Official Shiny Things thread—Part III

[yellownova]

Had the same dilemma. You have to also apply for the transfer in a paper form, there are fees... I left it in SCB. I'm taking the long term route anyway so just letting it sit there until I want to sell.

Sorry if this has been asked before, but if I were to switch from SCB to FSMone for my ES3 and MBH trades, do I sell everything on SCB and move it over to FSMone? Or just start a clean slate on FSMone?

 

[jacky817]

Hey Shiny and frens, don't kill me for bringing up this topic LOL:

What's your opinion on day trading?

It seems that you can actually make a consistent, and maybe huge, profit if you train really hard and be very "good" at it? Is that ********? And is it worth the effort?

My fren has gotten really sick of his 9-6 job and wants to be FIRE asap. He plans to focus on doing this on a part time basis, get really good at it, make some capital, and then put those into long term investing. Knowing him, I actually think he has the brain, composure and determination to become good at it lol.

Do you know any day traders irl? What is it like? Or should he go do something else that is "more meaningful"?

On that note, what else out there can give you a good $/time ratio? Other than selling backside

 

[limster]

Hey Shiny and frens, don't kill me for bringing up this topic LOL:

What's your opinion on day trading?

It seems that you can actually make a consistent, and maybe huge, profit if you train really hard and be very "good" at it? Is that ********? And is it worth the effort?

My fren has gotten really sick of his 9-6 job and wants to be FIRE asap. He plans to focus on doing this on a part time basis, get really good at it, make some capital, and then put those into long term investing. Knowing him, I actually think he has the brain, composure and determination to become good at it lol.

Do you know any day traders irl? What is it like? Or should he go do something else that is "more meaningful"?

On that note, what else out there can give you a good $/time ratio? Other than selling backside

Why always this "ask question for my friend post?" Hopefully your friend has the brain, composure, determination, to figure out for himself what it takes to be a profitable day trader, and then share his findings with this forum. Based on what he posts, we can sort of figure out whether he has at the minimum the aptitude for it

 

[FrostWurm]

My fren has gotten really sick of his 9-6 job and wants to be FIRE asap. He plans to focus on doing this on a part time basis, get really good at it, make some capital, and then put those into long term investing. Knowing him, I actually think he has the brain, composure and determination to become good at it lol.

Hi jacky, this is your friend. Thank you for your praise but I think the situation you are talking about above is actually with reference to yourself.

You should put more effort into your career, accumulate wealth steadily, and invest in a sensible manner. That is the only way you can live with a peace of mind.

I know you sometimes read r/wallstreetbets and are captivated by the guys who can turn $10,000 into $60,000. But what also happens are the guys who start with $60,000 and end up with $2,000.

Do note that life is not a casino and I'm sure you would not want to take the risk of having to live in poverty if things don't go your way. In fact, if you are so pre-disposed to gambling, a casino would actually offer you better chances as the odds are well-defined right from the start.

Nonetheless, I am not encouraging you to do so. Instead, focus on building your capital gradually by doing well in your job. If you think it is not suitable for you, change to something that is. Invest your salary steadily and sensibly, and you could be well on your way to retire early without taking excessive risks. All the best.

Regards,
Your friend

 

[Kaypohji]

Can recommend a China etf or Asia etf to invest in to form a part of my portfolio ?

 

[jacky817]

Oh that got personal pretty quickly. Appreciate the genuine advice, rest assured, that's an actual non-imaginary friend of mine from uni. I'm not asking on behalf of him/for him, it's a genuine question i'm wondering myself.

On one hand, the intuitive response for me would be to scream in his face, but on the other hand i can really empathize with him. Both of us are legit quite sick of the 9-6 concept (he probably got bored years earlier than me lol), but while i started with 100% ETF then slowly shifted some allocation to a single company stock, my risk tolerance ends there. Whereas he started seriously reading up on investing recently and got drawn to, basically the dark side from the get go. Just to be clear, if it were any other frens, I'd have just said no, go read an actual investment book.

What we share in common is the question on how do you acquire capital asap? His answer is day trading, and mine is well...I haven't found it =/ Thinking abt e-commerce or youtube on the side, but definitely wondering abt day trading =P (without margin of coz, hell no)

Sure, it's definitely dodgy, and there's probably no glamour in it coz you're gaming the system 100%. But how different is it from owning world stocks? We're just a bunch of capitalists, big or small, putting our excess riches into owning other people's time and labour. I will likely retire decades earlier than 65 as well, sitting on my ass, owning other people's rent and company employees' time. Are we any different?

In that regard, money is the direct and only path to your freedom, for the rest of your life and perhaps your loved ones. What does it matter how you earned it? So long it is legal and well, not morally dubious (maybe you can see trading as dubious idk).

Very controversial i know haha, curious to hear what you guys think. Cheers!

 

[FrostWurm]

Very controversial i know haha, curious to hear what you guys think. Cheers!

No it's not controversial at all. Everybody want to get rich quick, and we live in a capitalist society.

The only question is whether you are willing to lose it all if it doesn't happen. Just in case you have some misguided notion about day-trading, it is not some divine way of generating income. (Duh, for everyone would be doing it if it were).

However, I can think of two ways for you to live in fame or go down in flames.

1) Go to the casino, play blackjack, and card-count. You might be able to tilt the edge in your favour but it's still gonna be very challenging.

2) Options. Like I said in the earlier post, go to the reddit wallstreetbets subforum and see those guys posting their gains.

However, both 1) and 2) can result in you losing a lot of money as well. For most people, giving tuition or finding a part-time job is a better choice.

 

[newjersey]

hi BBC watcher,

i am a stock-picker.

it's in ST's philosophy not to talk about stock picking in this thread, which I will abide towards.

well, sometimes, I need international finance news to check my convergence.

and I guess I am an el-cheapo when it comes to paying for data.

there has been some v good speakers which CNBC features, which I follow.

It's given me a long term view of investments.

Hope that explains to you my thoughts.

I basically just need a 5-15 mins glimpse of the markets.

 

[chrisloh65]

Nothing wrong with day-trading if you can make a good living. It all depends on whether your friend has the temperament and skills to make a profit out of day-trading? It is not easy, and take years to master (some people just can't). So before your friend is able to make sustainable profits from day-trading, he better keep his day job first and try out day-trading part-time during his off-office-hours first to see whether he can make it. If he is really good at it, then by all means he can quit his day-job by then.

Oh that got personal pretty quickly. Appreciate the genuine advice, rest assured, that's an actual non-imaginary friend of mine from uni. I'm not asking on behalf of him/for him, it's a genuine question i'm wondering myself.

On one hand, the intuitive response for me would be to scream in his face, but on the other hand i can really empathize with him. Both of us are legit quite sick of the 9-6 concept (he probably got bored years earlier than me lol), but while i started with 100% ETF then slowly shifted some allocation to a single company stock, my risk tolerance ends there. Whereas he started seriously reading up on investing recently and got drawn to, basically the dark side from the get go. Just to be clear, if it were any other frens, I'd have just said no, go read an actual investment book.

What we share in common is the question on how do you acquire capital asap? His answer is day trading, and mine is well...I haven't found it =/ Thinking abt e-commerce or youtube on the side, but definitely wondering abt day trading =P (without margin of coz, hell no)

Sure, it's definitely dodgy, and there's probably no glamour in it coz you're gaming the system 100%. But how different is it from owning world stocks? We're just a bunch of capitalists, big or small, putting our excess riches into owning other people's time and labour. I will likely retire decades earlier than 65 as well, sitting on my ass, owning other people's rent and company employees' time. Are we any different?

In that regard, money is the direct and only path to your freedom, for the rest of your life and perhaps your loved ones. What does it matter how you earned it? So long it is legal and well, not morally dubious (maybe you can see trading as dubious idk).

Very controversial i know haha, curious to hear what you guys think. Cheers!

 

[HIPPODEUS]

Hi, found this thread / BBCW recently. Also bought the book and finished it in one day - just wanted to leave a note that I found it superb in that clarity of though was laid out neatly which made it simple to understand.

I fully intend to reorganize my insurance (much help from BBCW in his thread), and follow these simple rules. I'm also helping my mum (50+) catalogue all her endowments and whatnot.

Couple of questions:

1) I assume the underlying assumptions here regarding retirement are that post-65, you drawdown a portion of the portfolio (~3%) every month instead of putting in money every month? This drawdown then forms monthly income alongside any CPF life / other annuity payouts.

Wouldn't that imply that on bad performing stretches, your monthly "income" is substantially reduced since you can drawdown on a depressed portfolio?

2) How to treat investing for 2 goals - e.g. retirement (in 40 years) and buying a house house in 10 years (downpayment)? I would assume you invest similarly (local stock / global stock / local bond) with differing time horizons and simply keep track of them separately?

3) For myself, I'm likely to treat CPF as the bond portion of my retirement investments; SRS for local equities; IBKR for IWDA / VWRA (haven't decided). I have ~50k lumpsum to invest and ~1.2k per month.

Is the bank of choice still OCBC (as per the book) for SRS? I'm in the >80k tax bracket hence using SRS instead of SCB for tax purposes.

 

[zoneguard]

1) I assume the underlying assumptions here regarding retirement are that post-65, you drawdown a portion of the portfolio (~3%) every month instead of putting in money every month? This drawdown then forms monthly income alongside any CPF life / other annuity payouts.

3% is for each year and not per month. You also need to adjust upward the drawdown each year for inflation. Do the math and you'll find at 3% per month and you'll exhaust the portfolio very soon.

Wouldn't that imply that on bad performing stretches, your monthly "income" is substantially reduced since you can drawdown on a depressed portfolio?

You are right, google these terms: Safe Withdrawal Rate and Sequence of Return Risk. CPF Life forms the base of retirement income to support core expenses. The portfolio can support the wants. You can also explore other sources of wealth like real estate or annuities which has lower correlation to the portfolio.

I personally find the book is adequate for strategies for the accumulation phase but for the drawdown phase, you'll need to supplement it with other books/web resources.

 

[newjersey]

Nothing wrong with day-trading if you can make a good living. It all depends on whether your friend has the temperament and skills to make a profit out of day-trading? It is not easy, and take years to master (some people just can't). So before your friend is able to make sustainable profits from day-trading, he better keep his day job first and try out day-trading part-time during his off-office-hours first to see whether he can make it. If he is really good at it, then by all means he can quit his day-job by then.

day trading are for losers.

 

[viventa]

day trading are for losers.

I fail to see the need for such a pointless and callous comment. You just mentioned earlier today that you are a "stock-picker"; you don't see any of us commenting that "stock-picking [is] for losers", do you?

Based on your previous questions about "financial news", you obviously know very little about day trading (and please don't even try to pretend otherwise). Why make such an uninformed and distasteful remark on something you're not even familiar with?

 

[viventa]

What we share in common is the question on how do you acquire capital asap? His answer is day trading, and mine is well...I haven't found it =/ Thinking abt e-commerce or youtube on the side, but definitely wondering abt day trading =P (without margin of coz, hell no)

Generally, you "acquire capital asap" by working hard at a "9-6 job" and saving up a large portion of your monthly salary until you attain your desired amount of capital. You could also try being born rich, striking the lottery etc. But I think most people would have to opt for the "9-6 job" route, heh. Oddly enough, margin trading can actually help you with your "acquire capital asap" goal, albeit indirectly. But since you said "hell no" to margin, I guess you're stuck with "9-6 job".

On a side note, strictly speaking, margin increases scale, but not probability. If you're afraid of margin trading, you're basically unwilling to trust your envisioned trading strategy and/or its odds of success. You catch my drift?

Frankly, from what little you've told us, your "friend" just seems to be looking to day trading as a get-rich-quick scheme to get out of his 9-6 job. He should first consider that he might simply be in the wrong 9-6 job. Of course, the whole "find a job you enjoy doing, and you will never have to work a day in your life" adage isn't entirely accurate. But it's not entirely devoid of truth, either.

Also, day trading isn't just sitting in front of your computer for half an hour, submitting a bunch of orders, and then taking the rest of the day off. That's just the execution; the preparation is far more taxing and difficult. It's like FrostWurm said - if it were that easy to make money from day trading, everyone would be filthy rich by now.

I find myself in a very odd position where I am agreeing with chrisloh65 on this thread, but he gave sound advice on this. Your "friend" should actually try day trading while holding onto his 9-6 job. It's not just about whether he has the aptitude or drive to become a successful day trader; it's far easier for compounding to work its magic if you're not forced to withdraw your own trading profits to make ends meet (and this even assumes that you make profits consistently, which is not the case for most retail day traders). The successful day traders I know kept their 9-6 jobs for many years before moving to full-time day trading.

Tell your "friend" to learn the basics, start small (ie, set aside some money and, of course, be prepared to lose most of it), and give it a try for a month or two. Some people recommend that beginners start with a paper trading account, but I disagree - it's just not the same when it's not actual money on the line. If you can't handle small losses while day trading in your spare time, it's unlikely you can handle being a full-time day trader.

 

[HIPPODEUS]

3% is for each year and not per month. You also need to adjust upward the drawdown each year for inflation. Do the math and you'll find at 3% per month and you'll exhaust the portfolio very soon.



You are right, google these terms: Safe Withdrawal Rate and Sequence of Return Risk. CPF Life forms the base of retirement income to support core expenses. The portfolio can support the wants. You can also explore other sources of wealth like real estate or annuities which has lower correlation to the portfolio.

I personally find the book is adequate for strategies for the accumulation phase but for the drawdown phase, you'll need to supplement it with other books/web resources.

Apologies, I meant 3% per year.

I have googled around a bit and the general advice seems to be 3% drawdown subsequently adjust for inflation ensures the portfolio doesn't run out over a horizon of even 50 - 60 years, which is fine.

What I'm confused about is people therefore taking expected annual expenses (e.g. 30k) and dividing by 3% to arrive at the "retirement sum" (1m). In which case, if e.g. you retired in 2007 and drew down 3%, then in 2008 GFC hit and portfolio tanked, you wouldn't be able to drawdown your expected annual expenses (30k * 2% inflation = 30.6k) without substantially depleting your portfolio (i.e. you would be drawing down 30.6k on e.g. 776k if portfolio takes a 20% hit, implying a 4% drawdown rate). This would then mean you run out of money substantially quicker (~10 years)!

 

[Kaypohji]

There is always a risk. So u can change your portfolio exposure. Instead of 80% equities 20% bond, maybe u can go for more proportion of bonds etc those safer assets

Apologies, I meant 3% per year.

I have googled around a bit and the general advice seems to be 3% drawdown subsequently adjust for inflation ensures the portfolio doesn't run out over a horizon of even 50 - 60 years, which is fine.

What I'm confused about is people therefore taking expected annual expenses (e.g. 30k) and dividing by 3% to arrive at the "retirement sum" (1m). In which case, if e.g. you retired in 2007 and drew down 3%, then in 2008 GFC hit and portfolio tanked, you wouldn't be able to drawdown your expected annual expenses (30k * 2% inflation = 30.6k) without substantially depleting your portfolio (i.e. you would be drawing down 30.6k on e.g. 776k if portfolio takes a 20% hit, implying a 4% drawdown rate). This would then mean you run out of money substantially quicker (~10 years)!

 

[BBCWatcher]

On a side note, strictly speaking, margin increases scale, but not probability.

It’s a little more complicated, unfortunately.

Sometimes using margin can raise your stakes so high that your trades start to affect particular whole, small, thin markets. It’s possible to be caught bidding against yourself, and margin makes that possibility more likely. Usually you’ll suffer, but there could be some “bigger whale” with deep pockets and more leverage that can find and profit from such movements. That’s almost certainly not you, but hypothetically it could be.

There’s also a cost to margin (albeit a low one presently). Higher costs always reduce your probability of a successful outcome even when the underlying probabilities are the same.

 

[swan02]

Since I’m retired early myself. This was what I’ve gathered from ERN blog if I wanna survive a 60 year retirement. One eg if managing sequence of returns risk for a long retirement is.

1. Start from a portfolio of 60/40 allocation and then add 5 percent to equity every year until u r 100 percent in equities. This method is a known glide path strategy. It is to deal with the risk of a large drawdown that happens in the first 10 years of retirement. It is the red zone and very dangerous. After 10 years and no big recessions occurs but occurs after 10 years, your portfolio would have grown so large that a large drawdown wouldn’t affect you. At least in Theory.

Also this strategy is based on when equities are expensive ie greater than 20 shillers cape as per ERN. If ever equities are cheap, ie below 20 cape, u can go all in 100 percent equities and not worry of sequence of risk returns whenever it happens. Sequence of risk returns are only dangerous in an expensive market.

2. another method which is from another blog which I’ve forgot, is the 80/20 method where the fixed income is a mixture of cash and bonds. Cash to meet 3 years of lifestyle and 2 years worth of bonds to b used after 3
Years of cash is used up. This is based on a one million dollar portfolio.

3. One common theme is that to prepare for a 60 year retirement, u do need a lot more equities then say 30 percent in conventional retirement strategies at outset. Too much of it can be a problem when markets are expensive.

Apologies, I meant 3% per year.
What I'm confused about is people therefore taking expected annual expenses (e.g. 30k) and dividing by 3% to arrive at the "retirement sum" (1m). In which case, if e.g. you retired in 2007 and drew down 3%, then in 2008 GFC hit and portfolio tanked, you wouldn't be able to drawdown your expected annual expenses (30k * 2% inflation = 30.6k) without substantially depleting your portfolio ((~10 years)!

 

[xiaohaengbok]

I've been trying to catch up on the thread but there are just too many things to read =.=

My follow-up questions are:
1. Between IWDA and SWRD which tracks the same index but have different TER, which should we go for?

2. What are your opinions on VWRA vs SWRD/IWDA + EIMI purchase?

Thanks, everyone who has helped!

ADVICE REQUIRED FROM THE PROS

Reaching out to all the pros here for advice because I just did my own portfolio review today.

---

Context:

I am a 31 years old new investor who only recently started really reading into different investment strategies before deciding on adopting the three fund portfolio to start. Till date, I've invested around 20K SGD to SWRD.

My intention in the stock market is to reap as much returns as I can before I hit the age of 35 years old to make up for time lost in my 20s, and then revert back to just ETF trades.

However, even before I really read into these, I already started investing through hearsay i.e. you should buy this stock now because it's low!

What shocked me was that my portfolio now consists of a random mixture of ETFs and single stocks.

---

Here's the breakdown:

LSE Market (Interactive Brokers)
(SWRD) SPDR MSCI World UCITS ETF ~ SGD 21,754

NASDAQ (Saxo Capital)
(KBWY) Invesco KBW Premium Yield Equity REIT ETF ~ SGD 66

NYSE (Saxo Capital)
(FFC) Flaherty & Crumrine Preferred and Income Securities Fund Inc ~ SGD 2,927

(RYT) Invesco S&P 500 Equal Weight Technology ETF ~ SGD 285

SGX (DBS Vickers Cash Upfront)
(5SO) Duty Free International Limited ~ SGD 336

(BS6) Yangzijiang Shipbuilding (Hldgs) Ltd ~ SGD 10,200

(C6L) Singapore Airlines Limited ~ SGD 1,296

(CJLU) NetLink NBN Trust - Unit ~ SGD 2,450

(ES3) SPDR STI ETF ~ SGD 22,640

(G13) Genting Singapore Limited ~ SGD 4,980

Total: ~ SGD 42,000

---

Current predicament:

I have deviated too much from how 3 funds portfolio works and do not know what to do.

Dilemma 1. If I sell off the individual stocks now, I'd make a loss. If I don't sell them off, it means ~ SGD 45,180 is just sitting in the reds.

Dilemma 2. I still have around SGD 30,000 for investments. Should I throw all into the SWRD given that the price now is still low or should I bet it on say, C6L, Singapore Airlines Limited to potentially recoup the losses and earn dividends in 5 years' time?

Dilemma 3. Having read up about the Trinity study, I am keen to reap as much returns as I can up till 35 years old (5 years) to counteract the 4 percent rule in the Trinity study, and then revert back to just ETF trades. Because of the lower returns of around 3+% in the STI ETF, I was looking at REITs investments, which brings in about 4-5% of returns. However, given the mishmash of equities I have now, I'm more confused as to what I should do.

Dilemma 4. I have about SGD 67,000 which I could potentially not touch for the next 4-5 years. Should I keep this amount as the bond component or should I take the risk and invest into ES3 STI ETF through CPFIS given the good price now after the coronavirus hit? I'm quite open to risk taking for higher returns. However, doing so might mean deviating further from how 3 funds work and the suggested 10% in STI ETF.

Dilemma 5. I've recently invested using Interactive brokers. However, after reading up, I realised that the stocks held in Saxo Capitals earn the bank yearly management fees. I would like to close the account to avoid the fees but that would mean losing the shares in it. Is there a way to transfer those shares over to IKBR? Is it worth it to do so or should I just sell everything and close the account?

---

Help required:

What would experts like yourself do to bring some balance back to the portfolio while reaping more returns? I'd really like to hear your thoughts. Any help is appreciated!

 

[hiroki01]

Hello, I'm looking for some advice

Long story short: I'm self-employed and I've decided to split my emergency funds into two parts: one in a normal bank account (highly liquid/almost no interest) and another in a higher-risk but still relatively safe and liquid instrument. I understand the pros/cons of doing this and I'm willing to accept the risks.

My initial plan for the latter portion of my emergency fund was to invest it in A35 since it fulfills my criteria, but its market price has spiked over the past few weeks and is now trading well above the narrow band of 1.10 to 1.20 which it was in from 2012 to 2019. Assuming I put in 20k now at 1.245 and the price drops to 1.10 when I need the money, I'd be looking at a 11.2% loss which is the equivalent of ~6 years of dividends. Do you think it's a good idea to invest now or should I hold that money in my bank until it goes back to its more normal band (assuming it ever does given the wacky environment we're in)? Or are there better alternatives (I'm considering Stashaway Simple too, for instance)?