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Shiny Things

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My broker (CIMB) said I can't trade in US exchanges (because of my nationality).

I haven't passed CAR or SGX quiz.

Is there any way I can buy S&P 500 ETF?

Get a better broker. CIMB charges way too much for US execution (0.3% with a twenty-dollar minimum), and also all that punctuation in their name makes my eyes bleed. (Why yes, I have had a few glasses of wine this evening, how could you tell?)

Hi Shiny and gang,

So I guess the general consensus for reinvesting dividends is to accumulate enough then eventually buy more right?

Pretty much, yep.

IWDA and other funds that reinvests dividends automatically don't they pay it out to you, you just get more units, regardless whole or partial (correct me if I'm wrong).

Not quite. With "dividends reinvested" funds, you don't get more units - the value of the units you already have goes up.

Otherwise, though, you're pretty much bang on. The IWDA-style ETFs handle all that dull dividend-reinvestment stuff for you, which is nice.
 

potatoe8

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Pretty much, yep.


Hmm this leads my curiosity to another question.


When you read studies online saying "S&P has returned __% yearly since ___ to ___ with dividends reinvested", how exactly are dividends assumed to be reinvested? Does this mean that dividends are hypothetically immediately reinvested with every payout?


Of course, this isn't possible for most of us because the dividends we receive are too small so we have to wait for it to accumulate then reinvest, so our net return wouldn't be as good as that documented. Also there's the problem of transaction fees with every reinvestment.
 

limster

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Of course, this isn't possible for most of us because the dividends we receive are too small so we have to wait for it to accumulate then reinvest, so our net return wouldn't be as good as that documented. Also there's the problem of transaction fees with every reinvestment.


Are you actually vested in the S&P500 ETF already?

You seem to be nit-picking from the sidelines about very small things?
 

potatoe8

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Are you actually vested in the S&P500 ETF already?

You seem to be nit-picking from the sidelines about very small things?

I was wondering in theory.

Assuming the S&P yields 3% in dividends and 7% in capital appreciation per annum. If you forsake a year till you reinvest your dividends, that's a 0.21% opportunity cost, roughly the same amount as the TER of some ETFs.

Food for thought that's all.
 

Inediblebulk

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CSPX:LX is SP500 ETF with dividend auto reinvested.

Hmm this leads my curiosity to another question.


When you read studies online saying "S&P has returned __% yearly since ___ to ___ with dividends reinvested", how exactly are dividends assumed to be reinvested? Does this mean that dividends are hypothetically immediately reinvested with every payout?


Of course, this isn't possible for most of us because the dividends we receive are too small so we have to wait for it to accumulate then reinvest, so our net return wouldn't be as good as that documented. Also there's the problem of transaction fees with every reinvestment.
 

Dividends Warrior

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this isn't possible for most of us because the dividends we receive are too small so we have to wait for it to accumulate then reinvest, so our net return wouldn't be as good as that documented. Also there's the problem of transaction fees with every reinvestment.

Some companies in Singapore do offer the DRIP option.;)

But yeah.....I usually accumulate around 5k-8k before re-investing.
 

Shiny Things

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Hmm this leads my curiosity to another question.


When you read studies online saying "S&P has returned __% yearly since ___ to ___ with dividends reinvested", how exactly are dividends assumed to be reinvested? Does this mean that dividends are hypothetically immediately reinvested with every payout?

Generally yep. Doing this for indices is a bit funkier, because the index components don't all pay their dividends at the same time, but basically you're right. The dividend reinvestment policy doesn't make a huge difference to the index level, though - maybe a few hundredths to a tenth of a percentage point would be my order-of-magnitude guess. It's a hell of a lot smaller than the magnitude of "being in the market" vs "being out of the market because of nitpicking".

Of course, this isn't possible for most of us because the dividends we receive are too small so we have to wait for it to accumulate then reinvest, so our net return wouldn't be as good as that documented. Also there's the problem of transaction fees with every reinvestment.

Yeah, I get you, but I'm not sure what the issue is. This is an argument for either using dividends-reinvested ETFs (like IWDA) or just sucking it up and dealing.
 

VictorvonDoom

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I was wondering in theory.

Assuming the S&P yields 3% in dividends and 7% in capital appreciation per annum. If you forsake a year till you reinvest your dividends, that's a 0.21% opportunity cost, roughly the same amount as the TER of some ETFs.

Food for thought that's all.

If this is bugging you, then I suggest getting an ETF that reinvests the dividends. I know I did.
 

geddit

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PFF & Schroder div maximiser

Hi Shiny,

1. What are your thoughts on PFF (US)? Very decent dividend of >6% but very boring?

2. Schroder Global Dividend Maximiser. They sell call option for blue chips they own and generate more than 8%? Is that a sustainable model even if equities go into wild swings?
 

Vitus213

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Hi shiny. Sorry this may be off topic but can i know some of your thoughts on this statement posted on my thread by someone :

"2017 coming, you still want to join banking ?
if you trade, you should know that any year in the stock market that ends with a 7 is a bad year.
think of it as a 10 year recession itch, even though it will get shorter.
do note that as a broker whether in house or commission based, your pay is unlikely going to keep up with your peers in other industry"

Would be completing my studies by about that period of time and i am considering to venture into banking/finance industry.
 

Shiny Things

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Hi shiny. Sorry this may be off topic but can i know some of your thoughts on this statement posted on my thread by someone :

"2017 coming, you still want to join banking ?
if you trade, you should know that any year in the stock market that ends with a 7 is a bad year.
think of it as a 10 year recession itch, even though it will get shorter.

Well this bit is numerology rubbish, for starters - there's nothing inherently bad about years ending in 7. In fact 2007 was a pretty great year for banking unless you worked in asset-backed securities; 2008 was where it all went Pete Tong. Whoever's spouting that into your thread is high.

do note that as a broker whether in house or commission based, your pay is unlikely going to keep up with your peers in other industry"

Would be completing my studies by about that period of time and i am considering to venture into banking/finance industry.

Don't go into finance for the money. The money isn't as fabulous as it was before the GFC (though if I'm honest it's still pretty good), and the workload is horrendous whether you're in investment banking or sales-and-trading.

This might not be a bad time to get into the industry, though: you always want to get in to an investment when it's on the nose, and nothing is more on the nose right now than the finance industry.

Maybe pick something that you enjoy doing, instead of something that you feel like people want you to do?

Hi Shiny,

1. What are your thoughts on PFF (US)? Very decent dividend of >6% but very boring?

I don't do single stocks - I'm bad at stock-picking - but the deal with PFF is that it's an ETF of "preferred stocks", basically the US equivalent of stuff like the DBS preference shares that are listed on the SGX.

This is not a terrible investment, but it's not a particularly exciting one either. Pref shares are vulnerable to falls in equities and increases in interest rates, and the tax treatment on those things is going to be deeply unfavourable for you - 30% tax withholding, no arguments, no way to claim it back.

2. Schroder Global Dividend Maximiser. They sell call option for blue chips they own and generate more than 8%? Is that a sustainable model even if equities go into wild swings?
Nope, it's not. If equities start going down, then they'll start losing money on all those stocks they own. They might still be able to pay an 8% "dividend", but that won't stop you losing money on the stocks - and equally if stocks have a huge rally then this fund will underperform too, because their call options will make them give up all their upside.
 

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Hi all. Gonna start on my very first investment on ES3 & A35, so would like to confirm some information first before doing anything.

Current 23 this year, so it would be 87% ES3, 13% A35. So if investing $500/mth;

As of now, the stock price for ES3 is 3.49/3.47, the order quantity will be 125 and order price will be 3.470?



For A35 it will be 56 for order quantity and 1.15 for order price?

Edited: Minimimally must be 1 lot, so Is it ok to purchase 1 lot of ES3 and A35?

But I will enter the "low" of the high/low pricing?
 
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Perisher

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Hi all. Gonna start on my very first investment on ES3 & A35, so would like to confirm some information first before doing anything.

Current 23 this year, so it would be 87% ES3, 13% A35. So if investing $500/mth;

As of now, the stock price for ES3 is 3.49/3.47, the order quantity will be 125 and order price will be 3.470?



For A35 it will be 56 for order quantity and 1.15 for order price?

Edited: Minimimally must be 1 lot, so Is it ok to purchase 1 lot of ES3 and A35?

But I will enter the "low" of the high/low pricing?

unlikely to get ES3 at 3.47, try 3.48.
A35 can try 1.15.

But if you really want the counter, just go 0.01 above market rate and you will get those.
Getting 100 shares of each is fine.
 

Shiny Things

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So if investing $500/mth;

As of now, the stock price for ES3 is 3.49/3.47, the order quantity will be 125 and order price will be 3.470?

Not sure where you got that stock price from; see below. But if the price was 3.47 / 3.49, then you'd put your buy order in at 3.49 or 3.50.

Edited: Minimimally must be 1 lot, so Is it ok to purchase 1 lot of ES3 and A35?

Yep.

But I will enter the "low" of the high/low pricing?

Aha, I think there's some confusion here. The high and the low prices are just the low and high prices at which the stock has traded today; you can't actually buy at the low price.

The prices you need to pay attention to are the "bid" and "offer" (or they might be called the bid and ask, depending on your broker). The "offer" is the one you especially care about - that's the price that someone wants to sell at right now, so that's the price that you can buy at right now.

To get your order done, put the price at (or one cent above) the offer price. When you put your order in, what you're saying is "I want to buy up to this specified number of shares at no worse than this specified price."

So in our example above, if the ES3 price is 3.47 bid / 3.49 offer, and you put in a buy order for 100 shares at 3.50, you'd end up trading with that offer at 3.49, and you'd pay $349 (plus brokerage) for 100 shares of ES3.

Ok. But how do we determine the pricing?

The price is wherever the buyer and seller agree to trade - so in our example above, the price would be $3.49 per share, because that's the price where someone will sell it to you.
 

timewillpass

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Not sure where you got that stock price from; see below. But if the price was 3.47 / 3.49, then you'd put your buy order in at 3.49 or 3.50.



Yep.



Aha, I think there's some confusion here. The high and the low prices are just the low and high prices at which the stock has traded today; you can't actually buy at the low price.

The prices you need to pay attention to are the "bid" and "offer" (or they might be called the bid and ask, depending on your broker). The "offer" is the one you especially care about - that's the price that someone wants to sell at right now, so that's the price that you can buy at right now.

To get your order done, put the price at (or one cent above) the offer price. When you put your order in, what you're saying is "I want to buy up to this specified number of shares at no worse than this specified price."

So in our example above, if the ES3 price is 3.47 bid / 3.49 offer, and you put in a buy order for 100 shares at 3.50, you'd end up trading with that offer at 3.49, and you'd pay $349 (plus brokerage) for 100 shares of ES3.



The price is wherever the buyer and seller agree to trade - so in our example above, the price would be $3.49 per share, because that's the price where someone will sell it to you.

Thanks for the info!

I got the price from the SGX market app. Is it reliable?
 

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Shiny Things

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Thanks for the info!

I got the price from the SGX market app. Is it reliable?

Yep, it uses the same market data feed that everyone else uses. The thing I'm saying is that you don't look at the high and low prices to see where you can trade - you need to look at the "buy" and "sell" prices.
 

Presto80

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Not sure where you got that stock price from; see below. But if the price was 3.47 / 3.49, then you'd put your buy order in at 3.49 or 3.50.



Yep.



Aha, I think there's some confusion here. The high and the low prices are just the low and high prices at which the stock has traded today; you can't actually buy at the low price.

The prices you need to pay attention to are the "bid" and "offer" (or they might be called the bid and ask, depending on your broker). The "offer" is the one you especially care about - that's the price that someone wants to sell at right now, so that's the price that you can buy at right now.

To get your order done, put the price at (or one cent above) the offer price. When you put your order in, what you're saying is "I want to buy up to this specified number of shares at no worse than this specified price."

So in our example above, if the ES3 price is 3.47 bid / 3.49 offer, and you put in a buy order for 100 shares at 3.50, you'd end up trading with that offer at 3.49, and you'd pay $349 (plus brokerage) for 100 shares of ES3.



The price is wherever the buyer and seller agree to trade - so in our example above, the price would be $3.49 per share, because that's the price where someone will sell it to you.

i am quite new to investing too..dont really understand how the pricing works too. does bid and offer only show the price with the most quantity? hence those funny amount is shown?
if you put 3.50, if someone really put his sell offer at 3.50. will you be paying 350 instead?
 

Shiny Things

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i am quite new to investing too..dont really understand how the pricing works too. does bid and offer only show the price with the most quantity? hence those funny amount is shown?
if you put 3.50, if someone really put his sell offer at 3.50. will you be paying 350 instead?

The bid and offer fields show the lowest offer and the highest bid that are currently available.

Let's say someone's currently offering to sell ES3 at $3.50 a share. If you put in a buy order at $3.50, you'll get matched with that sell order, and you'll buy however many shares at $3.50 a share. (I said "$350" because I'm assuming you're buying one lot - 100 shares - so that'll be $350 total.)
 
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