*Official* BBCWatcher club

[miraclee23]

I haven't comparison shopped that particular situation (one $15,300 MBH buy per year), but a cost of $8.80 for that sort of transaction seems reasonable to me.

If I can add on, i use Stashaway for SRS investment, they charge only usd1 for every transaction (be it buy, or sell). So its a good deal for those who make very minimal transactions.

 

[BBCWatcher]

If I can add on, i use Stashaway for SRS investment, they charge only usd1 for every transaction (be it buy, or sell). So its a good deal for those who make very minimal transactions.

No management fee if you’re only holding ETFs, correct?

 

[miraclee23]

No management fee if you’re only holding ETFs, correct?

Correct.

 

[sylves]

like to seek advice on what you will do with your idle cash right now? interest rate from banks are so damn low that it cant beat inflation but stock market seems to be overpriced to enter.

 

[celtosaxon]

like to seek advice on what you will do with your idle cash right now? interest rate from banks are so damn low that it cant beat inflation but stock market seems to be overpriced to enter.

I think the more important question is: how did you end up with this idle cash in the first place?

The reason I ask is because I used to hesitate and let cash build up in my early years of investing… and looking back, it was a huge mistake. I would have been so much better off today had I just put on a blindfold and put all of my spare cash into the market each month with discipline.

How did I fix the problem? I took my cash pile and divided it by 10 and added 1/10th to each regular DCA from my salary.

That might mean triple or quadruple your normal DCA amount, but you have to think long-term. If you have an even larger cash pile, divide by 20 if you feel more comfortable. Should there be a market downturn between now and when your cash pile is deployed, you can step up the pace or dump it all in. But, you have to take action and get disciplined… don’t slip back.

 

[sylves]

I think the more important question is: how did you end up with this idle cash in the first place?

The reason I ask is because I used to hesitate and let cash build up in my early years of investing… and looking back, it was a huge mistake. I would have been so much better off today had I just put on a blindfold and put all of my spare cash into the market each month with discipline.

How did I fix the problem? I took my cash pile and divided it by 10 and added 1/10th to each regular DCA from my salary.

That might mean triple or quadruple your normal DCA amount, but you have to think long-term. If you have an even larger cash pile, divide by 20 if you feel more comfortable. Should there be a market downturn between now and when your cash pile is deployed, you can step up the pace or dump it all in. But, you have to take action and get disciplined… don’t slip back.

I received a serverance payout end of last year when my previous company went through restructuring. Was thinking if i should start DCA now when the price is all time high

 

[celtosaxon]

I received a serverance payout end of last year when my previous company went through restructuring. Was thinking if i should start DCA now when the price is all time high

Ah, that explains it… but the same principles apply: DCA with discipline (or even lump sum if you don’t mind the risks… at least statistically, it’s a reasonable ).

Yes, the market is high, but it can still go higher. Keep in mind that company earnings are also growing by double digits, for S&P 500 companies, the forecast is +15% earnings growth in 2026. If accurate, that means the market could support an increase of 15% in 2026 if valuations stay exactly the same as they are today. However, we also know forecasts are never accurate and anything can happen. This is where the blindfold and time are your two best friends.

 

[ChinoGirl]

If I can add on, i use Stashaway for SRS investment, they charge only usd1 for every transaction (be it buy, or sell). So its a good deal for those who make very minimal transactions.

I noticed from the Stashaway app that there is also a 0.09% operation fee per buy and sell order. This is on top of the USD1 per buy and sell order. This is for the EFF MBH.
May I know if the USD1 is for ETF bought with your SRS?
If there is an 0.09%, then FSM would work out cheaper for me as I plan to invest the lump sum of SGD15,300 per year into MBH.

 

[highsulphur]

I noticed from the Stashaway app that there is also a 0.09% operation fee per buy and sell order. This is on top of the USD1 per buy and sell order. This is for the EFF MBH.
May I know if the USD1 is for ETF bought with your SRS?
If there is an 0.09%, then FSM would work out cheaper for me as I plan to invest the lump sum of SGD15,300 per year into MBH.

I find fsmone hard to beat in terms of commission for large orders

 

[JetStorm]

I noticed from the Stashaway app that there is also a 0.09% operation fee per buy and sell order. This is on top of the USD1 per buy and sell order. This is for the EFF MBH.
May I know if the USD1 is for ETF bought with your SRS?
If there is an 0.09%, then FSM would work out cheaper for me as I plan to invest the lump sum of SGD15,300 per year into MBH.

Can ask why you choose MBH? Since 15300 I assume is your SRS and will be long term, why dont invest in Equities or Equity Etf?

 

[highsulphur]

Can ask why you choose MBH? Since 15300 I assume is your SRS and will be long term, why dont invest in Equities or Equity Etf?

If I have allocation for bond etf in my portfolio, I'll first use funds from my srs to buy those bond etfs and and use cash out of Srs to buy equities to minimise the potential capital gain tax from equity returns.

Of course, if one is all in equities, then it doesn't matter. Just use everything to buy equities

 

[ChinoGirl]

Can ask why you choose MBH? Since 15300 I assume is your SRS and will be long term, why dont invest in Equities or Equity Etf?

Hi,
Highsulphur has helped me to explain

 

[BBCWatcher]

If I have allocation for bond etf in my portfolio, I'll first use funds from my srs to buy those bond etfs and and use cash out of Srs to buy equities to minimise the potential capital gain tax from equity returns.
Of course, if one is all in equities, then it doesn't matter. Just use everything to buy equities

Yes, exactly right.

Step 1: Decide on your overall portfolio allocation. This allocation might be 85% stocks, 15% bonds for a 35 year old, for example.
Step 2: Use your SRS dollars to buy the portion of your portfolio with the lowest expected net returns (the bonds).

That's because future SRS withdrawals might be subject to income tax if they're big enough. But if the withdrawals are smaller, the tax will be smaller (or zero). That doesn't mean you should increase your bond allocation above "what it should be." This isn't a feedback loop. Step 1 should be decided independent of tax considerations. THEN, separately and subsequently, you optimize for tax and other costs.

 

[ChinoGirl]

I find fsmone hard to beat in terms of commission for large orders

Ahhh…I have confirmed with Stashaway that the operation fee of 0.09% is actually the prevailing GST. so this means that Stashaway is cheaper than FSM for my lump sum investment of $15,300. USD1.09 (including GST) for a buy order. Same for a sell order.

 

[highsulphur]

Ahhh…I have confirmed with Stashaway that the operation fee of 0.09% is actually the prevailing GST. so this means that Stashaway is cheaper than FSM for my lump sum investment of $15,300. USD1.09 (including GST) for a buy order. Same for a sell order.

9 cts or 0.09%?

GST is only payable for commission

 

[miraclee23]

Ahhh…I have confirmed with Stashaway that the operation fee of 0.09% is actually the prevailing GST. so this means that Stashaway is cheaper than FSM for my lump sum investment of $15,300. USD1.09 (including GST) for a buy order. Same for a sell order.

Thks for the info!

 

[parkson]

Hi BBC, this has probably been asked many times but what are your thoughts adding in dividend generating stocks vs the usual MBH, VWRA, ES3 for people who are Barista FIRE? Given these people have retired but would still need income and an obvious source would be from a steady stream of dividends like REITs, bank stocks etc. This is compared to gradually drawing down on your portfolio. Assume the usual ETFs would still be the go to, given you expose yourself to concentration risk on dividend stocks.


Thanks for your valuable insights as always!

 

[BBCWatcher]

Hi BBC, this has probably been asked many times but what are your thoughts adding in dividend generating stocks vs the usual MBH, VWRA, ES3 for people who are Barista FIRE?

Same answer: I don’t think it’s a good idea to filter stocks based on how they provide shareholder returns. Retrospectively that’s been a losing bet for at least a while, and I can’t think of any reason why the future will be different in that respect.

Historically so-called ”dividend stocks” were at least perceived as less risky, so applying such a filter (along with holding more bonds) was seen as a way to lower one’s portfolio risk. But the data suggests that hasn’t been true for a while. Dividend paying companies can screw up at least as easily as non-dividend paying companies. And a dividend filter is at least starting to increase sectoral risk nowadays.

 

[Weekender]

Any particular reasons for A35 instead of MBH?

Hi BBC, thank you for highlighting MBH too. I was considering A35 as a security ballast, and hopefully one that still provides better returns that the current FD. Perhaps I should consider splitting and investing in both A35 and MBH?

Consider cutting this part down to one or at most two funds if you can. The fees associated with the CPF Investment Scheme tend to penalize "too many" counters.

Thank you for pointing that out. Okays, will cut down to just two max. Will use my cash savings (non CPF/SRS route) investment route for world indexes i.e. VWRA.

The "best" answer might involve both brokers. Just pull out the fee schedules and see if you can minimize them without getting too complicated.

Thank you. I've went through their sites, materials online and with the help of GPT to dig in deeper on the comparisons, fees and forecasting some of those fees across a 10 year investment. I could see that they both have their own and different approaches in fees. Both seems like great platforms. Am leaning towards FSMOne, even though the total in fees (across a 10 year period) is just a slight tad more.

 

[BBCWatcher]

Hi BBC, thank you for highlighting MBH too. I was considering A35 as a security ballast, and hopefully one that still provides better returns that the current FD. Perhaps I should consider splitting and investing in both A35 and MBH?

I don't think so.

If you want to hold "deep" emergency reserve funds (emergency month #3 onward) in Singapore Savings Bonds, OK, that seems like a good idea. But you don't need to pay a fund manager to do that. Likewise, it's easy to invest directly in other Singapore Government Securities if for some strange reason $200K (per person) isn't enough. And there's also CPF.

If you want a "security ballast," A35 wouldn't be the first addition to MBH that I'd pick. It'd be a multi-currency global bond index fund like CRPA. And/or a sovereign real return bond index fund like IGIL. In other words, you'd be protecting against low risk (but not zero risk) Singapore dollar-specific problems and against high global inflation rates, respectively. Those seem like much bigger risks than the tiny risk MBH and A35 will significantly diverge in their long-term results, except for the variable yield premium that MBH should deliver.