*Official* Shiny Things club - Part 2

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nyl3v3

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Settled with POSB IS already! Now I have another question... I am currently actually in US (holding F2 visa). Just to double check I can invest right though I am on student visa (I am not working here, all my monies are from what I have earned in Singapore, if that matters). And... I cannot create SCB account since need to go down to sign documents :( for the time being! In that case, should I create IB account to invest in IWDA instead? 400-500 SGD per month for IWDA is my plan. Or should I wait till I get back to SG end of year to open SCB account? Would IB be better for long term investing? I have been reading the thread back and forth about it still not too sure.

Thanks ST in advance. And whoever have been answering my questions. (Sorry for so many questions too! =:p)
 

ChinoGirl

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Hi everyone,

I need help to decide if I should opt for A35 from POSB-IS or MBH from OCBC BCIP.

OCBC BCIP
-Buying 0.3% of the total investment amount or S$5 per counter, whichever is higher.
-Selling 0.3% of the total sales proceeds or S$5 per counter, whichever is higher.

POSB-IS
- A sales charge of 0.5% will be deducted from investment amount into the ABF Singapore Bond Index Fund. Currently no sales charge for selling.

It looks like POSB-IS (A35) is the platform to go for? Would the better yield from MBH more than compensate the cheaper sales commission of A35 from POSB-IS?
 
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Han Shot First

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Many other countries can and have. There are a few other minor reasons why Ireland happens to be a popular domicile for various funds appropriate for non-U.S. persons.

Singapore probably could, too, but the U.S. government wants a few things in return. Evidently the Singapore government has decided, so far, that it doesn't like the overall deals other countries got via their tax treaties with the U.S. The government's views could change over time -- who knows.

Could you elaborate what things the U.S. government wants in return?

I think a tax treaty with U.S. would be immensely beneficial to citizens of Singapore.
 

revhappy

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In order to retire early, you need to do something really extraordinary or innovative, like earn in high income country and save like crazy and then retire in a low income country. People from the US retire in Latin America.

But I think the risk reward of retiring early is usually not worth it unless you really have some aim in life to do something and that thing needs early retirement and doesn't get you income. Otherwise, you can continue working and bring in money and do a lot of lovely things. Most good things in life need money, especially vacations.
 

BBCWatcher

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Now I have another question... I am currently actually in US (holding F2 visa). Just to double check I can invest right though I am on student visa (I am not working here, all my monies are from what I have earned in Singapore, if that matters).
F-2 is the visa for the dependent of a F-1 student visa holder. Did you mean you have a F-1?

It matters a little because F-1 holders get U.S. Social Security Numbers and F-2 holders don’t — but they can get Individual Taxpayer Identification Numbers (ITINs). Financial institutions can be a little more welcoming to SSN holders, in practice, but an ITIN should be good enough.

And... I cannot create SCB account since need to go down to sign documents :( for the time being! In that case, should I create IB account to invest in IWDA instead? 400-500 SGD per month for IWDA is my plan. Or should I wait till I get back to SG end of year to open SCB account? Would IB be better for long term investing? I have been reading the thread back and forth about it still not too sure.
I have a perhaps surprising recommendation here: neither SCB nor IB at the present time. I would go with Schwab, and let me explain why.

Let’s suppose you’re investing US$350/month and live in the U.S. for 4 years. That adds up to US$16,800 total, and just as a rough estimate we’ll use a little more than half that (US$9,000) for cost calculation purposes — you’ll see that in a moment. And let’s assume a dividend yield of 2%. OK, let’s look at IWDA via IB:

Total brokerage commission: US$480
Total imputed dividend tax: 15% of 8% of US$9,000 (roughly) = US$108
Total fund management expense: 0.8% of US$9,000 (roughly) = US$72
TOTAL COSTS = US$660

OK, now let’s look at Schwab, and we’re going to use SWTSX and SWISX, a pair of mutual funds which you could buy in a 60:40 ratio. Here we go....

Total brokerage commission: zero
Total imputed dividend tax: 30% of 8% of US$9,000 (roughly) = US$216
Total fund management expense: about 0.042% * 4 of US$9,000 (roughly) = US$15
TOTAL COSTS = US$231

I’ve omitted the currency conversion cost since I wasn’t sure whether you already have these U.S. dollars or still have Singapore dollars. If the latter then let’s conservatively assume an additional currency conversion cost at Schwab of 0.4% of US$16,800 — it might be a better, but let’s go with that. That’d be another US$67 of cost, but obviously Schwab would still win.

So I’d pick Schwab here, for now. Then consider selling these mutual funds and immediately buying IWDA at SCB or IB in the future, when you’re “repositioned” and it makes sense to do so.

If you are on a F-2 and you’ve got a spouse on a F-1 who is earning legal income in the U.S., I should do some more checking to see if you and your spouse could make Roth IRA contributions, because that’d likely be even better.

Schwab U.S. offers an extremely lovely free Visa ATM card with its Schwab One brokerage account that’s a bonus. There’s a separate form to get that card (linked to the brokerage account) last I checked. When you open a Schwab One account Schwab offers to open a separate Schwab Bank checking account alongside. And then Schwab waives the US$1,000 minimum opening requirement if you get both. The only problem is you won’t be allowed to keep the checking account unless you keep a U.S. mailing address on it, so it’s up to you whether you want to bother with it. Regardless, go ahead and get the ATM card that’s linked to the brokerage account, even if you also get the equally lovely ATM card linked to the checking account.

And you will want to have/keep a U.S. bank account — a good one, with no minimum balance requirement, low or no fees, and a nice ATM card — but Schwab Bank isn’t best because of the U.S. mailing address requirement. But that’s another discussion for another day.
 
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BBCWatcher

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Could you elaborate what things the U.S. government wants in return?
I really couldn’t say. I’m not a tax treaty expert and won’t be on either country’s hypothetical negotiating team.

Taking a wild guess (only that), the U.S. side would probably be quite uncomfortable with Singapore’s near complete lack of taxation of passive income. (Real estate is a notable exception.) That doesn’t seem like a great starting point for a tax treaty.

I think a tax treaty with U.S. would be immensely beneficial to citizens of Singapore.
Probably, but not to the U.S. Treasury if it’s just a lower dividend tax rate with no other consideration. These arrangements require both sides to win.

How high did it go?
History could repeat itself.
I don’t think World War II is going to be repeated in any substantially similar way. Maybe passingly, superficially similar — unfortunately I cannot rule that out. The Pentagon apparently thinks global warming is the biggest security risk in worldwide military terms, and I’m inclined to agree. But any “Climate War,” if we even call it that, will be different. We absolutely have to solve that problem.

A substantial fraction of the world was in ruins during and shortly after World War II, with the U.S. (easily the world’s largest economy by then — and the world’s sole nuclear military superpower by 1945) a notable exception. I suppose Swiss stocks, for example, held onto some value. Canada was in pretty good shape, to pick another example. But the non-U.S. stock market caps couldn’t have been all that big back then.

This is very hard to calculate, and I’m not sure anyone has made a serious attempt. Just to give you an example of how difficult this is, the German stock market closed in August, 1944, and didn’t reopen until after the war ended. And the Nazis froze stock prices even before that, which must have been a farce.

U.S. stock prices hit their World War II low all the way back in May, 1942. That was only about 6 months after the attack on Pearl Harbor and U.S. entry into the war. World War II didn’t end until August, 1945, over 3 years later. Investors collectively seemed to figure out the long-term significance of the Pacific naval battles to that point, well before the general public, and they turned bullish from then on out.
 

littleredboy

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CSPX is ugh too expensive.

I've got mutual funds that was vested in emerging markets, and the performance is rather lackluster. I was looking at EIMI, and it isnt that fantastic either.
Is buying EIMI now a bet on these economies being bullish in the coming 10,20,30 years?
 

BBCWatcher

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CSPX is ugh too expensive.
I believe you mean that the S&P 500 stocks are too expensive, that you believe you have special insight into that stock index’s future total returns over your time horizon.

CSPX is an extremely affordable way to invest in the (expensive, you believe) S&P 500 stocks. CSPX has a total expense ratio of only 0.07%, and it’s Irish domiciled for those of you who can benefit from the 15% dividend treaty tax rate. I don’t know of any better vehicle for those stocks for non-U.S. persons.
 

swan02

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OK, Swan... let's deal with your stuff individually. There is A LOT going on here.

Firstly, I'll be blunt: I think you have made a mistake by thinking you can retire early. I think you have picked a portfolio that's going to struggle to sustain a 3.25% withdrawal rate. I think your glide path is going to come back to bite you in old age. I think you need to start your planning again from scratch.

Let’s start from the very beginning, and I’ll treat you as if you were a consulting client. You have high six figures to invest, and you’re retiring in Singapore. You said that you need:
  • it has to last for sixty years;
  • at a three-and-a-quarter-percent withdrawal rate (which implies you can live on less than about $30k SGD a year, not inflation adjusted, for the rest of your life!);
  • and you have an extremely low risk tolerance.

The entire Singapore government yield curve is trading sub-2-percent. If you have a portfolio of risk-free assets yielding 2%, and you withdraw 3.25% from it each year, you will eventually run out of money.

One of those three things has to give.

Either:
  1. you go back to work, so your money doesn’t have to last sixty years; or,
  2. you reduce your withdrawal rate, so you’re living even closer to the poverty line; or,
  3. you increase your risk tolerance and buy some equities.

Tell me which of those three you’re willing to bend on, and I’ll tell you how to redesign your portfolio so it can hit the other two goals.

----

If you’re willing to reduce your withdrawal rate, but you want to keep a low-risk allocation - if you really want a conservative mostly-bonds portfolio that leans on SGS - then that portfolio is not going to be able to support much more than a 2% withdrawal rate. I’m spitballing a bit here, but an SGS-heavy portfolio with a small equity slug (like a 20-80 allocation or so) will support a 1.5% withdrawal rate and still leave a bit of leftover yield and capital growth in the portfolio to deal with inflation.

If you’re willing to add more risk, but want to maintain a 3.25% withdrawal rate, you’re going to need to add more equities. The thing working in your favor here is that Singaporean equities have a very juicy div yield, nearly 4%. Just eyeballing it, you’d get a 3% total portfolio yield plus some capital growth prospects out of something like: 

  • 40% MBH
  • 10% SHYU LN (USD high-yield, yielding about 5%)
  • 25% ES3
  • 25% VWRD (you obviously need the distributing share class because you care about income).

That’d have a lot better prospect for maintaining a reasonable withdrawal rate for sixty years.

And if you’re willing to un-retire, then all of these problems go away! The longer you work, the more money you’ll save, and the less money you’ll need to save. Nobody retires when they’re thirty, I mean, come on.

——

Also, you talk a lot about how you’re going to use a “V-shaped glide path”, so that you end up with a lot of equities when you’re older. That’s not going to work. The problem is that your portfolio at the “apex” of the V - where you are now - is far too conservative, and you’ll be dipping into your capital (as we discussed above). So by the time you’ve gotten older and moved more into equities, your portfolio will be smaller than when you originally started (and even worse when you account for inflation).

A “V-shaped glide path” moves the sequence-of-returns risk to the end of your life rather than the beginning, and frankly that’s just as bad. When you’re old, your cost of living is higher; your medical expenses are higher; and you’ll be dipping into a smaller retirement pot than you would have had otherwise.

So if that thirty or fifty-percent equity downturn comes late in life, you’re really going to be in trouble, because you’ll have had fifty percent lopped off a much smaller pot… but you’ll need to withdraw more and more from that pot each year.



This is why the FIRE movement sh*ts me up the wall, pardon my French. It makes people think they can pull the ripcord at age 30 or whatever when they don't have enough in the bank to fund a fifty- or sixty-year retirement. "Financial Independence, Retire Early" is delusional unless you hit the lotto.

Let’s get down to some straight talk here: retiring is EXPENSIVE. As you get older, your expenses go up, mostly because of medical expenses; but you’re not earning anything any more. The money has to come from somewhere, and the amount of money will go up the older you get.

A thirty-year-old might be able to get by on thirty grand a year, give or take: but what about when they get older? Inflation alone is going to double the cost of living every 35 years or so (assuming a pretty reasonable 2% inflation rate); add higher cost of living and medical expenses on to that, and a retirement lump that might have looked manageable at age thirty will start to look pretty scrawny at age 60.

You wanna know something? Most of these FIRE gurus, even though they claim they've retired early, actually still have full-time jobs! Running a media empire (blogs, writing books, doing TV hits, whatever) is a full-time job, whether they say they're "retired" or not.



Separately, you’ve written a lot of things that don’t make sense. To be honest, they read like you skimmed that “early retirement now!” blog that you linked to but you didn’t understand all of it.

It looks like you just fixated on the oddly specific 3.25% withdrawal rate, on the idea of a V-shaped glide path, and you decided to come in here and say that you’d figured everything out and that we’d give you our blessing. Unfortunately, it seems like you might have been a bit hasty.

Let’s dive in and hopefully we can fix some misconceptions?



Firstly mate, we’re trying to help you here. You don’t need to get so punchy. But I think the problem that you’ve run into is that you’ve run too far the other way, from “balls-out long equities” to “I won’t invest in anything that will lose value ever”.

It’s OK to take some risk and own some equities. In fact, as I’m sure you know - up to a point, adding equities to an all-bonds portfolio actually lowers the portfolio risk AND increases the return! It’s a literal free lunch.



Don’t be so arrogant; it’s really not a good look.



IGLO is not a good choice in a “low-risk” portfolio for a Singaporean investor, because it’s a giant lump of FX risk. Currencies move a lot more than corporate credit. IGLO-in-SGD-terms is way more volatile than MBH would ever be.

And for that matter, get a load of the yield on IGLO. How is something with a sub-1-percent yield to maturity going to help you to hit a 3.25% withdrawal target?


No. Look, I genuinely don’t know what you’re talking about here.

The main features of TIPS (the US’s inflation-protected bonds), and the reason they’re good for an early retiree’s portfolio, is that they are linked to inflation. SSBs are not linked to inflation.

The thing you’re focusing on is the price floor for SSBs. And that’s fine, but… it doesn’t actually matter! Regular bonds might go down in price if rates go up, but they’ll then go back up in price because they pay off the full face value at maturity. The price floor on SSBs only matters if you want to sell them before they mature.

That is *not* an inflation-linking feature, and it’s nothing to do with TIPS.



No, again you’re saying things you don’t understand.

Firstly, the ABF Bond Fund’s code is A35, not ABF.

Secondly, A35 holds more than 85% Singapore government bonds. Its performance has very little to do with how much or how little GLC debt it holds.

Thirdly, A35 has outperformed IGLO over the last year, last three years, and last five years.

Fourthly, MBH is not “even more quasi-institution”. I’m going to assume you meant “quasi-government institution” there, but MBH doesn’t have a lot of GLC debt in it. It’s heavier on banks.



That doesn’t exist and it doesn’t need to exist. There is no good reason for a Singaporean retail investor to own, say, Japanese government bonds hedged into SGD.

The Eastspring funds that you’re looking at are all terrible investments, especially given your stated preferences. They’re all riskier than MBH (they own more corporate bonds and more equity-like risk), and they all have stratospheric TERs (north of 1.25%). Why pay more for a worse product?



Sequence-of-return risk is the risk of a big drop in asset markets early in retirement. It’s the thing that bit retirees who were heavy on equities in 2007. MBH is a bond fund, so it’s very unlikely to cause sequence-of-return risk.



And look, a couple of last things:



No, because NOBODY RETIRES WHEN THEY’RE THIRTY. This is not a thing that people do. You have been lied to.

If you want advice tailored to your specific situation, that’s why I offer individual consulting.



So the problem is that you came in with some fundamental assumptions (that you had enough money to early-retire, that a portfolio heavy on SGS would be able to hit a 3.25% withdrawal rate, etc etc).

But your underlying assumptions were wrong, and that's what people are pointing out. You're being challenged to rethink your underlying assumptions.

1. If you have read carefully in my mumbo jumbo. My AUM of high 6 figures set aside pertains to just stock/bond and is on top of money set aside for a physical property purchased as well. If you have also read carefully my expenses is in the range of 3-5k a month and this is linked to my SWR 2.9 to SWR 3.25% with the already low rental payout of a freehold property taken into account. An expected rate of return of physical property 5%, and shares 6% over the long term.

In fact, minus the kids, we are only spending like 1.5k max a month, and I can also rent out the two extra rooms when the kids are out of the house. There are indeed enough buffers in place.

I'm banging on a crash in these few years. If it doesn't, I'm back to work and I'm aware of the dangers of early retirement.

2. I'm aware of the low starting equity point in the V shape glide path. And that's why 20-50/60% starting equity is warranted.

And you are right I'm aware a small equity component of up to 30% works well with bonds in risk adjusted perspective. I was even considering to start off with 40% on retirement but could not bring myself to as I won't be able to sleep.

Factoring at least what've read and my assets on hand, a 20% equity start point accelerated quickly to 80 to 100 % first 10 years of retirement has a good probability of surviving in the high 90s percentage for a 60 year retirement.

Maybe I'm a fool to believe someone's else number, and that's why I still have my CPF Life and also aware if a crash doesn't happen these few years, I'm back to work in Macdonalds.

I also have a high equity allocation in my CPF like fund held overseas that I can't take out till i'm old and I didn't even take that into account in my AUM as I try not to see it when things crashes.

I won't exactly call myself a low risk taker, but a low risk taker when equity is frothy, and high appetite for risk when equity crashes. Market timing yes, but this is the only way for myself to take more risk. I know you are against Cape ratio, but again it helps me take risk.

Ultimately my asset class would be only about 0-20 percent safe assets, everything else risky for life. And that's why the physical property component all comes in. I do not want to be stuck with MBH to increase my returns. A physical property held for life is way better. If I'm not mistaken, it has a better risk adjusted return than equity but also at a risk of concentration risk.

3. I'm aware what TIPs is..again i said 'close' to TIPs. As I lump all close to asset classes together as in how the Permanent portfolios are so that I can organise the assets and make decisions. Afterall, I'm not aware of any TIPs in SG or else might buy it, so cash is "close to" TIPs.

4. I've already mentioned I'm aware its a Unit trust , and with all unit trust likely to have high TER.

So i'm still a fan of ABF or A35 to be specific. I just wish there is an IGLO hedged to SGD. I really like this ETF, it could have been perfect. Even with a low YTM. Hence I'm still thinking over this, but in the short run and ever a crash occurs, I can sell my IGLO with a cheap transaction fee under IB, and buy shares cheaply.

And I'm not suprised A35 beat IGLO. But I do want a foreign bond fund to cover my foreign equity, unfortunately can't find a hedged to SGD.

Why I wan't a foreign bond etf hedged is to do what Vanguard does for pre made multi asset ETFs.

Also A35 which if purchased are in large amounts, incurring pretty nasty transactions fees even with 0.18% plus plus with SCB, as opposed to IB and a cap transaction fee.

5. One way or another MBH will influence the sequence as its correlation to bonds and equity is positive.

Yeh I can also turn a 60/40 portfolio into maybe a 30% equity, 70% MBH and have similar risk and returns. I just don't want another variable to complicate how assets are allocated. I could just increase my equity with govt bonds to attain similar risk adjusted returns or total returns...

and yes I complicate my life with gold and long duration bonds and foreigns bonds and will consider eliminating long duration for now but a small allocation to gold of 10%. It is 10% of my equity/bond portfolio, not my overall asset, hence this is pittance.

A simple equity / bond with the bond mainly or totally in as much a AAA govt bond ETF so that I don't have to be annoyed with all the quasi govt or corporations etc..you know what I mean and don't wanna be specific. It does not change the end result MBH being positive correlated to equity as well.

5. FIRE delusional or not. I will know whether it is viable within 10 years, in fact in a few years as if a crash does not occur, I'm back to work cleaning tables.

I would rather take the risk while I'm young than later. I have no love for my job, pretty hate it. I would regret everyday of my life

6. Bottom line, I hope FIRE is possible. I have CPF Life, CPF like fund overseas and the good old inheritance. FIRE is definitely possible if by 2020 all things crashes and I go on a spending spree for risk assets.

And that's what i've learnt, to always be invested even as low as 20% equity is better than nothing. At least I'm better than those who are waiting on the side lines. So far I'm pretty happy with this strategy.

7. Lastly I never paid for "expertise", be it in my property investments or sales of my property or so called advice from private bankers. Never trusted nobody, sounds arrogant, but it works for me. Being super cheapo helped me to what I have gotten.
 

swan02

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I have, although 1997-1998 was really more of a regional thing, and thus it was named the "Asian Financial Crisis." Regional crises shouldn't be too exciting because (of course) you'd be reasonably globally diversified...right? Even "2000" (the "dot.com" bust) was mainly sector-specific, and (of course) you'd never overweight a particular sector to any significant degree...right?

The Global Financial Crisis ("2008") was indeed a wild ride: global and multi-sector.


You spurred me to take a quick look at the statements across the Global Financial Crisis. What's really surprising even to me is that those annual statements never show a dip. The year end valuation kept climbing. The climb slowed to a low percentage crawl YE2007 to YE2008, but the latter was a bigger number than the former. Monthly contributions overcame the headwinds, barely, even then. The very worst year, ever, and I still added net points to the score, as it were -- amazing. What else could you wish for financially speaking, really?

I don't actually look at this stuff too often, honestly -- and right now I'm proving the point since I didn't even know the reality I've described in the previous paragraph. I just check every once in a while (not even monthly) that the simple "program" is running, and I simply let the program run. I don't do much -- it's virtually all automated. Even the future, gradual portfolio adjustment -- the progressive shift from stocks to bonds over several years -- is all pre-programmed. I certainly don't watch CNBC or Bloomberg. Yes, OK, a little more manual effort is required in the Singapore context -- U.S. persons are a bit different -- but only a little. Or you could spend a little more on fees and use a "roboadvisor."

I suppose if you consult a seismometer every day (or more often) you'll be unable to sleep, wracked with worry that a big earthquake is imminent. If your smartphone receives alerts every time a new possible Earth crossing space rock is spotted, you'll worry that a collision is imminent. So why are you even looking at financial market data? Shiny Things says, "Go the pub." I agree: get your nose out of the ticker tape, permanently turn off the Financial Porn Channel (i.e. erase CNBC from your channel list), and go enjoy life.


You can buy Singapore government bonds practically every month if you wish. You can also ladder them and hold them to maturity if you wish. That's not necessarily a recommendation, but you really could do this. It only takes S$1,000 to buy one. Well, OK, you have to pony up S$1,150 (115%) on a reopened bond with a noncompetitive bid (the only type of bid you should be placing in these auctions), but you get back all the overage a few days later.


Hedging is very expensive, especially over time, and did I mention the Singapore government offers its bonds directly practically every month?

....Although (as I've said before) I wish the MAS issued a real return bond at least once per year, probably with a 10 year tenor. That'd be a useful instrument for ultra conservative savers/investors.


That's a choice, isn't it? You could earn an income through employment for, say, 10 more years, have that much more to prepare for a 50 year retirement, and sleep better, right?

Yet another possible choice is to go visit various high quality life insurers, get quotations on an escalating and probably deferred life annuity (and joint/survivor or joint/continent if you have a significant other) of sufficient payout (combined with CPF LIFE at "double ERS" level -- you and your significant other, if applicable -- since you'd buy that first) to assure a particular lifestyle, and then...sleep very well indeed. If you're particularly conservative you could consider splitting your life annuity allegiances between a high quality Singapore life insurer and a high quality overseas life insurer.


OK, I've never done that.


Mathematically my head is telling me that a paper loss of at least that size most probably happened at some point, but I honestly don't know! I'd have to go look for my biggest paper loss between dates X and Y. And why would I want or need that information?


I guess I passed that test then, mostly because I don't look.


I'm sure a paper loss of -50% has never happened to me. During the Global Financial Crisis the S&P 500 fell about 55% peak to trough, but here were the many softening factors in any/every reasonable portfolio allocation:

1. Not 100% invested in stocks. (Many bonds did VERY well.)

2. Not buying everything at the peak and selling everything at the trough. (Who does that? You can't even do quite that badly unless you're perfectly buying high and selling low.)

3. Not suspending or reducing your contribution program.

4. Reinvesting dividends, and many dividends were still paid straight through the GFC.

5. Reasonable geographic diversification.

6. Low cost investment vehicles.


Does that also mean that everybody who invested in real estate in Singapore through the Asian Financial Crisis stopped investing in real estate? It should, if that's the argument.


So if somebody gave you a big pile of money -- if you inherited a significant chunk of wealth -- it'd be OK then? You wouldn't lose any sleep when the value of the pile wobbles by 1% ($50K of $5 million is 1%), because you didn't earn any of it? Because it just landed in your lap?

I suppose in a way it's a bit "weird" that the instant valuation of my household assets frequently wobbles daily by an amount that is much bigger than my employment income over a much, much longer period. But you know what? I couldn't tell you how much that wobble amount was yesterday, or the day before, or last Tuesday, or on March 3.... I really don't know, because I don't even look. Why should I? Plus there's the fact that many people have jobs that sometimes involve working with "crazy" dollar numbers on behalf of employers and their interests.


I do. That's too high.


Which made absolutely no sense in any way, shape, or form if you're retired now.

1. Those early days were young and naive. Also being young had a belief for high risk taking. In fact this advice should still hold true while young that a high allocation to equities is warranted. The only problem is whether you can stick to your guns.

2. Can't exactly remember the loss percentage but it fluctuated between 35% to 40% considering also later on USA FX plummeted etc. The exact percentage is not important, just that I know I can't handle seeing a large absolute number in RED. Percentage actually helped quell my nerves.

3. You have indeed passed the test cause you understood your risk profile early on and have bonds in them. You are the model student a teacher of passive investment would like.

But I'm certain most of us are not like that, and that's why you don't find many rich people around !! I'm the richest among anyone I knew except a cousin who holds a damn high paying job and that's because I was able to shut my computer and play World of Warcraft.

4. And that's why in the Asian financial crisis, the two people I know still held on to their property.

1. being their homes and
2. They can't see RED even if at the back of their mind, it is very RED.
3. And that's the beauty of non public property. It actually suits people like me and I'm sure many others. I get to hear more layman people getting rich via properties than equity. But property and I only advocate freehold has such a lousy yield that equity investing is warranted...and I do not believe equity has to be in a form of high dividends or income assets.

5. The psychology of investing is very real and I never believe most of us will follow the standard operating book of passive investing.

I'm certain the majority like me are busy looking at prices and bloomberg and donald trumps twits.

When another GFC like event occurs, you'll see people calling up their advisors, already forgetting what they were told at the outset and start shredding up books they read.

I only need the statistics to back me up lol.

6. I'm aware of being able to buy govt bonds directly but I gather the spread is wide ? . A35 is still good enough.

7. Once I start buying insurances annuities and thinking of CPF life, it means I really have to go back to work and retire 10years later. I'll leave it for now. Actually in a matter of a few years I'll know whether I should apply for Macdonalds.
 

fmradio

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You can do what you believe is right and best for yourself. Your money your life. Why bother to justify your decision? I believe ST or the others have said their piece. you can either take their advise or continue your own investments.

That aside, there is a lot of recession fears for both US and SG. Does anyone have anything else to say?
 

swan02

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You can do what you believe is right and best for yourself. Your money your life. Why bother to justify your decision? I believe ST or the others have said their piece. you can either take their advise or continue your own investments.

That aside, there is a lot of recession fears for both US and SG. Does anyone have anything else to say?

Didn't initially intend to justify my actions. But I'm so free that I actually enjoy writing.

However, what I've wrote whether agreeable or not actually spells out a lot more information since shiny things part one.

There is little information on retirement planning.

For starters, people are now aware what SWR means. And if still don't, should.

And if they have read carefully. CPF life improves your SWR substantially and maybe FIRE is possible, and won't go on and on criticising CPF life but start reading up on authors retirement researchers such as Michael Kitces and Wade Pfau and many other retirement bloggers.

.........

Recession fears ...yes I'm fearful, also that's why I'm on a 20/80 portfolio. However, thinking of moving to 30/70 taking advantage of the recent bear and use "property" money to load up on any form of bonds MBH, A35, gold, IGLO, and equities and hope for a x2 interest rate cut come September.

Also expecting a SGD decline and hopefully a property downturn and morph into something larger where my property money would be applied.

Half half hearted with SG REITs but short term betting on many cuts to interest rates this and next year...but might take the MBH route as has lower risk.

Increase EM exposure coupled with EM high yield sovereign bonds ?

Inverted 2 year yield curve, so we have approx 12 months avg to enjoy making money ?

Also not forgetting the last leg usually entails the biggest bull run.
 
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BBCWatcher

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If it doesn't, I'm back to work and I'm aware of the dangers of early retirement.
You're assuming ability to work. That's not a given. Moreover, disability income insurance (DII) is simply not available to retirees. There's no direct, highly effective way you can insure against loss of that future income earning potential due to disability.

6. I'm aware of being able to buy govt bonds directly but I gather the spread is wide ?
What spread? There's no transaction fee, no markup, and as a noncompetitive bidder you get the very best price at every auction. There's no spread.

I don't think you should stay in a job you don't like, but switching to something you like is quite different than voluntarily staying unemployed.

Or are you claiming that there's absolutely nothing you could be doing for monetary compensation that you would enjoy doing? That'd be quite incredible.
 

swan02

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You're assuming ability to work. That's not a given. Moreover, disability income insurance (DII) is simply not available to retirees. There's no direct, highly effective way you can insure against loss of that future income earning potential due to disability.


What spread? There's no transaction fee, no markup, and as a noncompetitive bidder you get the very best price at every auction. There's no spread.

I don't think you should stay in a job you don't like, but switching to something you like is quite different than voluntarily staying unemployed.

Or are you claiming that there's absolutely nothing you could be doing for monetary compensation that you would enjoy doing? That'd be quite incredible.

My understanding of insurance tells me if I am so disabled that I can’t work, then TPD will trigger. While if I’m able to work, then only one or the other of DI or TPD will trigger but not both. So I can’t tell what’s lacking except lots of $$$ then I’ll have no need for them at all. Even so, the DI in singaoore is very subpar compared overseas. But I’ll b keeping my eyes on carelife. I’m kinda pro SG govt they r doing a good job.

Ya I’ve been through a dismal career. I think I do perform well but lack passion. I have switched careers multiple times and experienced many different industries. Nothing interests me. Like one astrologer once told me illl fail working for others and can only succeed as an entrepreneur.

I do wish to work as retiring for the last number of years is beginning to bore. All I do these days is yell at the kids. I do not have any ideas left. Wanna hire me ? I’m cheap and good.

hmm about individual sg govt bond auctions have always thought a pretty large sum to begin and hence left with the secondary market where wide spreads abound ? Am I not right ?
 

littleredboy

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Too expensive for my budget.

I believe you mean that the S&P 500 stocks are too expensive, that you believe you have special insight into that stock index’s future total returns over your time horizon.

CSPX is an extremely affordable way to invest in the (expensive, you believe) S&P 500 stocks. CSPX has a total expense ratio of only 0.07%, and it’s Irish domiciled for those of you who can benefit from the 15% dividend treaty tax rate. I don’t know of any better vehicle for those stocks for non-U.S. persons.
 

BBCWatcher

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My understanding of insurance tells me if I am so disabled that I can’t work, then TPD will trigger.
No, not very often. TPD=Total and Permanent Disability. There's a particular definition of TPD in a TPD insurance policy, and it's an extremely narrow definition of disability. If you're eligible to make a TPD insurance claim it means you're profoundly disabled.

There's a huge "zone" of loss-of-income disability that is not eligible for a TPD payout.

While if I’m able to work, then only one or the other of DI or TPD will trigger but not both.
Neither DII nor TPD will pay out if you're able to work. (Vanishingly far fetched exceptions excepted.) DII has a much less strict definition of disability, and TPD has a very strict one. If you qualify to claim from both types of insurance, you can claim from both.

Even so, the DI in singaoore is very subpar compared overseas.
Who told you that? The DII products sold in Singapore are rather decent, actually. There are many countries where similar products are not available.

Government-provided disability insurance is "subpar" compared to many other developed countries' social insurance systems.

But I’ll b keeping my eyes on carelife. I’m kinda pro SG govt they r doing a good job.
CareShield Life will also have an extremely narrow definition of disability. It remains to be seen whether the private sector will offer optional add-ons with adequate definitions of disability, but it doesn't seem likely.

Nothing interests me.
Literally nothing?

Like one astrologer once told me illl fail working for others and can only succeed as an entrepreneur.
An astrologer? OK, interesting, so then what are you doing now that's entrepreneurial?

hmm about individual sg govt bond auctions have always thought a pretty large sum to begin and hence left with the secondary market where wide spreads abound ? Am I not right ?
No, you're not right. The minimum purchase amount for Singapore Government Securities is S$1,000 (face value).

What do you think A35 holds? ;)
 

celtosaxon

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Is there a low cost total US market ETF listed on LSE? I’ve looked but haven’t found one.

I believe you mean that the S&P 500 stocks are too expensive, that you believe you have special insight into that stock index’s future total returns over your time horizon.

CSPX is an extremely affordable way to invest in the (expensive, you believe) S&P 500 stocks. CSPX has a total expense ratio of only 0.07%, and it’s Irish domiciled for those of you who can benefit from the 15% dividend treaty tax rate. I don’t know of any better vehicle for those stocks for non-U.S. persons.
 

swan02

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No, not very often. TPD=Total and Permanent Disability. There's a particular definition of TPD in a TPD insurance policy, and it's an extremely narrow definition of disability. If you're eligible to make a TPD insurance claim it means you're profoundly disabled.

There's a huge "zone" of loss-of-income disability that is not eligible for a TPD payout.


Neither DII nor TPD will pay out if you're able to work. (Vanishingly far fetched exceptions excepted.) DII has a much less strict definition of disability, and TPD has a very strict one. If you qualify to claim from both types of insurance, you can claim from both.


Who told you that? The DII products sold in Singapore are rather decent, actually. There are many countries where similar products are not available.

Government-provided disability insurance is "subpar" compared to many other developed countries' social insurance systems.


CareShield Life will also have an extremely narrow definition of disability. It remains to be seen whether the private sector will offer optional add-ons with adequate definitions of disability, but it doesn't seem likely.


Literally nothing?


An astrologer? OK, interesting, so then what are you doing now that's entrepreneurial?


No, you're not right. The minimum purchase amount for Singapore Government Securities is S$1,000 (face value).

What do you think A35 holds? ;)

What I meant was if I were able to work and working. I'm thus able to obtain DII and hence while working and become disabled, it is either DII or TPD that will trigger but not both simultaneously. After looking at the DI here in Singapore, I still can see holes hence one isn't really fully covered due to the restrictive definition.

Unlike Australia *assuming info is right and updated* being superior. For e.g. mental illness can not be discriminated. We are not forced to take up jobs let say cleaner when you were a doctor due to a more fair definition and this can be insured till 65. Also DI income continues without limitations of say 1 year later your salary is cut or forced to take a separate career path., waiting period 30-90 days and about 80 percentage of salary. And you will not be rejected at least even for jobs such as a Personal Trainer.

and..we can even buy through our "CPF" with group insurance discounts. Very affordable.

Now try to match that with Singapore's disability insurance. Some insurers would already reject the application of a Personal Trainer or charge ludicrous premiums.

Hence in Australia, just having income protection and TPD would pretty much be adequate and won't need CI or personal accident.

I'll look into individual SG bonds. Thanks. But I have a nagging feeling i'm missing out something. I think it has to do with either auction of such bonds isn't frequent enough ?

and I'm pretty certain it has to do with the secondary market having a wide spread since I could not buy my SG bonds as its not like easily available to be purchased as I have to subscribe and wait wait etc... or that if after I bought the SG bonds directly and having to sell, it will also not be as liquid ? I'll relook into it.

Ya literally nothing. Perhaps you can suggest a few professions and I'll consider taking up a course. The entreprenuerial spirit is not with the force, perhaps after I'm fully invested and regain my peace of mind from the force.
 
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BBCWatcher

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Is there a low cost total US market ETF listed on LSE? I’ve looked but haven’t found one.
I don't see one that quite fits that set of parameters. The closest match I can find is XD9U, which includes the top 639 U.S. listed stocks. (The S&P 500 consists of the top 505.) Vanguard's (U.S.) Total Stock Market Index ETF includes 3,606 listings, ticker symbol VTI in New York. The additional ~2,970 stocks represent very roughly 15% of VTI.

I suppose you could mix XD9U and R2US. R2US is a London listed/Irish domiciled Russell 2000 stock index ETF. For every dollar you invest, you'd put 85 cents into XD9U and 15 cents into R2US. That'd be a pretty close simulation of Vanguard's VTI, at least if my back-of-the-envelope math is right.

Way too complicated IMHO, but you could.
 
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