I feel dividend investors are closer to fundementals of buying a stock of a company. Chasing capital appreciation feels a lot like gambling, waiting to sell out to the next fool.
Besides SGX stocks, i think HKSE dividends also no withholding tax for Singapore investors? SGX with dividends still give good fashion returns, why i put some savings as RSP into investsaver.
For the record, in the U.S. stock market crash that precipitated the Great Depression the Dow Jones Industrial Average (which was/is a small basket of stocks) fell 89% peak to trough, although it took quite a while to do that: from October, 1929, to July, 1932.
If you had been motoring through that period with dollar cost averaging, you ended up buying a lot of cheap stocks. However, the labor market was dreadful for employees in the depths of the Great Depression. If your income falls to zero, and for years, it’s at least not easy to keep buying even the cheapest stocks. If you were retiring in, say, 1940, this was all pretty dreadful — and then from 1942 onward you had rationing during some of your retirement. (It was much more dreadful in other countries, though, including in Singapore. And you got some help as a retiree from depressed prices.) Not so coincidentally, U.S. Social Security started cutting its first monthly checks in 1940, and that first cohort of Social Security recipients did really well.
Anyway, that was the worst of the worst in modern financial history. It cannot be totally ruled out, but Vanguard’s Target-style approach is robust against even such calamities.
Just before Jack Bogle died he encouraged investors to dial down their expectations of future total returns and to maintain a focus on cost control. His forecast was for lower total returns going forward, and he pointed out that if his forecast is wrong then you’ll merely have more retirement wealth than you need, a happy problem to have. I agree with all that. Just follow the basic principles: start saving sooner rather than later, make saving and investing a regular and dogged habit, keep it simple (and low cost) with ample diversification, and it should all work out fine.
Jack Bogle also cautioned to hold more cash allocation until clouds clear. I think was it he or Warren Buffet, expressing worries about the current US adminstration. The last 2 big crisis were caused by irresponsible financial managers selling bad products to retails, so as long as the regulators keeps watchful eyes on the type of financial products out there, like they do now, and also with internet information sharing, i feel the next crisis is still not coming.
Jack Bogle also has a simple formula to ascertain returns, i think it was dividends + profits + capital appreciation, he expects dividends to continue stay low, while SP500 profits are heavily frontended up till now, left with capital appreciation, or how much more FOMO without quantative easing, that is how he gets the numbers and he is firm believer of SP500 only. He did drop mention of buying more ex-US stocks. There is the dividends part, which sadly Singapore based investors suffer more, as such i feel the returns for us holding to Iwda+Eimi will get even lesser, the next 15-20 years path that we set on, we have to keep expectations even lowered?
Vanguard dramatically cuts its expected rate of return for the stock market over the next decade
The stock market won't keep returning the kinds of yearly gains investors have gotten used to, according to Vanguard's Greg Davis.
"Our expectations around U.S. equity markets is for about a 5 percent median, annualized return," says the fund group's CIO.
Matthew J. Belvedere | @Matt_Belvedere
Published 23 Hours Ago Updated 19 Hours Ago
If you’re getting married in Thailand anyway, you can convert it if you want and park it in an FD—but if you didn’t need the money, it would be very very silly and risky to convert money just to chase an extra half a percentage-point or so.
You want simplicity so you go with SCB... then you want a complex forex.
I'd say either go simple all the way and do everything with SCB, or do 'complex' all the way and buy your IWDA through IB.
You want simplicity so you go with SCB... then you want a complex forex.
I'd say either go simple all the way and do everything with SCB, or do 'complex' all the way and buy your IWDA through IB.
If his iwda holding period is for 20+ years till retirement, is a one off 0.65% forex comm going to bankrupt him? An alternative is to deposit cash into the usd high account.. that saves u $4 for every $1000 deposited. But time n transport costs (not all moneychangers have rates that are better than scb... I've checked. So u might have to go quite far).have to be factored in
Hey ST, i read it on barrons feed, uncle jack is advocating for caution until a clearer signal. I think he is all about long term buy and hold, but how you accumulate need not be binary without a gauge of economic outlook.
Hey ST, i read it on barrons feed, uncle jack is advocating for caution until a clearer signal. I think he is all about long term buy and hold, but how you accumulate need not be binary without a gauge of economic outlook.
Hey ST, i read it on barrons feed, uncle jack is advocating for caution until a clearer signal. I think he is all about long term buy and hold, but how you accumulate need not be binary without a gauge of economic outlook.
I'll ask you the same questions I ask everyone who asks "how do I buy China":
* Just China, or do you include HK and Taiwan?
* A-shares (Chinese companies listed in China), or H-shares (Chinese companies listed in HK)? If A-shares, why, given that those trade at a 15%+ premium for the exact same shares?
No, just use Stanchart's online transfer. But if you're doing $1200 or so a month, you'll probably find it cheaper to use Interactive Brokers for everything.
The US market's up 11% plus dividends since that interview, so... is that a clear enough signal for you?
That, to be honest, was an atrocious piece of market timing by Bogle. The US market spewed because people _thought_ the US economy was turning lower... they turned out to be wildly wrong. Q1 employment and inflation numbers have been running a bit hot if anything, and the Fed's starting to creep back toward 1-2 hikes this year (instead of the absolutely ridiculous pricing for multiple cuts that we saw in late December).
Granted: if you were tempted to cut your exposure during the December spew, then that's probably a sign that you had too much in stocks, and you should probably tweak a little bit towards bonds. But if you were able to hold on through December, your portfolio's probably looking pretty healthy right now.
Was that Bogle? He died on January 16, 2019. And it's a bit too early to say whether anybody making market timing predictions is/was correct or wrong. Bear market rallies have happened before, and it still possible that's exactly what's going on right now.
Regarding China.... Just bet on the whole planet! Keep it simple.
I think a lot of people think that if X is doing "well" then it's a good idea to pile into X. It's a classic herd mentality, and it's not helpful. The fact is that market consensus already values stocks listed in China according to their future prospects. If you have particular insight that the market is wrong, and that those stocks will do even better than the market thinks, OK, place your bet. But "those companies are going to do well" is already priced into valuations. Placing such bets involves finding particular investments that are reliably going to surprise on the upside. That's hard, but it's somewhat easier (though still hard) because an "upside surprise" could just as easily be a downtrodden sector that does better than expected -- that works, too. (You can also make negative bets, as a few people did on credit default swaps and the subprime mortgage market before the Global Financial Crisis. That is, you could bet against stocks listed in China, that current market consensus is wrong and those stocks will underperform current market expectations.)
TLDR: Economics PhD student has an idea about risk smoothening across a lifecycle through heavy leverage (already suggested by a pair of Yale professors). Decides to invests in US equities in September 2007, at the start of the sub-prime crisis (my god). He used substantial (callable) leverage on credit obtained through some rather questionable means (credit cards, family, etc) and managed to maintain 200k - 400k exposure with -30k, -60k, and eventually -200k networth, until he was finally completely forced out in November 2008.
There's a happy ending to this, given he was worth 1.2 million in 2017; basically a result of enormous wages.
It's actually really interesting to see the change in psychology, given he started with a fairly reasonable thesis based on easy credit on risk-free or even 0% rates, and ended up borrowing from family and dropping massive 15% APR loans into the market.
So anyway, I was wondering about this Mortgage Your Retirement (MYR) idea. Basically, it's that presumably, your retirements savings are for, well, retirement. Therefore, you're looking to maximize your retirement consumption for a given level of risk (or vice versa). Standard savings behavior invests wages into your portfolio as you receive them. The effect of this is that the dollar amount of your equity exposure INCREASES as you age, increasing your risk precisely when you are less able to handle it.
Of course, it's easy to intuit this basic logic from thinking about what happens when you face a bear market at different times of your life. Someone in their accumulation phase, maybe a 20-something 2 years into his first job doesn't care at all, or more likely, is elated at the opportunity to obtain these stocks at such a discount. This is because the VAST majority of his earnings have not been exposed to the bear market. Someone nearing the drawdown phase, maybe 2 years from retirement, is devastated, and perhaps has to postpone retirement plans. Again, this is because of the quantity of his earnings has been exposed to sharp falls in price.
Of course, this is why people tilt their allocation from 80/20 to 20/80 equities/bonds throughout the course of their lives. But arguably, this is no where near enough to properly mitigate the risk of retiring directly into a bear market. The suggestion is therefore to fix an expected dollar amount to equity exposure, obtain credit at reasonable rates to hit that amount as soon as possible, spend your early years paying off these loans, then spend your later years adding purely to a bond component. This properly smooths your market risk over your lifetime.
There is also the matter of using bankruptcy to protect against the downside, which probably turns leverage early in life into an almost sure-win proposition on average, but this is perhaps unethical (and maybe harder in Singapore, with less bankruptcy protections?).
I wondered what ST and BBW (and really everyone) thought, especially about a reasonable implementation (use non-callable bonds at a non-insane rate) and also had trouble answering what seems to be a fairly basic question on my own.
What actually is the expected cost of such a strategy? Is it the total interest rate you have the pay on these loans? The interest above the risk-free rate? Maybe it's even an expected gain? The difference between expected returns and cost of borrowing? Perhaps the cost of the risk smoothening itself is the cost of borrowing, but it is mitigated by the fact of leverage, which has an expected positive return?
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