1) Sorry, what is MBH? And why do you not recommend Maybank for non-SG stocks?
2) HKSE because they don't seem to offer LSE.
1a) MBH is an ETF that owns high-grade SGD-denominated corporate bonds. It gives you a higher yield than A35, with very little extra risk - more than compensated by the higher yield on the bonds.
1b) Because Maybank charges dividend and custody fees on overseas stocks that are completely unnecessary. On Singapore stocks they're fine.
2) It's worth the effort to find a broker that does offer the LSE, because the tax benefits of the London-listed Irish-domiciled ETFs are absolutely worth it.
It sems that with the uncertain global outlook ahead, isn't the best decision to park all liquid funds in short term us treasuries or money market funds? (rather than SGD)
Hoooooo boy there is a lot going on here.
The only time that the outlook hasn't been "uncertain" lately was in January when everything was ripping higher, and we all saw how that ended. (The VIX-plosion was this year? 2018's been a LONG year.)
Anyway, if you look hard enough you can always find uncertainties that will give you an excuse to say "no I shouldn't invest right now, I should hide under the bed". That's not what gets you rewarded, though. What gets you rewarded is taking sensible, thoughtful investments, and continuing them regularly as markets go up and down.
ST, can u share your views on the optimal withdrawal strategies? how to accumulate a wealth building portfolio has been discussed to death, but i don't see many people talking about the end game.
i came across this article lately, which highlights some of the issues with the 4% withdrawal rule. any thoughts?
BBCW has some excellent thoughts on the nuance and the detail of withdrawal strategies. Generally though, I think a good rule of thumb is that portfolios can sustain 3% withdrawal rates - not 4% - with only a very small risk of running out of money.
I do have a question I was hoping you could help me with: my bank accounts only seem to allow me to send SGD. As a result, I have SGD in my Interactive Brokers account, which i then have to convert into USD before buying IWDA. This is rather awkward and leaves an open usd.sgd position on my account.
I was wondering if you do the same thing or if you had a workaround?
Thanks!
So you definitely want to send SGD and convert it within Interactive Brokers, because IBKR's FX spreads are so much tighter than you'll get anywhere else. To avoid those annoying USD.SGD positions, just do the following:
- Use Trader Workstation to execute the trade;
- In the trade ticket window, click on the "Advanced +" button. You'll see a field labeled Destination, and it'll say "IDEALPRO". Change that to "FXCONV".
- Submit the trade as you normally would.
Using FXCONV instead of IDEALPRO doesn't create the weird USD.SGD position lines, so you won't have phantom PnL sitting around.
Do you advise that I
1. Keep these stocks at current value and channel new savings into IWDA
Or
2. Sell these stocks at a loss and channel the money into IWDA which is also trading at a good discount now
OR
3. Continue to average down the stocks?
Thanks!
Option 2; flog 'em.
Focusing on the price you bought a stock at is a mistake that a lot of people make. People think "oh if it gets back to a profit I'll just sell it, just bail me out!"... but the market doesn't care about the price you bought it at. The only thing that matters is the price it's at now.
I'd personally sell them off - slowly or quickly, but my inclination would be to do it quickly, get it over with, unless your holdings are a significant chunk of the average daily volume (above 5% or so) - and move the money into IWDA.
Sorry, I think we're talking past each other. "Average down" to me means "gradually liquidate," i.e. sell increments of those share holdings over some number of months until they're all gone. In which case, you have proceeds from those stocks sales to fund your new, reoriented investment flow.
Mmm - I'd disagree with your usage there, even though I'm normally as descriptivist as they come. "Averaging down" to me is "buying more of something that's gone down"; what you're using the term for, I'd probably just say "gradually liquidating".