Official Shiny Things thread—Part III

[Kinderino]

https://endowus.com/insights/cash-management-endowus-cash-smart/

Worthwhile to look into Money Market funds from Endowus with trailer fees rebate?

Sent from Samsung SM-G935F using GAGT

 

[gladtoknowmore]

Comes right up in SCB Trading

How come via IB it doesn’t pop out that option ?

Something to do with my trading permission ?

 

[Mr Grey]

Hi Shiny,

A fellow Aussie here. Moved to Singapore 15 years ago and will be looking to pull up stumps in a few years time and head back to retire.

Over the years I have been heeding your advice here and regularly investing in IWDA, LQDE, EIMI, with a bit of A35 in the mix as well.

I've stopped adding positions in those above and begun increasing my AUD exposure by buying into VGS, A200 and IEM on the ASX. I'm looking to add a bond ETF as well, either VAF or VGB.

Would you say I'm on the right track with those ASX listed ETF's? Anything that stands out as a red flag? Would you advise I begin selling the Irish domiciled funds so I only have AUD and Australian domiciled by the time I am ready to move back?

Lastly, any thoughts on the Aussie Fire Bug blogger? What do you think of his portfolio strategy?

Cheers

 

[celtosaxon]

Hi Shiny,
Over the years I have been heeding your advice here and regularly investing in IWDA, LQDE, EIMI, with a bit of A35 in the mix as well.

I've stopped adding positions in those above and begun increasing my AUD exposure by buying into VGS, A200 and IEM on the ASX. I'm looking to add a bond ETF as well, either VAF or VGB.

To get the best advice, suggest adding rough % allocations, in both the as-is and to-be.

It might also be helpful to know whether this is an early or on-time retirement, and whether a quasi or full retirement.

 

[swan02]

In my opinion. These are what steps I would take in your position before returning to Australia.

1. Self study on topics in Superannuation, Taxation and centrelink. What separates Australia and Singapore is largely TAX and social security.

Be updated and know more than your tax accountant in those areas. The specialists in CGT are gonna charge you and arm and leg, yet these very specialists do make mistakes. NEVER trust any professionals be it in Law, Tax whatever, you have to know sufficiently to question them. Perhaps you should SMSF.

Never accept any tax advice from customer tax officer..their knowledge is so bad, its shocking which includes even the tax financial planner. DIY and you have the time to do it anyway...

2. As its been quite a number of years, my knowledge is rusty. But I would seek to look into areas of family tax benefit aka free money while you are retired. It is not asset neither income tested.

3. Sell all assets including your main residence if you have one in Singapore.
This unfortunately also includes the ASX shares you have bought. This is to reset your cost base in order to avoid CGT in future. Things become complicated should you hold assets of high capital gains. On the reverse, if you have losses.........tax loss harvesting then. However, do note the tax free threshold of australian resident for tax purpose of approx 18k and factor in tax offsets for purportedly low income.

4. if the amount of ASX shares is large, you may transfer to Self Wealth trading platform but I'm unsure from IB to Self wealth is allowed. But my experience was quite bad from CBA to self weath transfer, as the lag and inconsistencies resulted in long delays.

5. Read up on accounts based pension, non and concessionary contributions to Super, preservation age ...bottomline with super, things are tax free after 60..hence it would be prudent to contribute to Super with caps per year and rolling as well. And how it will affect your social pension in future.

6. As main residence capital gains tax exemption is open to aussie resident for tax purpose, you might consider putting in a large chunk of money into a main residence and live off family tax benefit if you have a family, along with your investments....all aiming to fit within the tax free threshold between you and spouse. In other words, its balancing act in order for you to reach equilibrium between the amount of aged pension (income and asset tested (excluding main residence) and investment income.

7. restart investing in VGS, VAS/A200, ......aussie bonds (maybe..)

8. however, I've always in the view that carrying aussie bonds is a bet on the aussie currency (its a risk on asset akin to equity). It may sound good that as being aussie domiciled that you do not face currency risks carrying them. However, I would instead prefer to hold Equity and SGD bond mix instead, generally equating as much as possible to the volatility of the AUD to equity , yet brings you greater upside but similar downside.

The RBA won't want a strong AUD.....so for e.g. if I have 100k aud. I would rather hold 20k VGS/VAS mix, and 80k A35 or MBH. Do note a range of minimum 20% to a max 50% with a median of approx 35% IWDA and 65% A35. I suggest you do your homework, as the recent crash exposes the volatility of the AUD crashing as much as 16 percent to the SGD, whereas the IWDA , if I'm not mistaken went down approx 26% in SGD terms (best you double check). The AUD tends to correlate 80% of the time with gold yet again, fails to do so to the downside which I largely blame the RBA monetary policies.

9. Aussiefirebug...hmm...didn't he pivot a few times in his asset allocation, being wary of the possible demise of franking credits ? .

I can't blame what he does as generally they are sound. However, Vanguard recommends 60 percent in international shares, 40 percent VAS. I'm unsure if he and many such bloggers would ever have bonds. They understood that a high degree of equity is needed for a long retirement.

I believe he believes in the DCA approach but 100 percent equity which according to literature should be done asap but he is spreading it which I think is sound but ultimately, he'll reach his 100 percent equity allocation with no need of bonds.

Considering that Aussies are blessed with the aged pension, 100% equity asset allocation is fine. In fact, Superannuation largely allocates 70-75% to equity in most part of accumulation phase, and then 50% closer to retirement and fixed all the way for longevity risk.

And it doesn't hurt to up your equity significantly to say 80% if the market crashed even during retirement, while keeping 5 years in a mixture of 3 years cash, 2 years bonds.

10. I suggest you read up on retirement planning where you incorporate your aged pension and investments, which likely improves your SWR greatly but yet remain skeptical and the possible delay accessing the aged pension.

11. Ratesetter is available in Australia. It is a fantastic platform for your idle cash with minimal risk.

12. Lastly, always remember the ATO may find reasons even many years later that you are actually an Australian resident for tax purpose for all these 15 years in Singapore if you hadn't made certain to ensure you are not (Tax Accountants can still make mistakes). Mistakes such having most of your assets residing in Australia e.g. home and investments. Spouse and kids still in Australia etc, returning to australia for visits more than once a year etc etc............this will change how you deal with your assets before returning to Australia all because of CGT.

Hi Shiny,

A fellow Aussie here. Moved to Singapore 15 years ago and will be looking to pull up stumps in a few years time and head back to retire.

Over the years I have been heeding your advice here and regularly investing in IWDA, LQDE, EIMI, with a bit of A35 in the mix as well.

I've stopped adding positions in those above and begun increasing my AUD exposure by buying into VGS, A200 and IEM on the ASX. I'm looking to add a bond ETF as well, either VAF or VGB.

Would you say I'm on the right track with those ASX listed ETF's? Anything that stands out as a red flag? Would you advise I begin selling the Irish domiciled funds so I only have AUD and Australian domiciled by the time I am ready to move back?

Lastly, any thoughts on the Aussie Fire Bug blogger? What do you think of his portfolio strategy?

Cheers

 

[Calpha K]

What options are there under "Order Type"?

There's only Limit (as you see it), and Market. Hence, I have been asking on the thread, where is this "Stop Limit" that you guys keep advocating? Because I don't see it at all...

 

[hwckhs]

There's only Limit (as you see it), and Market. Hence, I have been asking on the thread, where is this "Stop Limit" that you guys keep advocating? Because I don't see it at all...

I think you are confused. Nobody ever said SC offers stop-loss or stop-limit. You were the one who bought these up initially:

24-06-2020, 11:12 AM:

Hi all, how can I put a STOP LOSS in SC?

When I clicked on SELL, it shows only Limit or Market, but there's no STOP LOSS option.

Does the Sell Limit function as a stop loss? But according to my understanding, isn't a limit and stop two different things?

Appreciate any advice please.

25-06-2020, 12:32 AM:

Hi all,

Is there any other recommended brokerage, but with STOP LOSS function?

Standard Chartered doesn't seem to offer STOP LOSS, all I see is stop limit.

Any advice would be appreciated.

As you show in your screenshot, the only sell order types available in SC are limit and market.

 

[Calpha K]

So you're saying I can't set a stop loss at all?

How can I protect my positions then?

 

[hwckhs]

So you're saying I can't set a stop loss at all?

How can I protect my positions then?

I don't think anyone here is advocating using stop loss for DCA. We just buy through the dip and hold. That works over the long term.

People use stop loss mainly for trading.

 

[flowerpalms]

So you're saying I can't set a stop loss at all?

How can I protect my positions then?

This not about trading

Posted from PCWX using SM-G973F

 

[swan02]

So you're saying I can't set a stop loss at all?

How can I protect my positions then?

1. Isn't a stop loss a market timing tool ? This is the wrong forum should you believe in timing the market. A person who has found some way to beat the market won't ever let the world know or else the price will reflect such know how.

2. You protect your positions by having a diversified portfolio catered to your risk appetite or centered on a predetermined algorithm 110-age if you are willing to accept that level of risk.

3. Bonds, gold, cash, DCA, diversified equity, long investment time frame, emergency fund, asset allocation are all standard deviation mitigating and do not need monitoring.

4. make up your mind in which school of thought you belong to. If you believe in market timing and that perhaps you are a top 5% investor who has some know how to beat the efficient s&p 500 or a less efficient china and emerging economies, then very well time the market and invest in a trading platform supporting such antics and open the world of derivatives...

I think its a dangerous road unless you are prepared. Even a CFA would have trouble beating the market long term. Get that cert at least before trying.

5. And politely i'll say, that you are certainly not ready given you are unable to figure out something as basic as stop loss by yourself. Keep life simple and focus on asset allocation. Perhaps you should question yourself whether that equity risk level you are taking is too high...you do not need to follow strictly 110-age algorithm. Building up emotional resilience and having a good sleep is more important. Figure out your risk appetite.

If you are a noob investor and has no idea of your risk appetite.

1. just start with pure MBH 100% lump sum or dca all your cash over 3 months, or 6 months into MBH only. Or if you are dealing with a million dollars, 40 percent lump sum, DCA the rest over 12 months.

2. Then buy only equity with your cash savings every month and monitor your emotions.

Starting with a 100% MBH lump sum or short term DCA is likely to still beat someone who DCA their cash into equities/bonds over a long period ie. more than 12 months..with many in this forum doing it over years rarely following 110-age algorithm strictly as their cash sits idle.

3. So given the recent crash, where a health crisis morphed into a financial crisis, from peak to bottom, the MBH lost 4%. You would still keep and not sell knowing that the crisis would be resolved with an influx of liquidity. If you ever sold......perhaps stock investing is not for you.

 

[sylves]

ROM is a 2x-leveraged ETF that tracks the Dow Jones Technology index. It's not a Nasdaq ETF.

Like any other leveraged or inverse ETF, ROM is only for day-trading. Leveraged and inverse ETFs always go to zero over time, because of a thing called volatility decay.

The easy way of explaining volatility decay is:

If the underlying index goes down 5% on day 1, then up 5.25% on day 2, it's flat. But a 2x ETF on the same index will go down 10% on day 1, then up 10.5% on day 2—and it'll end up down 0.5%, even though the index is unchanged.

And that happens every day—so you'll repeat that decay 250 times every year, whether the market goes up or down, by a little or a lot. Half a percent every two days is a bit of an extreme example, but if the ETF decays that much every day, then in a year's time, the index would be flat but the ETF would be down forty-seven percent.

This is not a "probably" thing, it's a "definitely" thing. It's an immutable law of math; it happens because these ETFs promise a multiple of the daily return of the index. It's such a well-known thing that at one time, people were able to make pretty decent money by shorting 2x leveraged ETFs and their corresponding 2x-short ETFs and just going to the pub. And this is why you never, ever, ever hold leveraged or inverse ETFs for any period longer than a day.

Also, on top of everything, ROM pays dividends. And because it's listed in the USA, you'll pay withholding tax on those dividends - 30% of all of it goes straight to the taxman. Not great, Bob.

If you want exposure to the Nasdaq Composite, buy CNDX LN.
If you want exposure to technology stocks specifically, buy IUIT LN.
If you want to punt tech stocks intraday, buy XLK on margin and don't hold it over an ex-div date.

Thanks for the explicit explanation, ST!

 

[sylves]

Do anyone know how do i check the commission i paid for using IBKR margin account?

i tried to check under reports but it doesnt show the daily calculation fee for the margin trade.

 

[Sinja89]

Just a correction, USD.SGD commission is USD 2. The 2.79 you see is expressed in SGD (right side of USD.SGD).

And for buying IWDA, you can lower the commission by changing to tiered pricing instead of fixed pricing. Then the commission is about USD 1.91 instead of USD 5 for typical small investment sums.

Exact cut off where fixed is better is for orders above about 9k-10k usd if I remember the previous discussions correctly.

Wow thanks for the info! how do I change to tiered then ??

 

[CWL84]

Wow thanks for the info! how do I change to tiered then ??

Client portal > Menu on top left > Settings > Account Settings > go to the configuration column on your right and click on the gear icon beside the IBKR Pricing Plan section.

 

[chrisloh65]

Index ETF itself is not ponzi scheme, it is just an investment instrument.

Keep advocating other people to "DCA blindly into index ETFs over long term regardless of market conditions", this strategy itself is a ponzi scheme!

This is why those advocaters are so scare of people critizing such scheme! This strategy will only work if more and more people believe in it and keep buying and buying with whatever spare cash they can invest over the long term in the hope that these people will help to keep pushing up those few index ETFs higher and higher without selling, because once sufficient people start selling, the index ETF price will fall instead of go up. Furthermore, many of these indices pegged by such index ETF are market-cap weighted, so the higher price those large cap stocks go up, the higher their weightage, thus continuing the vicious cycle of pushing up the price of these few index ETFs. So the more the index ETF price go up, the more they are able to convince more people to adopt such ponzi scheme to push the price further up.

You must also understand human emotions and sentiments (or behavioral economics). If the index ETF price won't fall but keep going up or recover very quickly even during recession, it gives more people the false pretext that it is safe to keep throwing money buying index ETFs even when they are over-priced (because there will always be greater fools helping to push the price even higher! That is why must convince all of you must keep buying and buying regardless of stock market conditions, even when stock market and index ETF price is already terribly over-priced!).

The ultimate winners are the early adopters of such ponzi scheme, much like those MLM scheme, where early adopters will cash out first and much earlier and retire rich, while leaving the late adopters to be buying over-priced and even more over-priced index ETFs (if few people are selling but more and more people are buying), thus resulting in diminishing return over the long-term, but late adopters won't know until it is too late because the early adopters keep telling them to look at past 20-30 years and their (the early adopters') returns are so high (yes, because it started from a low base when the early adopters started with low index ETF price and started buying index ETF when doing so is not in vogue yet right?!).

So now you understand why those people strongly advocating "DCA blindly into index ETFs over long term regardless of market conditions" is trying to sell you a ponzi scheme (a vicious self-fulfilling prophecy) and they are adamant to silent critics like me who exposed the "ponzi" part of such scheme?!

I don't get how index etf are ponzi scheme? It is not buying in hope of another fool to pay higher. It is just to milk whatever gdp growth that index has (can be global gdp like iwda or specific country like es3).

Just realize gdp growth may not be relevant (since some index like es3 may not be representative of the country's gdp). Should be milk the average growth of the underlying companies in the index.

 

[hahaman111]

Chris, I understand your point liao. Valid points to think about wor.

 

[Calpha K]

I don't think anyone here is advocating using stop loss for DCA. We just buy through the dip and hold. That works over the long term.

People use stop loss mainly for trading.

This not about trading

Posted from PCWX using SM-G973F

1. Isn't a stop loss a market timing tool ? This is the wrong forum should you believe in timing the market. A person who has found some way to beat the market won't ever let the world know or else the price will reflect such know how.....

Really appreciate the input fellas. Yes I am aware that this is a DCA thread and I am also DCAing myself. But surely, asking if SC provides a Stop Loss is not asking too much? Because we are mostly using SC or IB here...

All I'm asking is how to set a stop at a price I feel comfortable, for liquidating in the future. We talk about buying for the long haul, but we never really discuss liquidating.

If I do burn my fingers doing anything other than DCA, then I do deserve it. But really all I'm asking is an honest question, a learning one at that. We are all here to learn. No need for the bashing, especially if you can't or won't answer the question. Matter of fact, none of you answered the question on whether SC can set Stop Loss at all.

At least Shiny Things had the courtesy and genuinely offered to answer my question albeit it may not follow the philosophy of this thread. I bring no malice towards the thread, but you guys are just straight up,"This ain't trading, sod off" and the like. What's up with that? Such answers are just not helping...so why even bother? I don't get it...

 

[chrisloh65]

I already told you much earlier at here:

https://forums.hardwarezone.com.sg/127969612-post5744.html

24-06-2020, 10:28 PM #5744
chrisloh65
No "Stop Loss" option in SC.
"Limit" is fixed price you want to buy or sell.

Hi all, how can I put a STOP LOSS in SC?

When I clicked on SELL, it shows only Limit or Market, but there's no STOP LOSS option.

Does the Sell Limit function as a stop loss? But according to my understanding, isn't a limit and stop two different things?

Appreciate any advice please.

Really appreciate the input fellas. Yes I am aware that this is a DCA thread and I am also DCAing myself. But surely, asking if SC provides a Stop Loss is not asking too much? Because we are mostly using SC or IB here...

All I'm asking is how to set a stop at a price I feel comfortable, for liquidating in the future. We talk about buying for the long haul, but we never really discuss liquidating.

If I do burn my fingers doing anything other than DCA, then I do deserve it. But really all I'm asking is an honest question, a learning one at that. We are all here to learn. No need for the bashing, especially if you can't or won't answer the question. Matter of fact, none of you answered the question on whether SC can set Stop Loss at all.

At least Shiny Things had the courtesy and genuinely offered to answer my question albeit it may not follow the philosophy of this thread. I bring no malice towards the thread, but you guys are just straight up,"This ain't trading, sod off" and the like. What's up with that? Such answers are just not helping...so why even bother? I don't get it...

 

[888888888888]

Do you have an RM?