting back the premiums paid?

My premiums is paid annually 3.6k and it's less than a month since I bought the policy. Should I proceed to terminate it in the event (highly likely) that I really can't get my premiums paid refunded?

No promises, but I'd try asking them very nicely if you can still tear it up and get the premium back.

Anyway, yes, the projected 3-4% is not just a lie, it's completely made up. Every insurance company quotes those percentages, because that's all they're allowed to quote. Those numbers are only useful for comparing between policies, not for predicting how much you're going to get.

You'd get more if you just put the money in SSBs.

Hi Just wanted to learn something here from you guys.

1. How do you all search for VT, VWRD and know which one is better?

Not sure what you mean by "search for", but if you want to compare ETFs: you always want a lower expense ratio; you usually want bigger rather than smaller; and you generally want a UK listing rather than a US listing (because of the better div tax treatment, though obviously that doesn't apply to things like gold ETFs that don't pay divs).

2. I wanted to do a small investment in Vanguard tech ETF (VGT), however just wanted to find the equivalent of an ireland domiciled one(something similar to VWRD as compared to VT) so i can save on some taxes. But not sure how to go about finding it. I found one called 0LMY

I'm going to reject the premise of your question: why do you want to buy tech in the first place? It's already trading at hefty multiples (see above); are you predicting that multiples are going to expand further, or that earnings are going to grow into the multiples?

Let's say a Singaporean is going to stay in the U.S. long enough such that he becomes a tax resident. Does it make sense to set up a Singapore holding company to avoid taxes until he is no longer a U.S. tax resident?

I'm going to defer to BBCW on this, but generally the IRS frowns on that sort of evasion.