Official Shiny Things thread—Part III

[cfleee]

It’s a broker handling company issued shares. But in any case I get your point and I just checked also that the receiving bank account must be in my name, so that rules out Transferwise I suppose. Thanks again for the help!

Ah, yes, that won't work. You'll just have to make the best out of whichever local bank accounts you have or can open. I looked into a similar issue but with a U.S.-based ESPP administrator and the conclusion was to just eat the (international) wire transfer costs if you don't have a domestic bank account there. The other bank-specific threads might be more useful to ask for experiences and fees receiving EUR wire transfers, though whether there are any correspondent bank(s) and fees involved does depend on both ends of the transfer.

I do wonder if you can receive EUR (or USD) wire transfers into a DBS MCA account for S$10 flat rate, and then send it out using $0 DBS Remit to Transferwise.

 

[jugzter]

Global bonds

Hi Shiny Things,

As I don't know yet where I'm going to retire, I'm planning to add VAGU/AGGU as my global bond portion. What are your thoughts on them? I think they provide good diversification across different geographies, credit, and term factors. And they should be more stable compared to corporate bonds ETFs, as they overweight U.S. Treasuries.

I'm not looking for income from the bonds, but rather as portfolio ballast and as dry powder when rebalancing.

Thanks in advance!

 

[swan02]

Though you didn't ask me, I think at least you might be interested in some figures that you can make your decision yourself.

The recent crisis taught us a lot. Between 19/2 to 20/3 converted into SGD terms

1. AGGU (hedged USA)=-1.06% (duration 7.13 years)
2. IGLO = +2% (duration 8.7 years)
3. A35 = no change (duration approx 8 years)

Investment grade
4. CORP=-10.67%. YTM 1.58%
5. MBH=-3%. YTM ? 2.4%-although likely lower but awaiting update.

Noteworthy how IGLO could over perform in a crisis which I deduce from it having a slight longer duration but likely it is because it has greater SAFE HAVEN currencies in USD and JPY than AGGU.

Notice MBH vs CORP. I would take MBH over CORP, an illustration that MBH isn't a wholly investment grade corporate bond, but a quasi Safe haven+Corporate bond feature giving it excellent risk adjusted returns.

Another e.g. superior risk adjusted return index by taking note how S&P 500 only lost approx 30% in SGD terms unlike vs the rest of the world even at a high valuation level.

So in your asset allocation, you would realise that you will prolly need more safe haven bonds allocation in either or all in percentage form or quality or duration if you hold poor risk adjusted indexes such as the STI or emerging economies.

Hi Shiny Things,

As I don't know yet where I'm going to retire, I'm planning to add VAGU/AGGU as my global bond portion. What are your thoughts on them? I think they provide good diversification across different geographies, credit, and term factors. And they should be more stable compared to corporate bonds ETFs, as they overweight U.S. Treasuries.

I'm not looking for income from the bonds, but rather as portfolio ballast and as dry powder when rebalancing.

Thanks in advance!

 

[5408854088]

this article compares VT, IWDA, and DFA World Equity Fund. any thoughts?

VT has lower expense ratio, forex risk, 30% dividend withholding tax, estate tax, dividend distributing, brokerage fees.

IWDA has lower expense ratio, forex risk, 15% dividend withholding tax, no estate tax, dividend accumulating, brokerage fees.

DFA World Equity Fund has higher expense ratio, wrapper fee, no forex risk, has 30% dividend withholding tax, no estate tax, dividend accumulating. Endowus has no platform fees, MoneyOwl is waiving it.

https://investmentmoats.com/money/invest-dimensional-fund-advisors-dfa-funds/

 

[shallow]

Hi all, recently I had a windfall of about $10k and I wish to fully deploy it into the market as I have no need for it at the moment. I understand lump sum is usually the best method for deployment but I am a little bit nervous about doing lump sum this close to equity at ATH. AA would be about 90/10.

Instead, I would most likely be putting $5k lump sum and DCA the rest(together with my usual DCA sum) in over 5 months. Would this be a sound strategy?

Sent from Samsung SM-G985F using GAGT

 

[swan02]

1. S&P 500 is only expensive because Tech P/E is like 38. Whereas cyclicals such as finance and industrials are cheap. Tech has a good reasons such as excellent earnings to be this expensive unlike year 2000. Tech hopefully needs to either trend sideways or meet earnings expectations, just don't continue to be exuberant, but with USD weakening, benefiting Tech, this will continue to rise.

2. S&P 500 needs to wait for fundamentals to pick up driving cyclicals up, hence the S&P 500 still has room to run. To wait until vaccine is up etc...you will be too late.

3. that bubble only burst because of Credit tightening.

4. Short term credit tightening won't come anywhere soon

5. but long term bond rates are rising (watch it)...due to expectations of rising inflation. Maybe the FED will target all parts of yield curve driving also 10 year rates down. High rates can be dangerous to all asset classes especially >10 year bonds and gold, silver, bitcoin.

6. When recovery starts, ie vaccine cure and most of us are innoculated, good recovery maybe expected late 2021 on wards, interest rates may start to rise, financials and industrial benefits, inflation steadies.......USD rises

7. It is a sound strategy if 10k indeed to you is a large sum and a large sum out of your overall portfolio.

8. near term risk is really the November election.

10k in a 300k portfolio won't make a diff..hence immediate lump sum

10k out of 50k portfolio does.

10k if you are earning 100k a year doesnt make a diff

10k if you are earning 30k a year does.

10k is nothing to a gambler

10k is everything to a Miser

most importantly is not to suffer buyers regret, go in the middle and you can sleep well.

Hi all, recently I had a windfall of about $10k and I wish to fully deploy it into the market as I have no need for it at the moment. I understand lump sum is usually the best method for deployment but I am a little bit nervous about doing lump sum this close to equity at ATH. AA would be about 90/10.

Instead, I would most likely be putting $5k lump sum and DCA the rest(together with my usual DCA sum) in over 5 months. Would this be a sound strategy?

Sent from Samsung SM-G985F using GAGT

 

[mozzozo]

Hi shinny and all, thinking of doing a 80/20 vwra/sti split. Currently 29 this year. Only planning to add bonds later on at around 40. Is this not advisable?

Hi guys, any comments on this allocation? And if its recommended?

 

[celtosaxon]

Hi shinny and all, thinking of doing a 80/20 vwra/sti split. Currently 29 this year. Only planning to add bonds later on at around 40. Is this not advisable?

Don’t worry... if you were doing anything foolish, you would get plenty of comments. In other words, what you are doing seems reasonable, as long as you are happy with it.

 

[BBCWatcher]

Hi shinny and all, thinking of doing a 80/20 vwra/sti split. Currently 29 this year. Only planning to add bonds later on at around 40. Is this not advisable?

Don’t worry... if you were doing anything foolish, you would get plenty of comments. In other words, what you are doing seems reasonable, as long as you are happy with it.

It's a little more edgy than I'm comfortable with, although I'd be more comfortable if your CPF assets and cash/cash-likes (emergency reserve) are well stocked. A small, low cost bond fund allocation gives you something to rebalance against periodically, and rebalancing has some merit. And there are some people who freak out when their stock portfolio's value falls by half, which has happened (the Global Financial Crisis), and then they do really terrible things like sell all or most of their stock holdings at or near the bottom.

But could you go "all in" with stocks, except for CPF and emergency reserve savings? Sure, you could. It's within the bounds of reasonableness as long as you're prepared for the volatility.

 

[Rknight]

I am just offered the option for DBS:

1) Take cash(dividends)
2) Take share

What is the recommended strategy for shares such as DBS ?

 

[moolala]

It's a little more edgy than I'm comfortable with, although I'd be more comfortable if your CPF assets and cash/cash-likes (emergency reserve) are well stocked. A small, low cost bond fund allocation gives you something to rebalance against periodically, and rebalancing has some merit. And there are some people who freak out when their stock portfolio's value falls by half, which has happened (the Global Financial Crisis), and then they do really terrible things like sell all or most of their stock holdings at or near the bottom.

But could you go "all in" with stocks, except for CPF and emergency reserve savings? Sure, you could. It's within the bounds of reasonableness as long as you're prepared for the volatility.

why CPF? can't touch it til very old...might as well put into stocks
i would max medisave but thats it

 

[foxer77]

might need to consider whether the stock would beat the interest given of 2.6% if using CPF for stock .

 

[swan02]

Anyone familiar, thanks.....

VWRA/VWRD vs IWDA+EIMI combo

Is there an update where perhaps VWRD/VWRA cannot be replicated by an IWDAa+EIMI combo ?

I'm asking because the prices have been moving way off from each other, unless there is some specific differences VWRA/VWRD has ?

 

[hwckhs]

VWRA/VWRD vs IWDA+EIMI combo

Is there an update where perhaps VWRD/VWRA cannot be replicated by an IWDAa+EIMI combo ?

I'm asking because the prices have been moving way off from each other, unless there is some specific differences VWRA/VWRD has ?

I'm no expert. Just sharing what I know.

VWRA - FTSE All World index's developed/emerging ratio is market capitalization weighted (not fixed, currently about 89%/11% according to the factsheet) and include about 90-95% of the investible universe.

IWDA/EIMI - The developed/emerging split is determined by the investor (fixed) and the number of stocks included are not the same (IWDA includes large and mid caps - 85% of listed companies, but EIMI has all including small-caps, so it's a mixed bag).

IWDA/EIMI can be made similar to VWRA if you following the same weightage. Even then, the "correct" ratio you choose today may not be correct anymore tomorrow, next month/year/decade. How different is your IWDA/EIMI result is mainly determined by your ratio. Many people who use IWDA/EIMI seem to overweight EIMI (more than 11%). That might explain the difference.

P/S: The direct comparison to FTSE All World is MSCI ACWI. They track closely to each other if you look at the chart. In LSE, Vanguard's VWRD/VWRA has higher AUM than iShare's MSCI ACWI (ISAC), and therefore is more popular.

Sources:
https://www.ftserussell.com/products/indices/geisac
https://www.msci.com/developed-markets
https://www.msci.com/emerging-markets
https://www.vanguardinvestor.co.uk/...n=equityglobal_ftseallworlducitsetf_fund_link
https://www.ishares.com/uk/individual/en/products/251882/ishares-msci-world-ucits-etf-acc-fund
https://www.ishares.com/uk/individu...-etf?switchLocale=y&siteEntryPassthrough=true

 

[BBCWatcher]

why CPF? can't touch it til very old...

First of all, you’re not supposed to touch your stock investments until (as you put it) you’re “very old.” That’s the whole point, the plan. It’s a long-term play, not a piggybank.

Second, only CPF SA is expressly, generally reserved for age 55+. I wrote “CPF,” not “CPF SA.”

 

[moolala]

First of all, you’re not supposed to touch your stock investments until (as you put it) you’re “very old.” That’s the whole point, the plan. It’s a long-term play, not a piggybank.

Second, only CPF SA is expressly, generally reserved for age 55+. I wrote “CPF,” not “CPF SA.”

well, you are not supposed to but you are allowed to touch it if u need it.
But for CPF, once in, it's locked - u cant changed that.
On top of that, while u can use CPF OA for housing, sg market investment, you still have to pay everything back in - meaning you are still cashflow locked

For stocks, if u liquidate it, u can spend it on other stuff that u need and not restricted by OA rules

Stocks give better returns than CPF in general and also more flexibility. It may fluctuate alot but if u compare to CPF, where u can't touch it per se, its basically the same thing i.e. stocks are down 50% so u wont touch it

thats why i never think of putting money into CPF - i used to when i was young but realised its a trap thus im trying to understand why would ppl put $$ into CPF beyond obvious benefits like tax relief- maybe im missing something, i guess ppl who are not disciplined would benefit from CPF rules...if u have the discipline and have strict rules with ur retirement plans, then imo CPF is just bad

 

[mozzozo]

It's a little more edgy than I'm comfortable with, although I'd be more comfortable if your CPF assets and cash/cash-likes (emergency reserve) are well stocked. A small, low cost bond fund allocation gives you something to rebalance against periodically, and rebalancing has some merit. And there are some people who freak out when their stock portfolio's value falls by half, which has happened (the Global Financial Crisis), and then they do really terrible things like sell all or most of their stock holdings at or near the bottom.

But could you go "all in" with stocks, except for CPF and emergency reserve savings? Sure, you could. It's within the bounds of reasonableness as long as you're prepared for the volatility.

Thanks for the reply bbc and celto. For me now, I guess risk is something that I'm ok with, whatever the drawdown would not affect me that much as that is money I do not need.

Just curious, I've read ST book and all but other than fx risk, I don't see why I should have a allocation to STI. Wouldn't 100% VWRA work?

 

[BBCWatcher]

well, you are not supposed to but you are allowed to touch it if u need it.
But for CPF, once in, it's locked - u cant changed that.

That’s the point!

On top of that, while u can use CPF OA for housing, sg market investment, you still have to pay everything back in - meaning you are still cashflow locked

“Locked” meaning you cannot use those particular dollars for iPhones and beers before age 55, sure. So what?

For stocks, if u liquidate it, u can spend it on other stuff that u need and not restricted by OA rules

Yes, and I didn’t say all assets should be in CPF, did I? I also didn’t say anything about OA specifically.

Stocks give better returns than CPF in general and also more flexibility.

We hope stocks give better returns than CPF assets, but we don’t know that they will. That’s only a forecast, not even a promise.

 

[BBCWatcher]

Just curious, I've read ST book and all but other than fx risk, I don't see why I should have a allocation to STI. Wouldn't 100% VWRA work?

There are a variety of views on this question, and I refer you to prior posts in this thread discussing this question. But you’re correct about the basic logic, that the STI stocks should have stronger correlation specifically with the Singapore dollar than global index stocks. Views vary in how and how much to apply that basic logic.

 

[moolala]

Based on historical returns over 50 years++, stocks have given better returns than the interest by CPF, spy gives 10% annualized, IWDA might be lower but its diversified

i seriously doubt that anyone who is going to touch their retirement fund is gonna to do that for iphones - they probably have serious need and CPF would have limited their choice

The only good thing i can think of about CPF is if ur an undisciplined person

The rest are all negative points