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*Official* Shiny Things club - Part 2

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Old 19-04-2018, 08:52 AM   #16
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Got a scare when thread was locked
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Old 19-04-2018, 09:05 AM   #17
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xyziop wrote:
Thoughts about this article? https://www.betterment.com/resources...vice-is-wrong/

It states that one should jack up his emergency fund by 30% and then invest it into a 40/60 stocks bonds mix.
I agree with the concept of having funds available for emergency, but the means of having it in a liquid savings accounts dont appeal to me personally.

For one, I have credit card balance transfer that is fairly cheap (<6% interest), which is less than the expected returns of my ETF portfolio. I also have a stable job, and am a young age with better health than my peers, with hospitalisation insurance coverage. If really need be, I can approach my parents for any "bridging loan“ kind of arrangement, or liquidate my 200k ETF portfolio and get the money in 7 working day tops.

Again, I understand why people have "emergency funds", but I am comfortable with my stance on this matter. Back to the article, I dont know if that line of thought is what I would subscribe to, since I rather not touch my investment portfolio.
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Old 19-04-2018, 12:39 PM   #18
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I find it quite interesting when people like to become such perfectionists with exact asset allocation, emergency cash balance etc, when the future is so unknown.

The scariest statement I find is when people say cash is a drag on their portfolio. I really hope, we don't see a day when they will regret making that statement.

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Old 19-04-2018, 01:18 PM   #19
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Question

Hi Shiny,

Been lurking in your thread and I have a question.

I'm currently looking at trading with either SCB/IB, however, I do not have 10K USD worth of cash to get started, but I'm looking to put 2K SGD cash into buying IWDA every month.

Would it be better if I:

1. Start trading in SCB until I have 10K USD worth of IWDA shares and transfer them to IB?

2. Or save up 10K USD equivalent of SGD in cash and put them into IB to save on the FX spread entirely.

Thanks!
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Old 19-04-2018, 01:29 PM   #20
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Hi Shiny,

Been lurking in your thread and I have a question.

I'm currently looking at trading with either SCB/IB, however, I do not have 10K USD worth of cash to get started, but I'm looking to put 2K SGD cash into buying IWDA every month.

Would it be better if I:

1. Start trading in SCB until I have 10K USD worth of IWDA shares and transfer them to IB?

2. Or save up 10K USD equivalent of SGD in cash and put them into IB to save on the FX spread entirely.

Thanks!
Are you 25 or younger? If so, you only need USD 3k equivalent to activate your IBKR account. Speaking from personal experience (and I was over 25 when I opened my account), I was able to activate my account with SGD 6k and start investing with IBKR. It's just that I didn't have the option to withdraw any cash from my account until I had in excess of USD 10k equivalent in assets with them.

If you can commit to buying IWDA every month, then you should just start off with IBKR because the monthly cost is the same to you whether IBKR or SCB: USD 10 each month. Unless you have other assets with SCB that can push you into priority banking, that is; at 0.18% with no minimum commission, your SGD 2k investment, or about USD 1,526 will generate commissions of USD 2.74 a month per transaction with SCB. This is before factoring in the USDSGD spread, which based on what forummers who use SCB here have said in the past, runs at about 0.5%.
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Old 19-04-2018, 01:42 PM   #21
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Are you 25 or younger? If so, you only need USD 3k equivalent to activate your IBKR account. Speaking from personal experience (and I was over 25 when I opened my account), I was able to activate my account with SGD 6k and start investing with IBKR. It's just that I didn't have the option to withdraw any cash from my account until I had in excess of USD 10k equivalent in assets with them.

If you can commit to buying IWDA every month, then you should just start off with IBKR because the monthly cost is the same to you whether IBKR or SCB: USD 10 each month. Unless you have other assets with SCB that can push you into priority banking, that is; at 0.18% with no minimum commission, your SGD 2k investment, or about USD 1,526 will generate commissions of USD 2.74 a month per transaction with SCB. This is before factoring in the USDSGD spread, which based on what forummers who use SCB here have said in the past, runs at about 0.5%.
Hi wealth_farmer,

Thank you for the response! I am over 25. If that is the case I will try to open an IB account. I'm looking to invest IWDA for 6 months and ES3 for another 6 months, this will repeat every year. If I were to do this, there will be periods of time where I'm paying IB $10 for nothing. Is this advisable? Or are there better ways to do it?

Last edited by redtees; 19-04-2018 at 01:49 PM..
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Old 19-04-2018, 02:06 PM   #22
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Hi wealth_farmer,

Thank you for the response! I am over 25. If that is the case I will try to open an IB account. I'm looking to invest IWDA for 6 months and ES3 for another 6 months, this will repeat every year. If I were to do this, there will be periods of time where I'm paying IB $10 for nothing. Is this advisable? Or are there better ways to do it?
Hmmm... why six months IWDA followed by six months ES3? Why not IWDA one month, ES3 the next... rinse and repeat? If you're not gonna be investing each and every month into IWDA, then IBKR doesn't make sense.
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Old 19-04-2018, 02:12 PM   #23
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Hmmm... why six months IWDA followed by six months ES3? Why not IWDA one month, ES3 the next... rinse and repeat? If you're not gonna be investing each and every month into IWDA, then IBKR doesn't make sense.
IWDA one month and ES3 the next works for me as well. It's just to make sure that an equal amount of my yearly investment goes into each ETF.

I guess this means that IB is not a good choice if IWDA will only be invested every alternate month.

Last edited by redtees; 19-04-2018 at 02:47 PM..
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Old 19-04-2018, 02:50 PM   #24
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IWDA one month and ES3 the next works for me as well. It's just to make sure that an equal amount of my yearly investment goes into each ETF.

Does this mean that IB is not a good choice if IWDA will only be invested every alternate month? Since I will just be paying them 10 USD for nothing for those months that I don't buy IWDA.
Yeah, personally if I'm on a bimonthly schedule, I wouldn't go with IBKR. Not unless I already have USD100k assets with IBKR which is when they stop charging the USD 10 monthly minimum activity fee. I'd go with SCB in this case.
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Old 19-04-2018, 02:51 PM   #25
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Yeah, personally if I'm on a bimonthly schedule, I wouldn't go with IBKR. Not unless I already have USD100k assets with IBKR which is when they stop charging the USD 10 monthly minimum activity fee. I'd go with SCB in this case.
Understand, thanks!
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Old 19-04-2018, 03:18 PM   #26
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Hi wealth_farmer,

Thank you for the response! I am over 25. If that is the case I will try to open an IB account. I'm looking to invest IWDA for 6 months and ES3 for another 6 months, this will repeat every year. If I were to do this, there will be periods of time where I'm paying IB $10 for nothing. Is this advisable? Or are there better ways to do it?
Hi,

I am over 25 and I opened my account with SGD3k deposit. So it shouldn't be a problem opening one.

Why 6 month though? You can easily make it a monthly contribution with the amount that you are investing i.e. 2k to IWDA and ES3 each per month.
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Old 19-04-2018, 04:48 PM   #27
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The scariest statement I find is when people say cash is a drag on their portfolio. I really hope, we don't see a day when they will regret making that statement.
Cash might be a "drag" on a portfolio, but "So what?"

The basic argument in favor of keeping "cash" -- SSBs, let's suppose -- as an emergency reserve fund is that (a) stock portfolios (for example) could fall in value 30% or more rather quickly if/when there's a financial crisis of some kind, and (b) financial crises are probably correlated with your own personal financial needs, notably that you personally might lose your job as a consequence of a financial crisis.

If you don't mind liquidating highly depressed assets in order to sustain yourself if/when there's a financial crisis with personal impact, OK, so be it. However, a lot of investors/savers are uncomfortable with that idea and would prefer not to be forced to sell during stock market troughs. Yes, OK, that "insurance" might mean they lose a little bit of upside potential, but it's still a reasonable thing to do for many people.

If you agree with this argument, then you might wish to blend SSBs with short-term and medium-term SGSes (government bonds), or a (low cost) government bond fund, to form your emergency reserve fund. That's because high quality government bonds would tend to appreciate during a financial crisis. So you could sell some of those appreciated bonds, lock in those profits, and raise emergency funds -- or at least that's a possibility. An emergency reserve fund doesn't have to be cash in a bank or stuffed under a mattress. It can be in reasonably liquid cash-like vehicles, notably high quality government bonds -- and maybe in a couple or more currency zones.
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Old 19-04-2018, 05:10 PM   #28
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Hi,

I am over 25 and I opened my account with SGD3k deposit. So it shouldn't be a problem opening one.

Why 6 month though? You can easily make it a monthly contribution with the amount that you are investing i.e. 2k to IWDA and ES3 each per month.
That's because I only have 2K SGD to invest every month. I can do something like 1K to IWDA and 1K to ES3 every month, but that would mean incurring quite a hefty amount of fees on both platforms, which I feel I should avoid.

Last edited by redtees; 19-04-2018 at 05:15 PM..
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Old 19-04-2018, 05:23 PM   #29
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That's because I only have 2K SGD to invest every month. I can do something like 1K to IWDA and 1K to ES3 every month, but that would mean incurring quite a hefty amount of fees on both platforms, which I feel I should avoid.
Do you have a bond component, or you're treating your CPF as your bond component? Or you're going with a ballsy 100% allocation to equities?
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Old 19-04-2018, 05:26 PM   #30
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Do you have a bond component, or you're treating your CPF as your bond component? Or you're going with a ballsy 100% allocation to equities?
I'm saving for retirement so CPF will be my bond component.
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