Why does it not apply?
Will dca into a stock that goes nowhere magically make it profitable?
Actually... yeah, kind of! You’ll be reinvesting the dividends; and you’ll be buying more stock when the price is low; so even a rangebound stock would end up with an average price toward the lower end of the range.
For stable and dividend heavy securities like sti, it is actually better to lump sum everything at the start and eat the dividends.
We’ve spoken a few times here about the false dichotomy between DCA and lump-sum investing. The thing is that most people don’t have a lump-sum to invest - most people have a continuous stream of cash, coming from their paychecks. So most people will be naturally dollar-cost averaging.
Hi,
Apologies if this has been asked before. I bought the book by Shiny Things and I have some doubts about STI ES3. The price of STI ES3 has been hovering in the $3 range since 2008. Is there a good reason why it is worth buying it for the long term since it is kind of stuck or appreciating so slowly? Thank you.
Yes, there are two good reasons.
From a fundamental point of view, entirely independent of its price or its returns: you want to have
some exposure to Singaporean equities. You live in Singapore; you’re presumably going to retire in Singapore. And that means you’ll need Singapore dollars to spend (which means Singapore-dollar bonds) and you’ll want protection against increases in the cost of living in Singapore (which means Singaporean equities).
From a more trading point of view: the Singaporean stock market’s price might not have gone anywhere, but it’s an absolute firehose of dividends: ES3 pays close to 4% dividends per annum, and you’re going to be diligently reinvesting those, which gives you a great head start.
Unrelated but, anyone has a good brokerage to recommend for forex trading? Looking to do more of swing trades. The one I’m using currently has been increasing their commissions but quite abit
In fact does IBKR have a good forex trading platform?
1) Don’t trade FX.
2) If you must trade FX, use IBKR and trade the CME FX futures.
Hi ST and fellow seniors,
Been lurking in HWZ for ages, finally registered for an account to express my thanks for the all the info; tip and tricks I received here.
Having just being automatically enrolled into Elder Shield; have sufficient term & medical insurance (I hope) for myself and 2 dependents. I think it's time to start my journey and hopefully be "Rich by Retirement"
After reading couple hundred pages of this thread and lately; ST's book.
These are what I've done:
1) Open DBS Vickers account (promised myself when much younger to never give SCB any business if I'm able to climb out of the hole I dug myself then) and IBKR.
2) Bought $5000 ES3 via Vickers - 1st trade*
3) Bought $5000 MBH Vickers - 2nd trade*
4) Bought $5000SGD worth of IDWA via IBKR
5) transferred 40K from CPFOA to SA to capitalise on the 4+1% interest [balance of 100+K of HDB loan @2.5+0.1% can slowly pay via monthly OA contribution; still short of ~18K after this 40K topup into SA to hit 2019's FRS. Cant do any voluntary contribution (VC) because my mandatory contribution (MC) have hit CPF Annual Limit of 37,740]
What I have currently:
50K in GE's Great270 maturing in yr2023
25K in Nov '18 SSB giving ~2.48% over 10yrs
202K COH
What I intend to do given that 110-age=70% in stocks, balance in bond:
a) buy another 45K ES3 via Vickers 3rd trade*
b) buy another 37K MBH via Vickers 4th trade*
c) buy another 45K SGD worth of IWDA via IBKR
d) to invest ~2K monthly to DCA the 3 position
this would leave me with an emergency fund of 75K that will sit in DBS multiplier account(50K) to earn ~2.2%pa and Citi's Maxigain (25K) to earn ~1.24% - 1.54% 6mths later
the 25K in Citi is basically to sit there and wait for better investment opportunity.
Honestly I think you’re in pretty good shape with your strategy. I think you might be a little too bond-heavy, yes; but you can solve that by just funneling a little more money into ES3 and IWDA. Keep it up!
Is it better to use Saxo Capital over SCB as the fees seems to be about the same but Saxo seems to have a much better brokerage site for research and analysing. Looking mostly to invest in IWDA and picking up a few stocks international and local stocks on my own.
No. Saxo is a bad broker - they charge hefty custody and dividend fees. Don’t use them.
Also is what is the difference from buying NIKKO AM STI ETF/ BOND ETF from the POSB regular savings plan unit trust/etf section as compared to buying it from a brokerage where there are commissions to be paid. Is it correct to say there are no commissions paid when using the POSB account to invest in the ETFS except for the managements fees?
Ah, no, that’s not correct. POSB IS has no minimum on its commissions; so you only ever pay 1% or 0.5% or whatever, even if you’re only buying $100 worth.
Hi ST,
My apology if this has been discussed before.
SPDR recently launched a SPDR MSCI World UCITS ETF (ticker: SWRD). The dividend is also accumulating and its Expense Ratio is 0.12%. This is also listed in LSE. What's your take on this? Would this be another alternatuve to IWDA?
Eh, we looked at it, but the spreads on SWRD are quite wide. I haven’t found a reason to switch my recommendation from IWDA yet.
Shiny things, can I put 1k a month into IWDA via SCB and transfer to IB when the IWDA reaches 100k?
Yes. That’s exactly what you should do.
Shiny, you suggested to invest our SRS into ES3. Can SRS be invested in stuff outside of SG? USD denominated stuff on SGX like J0P?
I don’t know, TBH, and I think it depends on the broker. I wouldn’t bother, though.
Because, to be clear, you shouldn’t just blindly buy ES3 in your SRS. The problem is that SRS accounts are kind of limited as to what they can buy. So, to be clear:
Only if you were going to buy ES3 anyway, and only if you have money in your SRS to buy things, then buy ES3 with that spare money.
P.S. The Citibank Maxigain gravy train is over - for those who trumpeted high interest rate accounts vs those who insisted on SSB/A35/MBH. What next for funds in these accounts?
Aw man, Citibank Maxigain was the best of a bad bunch for those high-interest savings accounts. Is there anything good out there now?
I take what I can get, and I don't see much competition at this point for SRS qualified, global equities exposure.
Happy to be corrected.
So I posted this over in your other thread, but as BBCW pointed out, the thing that’s tripping you up is “SRS qualified”. There are plenty of good options for global equity exposure that are not SRS-eligible; there are plenty of good options for local equity exposure that are SRS-eligible; but there aren’t (as far as I can see) any good options for global equity exposure that are SRS-eligible.
The solution is that if you have an SRS account, use it for your local equity exposure. Keep your global equity exposure in your regular taxable account.
On a related note: hey, BBCW, question for you. Nobody seems to have done the math on tax-efficient asset placement for Singaporean investors, so I’m curious which is better: is it more tax-efficient to use an SRS account for bonds, or for equities?
Again, because TER is 0.36, I don't think the charges for these other funds will be channeled to the buyer?
It turns out I was wrong on this. I assumed (because fund companies are, generally, scum) that this was a wrap fee on top of the fees from the underlying funds; as BBCW pointed out, though, it looks like it’s a weighted average of the fees on the underlying funds (and whatever Lion might charge on top).
I still think this is a poor investment, because the underlying fund choices are still very poor and high-cost. That money could be going into your pocket, instead of going into a sub-fund that charges 1.5% (and instead of paying huge trailing fees - 40% to 100% of the management fee - to a financial advisor)
