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BBCWatcher 30-08-2019 04:44 PM

Quote:

Originally Posted by gaomu73 (Post 122511122)
Negative interest rates are already in the EU and Japan.

Only a few countries have government bonds with negative nominal yields. Japan is one of them, and Switzerland (not an EU country) is another. The European Union consists of 28 countries (including the United Kingdom at present), and not very many of them have government bonds with negative yields.

Worldwide, at last check, there are 9 countries' governments issuing 10 year bonds with negative nominal yields.

Quote:

Shouldn't we plan for it now or should we wait until it arrive here?
You can plan as much as you want if you like. You can even buy negative nominal yielding Swiss government bonds if you wish, for example. I've got better things to do and more important things to worry about, as it happens.

Quote:

It's wonderful if you are already invested. If you are starting, I'm not sure it's a good idea. There are many newbies reading this forum. I am concerned they will go head in without knowing the consequence.
Consequence(s) of what? Is anybody here planning to buy Japanese government bonds (as another example)?

....Looking across Singapore's current yield curve for primary government debt, nominal yields range from 1.65% to 1.96% (data for August 29, 2019). That's not at all close to zero, actually. However, if you think that nominal yields on these bonds will fall, then what you should do now is to buy a lot of Singapore Government Securities on the secondary market or pile heavily into A35, the Singapore government bond fund. As yields fall, the prices on your bonds will go up, and that'll be wonderful for you. That's not a recommendation, and I'm not making any predictions. However, if that's your forecast, and if you feel confident in your forecast, then that's what you should do, at least in part.

BBCWatcher 30-08-2019 04:50 PM

Quote:

Originally Posted by bullshitregister (Post 122512007)
The two year notes were negative yield for Siemens

OK, that's one.

Look, if you don't like negative nominal yielding bonds, don't buy them!

flowerpalms 30-08-2019 04:57 PM

I will just stick to Shinys book

Es3 + iwda + mbh

gaomu73 30-08-2019 08:42 PM

Quote:

Originally Posted by BBCWatcher (Post 122512253)
Only a few countries have government bonds with negative nominal yields. Japan is one of them, and Switzerland (not an EU country) is another. The European Union consists of 28 countries (including the United Kingdom at present), and not very many of them have government bonds with negative yields.

Worldwide, at last check, there are 9 countries' governments issuing 10 year bonds with negative nominal yields.

In the past, no country issued negative yield bond. It was unthinkable. Japan started because of its economic problem. Switzerland and the EU followed. Today, negative yield bonds are at US$16 trillion, making up 25% of the market. For countries not yet issuing negative yield bonds, the yield is getting lower. The writing is on the wall.
(Could you share the source on the number of governments issuing negative yield bond? If it gets updated regularly, I'm interested to monitor it.)

Quote:

OK, that's one.
It's actually a few, assuming Bloomberg covered all companies.
https://i.imgur.com/mOGsKeQ.jpg
(Credit to bullshitregister for the Bloomberg link)

Quote:

Consequence(s) of what?
What if stock-bond is no longer the optimal construct? It worked for a long time. I get that. Can it work forever? Is it infallible? The financial environment is not static, so how can we assume it will always work? Are there asset classes we have missed presently? Is it possible new asset classes in the future will be a better fit?

BBCWatcher 30-08-2019 10:07 PM

To repeat, if you don't like negative nominal yielding bonds, don't buy them. However, if you are confident in your forecast that more bond yields will turn negative, then you should buy lots of those bonds now.

gaomu73 30-08-2019 10:13 PM

Quote:

Originally Posted by BBCWatcher (Post 122517030)
To repeat, if you don't like negative nominal yielding bonds, don't buy them. However, if you are confident in your forecast that more bond yields will turn negative, then you should buy lots of those bonds now.

I rest my case. Once again, thank you for all the advice. I have personally benefited.

jhyeo_ 01-09-2019 01:57 PM

Hi BBC and all,

I’m looking to get some exposure to China/Hong kong markets hence considering to long HSI etf.

Any difference in getting 3115 and 2800?

BBCWatcher 01-09-2019 07:29 PM

Quote:

Originally Posted by jhyeo_ (Post 122541722)
Iím looking to get some exposure to China/Hong kong markets hence considering to long HSI etf.

I donít recommend you do this unless you have an unambiguous right of abode in Hong Kong and plan to retire there, but Iíll answer your question.

Quote:

Any difference in getting 3115 and 2800?
2800 still has much more trading volume with likely narrower bid-ask spreads, so it looks like a better choice.

BBCWatcher 01-09-2019 08:47 PM

From time to time I like to provide an update on what Iím doing. So hereís an update as we head into the final months of 2019: nothing different, really. ďSteady as she goes.Ē

At the moment Iím pondering whether to push even more dollars earlier into CPF. Longtime readers may recall that Iím vacillating between FRS-level and ERS-level CPF LIFE, with a little bit of adjustment possible soon depending on which aim point I choose. Iím in a strange (and fortunate) position of expecting lifetime retirement income streams from three high quality governments (household basis, including Singapore), so Iíve been a little hesitant about aiming for ERS-level CPF LIFE. However, Iíve run the numbers and find ERS-level CPF LIFE to be quite attractive even in my atypical situation. So Iím leaning in that direction.

Iíve also decided to exchange a low cost 90%-10% stocks-bonds fund held within a U.S. tax advantaged retirement account for a low cost 100% stocks fund. That exchange obviously slightly increases my total portfolio percentage allocated to stocks. Itís a very efficient way to do some needed portfolio rebalancing because itís tax and cost free, and it should increase the tax advantages going forward. (A basic rule of tax optimization is to keep the highest yielding stuff inside the tax advantaged wrapper.) Although I could have made this exchange over the course of a few months, I did it in one go. It wasnít a big enough adjustment to worry about pacing.

Thatís about it.

flowerpalms 01-09-2019 08:50 PM

I dont know what you are talking about because i am only following shinys book

Quote:

Originally Posted by BBCWatcher (Post 122548183)
From time to time I like to provide an update on what I’m doing. So here’s an update as we head into the final months of 2019: nothing different, really. “Steady as she goes.”

At the moment I’m pondering whether to push even more dollars earlier into CPF. Longtime readers may recall that I’m vacillating between FRS-level and ERS-level CPF LIFE, with a little bit of adjustment possible soon depending on which aim point I choose. I’m in a strange (and fortunate) position of expecting lifetime retirement income streams from three high quality governments (household basis, including Singapore), so I’ve been a little hesitant about aiming for ERS-level CPF LIFE. However, I’ve run the numbers and find ERS-level CPF LIFE to be quite attractive even in my atypical situation. So I’m leaning in that direction.

I’ve also decided to exchange a low cost 90%-10% stocks-bonds fund held within a U.S. tax advantaged retirement account for a low cost 100% stocks fund. That exchange obviously slightly increases my total portfolio percentage allocated to stocks. It’s a very efficient way to do some needed portfolio rebalancing because it’s tax and cost free, and it should increase the tax advantages going forward. (A basic rule of tax optimization is to keep the highest yielding stuff inside the tax advantaged wrapper.) Although I could have made this exchange over the course of a few months, I did it in one go. It wasn’t a big enough adjustment to worry about pacing.

That’s about it.


mmchaisi 02-09-2019 07:27 AM

Shiny book is 101, ok for most and starters. Looks like bbcw has worked in 3 countries and has substantial pensions, CPF, 401K and possibly a UK fund and therefore can be more creative in his investment and retirement planning. It would be interesting for me to know how old you are and your exit strategy when it comes to obligatory liquidating, if you dont mind sharing.

Quote:

Originally Posted by flowerpalms (Post 122548217)
I dont know what you are talking about because i am only following shinys book


flowerpalms 02-09-2019 08:15 AM

That is why for newbies we should be looking into singapore context first before venturing into other global stuff

And in terms of singapore context imo the best is shinys book. Dont understand why some newbie like to complicate things when the system is alrdy there in the book. So just follow lah. Why want to buy what hang seng, amazon, facebook, gold, s&p and mess up ur allocation

And then you realise that if you follow shinys 3 asset portfolio system and allocation strategy, nobody can say you are following blindly. The book stands up for it, the book defends it


Quote:

Originally Posted by mmchaisi (Post 122553654)
Shiny book is 101, ok for most and starters. Looks like bbcw has worked in 3 countries and has substantial pensions, CPF, 401K and possibly a UK fund and therefore can be more creative in his investment and retirement planning. It would be interesting for me to know how old you are and your exit strategy when it comes to obligatory liquidating, if you dont mind sharing.


ChinoGirl 02-09-2019 08:43 AM

Hi BBCWatcher,

I have an initial lump sum of $50,000 for my portfolio.
Allocation is as follows:
65% IWDA via IBKR
15% G3B via POSB IS
20% MBH via OCBC BCIP

Should I be entering into all 3 every month until the $50,000 has been “exhausted”, or once every few months to spread out the cost of commission?

I will set aside SGD2000 per month to my investment chest after I have “exhausted” the $50,000.

SGD1300 IWDA every month (as I will incurring USD10 for value below USD100,000 after my first 3 month, which will end in October 2019)

SGD600 G3B every 2 months (sales charge for purchase is 0.82%)

SGD1600 MBH every 4 months (sales charge for purchase is SGD5. OCBC BCIP only accepts sum in multiple of SGD100).

Rebalancing will be done every May and November.

BBCWatcher 02-09-2019 09:35 AM

Quote:

Originally Posted by mmchaisi (Post 122553654)
Looks like bbcw has worked in 3 countries and has substantial pensions, CPF, 401K and possibly a UK fund and therefore can be more creative in his investment and retirement planning.

This is the "*Official* BBCWatcher club" thread. ;)

My household is atypical in some important respects. I wouldn't say I'm "creative" at all. It's just that I have to apply generalized advice to atypical circumstances. As a notable example, as a U.S. person, non-U.S. funds such as IWDA, VWRA, MBH, and A35 are entirely inappropriate. They, and many other non-U.S. securities and stocks, are "Passive Foreign Investment Companies" (PFICs) under the U.S. tax code. PFICs are really pretty nasty. U.S. persons can invest in them -- it's not illegal or anything like that -- but the reporting is complicated and the tax impact is not good.

Quote:

Originally Posted by ChinoGirl (Post 122554359)
I have an initial lump sum of $50,000 for my portfolio.
Allocation is as follows:
65% IWDA via IBKR
15% G3B via POSB IS
20% MBH via OCBC BCIP

Should I be entering into all 3 every month until the $50,000 has been ďexhaustedĒ, or once every few months to spread out the cost of commission?

Every month is fine at Interactive Brokers and POSB Invest-Saver.

OCBC's BCIP has a S$5 minimum commission (unless you're under age 30, recently opened an account, and are participating at $500/month or less), so if your monthly purchase would be ~$1,600 or more then just go with monthly. If you're at $1,500/month or below then you might consider "batching up" purchases, but that's somewhat tedious since you have to keep providing well timed instructions.

Quote:

SGD1300 IWDA every month (as I will incurring USD10 for value below USD100,000 after my first 3 month, which will end in October 2019)
Yes, that makes sense.

Quote:

SGD600 G3B every 2 months (sales charge for purchase is 0.82%)
Just go with S$300/month. The percentage charge is the same, and you don't have to keep issuing tedious stop/start/stop/start instructions.

Quote:

SGD1600 MBH every 4 months (sales charge for purchase is SGD5. OCBC BCIP only accepts sum in multiple of SGD100).
Yes, that makes sense, unless you're under age 30 and can get the much lower purchase charge. If that is the case, then you'd just go with S$400/month, which is under the S$500/month per counter maximum for that particular under 30 promotion.

Quote:

Rebalancing will be done every May and November.
That's OK, but once a year is also good enough.

killtuna 02-09-2019 11:01 AM

Quote:

Originally Posted by ChinoGirl (Post 122554359)
Hi BBCWatcher,

I have an initial lump sum of $50,000 for my portfolio.
Allocation is as follows:
65% IWDA via IBKR
15% G3B via POSB IS
20% MBH via OCBC BCIP

Should I be entering into all 3 every month until the $50,000 has been ďexhaustedĒ, or once every few months to spread out the cost of commission?

I will set aside SGD2000 per month to my investment chest after I have ďexhaustedĒ the $50,000.

SGD1300 IWDA every month (as I will incurring USD10 for value below USD100,000 after my first 3 month, which will end in October 2019)

SGD600 G3B every 2 months (sales charge for purchase is 0.82%)

SGD1600 MBH every 4 months (sales charge for purchase is SGD5. OCBC BCIP only accepts sum in multiple of SGD100).

Rebalancing will be done every May and November.

Hi ChinoGirl, noticed that we have similar initial lump sum investment and subsequent monthly investment.

I already lump sum MBH of $10,000 with DBS Vickers, and have purchased monthly IWDA $4k (twice a month) and ES3 $3k since July.

I am undecided on the ratio between IWDA and ES3/G3B. Do you mind sharing what is your rationale to put 80% of stock in global?


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