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Old 23-01-2020, 07:03 AM   #1711
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Stocks are doing amazingly well. Just not in singapore
Hi there. Thank you so much for your input. Have bad experience with stocks but maybe it is due to my inexperience. Got burnt. But with economic not fueling up, and stock doing good, would there be a potential pitfall? Do know of some that hang on to stocks though alr depreciated in value but still drawing dividends.
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Old 23-01-2020, 07:20 AM   #1712
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Topped up your CPF to FRS yet? Your wife?
Those are typically safe returns.
Sorted out your insurance? Especially if you have dependents?

Buy a global index, automate as best you can, check back in 20yrs. =D
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Old 23-01-2020, 07:43 AM   #1713
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Topped up your CPF to FRS yet? Your wife?
Those are typically safe returns.
Sorted out your insurance? Especially if you have dependents?

Buy a global index, automate as best you can, check back in 20yrs. =D
Hi there, I did not top up my FRS as I am not sure if I would make another property purchase in future as an investment. I did not load too much insurance on my kids. Only bought 200k on my life and my spouse. And also covered the kids life so they will not need to pay high premiums then.
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Old 23-01-2020, 09:19 AM   #1714
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Now that we are experiencing a slow down. Do you foresee any major recession in the way? No one knows for sure when but what is your guess?
According to the available data, the manufacturing sector in Singapore is already in recession, and the rest of the economy is roughly moving sideways. The government is forecasting GDP growth of 0.5% to 1.0% for 2020, less on a per capita basis (total population generally increases slightly due to net inward migration). That seems like a reasonable forecast to me.

As far as "black swan" events, if the Chinese and Hong Kong governments don't honor the wishes of the people of Hong Kong, then Singapore will likely be the primary, one-time beneficiary of turmoil there. Let's all hope that doesn't happen.

Also, what are some safe investments at this point of time that we could look at? Stocks are not doing well.
Stocks are doing amazingly well. Just not in singapore
Actually, the Straits Times Index (STI) stocks have performed fairly well. State Street Global Advisors has very recently published the standard performance data through year end 2019 for their STI stock fund, ES3, and here it is (annualized, dividends reinvested, net of estimated costs):

1 Year: 9.00%
3 Year: 7.29%
5 Year: 2.53%
10 Year: 4.07%
Inception (April 11, 2002): 6.93%

That's pretty decent, actually. I think long-term Singapore dollar-oriented investors should be quite satisfied with that record so far.

Property might crash. What are other alternatives? With Ammo of 500k cash and 1 hdb (first purchase) worth 500k fully paid. �� mid 30s
Assuming your insurance necessities are covered and you keep some emergency reserve, why not just dollar cost average into the "standard" 3 fund formula? What's wrong with that?

I would not have rushed to pay off your HDB unit (presumably financed with very cheap dollars) as you evidently did, but what's past is past.

Insurance necessities generally mean:

1. Term life insurance if you have one or more dependents, although maybe you can self-insure now;

2. Disability Income Insurance (DII);

3. A basic Integrated Shield plan (e.g. Great Eastern's Supreme Health B Plus assuming you're a citizen; extra cost/higher level plans are insurance luxuries);

4. Travel medical insurance if you venture outside Singapore.

The "three fund formula" typically means:

A. MBH for the bond leg;

B. ES3 or G3B for the local stocks leg;

C. IWDA or VWRA for the global stocks leg.

These funds are not appropriate for U.S. persons, and this list is based on having the legal ability and expectation to retire in Singapore. I personally don't feel comfortable having more than 20% of your portfolio in ES3 or G3B until you get much closer to retirement age, but there's a friendly disagreement on that point.

Have bad experience with stocks but maybe it is due to my inexperience. Got burnt.
What happened? What did you do?

But with economic not fueling up, and stock doing good, would there be a potential pitfall? Do know of some that hang on to stocks though alr depreciated in value but still drawing dividends.
Sure, stock prices could go down. Since you're in your 30s, retiring ~30 years from now, and dollar cost averaging into age appropriate, prudent investments, you would be/should be very happy if stock prices fall while you're buying. That means you're getting a better deal.

Do you buy more apples at the supermarket when the price of apples goes up, or do you buy a few more apples when they're on sale? Stocks are no different, and dollar cost averaging means you buy more shares when the price is lower and fewer shares when the price is higher.

Topped up your CPF to FRS yet? Your wife?
Those are typically safe returns.
Sorted out your insurance? Especially if you have dependents?
Buy a global index, automate as best you can, check back in 20yrs. =D
Hi there, I did not top up my FRS as I am not sure if I would make another property purchase in future as an investment.
Oy vey.

Currently your approximate net worth is roughly S$1 million, and half that net worth is already in directly held Singapore real estate. And you just got through fretting above that real estate could crash. (Yes, it could!) So do you want to raise your investment exposure to Singapore real estate from ~50% to...well, what do you feel comfortable with?

I think Okenba might have a good idea here for the initial bond/bond-like portion. Assuming you maintain adequate or better liquidity, it's tough to beat 4% Special Account interest and with tax relief on up to $7,000 top ups (one for yourself, and another $7,000 total when topping up one or more qualified family members' SAs/RAs). MBH, the bond fund I listed above, almost certainly won't beat 4% SA. There are also MediSave top ups for tax relief if you can squeeze them in, and I like those better, actually, when you're earlier in your career, as you are.

I did not load too much insurance on my kids. Only bought 200k on my life and my spouse. And also covered the kids life so they will not need to pay high premiums then.
This last bit doesn't make sense to me. Children don't have dependents, and term life insurance at circa age 30 when they start families and have dependents is not at all expensive. And nobody is paying any premiums for insurance they don't need for the ~30 years before they need it, and that means their parents (and future benefactors) -- you -- are that much wealthier and can spoil them and their children (your future grandchildren) even more.

Last edited by BBCWatcher; 23-01-2020 at 09:22 AM..
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Old 23-01-2020, 10:11 AM   #1715
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Hi there, I did not top up my FRS as I am not sure if I would make another property purchase in future as an investment. I did not load too much insurance on my kids. Only bought 200k on my life and my spouse. And also covered the kids life so they will not need to pay high premiums then.
Kids don't have dependents and generally don't need insurance. Do your own due diligence because some say that locking in their insurability is worthwhile.

You may wish to think more about your own insurance. Especially if your spouse is not working. Even if your spouse is working, your household loses half their income should you pass on. If you have young kids, your spouse would need to support them until they are old enough to earn for themselves. Would your insurance be of sufficient help for your spouse to do so? (Having said that, your assets also serve as a form of 'insurance', so with 500k and a fully paid mortgage, you may actually be okay. *shrug*)
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Old 23-01-2020, 07:39 PM   #1716
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Chinese authorities have effectively shut down the city of Wuhan, the city of about 11 million people where a novel strain of Coronavirus was first detected in humans late last year. This strain's closest relative is the SARS virus which also causes flu-like symptoms, sometimes quite severe. This new strain is not well understood yet, but it is human to human transmissible and, like SARS, can sometimes be fatal.

I'm fairly optimistic that public health authorities in China and elsewhere will handle this outbreak better than their predecessors (mis)handled the 2003 SARS epidemic and that they'll have the support they need. One hard lesson learned from SARS is that everybody needs to be sharing accurate information as soon as they have it, and China seems to be doing that. For example, Chinese public health authorities were able to get this strain isolated and share its genome quickly, and now public health organizations can detect this strain from patient samples. It took years to get that far with HIV, and all this diagnostic progress happened in days, really.

The vast majority of news reports don't have any macroeconomic or financial market impact except perhaps to high frequency traders, and usually not even then. This one is a possible exception since the SARS epidemic did have a medium-term impact on the real economy, especially regionally. We'll see, but I think China and the rest of the world will be OK.
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Old 24-01-2020, 09:18 PM   #1717
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Hi BBCW,

I am trying to rationalize by number of bank accounts/credit cards I have. Currently I have the following.

DBS bank A/C +CC
SCB bank A/C +CC
HSBC bank A/C +CC
ICBC bank A/C +CC
CIMB bank A/C +CC

CIMB used to be good when their CC had high cash back and also low currency conversion fees. But those have changed. Now the only good thing about CIMB seems to be zero incoming foreign ccy TT. But I believe ICBC also has zero incoming foreign ccy TT

http://v.icbc.com.cn/userfiles/Resou...f_May_2016.pdf

So, I am considering closing CIMB credit cards and the bank accounts. Do you see any good reason to keep them?

Thanks in advance!
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Old 24-01-2020, 09:47 PM   #1718
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So, I am considering closing CIMB credit cards and the bank accounts. Do you see any good reason to keep them?
CIMB credit cards are annual fee free for life. I don’t see the harm in keeping one.
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Old 29-01-2020, 08:19 AM   #1719
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Hi BBCW, could u advise which stock broker is the cheapest for buying Singapore stocks using SRS funds?

Thanks
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Old 29-01-2020, 09:37 AM   #1720
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Hi BBCW, could u advise which stock broker is the cheapest for buying Singapore stocks using SRS funds?
There are some other threads on that. FSMOne appears to be generally pretty competitive for these purposes, at the moment.
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Old 29-01-2020, 10:24 AM   #1721
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From what I see FSMOne does not broker with SRS funds.
The brokers that do work with SRS funds are pretty much all the same rates at ~0.28% with ~$25 minimum commission. I don't think you can go wrong with any one of them.

Me, I use DBS Vickers
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Old 29-01-2020, 11:25 AM   #1722
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hi BBCWatcher, i have another noob question.

As i know nothing abt investing and im doing it really to make my money work harder for me so that i can save up for retirement in like 15 to 20 years, does it make sense that I juz go with roboinvesting app like stashaway? or its better that i go with buying IWDA or VWRA?
*both employing the Dollar Cost Averaging strategy.

my considerations are: Stashaway seems to be super easy to use, dont need to worry abt exchange rate in the next 15 to 20 years when i finally wanna sell, potentially gives similar returns to investing in VWRA or IWDA. But im not so sure abt the sustainability unlike the conventional VWRA or IWDA where i know exactly what im buying into.

Thanks!!
StashAway buys US domiciled ETFs in USD, so it is affected by the exchange rate. It is also affected by 30% div withholding tax, and potentially estate taxes if you pass on.
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Old 29-01-2020, 11:51 AM   #1723
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Actually, the Straits Times Index (STI) stocks have performed fairly well. State Street Global Advisors has very recently published the standard performance data through year end 2019 for their STI stock fund, ES3, and here it is (annualized, dividends reinvested, net of estimated costs):

1 Year: 9.00%
3 Year: 7.29%
5 Year: 2.53%
10 Year: 4.07%
Inception (April 11, 2002): 6.93%

That's pretty decent, actually. I think long-term Singapore dollar-oriented investors should be quite satisfied with that record so far.
I would like to know the returns for MSCI World or S&P500 from 2002 till now.

In the last decade US did better but people forgot in the decade before that SG did better.

Any 17 year return figures?
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Old 29-01-2020, 01:55 PM   #1724
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From what I see FSMOne does not broker with SRS funds.
They do, to some degree anyway.

As i know nothing abt investing and im doing it really to make my money work harder for me so that i can save up for retirement in like 15 to 20 years, does it make sense that I juz go with roboinvesting app like stashaway? or its better that i go with buying IWDA or VWRA?
*both employing the Dollar Cost Averaging strategy.

my considerations are: Stashaway seems to be super easy to use, dont need to worry abt exchange rate in the next 15 to 20 years when i finally wanna sell, potentially gives similar returns to investing in VWRA or IWDA. But im not so sure abt the sustainability unlike the conventional VWRA or IWDA where i know exactly what im buying into.
StashAway buys US domiciled ETFs in USD, so it is affected by the exchange rate. It is also affected by 30% div withholding tax, and potentially estate taxes if you pass on.
All true, plus you pay a pretty hefty fee for whatever convenience they offer, and I really don't think they offer much.

StashAway does have a heck of an online army promoting it, probably because they have a referral program. But I'm not a fan as they're presently constructed.

I would like to know the returns for MSCI World or S&P500 from 2002 till now.

In the last decade US did better but people forgot in the decade before that SG did better.

Any 17 year return figures?
I'm able to find the total gross returns of the Straits Times Index stocks from January 1, 2002, to the present date (as I write this) assuming reinvested dividends and decent fund costs. The way I can do that is to use EWS, which is a U.S. listed equivalent to ES3 and G3B. You wouldn't actually use EWS, but the math works since I'm incorporating a 0% dividend tax assumption.

Anyway, over that interval, EWS returned 8.55% per year. That's in U.S. dollar terms, please note. For a sample S&P 500 index fund (SPY) I get 7.96% over almost the same interval. (I can't quite get the intervals to line up to the exact day, but "close enough.")

That's a pretty arbitrary historical time interval, though. Any particular reason(s) for a January 1, 2002, baseline? Also, I'm rather skeptical that 8.55% figure was actually achievable, especially historically. These figures assume zero dividend reinvestment costs, and that's far, far away from Singapore's reality, especially historically. Please note that these figures assume a one-time investment on January 1, 2002, followed by dividend reinvestments only. They do not reflect a dollar cost averaging strategy.
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Old 29-01-2020, 02:41 PM   #1725
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at a personal level, wont u recommend IWDA or VWRA? or maybe a mix of both?
A mix, no, unless it's "accidental," i.e. you start with one of them then switch your additional investments to another while keeping your existing position.

Take your pick. They're both fine. Flip a coin if you really cannot decide.
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