Official Shiny Things thread Episode V, The Empire Strikes Back

[cassowary18]

why put into CPF? what if inflation goes crazy? then ur stuck with mediocre returns vs a bond whose yield can change

If inflation increases, interest rates will increase which will affect SA interest rates too. SA interest rate is the higher of 4% or (12-month average yield of 10YSGS + 1%), so when interest rates go up to curb inflation, your SA interest rate will go up too.

 

[moolala]

If inflation increases, interest rates will increase which will affect SA interest rates too. SA interest rate is the higher of 4% or (12-month average yield of 10YSGS + 1%), so when interest rates go up to curb inflation, your SA interest rate will go up too.

when did u get this info that IR for cpf is guaranteed to rise? I don't think it is guaranteed and assuming it is likely is not a good way to plan when it doesn't happen.

edit: found it but can't they change this policy as and when they want? there's no writing they will stick to this if CPF is insolvent or some shyt happen

why be stuck on government grace when u can structure it another way?

 

[Xanthyon]

folks it's been a long time since I popped into this forum, good to see some oldies like BBCW still around.

some personal updates for the newbies in case they are wondering if ST's book/advice works (TL;DR - it works).

Summary of my investment journey

• Started investing in May 2018 after reading ST's book
• Invested in IWDA and EIMI thru SCB, bought 2x a year to accumulate $ and save on brokerage cost
• Invested in G3B, A35, MBH thru POSB RSP, monthly DCA since cost is low
• Sold all my local ETFs in Jan 2021, no intention to continue buying local ETFs since the return is too low for my risk tolerance
• Sold all IWDA and EIMI yesterday for a 55% returns (~18% annualized)
• Switched to IBKR this week after my portfolio hitting US$100K

I've just bought the latest edition of ST's book to see what's changed since I purchased the first edition sometime in 2017 (and also to buy ST a coffee as thanks )

 

[highsulphur]

folks it's been a long time since I popped into this forum, good to see some oldies like BBCW still around.

some personal updates for the newbies in case they are wondering if ST's book/advice works (TL;DR - it works).

Summary of my investment journey

• Started investing in May 2018 after reading ST's book
• Invested in IWDA and EIMI thru SCB, bought 2x a year to accumulate $ and save on brokerage cost
• Invested in G3B, A35, MBH thru POSB RSP, monthly DCA since cost is low
• Sold all my local ETFs in Jan 2021, no intention to continue buying local ETFs since the return is too low for my risk tolerance
• Sold all IWDA and EIMI yesterday for a 55% returns (~18% annualized)
• Switched to IBKR this week after my portfolio hitting US$100K

I've just bought the latest edition of ST's book to see what's changed since I purchased the first edition sometime in 2017 (and also to buy ST a coffee as thanks )

What did you buy after you sold everything? Aren't you holding long term those iwda and EIMI?

 

[Xanthyon]

What did you buy after you sold everything? Aren't you holding long term those iwda and EIMI?

I sold everything for a couple reasons

1. I plan to buy VWRA since it's replaced IWDA + EIMI combo. I gotta read ST's latest book to know the exact rationale, but my guess it's probably covering the stocks in both IWDA + EIMI in 1 ETF (lower trade cost), lower expense ratios, better liquidity or a combination of other cost-related factors.
2. It's not possible to transfer positions between SCB and IBKR as they are on different systems (I called SCB to confirm)

So yes I'm still holding IWDA+EIMI long term, just via a new broker (IBKR) and a different product (VWRA)

 

[highsulphur]

I sold everything for a couple reasons

1. I plan to buy VWRA since it's replaced IWDA + EIMI combo. I gotta read ST's latest book to know the exact rationale, but my guess it's probably covering the stocks in both IWDA + EIMI in 1 ETF (lower trade cost), lower expense ratios, better liquidity or a combination of other cost-related factors.
2. It's not possible to transfer positions between SCB and IBKR as they are on different systems (I called SCB to confirm)

So yes I'm still holding IWDA+EIMI long term, just via a new broker (IBKR) and a different product (VWRA)

Ok I can understand what you are doing.

Are you going to buy vwra as soon as possible now?

 

[SibehHL]

Folks, have a question on draw-down technique. I have the same amount vested in Bonds components (MBH, ZHS, ABF, Astrea, SGS Bonds, SSB etc) and ETF (IWDA & VWRD) Also holding some STI shares such as SIA, STI EFT, Banks etc

If I have to start selling (DCA out) to cover my daily expenses in retirement, what should be the first to go? STI shares? Bonds or IWDA/VWRD? Or should it be a combination? It will be a shame to start selling my ETF because the current returns are so much better than the STI shares & Bonds type component. To illustrate my point, the rise in IWDA+VWRD since April 1st (3 days of trading) is sufficient to cover my family's current monthly expenses. But holding the STI shares & Bonds offers better stability and reduced FX exposure. Trying to figure out the what's best suited for me.......

 

[Xanthyon]

Ok I can understand what you are doing.

Are you going to buy vwra as soon as possible now?

Hmm I used to buy 2x yearly (May and Nov) when I was in SCB to save on brokerage cost. However now that I have >US$100K in IBKR and with a much lower brokerage fee, I may just space out the VWRA buys over a few months. That is unless there is a sharp drop in the market like in Mar 2020 then I'll just go all-in.

 

[highsulphur]

Hmm I used to buy 2x yearly (May and Nov) when I was in SCB to save on brokerage cost. However now that I have >US$100K in IBKR and with a much lower brokerage fee, I may just space out the VWRA buys over a few months. That is unless there is a sharp drop in the market like in Mar 2020 then I'll just go all-in.

Would you then run the risk of the market running away from you after you sold out all your iwda and EIMI? If the intention is to switch broker and underlying, you should buy as soon as possible to min the time lag

 

[Xanthyon]

Would you then run the risk of the market running away from you after you sold out all your iwda and EIMI? If the intention is to switch broker and underlying, you should buy as soon as possible to min the time lag

Just think - I sold IWDA at 78.50 with an average cost of 50.4. Do you think I can buy IWDA via IBKR at 50.4? Given the same US$100K, selling via SCB for US$100K (at 50.4 avg cost basis) is different from buying US$100K via IBKR (at 78.5 avg cost basis).

It's also possible that the market tank by 20% tomorrow and if that happens then my gains from the last 3 years will be instantly wiped.

 

[highsulphur]

Just think - I sold IWDA at 78.50 with an average cost of 50.4. Do you think I can buy IWDA via IBKR at 50.4? Given the same US$100K, selling via SCB for US$100K (at 50.4 avg cost basis) is different from buying US$100K via IBKR (at 78.5 avg cost basis).

It's also possible that the market tank by 20% tomorrow and if that happens then my gains from the last 3 years will be instantly wiped.

You are missing my point but never mind.

 

[Xanthyon]

You are missing my point but never mind.

You are missing my point. The point is there is no benefit of dumping all my cash in one shot at this point in time. Rebuying in IBKR over a few months is a better hedge against unexpected market movements.

 

[hwckhs]

You are missing my point. The point is there is no benefit of dumping all my cash in one shot at this point in time. Rebuying in IBKR over a few months is a better hedge against unexpected market movements.

I think it's because you said you sold your IWDA+EIMI in SCB and rebought VWRA in IBKR, we assume you were just transferring with no time lag. Apparently, you sold your holdings and are staying out of market while looking for a good time to buy again. So, I agree with @highsulphur that you are subjecting yourself to market risks.

Just think - I sold IWDA at 78.50 with an average cost of 50.4. Do you think I can buy IWDA via IBKR at 50.4? Given the same US$100K, selling via SCB for US$100K (at 50.4 avg cost basis) is different from buying US$100K via IBKR (at 78.5 avg cost basis).

It's also possible that the market tank by 20% tomorrow and if that happens then my gains from the last 3 years will be instantly wiped.

Just to confirm, you sold IWDA+EIMI (SCB) in one shot, but will re-buy VWRA (IBKR) over a few month?

Let me work your numbers backward. Assuming your holdings were worth US$100k, sold at 78.50 with an average cost of 50.4, that means your costs were actually about US$64k (US$100k / 78.50 x 50.4). If you used the US$100k sales proceeds to immediately buy VWRA in IBKR, your actual cost remains as US$64k as before (ignoring the sell and buy commissions). These are the costs you put in via DCA in previous years. It remains unchanged.

Obviously IBKR would not know about your actual initial costs. I can understand how you will feel to see your new portfolio in IBKR in red, if like you said it drops 20% the next day, but I think that misleads you. With a 20% drop, your new portfolio in IBKR would worth US$80k, but it is still higher than your initial costs of US$64k and you would still be in profit. The new cost price of VWRA does not matter if your sole intention is to switch broker and product (assuming your IWDA:EIMI is 9:1 which is close to VWRA).

Your decision to sell IWDA+EIMI (in one shot?) and re-buy VWRA over a few months can turn out to be a wise or not-so-wise move, depending on how the market moves. No comment on that, but I sincerely wish you good luck.

 

[highsulphur]

I think it's because you said you sold your IWDA+EIMI in SCB and rebought VWRA in IBKR, we assume you were just transferring with no time lag. Apparently, you sold your holdings and are staying out of market while looking for a good time to buy again. So, I agree with @highsulphur that you are subjecting yourself to market risks.



Just to confirm, you sold IWDA+EIMI (SCB) in one shot, but will re-buy VWRA (IBKR) over a few month?

Let me work your numbers backward. Assuming your holdings were worth US$100k, sold at 78.50 with an average cost of 50.4, that means your costs were actually about US$64k (US$100k / 78.50 x 50.4). If you used the US$100k sales proceeds to immediately buy VWRA in IBKR, your actual cost remains as US$64k as before (ignoring the sell and buy commissions). These are the costs you put in via DCA in previous years. It remains unchanged.

Obviously IBKR would not know about your actual initial costs. I can understand how you will feel to see your new portfolio in IBKR in red, if like you said it drops 20% the next day, but I think that misleads you. With a 20% drop, your new portfolio in IBKR would worth US$80k, but it is still higher than your initial costs of US$64k and you would still be in profit. The new cost price of VWRA does not matter if your sole intention is to switch broker and product (assuming your IWDA:EIMI is 9:1 which is close to VWRA).

Your decision to sell IWDA+EIMI (in one shot?) and re-buy VWRA over a few months can turn out to be a wise or not-so-wise move, depending on how the market moves. No comment on that, but I sincerely wish you good luck.

Thanks for explaining because I know I don't have the patience

 

[Xanthyon]

I think it's because you said you sold your IWDA+EIMI in SCB and rebought VWRA in IBKR, we assume you were just transferring with no time lag. Apparently, you sold your holdings and are staying out of market while looking for a good time to buy again. So, I agree with @highsulphur that you are subjecting yourself to market risks.



Just to confirm, you sold IWDA+EIMI (SCB) in one shot, but will re-buy VWRA (IBKR) over a few month?

Let me work your numbers backward. Assuming your holdings were worth US$100k, sold at 78.50 with an average cost of 50.4, that means your costs were actually about US$64k (US$100k / 78.50 x 50.4). If you used the US$100k sales proceeds to immediately buy VWRA in IBKR, your actual cost remains as US$64k as before (ignoring the sell and buy commissions). These are the costs you put in via DCA in previous years. It remains unchanged.

Obviously IBKR would not know about your actual initial costs. I can understand how you will feel to see your new portfolio in IBKR in red, if like you said it drops 20% the next day, but I think that misleads you. With a 20% drop, your new portfolio in IBKR would worth US$80k, but it is still higher than your initial costs of US$64k and you would still be in profit. The new cost price of VWRA does not matter if your sole intention is to switch broker and product (assuming your IWDA:EIMI is 9:1 which is close to VWRA).

Your decision to sell IWDA+EIMI (in one shot?) and re-buy VWRA over a few months can turn out to be a wise or not-so-wise move, depending on how the market moves. No comment on that, but I sincerely wish you good luck.

Thanks for the detailed explanation, I see your point about actual cost. Couldn't see it from vague one-liners.

I decide to rebuy VWRA over a few months since it's what ST recommended in his book anyway. Also, I'm not comfortable to buy IWDA/VWRA in one shot considering it's near/at ATH.

 

[hwckhs]

I decide to rebuy VWRA over a few months since it's what ST recommended in his book anyway. Also, I'm not comfortable to buy IWDA/VWRA in one shot considering it's near/at ATH.

Oh, did he? I don't have the latest version of the book to check.

@Shiny Things suggested (in this thread) to invest lump sums (big bonus, other income, inheritance etc) over a few months, but I doubt he would suggest the same approach for people who want to change from IWDA to VWRA. Maybe you want to check your understanding again, or we need @Shiny Things to confirm.

 

[highsulphur]

Oh, did he? I don't have the latest version of the book to check.

@Shiny Things suggested (in this thread) to invest lump sums (big bonus, other income, inheritance etc) over a few months, but I doubt he would suggest the same approach for people who want to change from IWDA to VWRA. Maybe you want to check your understanding again, or we need @Shiny Things to confirm.

I doubt that's what he recommends. If you are switching brokers or underlying, there shouldn't be any significant time lag. Of course, if one chooses to time the market, then its a different story

 

[celtosaxon]

I fully agree with NOT waiting to reinvest after liquidating in full... this is called a sideways move for a reason, anything else is called market timing which only adds risk - not just market risk but discipline risk. I would would reinvest it all in full without a moments hesitation... keeping time out of the market to an absolute minimum. The only exception is to possibly hold back a small portion for rebalancing only.

 

[iceblendedchoc]

just keep buying instead of trying to time the market. It should be a mindless process. Log in once a month , buy and exit.

Is there an automated command i can use in IBKR instead of logging in once a month to do that?

 

[highsulphur]

just keep buying instead of trying to time the market. It should be a mindless process. Log in once a month , buy and exit.

Is there an automated command i can use in IBKR instead of logging in once a month to do that?

Unfortunately I don't think so.

I executed diligently twice a month most of last year