*Official* Shiny Things club - Part 2

[crystalnox]

Hi experts. Just starting this journey beginning this month. Intend to do 50% a35 and 50% iwda. Bond component will just use cpf to make it easy.

My monthly fund fluctuates between 2k to 4k. Currently using SCB. Any better options to reduce cost? Thanks

Sent from Xiaomi MI MIX 2S using GAGT

Switch to interactive Brokers for your IWDA since you’re investing monthly. Can save on some fx costs.

 

[BBCWatcher]

US prosper previously because of open trade & being tech leaders.
Now with protectionist policies & refusing to spend sufficient money on R&D, may end up with up like great depression in 1929.
Circumstances are very different now.

That's one hypothesis. Good luck!

I'll point out one huge flaw in your argument: the U.S. national economy is not the same as U.S. stock market listings, and that already big difference is growing over time. Your argument is like taking a pessimistic forecast for the Panamanian national economy to predict that ocean shipping will do poorly. Ah, no, that's not how it works. Yes, Panama is the most popular national registry for ships (2018 data), but that flag has really nothing at all to do with the business prospects of the ocean shipping industry.

Corporations can (and do) list their shares on the NYSE or NASDAQ without having any other material U.S. nexus.

 

[decibel.]

Thanks for the guidance so far.
My portfolio now is like

70% IWDA
30% G3B

I decide to forgo the bond component since got cpf.

I came across another counter that looks interesting and think of adding EIMI that has emerging markets which will make my portfolio into

60% IWDA
20% EIMI
20% G3B

Will it be better or don't add EIMI better?

Sent from Samsung SM-G920I using GAGT

 

[Fcesca]

Hi ST,

Wondering if you help answer this.. tried to ask on the IB chat feature but got nowhere.

Whenever I go to trade SWDA, it (almost) always shows me the closing price for the last trading session.

I still seem to get active bid/ask data, but the price at the top is the closed price.

How come??

IWDA always shows the current price..

 

[limster]

Hi ST,

Wondering if you help answer this.. tried to ask on the IB chat feature but got nowhere.

Whenever I go to trade SWDA, it (almost) always shows me the closing price for the last trading session.

I still seem to get active bid/ask data, but the price at the top is the closed price.

How come??

IWDA always shows the current price..

just pay $0.03 for the live snapshot

https://ibkr.info/node/2830

 

[hwckhs]

Hi ST,

Wondering if you help answer this.. tried to ask on the IB chat feature but got nowhere.

Whenever I go to trade SWDA, it (almost) always shows me the closing price for the last trading session.

I still seem to get active bid/ask data, but the price at the top is the closed price.

How come??

IWDA always shows the current price..

Sorry, thought you were asking about SWRD. SWDA has trades done today. So not sure why it shows last close. Anyway, SWDA shows last done price properly in my TWS, it's not showing last close.

On a side note, I got free LSE live feed from IBKR. They offered it to me for free not long after I opened the account. Not sure how to request for it though, as it just pops up in front of me in TWS. Am a very happy IBKR user now.

 

[BBCWatcher]

Goodluck to you too for being so overly optimistic on USA, the land of sunset, Lol!

Apparently you're still confused or at least unaware that "Wall Street" is simply a place where investors from around the world trade all sorts of securities and commodities from around the world that have significant U.S. nexus, no material U.S. nexus, or something in between. Marketplaces are not necessarily aligned with national economies and usually aren't. Wall Street rather infamously isn't Main Street as the saying goes, quite correctly.

Or are you predicting how well (or poorly) diamonds will do based on how well (or poorly) the Indian national economy will do? Or based on how well the metropolitan Mumbai economy will do? Because that's your assertion. Mumbai, India, happens to be home to the world's largest diamond trading marketplace, the Bharat Diamond Bourse. Runners up include Antwerp and Tel Aviv. Are diamonds going to sink or swim based on how well the metropolitan economies in Mumbai, Antwerp, and Tel Aviv do in the future? You can make such forecasts if you wish, and good luck to you, but that'd be pretty crazy.

I make no particular predictions, but if I'm going to make predictions they ought to reflect sanity and facts. And I'm certainly not going to make predictions on how well ocean shipping companies will do based on the performance of Panama's economy, the country where more ships are flagged than any other. We live in a very globally connected world with incredibly porous capital borders, and it's unfortunate you don't seem to have incorporated that reality into your attempts to predict the future.

 

[tesarise]

I know US stock market crash like rock sinking in water in 2008-2009. Same thing will happen again irregardless of your bullish slants on US, the land of sunset, with their mismanagement of the country & stupid trade war.

come back when you know how to English
irregardless is not a word

 

[Xtnega]

None of the above. You'll find POSB IS, or OCBC BCIP, are both a lot cheaper.

Hi. Sorry to disturb but I wanted to clarify on the FSM platform which you have stated to be more expensive compared to POSB IS or OCBC BCIP.

I was reading through the Pricing Structure for FSM and found it to be rather low. https://secure.fundsupermart.com/fsm/new-to-fsm/pricing-structure

This is wrt my intention to purchase SGX and US-based ETFs on a periodic basis.

For example, it is stated that ETF purchases on FSM is 0.08% and i do not see any recurring platform fee charges applicable for ETFs. Is there a fine print somewhere i missed out that adds to the cost of using the FSM platform?

Thank you in advance!

 

[BBCWatcher]

I know US stock market crash like rock sinking in water in 2008-2009.

Peak to trough, the S&P 500 stock index declined 56.8% between October 9, 2007, and March 9, 2009. That's a significant decline. It's the second biggest decline in history. The biggest decline peak to trough occurred during the ~2.8 year period starting in late 1929, as the Great Depression got underway. That's when the S&P 500 declined 83.4%.

Let's now turn to some comparisons with stock markets in other countries. How about mainland China, for example? Well, the SSE Composite Index (which doesn't go any father back than the 1990s, so no 100+ year comparisons I'm afraid) declined 71% peak to trough during the Global Financial Crisis.

Another interesting point of comparison is that the S&P 500 hit 1565.15 on October 9, 2007 (closing level), its pre-Global Financial Crisis peak. When did the S&P 500 pass that level? Answer: On March 28, 2013, when it closed at 1569.19. The S&P 500 reached 2945.83 on April 30 this year (2019), getting up near double its 2007 peak. When did the SSE Composite Index pass its pre-Global Financial Crisis record high? That's a trick question: it never has.

These figures do not include reinvested dividends.

If you don't like the stock markets that Wall Street offers (the NYSE and NASDAQ), the world's largest and most globally diversified stock markets that reflect much more than the U.S. national economy (the world's largest national economy, as it happens), which other stock market(s), that happen to be located in some other country(ies), would you like to recommend? I think there are a number of perfectly acceptable stock markets, including the NYSE and NASDAQ.

 

[Shiny Things]

Is there a way to calculate annual returns
rate for etf? Can't decide which bond etf to invest

You don't necessarily want to chase the absolute maximum returns; don't forget that bonds are supposed to be a stable component of your portfolio. MBH is a good compromise between returns and stability.

Hi all, very first post on HWZ forums although I have been reading quite a bit.

I'm looking to open an SRS account to get some tax break (although I'm still a little sketchy on locking up funds till retirement!) and use that funds to invest. I read that now it's better to buy SSB directly from the gov vs buying A35. So should I just use the SRS to fully purchase ES3?

Yeah, that works.

Another question I have is regarding treating CPF as the bond portion (should I put everything in SA for higher interest floor rates?).

Is that logic correct? Seems like quite a huge sum I would need to balance my portfolio if I treat CPF as the bond component.

This is also true, and that’s why I don’t make a call on whether or not people should include their CPF in their bond component. Ultimately, it’s whatever you feel comfortable with.

Another Q I have is whether there is a Irish domiciled ETF equivalent for RSP? What do you think about RSP vs SPY.

Equal-weighted ETFs are just an alternate way of getting exposure to the size factor (the hypothesis that small-cap stocks tend to outperform large-cap stocks). I think the size factor has been thoroughly mined, to be honest, so I’m not sure this still works well. I wouldn’t bother.

hi ST,

pls let me know your thoughts if this thought is correct in your view.

I realised that the daily upheavals of the market or economics-at-large are not an important factor to the stock prices, as stocks are linked to the biz growth of the company.

I have learnt to ignore the noise in the market/economy and focus on the company's growth potential and it's portfolio.

your thoughts, pls?

Uh, not quite. Economic growth does have an impact on stock prices, and so does general market sentiment. But these kick in over very long time frames; you're right to ignore the daily ups and downs and ups and downs of the markets.

Hi experts. Just starting this journey beginning this month. Intend to do 50% a35 and 50% iwda. Bond component will just use cpf to make it easy.

Err, do you mean ES3 instead of A35? A35 is a bond ETF.

My monthly fund fluctuates between 2k to 4k. Currently using SCB. Any better options to reduce cost? Thanks

Yeah, you can use Interactive Brokers to buy your IWDA, and you’ll save a fair bit of money with that transaction size.

I'm a SG citizen and Australian PR. A few years ago before I knew of Shiny Thing's book, I opened an Australian brokerage (CMC) account to DCA VAS, but never pulled the trigger.

Since Jan 19 after reading his book, I've been DCA-ing IWDA and STI using IB (Singapore account) 3k into each monthly.

Do you think it's worth for me to DCA VAS as well using CMC? Or should I just stick to IWDA + STI to keep it simple? I currently have about 400k in Australia banks just earning ~2.2-2.5% of interest and 150k in SG banks earning nothing

Thanks heaps!

Depends where you’re planning to retire. If you’re definitely going to retire in Singapore, there’s no need to own VAS / VAF; conversely, if you’re planning to retire in Australia, you wouldn’t need to own the STI.

Also I’d probably use a different brokerage? CMC is more of a spread-betting shop.

So I started the POSB Invest Saver and now am DCA into it.

Is it OK to keep it separate? Should I just feed the RSP and leave the previously bought ETFs as is? Or do I sell away the older ETFs?

Nah, you can leave them separate, no worries - as long as you’re not getting charged dividend or platform fees that are eating away at your old account.

For example, it is stated that ETF purchases on FSM is 0.08% and i do not see any recurring platform fee charges applicable for ETFs. Is there a fine print somewhere i missed out that adds to the cost of using the FSM platform?

Thank you in advance!

“…with a $10 minimum”, that’s the catch. Unless you’re doing hefty transaction sizes, FSM’s going to be the same price as Stanchart.

I came across another counter that looks interesting and think of adding EIMI that has emerging markets which will make my portfolio into

60% IWDA
20% EIMI
20% G3B

Will it be better or don't add EIMI better?

Don’t add. Even if you were to add EIMI to your portfolio, 20% is far too much - emerging markets make up less than 10% of global market cap.

Inverted yield curve is due to some economic phenomenon. Too complicated to explain here

Oh mate, come on. An inverted yield curve is not “too complicated to explain here”. It’s when short-term bond yields are higher than long-term bond yields, and that happens because people think the central bank is going to cut rates.

Inverted yield curves don’t cause recessions. They just say “the market thinks interest rates are going down”.

And this:

Next recession should be around in next 18-24 months period?
Whatever stock market rebounce now are probably dead cat bounce.
I definitely won't continue to DCA at current peak.
Coming economic recession may be a long drawn out one slowing dropping to bottom & recovery may be weak, hence DCA for long term may have little return to speak.

“Should”, “probably”, “may”, “may”, “may”, “may”. You’re making astrology look like an exact science.

Anyway, since you think the US market is going down: have you put your money where your mouth is and bought some 2-year puts on the S&P 500? You can buy December 2021 2900-strike puts for about 290 ticks; if the index drops to 2500 (which is only a 15% drop), you’ll make 30%.

Why would fear mongers come in now, when markets are like what 1 or 2% below ATH?

[…]

If you see the last 2 times when Fed was cutting rates this is what happened:
(Insert fear-mongering)

Hey Rev. I’ll be honest, you worry me a bit. I think you’ve talked yourself into a negative worldview and you’re just looking for reinforcement. You won’t find it here though.

Stocks go up and down, and there’s no guarantee that equity markets will always go up, obviously. But generally, betting on markets going down gives you a return curve like HSGFX’s, which has lost 50% of its value since inception despite correctly calling the 2008 crash!.

The other thing is, like I’ve pointed out to Sugarbun: you’re talking about the US market, and acting as though the US is the entire world. But the US stock market:
* Is only about 25% of a well-diversified Singaporean investor’s position; and,
* Is full of companies that have earnings from, and exposure to, economies all over the world.
Both of those things mean that even if the US economy goes into recession, it won’t be the end of the world for a properly diversified portfolio.

And if US interest rates go down, it’ll be good for the bond component of a portfolio, as people have seen during this recent little spew. If you really think the US economy is headed for the tank, the right trade is to be limit long 30-year Treasuries (or even 30-year zero-coupons, if you really want to put your money where your mouth is)

As BBCW correctly points out, if you think the US economy is overheated and primed for a fall, you should be super enthusiastic about European, Japanese, and Australian stocks, because their economies are on the lows at the moment and primed for an upswing.

But really, the thing you’re missing is that the investors in this thread (myself included) are not active traders. We’re here to buy and hold, buy through the dips, and then slowly sell in our retirement. That’s a long time for most people, more than enough time to ride out downturns.

So coming in here and telling us that US equities might dip over the next couple years is just going to get (metaphorical) rotten fruit chucked at you, because you’re talking to the wrong audience.

 

[RoLanTo]

Hi ST,

yes sti etf ES3.. typed wrongly.
my intent will be doing alternate months, between STI n IWDA.

sorry, no idea how to use IB, will go read this in detail.. but from first glance.. need 10k USD account + min trade/per month to avoid fees?

as i just started with SCB for IWDA.. my position is quite small.. i dont have that figure to avoid additional fees.. do you still advocate the move to IB based on my situation?

Also, may i ask.. if i accumulated big enough portfolio in SCB for IWDA, for example 100K usd worth.. can i port them over to IB? advisable to do that?

 

[limster]

Sorry, thought you were asking about SWRD. SWDA has trades done today. So not sure why it shows last close. Anyway, SWDA shows last done price properly in my TWS, it's not showing last close.

On a side note, I got free LSE live feed from IBKR. They offered it to me for free not long after I opened the account. Not sure how to request for it though, as it just pops up in front of me in TWS. Am a very happy IBKR user now.

its only free for 1 month. i cant remember if you need to unsubscribe after the free trial period to prevent IBKR from charging you for the following month, or whether it will auto-unsubscribe.

 

[hwckhs]

its only free for 1 month. i cant remember if you need to unsubscribe after the free trial period to prevent IBKR from charging you for the following month, or whether it will auto-unsubscribe.

Not a good news to me then. Currently, the subscription says "Fee waived".

Will keep a watch on this. Thanks.

 

[BBCWatcher]

The other thing is, like I’ve pointed out to Sugarbun: you’re talking about the US market, and acting as though the US is the entire world. But the US stock market:
* Is only about 25% of a well-diversified Singaporean investor’s position; and,
* Is full of companies that have earnings from, and exposure to, economies all over the world.
Both of those things mean that even if the US economy goes into recession, it won’t be the end of the world for a properly diversified portfolio.

Let's do a little back-of-the-envelope math here to see how Shiny Things got that 25% figure. Spoiler: it looks spot on.

Let's look at a long-term oriented, accumulation phase portfolio allocation that I might choose, assuming retirement in Singapore. That'd consist of:

80% stocks/stock-likes
20% bonds/bond-likes

The 80% would consist of:

60 percentage points of global stocks (e.g. IWDA)
20 percentage points of local stocks (e.g. ES3)

I don't feel comfortable with anything more than 20 percentage points of total portfolio in Singapore-listed stocks, so let's go with that.

Roughly 60% of IWDA is U.S. listed, so that'd be 36% of this total hypothetical portfolio (60% of 60 percentage points). Roughly 44% of the S&P 500's sales are outside the United States (56% inside), so we should take 56% of that 36% and get about 20%. But then we have to add back in the U.S. sales of the ~40% of IWDA's stocks that aren't U.S. listed (and U.S. sales of Singapore-listed stocks), so "about 25%" looks spot on here.

So, if you're freaked out about the U.S. national economy for some odd reason(s)(*), a "typical" BBCWatcher-style, long-term investment portfolio during one's accumulation decades (i.e. more than 7 years away from drawdown starting age) would be about 25% exposed to the real U.S. national economy. The other 75% wouldn't be, not directly anyway.

(*) I don't think you should be any more or less than any other country. I'm also not a fan of President Trump, but bad/incompetent presidents aren't new. As notable examples, Richard Nixon was impeached and resigned in disgrace, and it's now known that Ronald Reagan suffered from progressively worsening dementia even while he was in office. Trade bluster and tariff tantrums aren't new either. (Reagan again, but even President Obama had such moments.) Besides, short-term or even medium-term problems aren't problems, as Shiny Things points out. I have investment-related and other concerns about global warming. If you want to freak out about something, that's the one.

 

[hwckhs]

I wanted to ask for figures, and am glad that you shared it in the later post. Thank you

Roughly 44% of the S&P 500's sales are outside the United States (56% inside)...

 

[yellownova]

Hi,so I've got local stocks, local bonds. And am now ready to get into overseas stocks. I signed up for sc to trade. So the qn is.. Ireland domiciled stocks should be traded in EUR or GBP? I'm a bit confused by that.

 

[kram62]

Hi,so I've got local stocks, local bonds. And am now ready to get into overseas stocks. I signed up for sc to trade. So the qn is.. Ireland domiciled stocks should be traded in EUR or GBP? I'm a bit confused by that.

They can be traded in many currencies. For example IWDA is traded in USD while SWDA is the same fund but traded in GBP. Both are domiciled in Ireland and traded on the London stock exchange.

The domicile of a fund does not dictate the currency used to trade it.

 

[Mecisteus]

Goodluck to you too for being so overly optimistic on USA, the land of sunset, Lol!
The writing is already on the wall.

Just a reminder guys.

This guy is the clone of ervino aka troublemaker.

 

[MultiSystemAtrophy]

Hmm I buy mostly via SCB. So priority member is 0.18% and custodian.

I was thinking of how to minimise my srs brokerage fees (to purchase es3). Always been using poems for donkey years. Then read about this dbs vickers cash upfront 0.12% and the shares will be under your name.
Any catch?