*Official* Shiny Things club - Part 2

[candy crush]

Following ST's book definitely helps. But, I'll add a few notes, speaking from my own experience learning how to buy stocks last year.

You may not want to place your order outside of trading hours. LSE is open from 8am - 4:30pm London time (daylight saving currently in force), which is 3pm - 11:30pm Singapore time. Both today and yesterday, you placed your order before LSE was open. IWDA can move up or down quite a bit from yesterday's last done price. If you order based on the last price, you will be underbidding if the market opens higher (which happened yesterday), or overbidding if it opens lower.

I suggest that you only place your order when LSE is open. That's when you can see Bid, BVol (Buy Volume), Ask, SVol (Sell Volume) etc. You need to understand these terms (try Google and read). Open SC Online Trading and observe how these values change dynamically during trading hours. If you want to buy instantly, order at (or slightly higher than) Ask price. Do note that values shown in SCB is delayed by up to 15 or 20 minutes. If your order is not executed after a long time (eg. 30 minutes), you may want to revise your bid price, or cancel and place a new order.

Personally, I like to save a little money by bidding at the mid point between Bid and Ask. That makes you the highest bidder, and you just wait for someone to sell you at that price. For an ETF with high volume like IWDA, the order should be fulfilled rather quickly. (I use IBKR's Algo option which adjusts my bid price automatically based on prevailing Bid/Ask. My orders for a similar ETF - VWRD are usually fulfilled within 15 minutes.)

Hope it helps.

wa piang, so troublesome one

lucky my POSB investsaver everything auto one

 

[limster]

I think usually he put the buy order and go to sleep le

IWDA starts trading in the afternoon, he/she sleep so early?

You do know the trading time for IWDA right? Can consider buying Shiny's book to read and learn more. If book don't have trading time, then next edition should put in.

 

[kram62]

IWDA starts trading in the afternoon, he/she sleep so early?

You do know the trading time for IWDA right? Can consider buying Shiny's book to read and learn more. If book don't have trading time, then next edition should put in.

No need for a book to know that : https://www.stockmarketclock.com/exchanges/lse/trading-hours

 

[loveboon]

Hi Shiny,

If I were to treat the monies in my CPF as part of the bond component, is it alright if I were to invest in just G3B with POSB IS?

Many thanks.

 

[MichealScott]

wa piang, so troublesome one

lucky my POSB investsaver everything auto one

You sure your POSB IS can buy IWDA?

Sent from Stamford Bridge using GAGT

 

[BBCWatcher]

I think these are a great idea as long as the management fees are low—for example, Vanguard’s target-date mutual funds charge about 0.15%, which is a great rate.

For those U.S. persons looking for these funds, Schwab's target date mutual funds are slightly lower cost than Vanguard's, and they have a lower minimum, too.

 

[shortofrange]

On the question of purchasing IWDA on LSE via stan chart... I'll need to fill up the W8-BEN form soon... if not there will be holding taxes due to capital gains right? Can I just fill it up and apply only when I'm about to sell the IWDA, or should I apply now and hold/renew the status all the time before they expire?

 

[kevinkoh1992]

I had just opened SCB trading account, which came with esaver. However I intend to leave the esaver empty. Thus to avoid fall below fee, should I close the esaver? I believe I should be able to top up my trading account from other bank account directly right?

 

[limster]

On the question of purchasing IWDA on LSE via stan chart... I'll need to fill up the W8-BEN form soon... if not there will be holding taxes due to capital gains right? Can I just fill it up and apply only when I'm about to sell the IWDA, or should I apply now and hold/renew the status all the time before they expire?

Your one sentence has at least 3 factual errors. Have you considered getting Shiny's book to learn more about investment? This is for your own good, otherwise you may make bigger investment mistakes.

Error 1: W8-BEN not needed for IWDA investment
Error 2: Filling up W8-BEN means no withholding taxes. Witholding taxes on IWDA are deducted at source and unavoidable.
Error 3: Its withholding, not holding. Where did you learn the term 'holding taxes'? Withholding taxes are due to 'capital gains'. That one, you really need to read up.

 

[BBCWatcher]

Error 1: W8-BEN not needed for IWDA investment

That's not entirely correct. A financial institution, particularly a U.S. financial institution, is within its rights to ask you for one -- and within its rights to take action you probably won't like if you don't provide a truthful W-8BEN (or W-9 if you're a U.S. person). Those actions could hypothetically include treating you as worse than a non-treaty nonresident alien or closing your account.

In short, if the broker asks you to fill one out, fill one out.

Error 2: Filling up W8-BEN means no withholding taxes. Witholding taxes on IWDA are deducted at source and unavoidable.

That's right.

Error 3: Its withholding, not holding. Where did you learn the term 'holding taxes'? Withholding taxes are due to 'capital gains'. That one, you really need to read up.

Capital gains withholding tax is possible in many jurisdictions, including in the U.S. Individuals who are tax delinquent from the U.S. point of view can be subject to this form of withholding tax, which is what I was alluding to as one possible outcome if you don't make a truthful tax status declaration.

 

[Kapish]

Your one sentence has at least 3 factual errors. Have you considered getting Shiny's book to learn more about investment? This is for your own good, otherwise you may make bigger investment mistakes.

Error 1: W8-BEN not needed for IWDA investment
Error 2: Filling up W8-BEN means no withholding taxes. Witholding taxes on IWDA are deducted at source and unavoidable.
Error 3: Its withholding, not holding. Where did you learn the term 'holding taxes'? Withholding taxes are due to 'capital gains'. That one, you really need to read up.

submitting W8-BEN doesn't mean no withholding tax. it's to identify yourself as a non-US citizen and therefore allow them to deduct the withholding tax. there's no way around the withholding tax unless there is a tax treaty eg. for UK stocks

 

[maitland]

They exist over here in the States (though usually in the form of mutual funds/unit trusts rather than ETFs). I think these are a great idea as long as the management fees are low—for example, Vanguard’s target-date mutual funds charge about 0.15%, which is a great rate.



This is why it makes sense to have an allocation to bonds in your portfolio. You’re like someone who’s 45 years old, planning to retire at 65 - when you retire, you’ll need to draw down those funds that you’ve been diligently saving.

In fact, that would be the strategy I’d use in your situation. Use a “110 minus your age” rule for your allocation, and pretend that you’re going to be 65 in the year when your kid heads to university. So if that’s 20 years from now, you’d pretend you’re 45 right now, and that would put you 65% in stocks and 35% in bonds. Each year, this would glide a little more toward bonds and a little less toward stocks, until you’re 45% stocks and 55% bonds by the time your kid is in college.

When you draw it down, you’ll just sell the parts of your portfolio that you need to in order to keep your allocation at its target (45/55 stocks/bonds, remember).

Any asset allocation etf (without withholding taxes) a Singaporean can buy?

How do you keep the education portfolio separate with your retirement portfolio? All via excel?

 

[maitland]

For those U.S. persons looking for these funds, Schwab's target date mutual funds are slightly lower cost than Vanguard's, and they have a lower minimum, too.

Any options out there available to a Singaporean?

 

[limster]

i wonder if the original poster is going to become more confused, because he is a local investor and using Stanchart and just needs the info pertaining to Singaporean + Singapore broker + not trading US shares. i guess thats why Shiny's book is good, because it gives 'local' advice, rather than advice from some US person's perspective.

 

[FnangB]

The ETF generally holds the bond to maturity, or pretty close to it - so they do exactly what you would do if you held a bond that was trading at a discount, they hold it until maturity and they get the full $100 (or whatever) back.

Okay perfect I was scared that they would "trade too much"

I watched and compared the ETF bonds list on iShare and they all make sense now, and indeed there is a choice for every profile like the ones that target 20yr super risky as maturity is so high and on the opposite the gov 1-2 yr safest choice thus negative / null result..
and that's why the HIGH have such a low maturity to counter balance from the fact that they came from very risky company

It's nice, if I want to reduce the risk of the IEAC / HIGH mix, I think I can add some SE15 (corp but 1-5yr maturity, lower than IEAC) or IBGX (gov 3-5) etc..

Merci pour vos conseils les hardwarezoniens !

 

[ehsevol]

Hi, silly question, but when you guys mention "invest 1k sgd a month" does it refer to total investment amount across all 3 components or per component e.g. 1k for just IWDA?

400 - G3B or ES3
400 - IWDA
200 - A35 or MBH

With the above split, is it still SCB for local stock and bond and IB for IWDA?

To add on,

IB charges lower fees and even lower exchange rate spreads for larger investors as compared to SCB

I would say that since you have decided to invest 1k per month, you save you the hassle of choosing which RSP for the alternatives to MBKE MIP, and also having to choose G3B and A35 over ES3 and MBH.

With your 1k per month investment, no changes to the local stock and bond component. Follow the book:

ES3 and MBH - SCB
IWDA - IB

A significant change in shinys last edition of the book is the discontinuation of MBKE MIP. But unless you invest less than 1k per month, the alternatives we discuss shouldnt affect you. For 1k per month or more, the brokers and component to use remain status quo as above. Allocations to apply are the same as well. You wont go wrong here.

 

[ehsevol]

I've read a lot of advice about how the recommended ES3/IWDA isn't appropriate for US tax paying people. Was wondering if anyone knows about Canada? Currently been working here for 4 months (will not pay tax here for this calendar year since I will be here for < 183 days) but foresee myself relocating here for 1-2 years at least, get PR and perhaps even migrate over. Wondering if anyone has advice on how that changes the investment strategy shared.

 

[BBCWatcher]

I've read a lot of advice about how the recommended ES3/IWDA isn't appropriate for US tax paying people. Was wondering if anyone knows about Canada? Currently been working here for 4 months (will not pay tax here for this calendar year since I will be here for < 183 days) but foresee myself relocating here for 1-2 years at least, get PR and perhaps even migrate over. Wondering if anyone has advice on how that changes the investment strategy shared.

You probably wouldn't bother at all with ES3 (or comparable, such as G3B or the U.S. listed EWS) if the odds of your staying in Canada go up substantially, especially if you're relatively far away or farther from retirement.

As for IWDA, you probably wouldn't pick that one either simply because there are lower cost choices available. Canada has a tax treaty with the United States that offers no higher than 15% dividend tax withholding, the same that you'd get in Ireland. I think there's also an estate tax element in the tax treaty. Thus you'd be able to pick lower cost alternatives, and there are some. Moreover, Canada has some Canadian tax advantaged savings/investing vehicles such as RRSPs and TFSAs. RRSPs are better than TFSAs in certain ways, especially tax treaty ways, so that'd probably be the one to start with.

Canadian financial institutions are pretty infamous for charging rather high fees and expenses, especially compared to their southern neighbors across the border (and in some cases even their southern subsidiaries), so you have to shop around that much more carefully to find the best financial deals. There are some decent or better deals available.

 

[mousepad_88]

https://andrewhallam.com/2019/09/an...nday-september-23-thursday-september-26-2019/

PSA: author of millionaire teacher speaking in SG.

 

[ehsevol]

You probably wouldn't bother at all with ES3 (or comparable, such as G3B or the U.S. listed EWS) if the odds of your staying in Canada go up substantially, especially if you're relatively far away or farther from retirement.

As for IWDA, you probably wouldn't pick that one either simply because there are lower cost choices available. Canada has a tax treaty with the United States that offers no higher than 15% dividend tax withholding, the same that you'd get in Ireland. I think there's also an estate tax element in the tax treaty. Thus you'd be able to pick lower cost alternatives, and there are some. Moreover, Canada has some Canadian tax advantaged savings/investing vehicles such as RRSPs and TFSAs. RRSPs are better than TFSAs in certain ways, especially tax treaty ways, so that'd probably be the one to start with.

Canadian financial institutions are pretty infamous for charging rather high fees and expenses, especially compared to their southern neighbors across the border (and in some cases even their southern subsidiaries), so you have to shop around that much more carefully to find the best financial deals. There are some decent or better deals available.

Thanks for the reply. It all sounds quite intimidating. In terms of diversification do you think it would still be one that tracks the Canadian stock index, and one global one e.g. IWDA alternative? Would I have to be mindful of disposing IWDA/ES3 at a certain point?