www.hardwarezone.com.sg

www.hardwarezone.com.sg (/)
-   Money Mind (https://forums.hardwarezone.com.sg/money-mind-210/)
-   -   *Official* BBCWatcher club (https://forums.hardwarezone.com.sg/money-mind-210/%2Aofficial%2A-bbcwatcher-club-5855578.html)

BBCWatcher 11-10-2019 09:20 AM

Quote:

Originally Posted by OneBen (Post 123172241)
I'm saving for retirement and looking for a stable investment if possible.
30 this year and intend to save for a long period. maybe 25 - 30 years.
What would be your recommendations?

And where do you plan to retire?

kram62 11-10-2019 09:54 AM

Quote:

Originally Posted by BBCWatcher (Post 123175034)
And where do you plan to retire?

Not OP but what when one doesn't know where to retire. My wife and I are from different countries with different rights to abode (non overlapping), we are currently settled for the foreseeable future in sg (no time limit for now).

Don't really plan for now to live and/or retire in any of our respective home countries. Where we'll be in 10, 20, 30 years is a big question mark.

So for now I am mostly following the approach to invest in worldwide ETFs (IWDA for starter) with SSBs from last year as emergency fund and starting bond component.

Any other tip for someone who doesn't know where retirement will be?

jagaga 11-10-2019 09:56 AM

I'm saving for retirement and that will be another 30-35 years (currently 28 y.o). SG citizen and most likely retire in SG.

celtosaxon 11-10-2019 11:31 AM

Why do you mention “stable investment if possible” if you have a 25-30 year time horizon?

Would it bother you if your investments lost half their value after 5 years if they still ended up doubling after 20 years?

Generally, the longer your time horizon, the more risk you can (and should) take on, which means less stability in shorter term (greater risk) but higher returns in the longer term (compared with safer investments).

However, if large swings in the market are going to keep you up at night, it may not be worth the roller coaster ride, for you.

Quote:

Originally Posted by OneBen (Post 123172241)
Hi

I'm saving for retirement and looking for a stable investment if possible.
30 this year and intend to save for a long period. maybe 25 - 30 years.
What would be your recommendations? Thanks.


BBCWatcher 11-10-2019 06:30 PM

Quote:

Originally Posted by jagaga (Post 123175626)
I'm saving for retirement and that will be another 30-35 years (currently 28 y.o). SG citizen and most likely retire in SG.

You could certainly go with the "standard three fund package" of a Singapore dollar bond index fund (MBH), a Straits Times stock index fund (ES3 or G3B), and a global stock index fund (IWDA, VWRA, or LCWD). I tend to prefer a 20%-80% split between bonds and stocks (when you're more than 7 to 10 years away from retirement), so in this case MBH would be about 20%. Then I like to keep the STI fund at 20% or less, so let's pick 20% there. Then 60% in global stocks. But that's my preferred split in these circumstances (non-U.S. person, planning to retire in Singapore).

Quote:

Originally Posted by kram62 (Post 123175579)
Not OP but what when one doesn't know where to retire. My wife and I are from different countries with different rights to abode (non overlapping), we are currently settled for the foreseeable future in sg (no time limit for now).

Don't really plan for now to live and/or retire in any of our respective home countries. Where we'll be in 10, 20, 30 years is a big question mark.

So for now I am mostly following the approach to invest in worldwide ETFs (IWDA for starter) with SSBs from last year as emergency fund and starting bond component.

Any other tip for someone who doesn't know where retirement will be?

That's a pretty good combo. You could consider adding some CRPA (multi-currency investment grade corporate bond index fund) into the mix if you wish.

celtosaxon 11-10-2019 10:53 PM

I’ve been thinking about shifting my emerging market exposure more towards Asia. I’ve currently got an 80/20 split between US/EM.

Within EM I’ve got 1/3 in AAXJ [MSCI All Country Asia Excluding Japan] and the other 2/3 in IEMG [Core MSCI Emerging Markets]. I’m thinking about dumping the entire IEMG holding and moving it all into AIA [S&P Asia 50 Index] instead.

The reason is, looking at the last 10 years of returns (I used EEM as a proxy, as it’s almost identical to IEMG) emerging markets outside Asia (plus the notable absence of Korea), puts a real drag on IEMG performance.

The only concern that I have is the S&P Asia 50 Index is not as well diversified, and I will be getting way more Tencent exposure than I would be comfotable holding if it were outside of this ETF. The next best option I can find is GMF but that one is overexposed to China, and that is not my objective.

Any thoughts?

BBCWatcher 12-10-2019 07:40 AM

I’m not a fan of picking favorites based on the rather arbitrary standard of where stocks happen to be listed and traded.

celtosaxon 12-10-2019 10:43 AM

Indexes are usually market cap based, and in almost all cases, the largest listings in any given location are going to be local companies. Sure, there are the few odd exceptions, but overwhelmingly this is the case.

So an investment in China means putting your money into companies like Tencent, Alibaba, China Mobile, CCB, etc. and their rise or fall will be affected by policies, culture and talent of a particular locale, and even the local economy (depending on sales mix).

Now, you could argue that none of this matters and reversion to the mean will eventually take care of any global variability. That theory “might” come true eventually.. but will we see it in our lifetime? If you take the last 100 years of stock market performance between the US and Europe, the US has consistently outperformed over any long-term window you look at. One thing I’ve learned in my 25 years of investing — it is far more likely for winners keep winning than for losers to turn into winners.

Quote:

Originally Posted by BBCWatcher (Post 123188716)
I’m not a fan of picking favorites based on the rather arbitrary standard of where stocks happen to be listed and traded.


RMCWMR 12-10-2019 11:42 AM

Quote:

Originally Posted by celtosaxon (Post 123190617)
Indexes are usually market cap based, and in almost all cases, the largest listings in any given location are going to be local companies. Sure, there are the few odd exceptions, but overwhelmingly this is the case.

So an investment in China means putting your money into companies like Tencent, Alibaba, China Mobile, CCB, etc. and their rise or fall will be affected by policies, culture and talent of a particular locale, and even the local economy (depending on sales mix).

Now, you could argue that none of this matters and reversion to the mean will eventually take care of any global variability. That theory “might” come true eventually.. but will we see it in our lifetime? If you take the last 100 years of stock market performance between the US and Europe, the US has consistently outperformed over any long-term window you look at. One thing I’ve learned in my 25 years of investing — it is far more likely for winners keep winning than for losers to turn into winners.

But then aren't you relying on past data, bearing in mind past data does not influence the future outcome?

celtosaxon 12-10-2019 01:53 PM

To a large extent, everyone investing in stocks is relying on past market performance to decide it is indeed worth the risk. We all believe what goes down must go up (eventually)... in history we trust. Will the next 100 years buck that trend? Anything can happen.. but we must make decisions on what is probable, not what is possible.

Just look at Japan (ticker EWJ) and look at the 20 year performance (Sep 30, 1999 - Sep 30, 2019) and it is -5% over that period. Now look at the US (ticker SPY) over the same period and its up 114%. How long can a person accept subpar performance before throwing in the towel?

Quote:

Originally Posted by RMCWMR (Post 123191348)
But then aren't you relying on past data, bearing in mind past data does not influence the future outcome?


jpcd89 12-10-2019 05:39 PM

Hi BBC,

Do you think it makes sense to convert my traditional 401k to a traditional IRA and use it for the college tuition, unlocking the employer match that I am getting?

BBCWatcher 12-10-2019 06:31 PM

Quote:

Originally Posted by jpcd89 (Post 123195883)
Do you think it makes sense to convert my traditional 401k to a traditional IRA and use it for the college tuition, unlocking the employer match that I am getting?

If you're getting an employer match that means you're employed, and generally you're not allowed to convert that particular 401(k) to an IRA while you're still employed.

However, let's suppose you end employment to attend college (a leave of absence won't do it, generally -- check the plan rules), you convert the 401(k) to an IRA (Traditional to Traditional), and you use funds from the IRA to pay tuition. You can do that, but you have to pay income tax at ordinary rates on the distribution. Be careful on the timing if you can be careful. And you'll likely be better off rolling into a Roth IRA while you're in a low tax bracket (presumably).

Of course, if you need the funds to pay for college then you need them. But if you have other sources of funds, no, I don't think it makes sense. I'd be looking first at whether you can shift into a Roth IRA while you're in a low or zero tax bracket.

....Unless I'm missing something in your question?

jpcd89 12-10-2019 06:57 PM

Quote:

Originally Posted by BBCWatcher (Post 123196479)
If you're getting an employer match that means you're employed, and generally you're not allowed to convert that particular 401(k) to an IRA while you're still employed.

However, let's suppose you end employment to attend college (a leave of absence won't do it, generally -- check the plan rules), you convert the 401(k) to an IRA (Traditional to Traditional), and you use funds from the IRA to pay tuition. You can do that, but you have to pay income tax at ordinary rates on the distribution. Be careful on the timing if you can be careful. And you'll likely be better off rolling into a Roth IRA while you're in a low tax bracket (presumably).

Of course, if you need the funds to pay for college then you need them. But if you have other sources of funds, no, I don't think it makes sense. I'd be looking first at whether you can shift into a Roth IRA while you're in a low or zero tax bracket.

....Unless I'm missing something in your question?

Thanks! Missed the part on transfers only allowed only after employment ends.

BBCWatcher 12-10-2019 07:30 PM

Quote:

Originally Posted by jpcd89 (Post 123196833)
Thanks! Missed the part on transfers only allowed only after employment ends.

Does your employer offer a Roth 401(k) option? If so, and if you’re in a low tax bracket or will be, why not choose the Roth flavor?

Also, you may be able to set up a 529 plan for yourself. Accrued interest, dividends, and capital gains are U.S. tax free when you have a qualified withdrawal from a 529 plan. Also take a look at whether you’re eligible for tax credits such as the American Opportunity Tax Credit and Lifelong Learning Tax Credit.

FrostWurm 12-10-2019 09:58 PM

Quote:

Originally Posted by celtosaxon (Post 123193018)
To a large extent, everyone investing in stocks is relying on past market performance to decide it is indeed worth the risk. We all believe what goes down must go up (eventually)... in history we trust. Will the next 100 years buck that trend? Anything can happen.. but we must make decisions on what is probable, not what is possible.

Just look at Japan (ticker EWJ) and look at the 20 year performance (Sep 30, 1999 - Sep 30, 2019) and it is -5% over that period. Now look at the US (ticker SPY) over the same period and its up 114%. How long can a person accept subpar performance before throwing in the towel?

Before we even start talking about trends, we must accept we are forming our argument with the benefit of hindsight. It is not easy to accept this, but it is important that we do.

Imagine that now is the middle of 1989, and you look at the charts, you would have concluded that Japan was the best performer in the world. In the years right before the crash, there were even widespread speculations that Japan was on track to overtake the US. Clearly that didn't happen, but one certainly would have felt that way in the 1980s.


All times are GMT +8. The time now is 06:30 AM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Copyright © SPH Magazines Pte Ltd. All rights reserved.