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BBCWatcher 21-10-2018 10:54 PM

Quote:

Originally Posted by celtosaxon (Post 117152379)
Is it possible to get term life 70? I have always assumed it would be almost impossible, or at least impossibly expensive.

Sure, it's possible if the individual is insurable. For reference, a male non-smoker, age 40, can buy S$500,000 of simple term life insurance coverage to age 70 for S$790/year (FWD quotation).

Quote:

Originally Posted by celtosaxon
While we are both alive our combined benefits should be double my SS (2.0). If something happens to me she will get my full SS plus CPF Life (1.5 total). But if something happens to her, I will only get my full SS (1.0 total), that is the weak spot.

Any reasonable prospect of your becoming a CPF member?

Quote:

Originally Posted by ravi2653 (Post 117156759)
Earlier you advised me to buy LG All Season Fund (Standard/Conservative) to gain global exposure through my SRS contribution. As such, I explored couple of platforms to buy it. First one, OCBC online - OCBC website is mentioning 0.88% online sales charge plus TER of 0.5%. Second option, FSM - its mentions 0.25% as management fee plus 0.0875% per quarter (0.35%/year) as platform fee. Both options seems to be not so cost effective. Am I missing something or reading something wrong? Any alternative option to buy this fund?

Check POEMS and DollarDex to see if they offer better deals.

Quote:

Originally Posted by ravi2653
Also during my search for Global investment options available via SRS, I came across INFINITY GLOBAL STOCK INDEX FUND on OCBC online platform with a sales charge as 0.352% only. What you think of this index fund?

You should be able to wipe out that sales charge with a better fund distributor. Beyond that, it's essentially VWRD (the Irish domiciled Vanguard fund) in a SRS consumable fund, with higher expenses of course. It might be the lowest cost way to get VWRD using SRS funds.

Quote:

Originally Posted by BuiBuiZai (Post 117157657)
I'm in my mid 30s, have zero investment besides a fully paid 4br hdb with wife.

Well that's an accomplishment. Congratulations!

Quote:

Originally Posted by BuiBuiZai
1. 300k savings
2. 3k monthly investment budget
3. 20k to 50k annual variable bonus
How should I go about investing? Understand the 80% shares and 20% bonds fixed with global exposure.

At this time of economic or stock performance, 300k to split into multiple interval purchase or full lump sum or should I enter when there is a correction say 30% with 50% funds and follow by DCA with balance funds and monthly wage?

I'm perfectly fine with your splitting that 300K up into chunks and spending 12 months (for example) moving it into age and risk appropriate investments. How about $20K/month for 15 months to make the math easy?

Quote:

Originally Posted by BuiBuiZai
Is it wise to purchase a new 1.5m 3bedroom dual key condo launch at this point of time to take advantage of the leverage potential (hopefully able to rent out studio at 1.5k a month) and balance funds put into stock n bonds purchase follow by DCA?

I don't think so, no. And it appears you don't have enough for the 12% ABSD and 25% down payment.

By the way, why do you have a fully paid HDB unit at age ~35? Did you accelerate repayment on a ~2% mortgage? You know how I feel about doing that, right? It's "water under the bridge" at this point, but OK.

BBCWatcher 21-10-2018 11:29 PM

I am impressed with John Bogle, the 89 year old founder of Vanguard, and his major contributions to the democratization of stock and bond investing. Morningstar's Christine Benz periodically interviews Bogle to get his views on the markets and on investing, and her latest interview with him is available here.

Here are some highlights of Bogle's current views:

1. He thinks stocks have done really extraordinarily, unusually well since Vanguard was founded, and he believes it's prudent to forecast a more modest long-term return on stocks when doing your financial planning. If he's too pessimistic, then you'll have the happy problem of being "too wealthy," but he thinks you should plan for a lower yielding world.

2. He doesn't think it's particularly necessary for U.S. investors to buy non-U.S. listed stocks, pointing out that U.S. listed stocks are quite globally oriented already. He also has advice on capping exposure to emerging market stocks.

I would point out that this advice doesn't translate to Singaporean investors and SGX stocks, since the SGX isn't at all like the U.S. markets. Translated for Singaporean investors, he's basically saying that IWDA is fine, and don't worry too much about the emerging markets.

3. He points out that funds with high turnover -- actively managed funds, notably -- incur significant trading expenses that are not reflected in the reported management fees. Those costs can really hurt investors, especially in the lower yielding world he forecasts. So don't look only at the reported expense figures, but also look at the fund management philosophy, turnover, and of course buying and selling costs (including any currency conversion costs). There's not much you can do to pick stocks and to time markets, but you certainly can control costs by making wise investment decisions among the available choices.

viventa 22-10-2018 01:17 AM

Quote:

Originally Posted by BBCWatcher (Post 117162867)
1. He thinks stocks have done really extraordinarily, unusually well since Vanguard was founded, and he believes it's prudent to forecast a more modest long-term return on stocks when doing your financial planning. If he's too pessimistic, then you'll have the happy problem of being "too wealthy," but he thinks you should plan for a lower yielding world.

How modest is "modest", though? 4% to 6% growth per year for VWRD? By parity, I presume we should be expecting something like a paltry 2% to 4% for STI ETF...

BuiBuiZai 22-10-2018 10:13 AM

Quote:

Originally Posted by BBCWatcher (Post 117162181)
I'm perfectly fine with your splitting that 300K up into chunks and spending 12 months (for example) moving it into age and risk appropriate investments. How about $20K/month for 15 months to make the math easy?

300k entirely into 1 IWDA even if no intention to go into bonds?

Quote:

Originally Posted by BBCWatcher (Post 117162181)
By the way, why do you have a fully paid HDB unit at age ~35? Did you accelerate repayment on a ~2% mortgage? You know how I feel about doing that, right? It's "water under the bridge" at this point, but OK.

Yes, accelerated payment to avoid the 2% mortgage. Believe you understand the traditional chinese mindset of being debt free.

Quote:

Originally Posted by BBCWatcher (Post 117162181)
I don't think so, no. And it appears you don't have enough for the 12% ABSD and 25% down payment.

If i were to go ahead with the condo purchase below will be the financial plan, please point out if you think any of them are detrimental to earlier retirement.

1. Intend is to sell 300k HDB and buy 1.4m~1.5m Condo. This free up more cash and at the same time avoid ABSD

2. First 5% + 20% amounting to 400k (incl 4% BSD) via cash
--> This is to avoid 2.5% CPF accrued interest + ~2% mortgage loan interest

3. Balance 200k cash to invest into IWDA + SGS/SSB

4. Monthly mortgage of 4k via cash repayment

5. Yearly excess cashflow from Wage less Expenses+Mortgages of <50k to invest into IWDA + SGS/SSB (with 3 months wage set aside for emergency funds)

6. Condo purchase comes with a Dual Key studio, assuming rental per month of 1.5k, this will go into IWDA

7. For new launch, there is this progressive payment which leads to more cashflow avail for IWDA + SGS/SSB but lets not overcomplicate matters and shall leave this out

Is the above a sound plan? Or i should really avoid selling HDB buying Condo altogether and invest directly into IWDA/EIMI + SGS/SSB?

Thank you in taking time to look into my concern

BBCWatcher 22-10-2018 10:15 AM

Quote:

Originally Posted by viventa (Post 117164136)
How modest is "modest", though? 4% to 6% growth per year for VWRD?

He's forecasting roughly 5% nominal for U.S. listed stocks. VWRD is much broader than that.

Quote:

By parity, I presume we should be expecting something like a paltry 2% to 4% for STI ETF...
That'd be consistent with Bogle's forecast.

But the better analogy for Singapore is real estate. Real estate had a tremendously bullish run during Singapore's national progression from a developing country to a developed country, into the late 1990s. I suspect that Bogle would (correctly, in my view) caution Singaporean investors that's it's unreasonable to forecast that history will repeat itself in that way.

More generally, you should not take past performance and simply project it forward. You could be looking at a one-time historic market event, and in these two cases (U.S. stock market performance to date, Singapore's real estate market into the late 1990s) you probably are. In your financial planning, you should forecast something more realistic. If you're wrong, you'll be wealthier than you expect. But if you're right, you'll be on track (or closer to on track) in meeting your financial goals.

BBCWatcher 22-10-2018 10:29 AM

Quote:

Originally Posted by BuiBuiZai (Post 117166989)
300k entirely into 1 IWDA even if no intention to go into bonds?

You indicated that you have a portfolio allocation in mind. Assuming that allocation is reasonable, you would follow that.

Quote:

Yes, accelerated payment to avoid the 2% mortgage. Believe you understand the traditional chinese mindset of being debt free.
I do recognize that psychology, but your post then suggested you want to go into debt again immediately ("leverage"). If leverage is such a great idea now, in a rising interest rate environment, then why wasn't it a great idea when you had a low cost, more modest mortgage?

See my point? You thought leverage was a terrible idea for the past several years. Why is it a great idea now, and much bigger?

Quote:

If i were to go ahead with the condo purchase below will be the financial plan, please point out if you think any of them are detrimental to earlier retirement....
Yes, probably, in two ways. You're now living rent free in a HDB unit. A private sector condo is a more expensive way to live, so making that trade means you are effectively, in reality, boosting your consumption of housing. Boosting consumption is not helpful in trying to save for retirement.

Second, let's suppose many years from now you end up with one owner-occupied private condo. And now you're ready to retire. What then? Do you sell the condo in order to liberate its equity? That's an all or nothing transaction. You're not allowed to take 7 to 10 years to sell fractions of your condo in order to rebalance into a more retirement-oriented portfolio that can support decades of living expenses.

I'm assuming here that real estate in Singapore and alternative investments perform comparably. That's a BOLD assumption. But let's assume that for sake of argument. You still have to clear the other two hurdles for this idea to make financial sense.

Quote:

Is the above a sound plan? Or i should really avoid selling HDB buying Condo altogether and invest directly into IWDA/EIMI + SGS/SSB?
I'd vote for that, although I'd prefer a mix of MBH/SSB for the bond leg, and you can add a little ES3 to the mix if you wish. The MBH and ES3 parts assume you intend to retire in Singapore.

....OK, if the only way you can muster enough discipline to save doggedly and reliably, over the long term, is via the "forced" savings of a (rising interest rate?) mortgage hanging over your head, and the psychology of wanting to be debt free, then I suppose that's the best you can do with what's inside your head. ;)

BuiBuiZai 22-10-2018 11:21 AM

Thank you BBCw,

In conclusion, selling off my HDB and going for a Condo should lead to delay in retirement for some lifestyle benefits.

Will consider what you have point out.

XiaoXiaMi96 22-10-2018 05:47 PM

Hi BBC, looking to seek your advice on how to use IB to bid for the 4-weeks t-bills (912796QK8) announced today. I have always used IB to buy/sell etf but never tried to bid for t-bills at auction. After searching for the CUSIP, what price should I enter?

Also I tried buying the t-bills in the secondary market but it never seems to get filled.

Thanks a billion.

tan175777 22-10-2018 06:21 PM

accidentally transferred money to gbp settlement account
 
hi, bbc, I am a 22 year old new to investing, recently I wanted to buy some IWDA etf stocks but I transferred money into GBP standard charted settlements account instead of the USD account (i thought trading in the london stock exchange means GBP T T) Should i just transfer(lose 150sgd) or buy other etf?

XiaoXiaMi96 23-10-2018 12:07 AM

Quote:

Originally Posted by XiaoXiaMi96 (Post 117175090)
Hi BBC, looking to seek your advice on how to use IB to bid for the 4-weeks t-bills (912796QK8) announced today. I have always used IB to buy/sell etf but never tried to bid for t-bills at auction. After searching for the CUSIP, what price should I enter?

Also I tried buying the t-bills in the secondary market but it never seems to get filled.

Thanks a billion.

Finally got through to IB live chat, IB does not support participation in ust auctions... any other options? TreasuryDirect is not available for foreign individuals.

BBCWatcher 23-10-2018 01:58 AM

Quote:

Originally Posted by BuiBuiZai (Post 117168151)
In conclusion, selling off my HDB and going for a Condo should lead to delay in retirement for some lifestyle benefits.

The lifestyle benefits are subjective and situational. The private sector condo might be smaller (fewer square meters), for example. It's also possible to end up with less money for furnishing and outfitting, versus having more money to spend on luxuriously outfitting your HDB unit. "It depends."

....But at the very least your "logic" is inconsistent. Debt was horrible and had to be paid off as fast as possible (even though it was a historically low interest rate -- and God forbid if you incurred a prepayment penalty!)....but now debt is wonderful, quadrupled or quintupled, and (most probably) with a higher interest rate? That really doesn't make sense.

Quote:

Originally Posted by tan175777 (Post 117175681)
hi, bbc, I am a 22 year old new to investing, recently I wanted to buy some IWDA etf stocks but I transferred money into GBP standard charted settlements account instead of the USD account (i thought trading in the london stock exchange means GBP T T) Should i just transfer(lose 150sgd) or buy other etf?

Look for SWDA, which is the same thing denominated in British pounds, and buy that instead. In the future you can use U.S. dollars to buy IWDA.

Quote:

Originally Posted by XiaoXiaMi96 (Post 117181309)
Finally got through to IB live chat, IB does not support participation in ust auctions... any other options? TreasuryDirect is not available for foreign individuals.

Yes, Schwab Singapore. You'll need US$25,000 minimum to open, but Schwab lets you buy U.S. Treasuries at auction for zero charge and hold them to maturity also without charge. There will be a higher cost on the currency conversion, but it'll still be quite reasonable. Like IB, Schwab has a custodial account at Citibank Singapore that can receive Singapore dollars via FAST or GIRO (and instantly convert them to U.S. dollars that land in your Schwab account).

Alternatively you could buy funds that hold U.S. Treasuries. BIL (listed/traded in New York) looks OK to me from a distribution tax point of view -- please double check that -- although it'll still be subject to U.S. estate tax if that matters. Blackrock iShares has some London listed/traded U.S. Treasury funds.

whucarezz 23-10-2018 11:23 AM

BBCW

Thanks for the pointer on Schwab

I have approx USD100K in cash sitting in IBKR, which I've just started dutifully plonking into VWRD in bite sized chunks periodically

While I am doing this, there is a sizeable cash balance left idling in my IBKR which is not accumulating interest

What would you recommend we do with these balance idle funds in IBKR (which are earmarked to be plonked into VWRD periodically)?

BBCWatcher 23-10-2018 12:07 PM

Hmmmm....

Well, the U.S. listed/traded ETF "BIL" looks OK to me for these purposes. It's a short term U.S. Treasury bill fund, the costs look fairly low, and it appears it'll be interest tax friendly. The only caveat is that it's probably U.S. estate taxable if that matters, like broker held cash. BIL's share price shouldn't wobble too much given the fact it only holds 4 to 13 week maturity t-bills.

viventa 23-10-2018 01:25 PM

Curious, any thoughts about the recommendations in this piece?

Commentary: You can still retire at 40, even with a longer life expectancy

Of course, past performance is no guarantee of future results, especially in the context of Singapore's stock market. I'm also aware of what BBCW and/or ST would have to say about the author "overselling" REITs. But nonetheless, a few recommendations piqued my interest.

Specifically, the article states:
Quote:

If you have invested in this ETF for the past 10 years, you would have achieved an annualised return of 6.4 per cent. S$100,000 invested in the STI ETF 10 years ago would now be worth S$185,430.

By simply switching to the strategy of buying each STI component in equal weights, you can increase your annualised returns to 7.6 per cent per annum. S$100,000 invested in an equal weighted portfolio 10 years ago would now be worth S$207,440.
Further, it stated:
Quote:

Performance can be improved if you select stocks based on simple value investing measures. If you choose to buy 15 of the highest yielding dividend stocks of the STI based on its last annual report, you would have achieved a return of 12.9 per cent if you had done so in the past 10 years. You can find a table that lists the dividend yield corresponding to each STI stock component in local business publications. Simply choose 15 of the stocks that give out the highest dividend yields, buy them in equal proportions, hold them for a year and repeat this exercise after one year.
These seem to skew more towards active portfolio management than the passive investment strategies which you and ST are in favour of. But given that a portion of our portfolios will still include STI ETFs, is the recommendation of buying the 15 highest yielding divident stocks a sound one? It doesn't seem to take that much more effort compared to the current passive investment strategy that most of us would adopt, and the additional returns are certainly enticing.

XiaoXiaMi96 23-10-2018 02:00 PM

Quote:

Originally Posted by BBCWatcher (Post 117182032)
Yes, Schwab Singapore. You'll need US$25,000 minimum to open, but Schwab lets you buy U.S. Treasuries at auction for zero charge and hold them to maturity also without charge. There will be a higher cost on the currency conversion, but it'll still be quite reasonable. Like IB, Schwab has a custodial account at Citibank Singapore that can receive Singapore dollars via FAST or GIRO (and instantly convert them to U.S. dollars that land in your Schwab account).

Alternatively you could buy funds that hold U.S. Treasuries. BIL (listed/traded in New York) looks OK to me from a distribution tax point of view -- please double check that -- although it'll still be subject to U.S. estate tax if that matters. Blackrock iShares has some London listed/traded U.S. Treasury funds.

Quote:

Originally Posted by whucarezz (Post 117186632)
BBCW

Thanks for the pointer on Schwab

I have approx USD100K in cash sitting in IBKR, which I've just started dutifully plonking into VWRD in bite sized chunks periodically

While I am doing this, there is a sizeable cash balance left idling in my IBKR which is not accumulating interest

What would you recommend we do with these balance idle funds in IBKR (which are earmarked to be plonked into VWRD periodically)?

Quote:

Originally Posted by BBCWatcher (Post 117187564)
Hmmmm....

Well, the U.S. listed/traded ETF "BIL" looks OK to me for these purposes. It's a short term U.S. Treasury bill fund, the costs look fairly low, and it appears it'll be interest tax friendly. The only caveat is that it's probably U.S. estate taxable if that matters, like broker held cash. BIL's share price shouldn't wobble too much given the fact it only holds 4 to 13 week maturity t-bills.

Thanks BBC, I'm actually in similar position as whucarezz. Going Schwab would mean switching to SGD, withdraw, fund Schwab, go USD again, so not feasible. Will take a look at BIL, not sure if it'll work like laddering 4-weeks t-bills.


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