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Old 13-08-2019, 11:31 PM   #6166
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Hi guys, help me if anyone has any hint of guidance thanks.

Questions

1. GOLD etfs
Recommended gold etfs recommended seem to be listed in nasdaq such as GLDM and GOLD since there isn't any capital gains tax as a non resident for tax purposes of USA and low TER. I also get there is the 60k USD estate tax onwards.

For reasons of not wanting to do the paperwork for USA stocks. I'm incline to look else where such as LSE: IGLN and ASX: GOLD
IGLN has lower TER but some annoying bits I've noticed.

I use Interactive brokers to conduct my trades:

a. Since I've already AUD. I converted it to USD immediately prior to buying IGLN but could not buy it, only the next day. However, at times it is possible. I've noticed it is always Friday that I could not buy IGLN immediately upon converting to USD, however other days I can. Am I missing something ?

b. I've also noticed ASX: GOLD and nasdaq: GLDM seem to move in prices that makes sense. However, the movement of LSE:IGLN does not when I compared it to the above two after taking into account movement of FX of ASX: Gold.

I've always thought that GOLD dominated in AUD is no different to GOLD denominated in USD or other currencies as its inherent value is the same, am I right ?

......until I read this https://www.fool.com.au/2019/05/02/w...the-best-pick/

"Like many international commodities, gold is universally traded in US dollars, which means that for Australians, the price we can buy gold at is affected by the gold spot price as well as the price of our dollar relative to the greenback (we have to buy US dollars in order to buy gold). This adds a layer of complexity and volatility that our American friends don’t have to experience"

2. Fixed income

General advice is to keep in ABF etf in order not to be exposed to FX risk as the diversifying benefits of FX in research shows of little value (not compensated for taking FX risk) unlike in stocks where FX having lots of diversifying benefits

for this question, i'm not into MBH or any form of corporate bonds like CORP, but simply to say ABF has better protective effect, and I instead would wish any equity risk or equity like risk to be in the equity component rather than all over the place in MBH, or EM sovereign bonds, or corporate bonds be it high yield or not...hence the focus of the question are bonds with maximum protection or diversifying as close to negative correlation if possible.

Asset allocation: 20% equity, 80% Fixed income and Gold mixed. Money managed is six figures. 50/50 in equity between international and local shares.

a. are long durations bonds such as IDTL advisable, knowing that FX risk can be problematic and also the small likelihood of interest rate rise ?..

b. or intermediate bonds more advisable ?

c. or also mixtures of cash or short term treasuries ? or should i keep a mixtures of JPY, USD and SGD in equal ratios ?

c. since I have 80% in fixed/gold income...what would you have in your asset allocation in ratio between, intermediate bonds, long duration bonds, cash and gold ?

d. I'm leaning towards buying a lot of IGLO as the makeup is a good amount of diversified bonds from safe havens such as USA and Japan..and it moves as expected with my IWDA or VUSD. Plus when factoring exchange rate movements against my SGD, I see it moves as expected. Am I seeing things wrongly here ?

Whereas my ABF moves nicely only with my Singapore shares

Thanks very much
wow, u are really doing yourself a disservice...
I think you should start w reading Shiny Thing's book.
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Old 14-08-2019, 12:55 AM   #6167
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Hey! So, first: let's talk about inverted yield curves - the US curve is going to be all over the news for the next few days, so let's get ahead of it and understand what it means and how it should affect you (spoiler alert, it shouldn't).

So before Lighthizer and the Mnook dropped their tape bomb this morning, the US treasury yield curve—specifically, the spread between the yield on 2-year and 10-year bonds—was the flattest it'd been in a long time, with 10s yielding just three-and-a-half basis points more than 2s. It traded a little steeper, but it's back at two-and-three-quarter basis points now (and, shameless plug, you can see the current level of the 2s-10s spread at www.istheyieldcurveinverted.net, designed and built by your favourite mouthy ang-moh and powered by Amazon Lambda).

The thing that has everyone freaked out is that that's very close to zero - a "flat" yield curve, where long-dated bonds don't yield any more or less than short-dated bonds. (When long-dated bonds yield more than short-dated bonds, that's called a "normal" yield curve; when short-dated bonds yield more than long-dated bonds, that's called an "inverted" yield curve.) Parts of the US yield curve have already been inverted, un-inverted, and inverted again; but the spread that everyone pays attention to is the 2yr vs the 10yr.

Why is everyone soiling themselves about this? Because, in the past, a flat or inverted yield curve has been a pre-emptive signal of economic slowdowns. (Think about why this is. Bond yields are, very roughly and leaving a lot of things aside, a forecast of where interest rates are going to go in the future. And if the yield curve is inverted, that means interest rates will be cut in the future... and interest rates tend to get cut when an economy is slowing down.)

Over the past forty years or so, an inversion in the 2s-10s US treasury yield curve has tended to precede a recession. Here's a chart from the St Louis Fed's absolute solid gold FRED statistics database: you can play with it yourself at this link here.



And that sort of makes sense. If you think the bond market is pretty good at predicting interest rates, and if you think interest rates are generally correlated with the state of the economy, then it follows that the bond market should be a leading indicator of the economy.

So. Should you freak out about this and sell everything? Obviously the answer is "no, you can sit back and relax". But here are some reasons why it's okay to relax and ignore anyone freaking out about an inverted yield curve.

1) This is the US yield curve, not Singapore. The US yield curve is for the US, it's not going to do a very good job of forecasting economic conditions in a country twelve timezones away.

2) Inversions come as much as two years ahead of recessions. Get a load of this chart right here. I've lined the 2s-10s (scaled) up against the year-on-year change in the Wilshire 5000, a broad US-stock-market index (because FRED doesn't have S&P 500 data back far enough). You can see that when the curve inverts, it can take as long as twp years before the year-on-year return on stocks becomes negative!

US 2s-10s first inverted in June '98, eighteen months before US equities peaked; and again in February 2006, again, a year-and-a-half before the peak in US equities.

Hiding out in cash for two to three years is silly. You're missing out on dividends and capital gains in the meantime while you wait for the next recession/downturn/whatever.

3) Even when it comes, a stock market downturn is a buying opportunity. I'm not going to say "recessions don't affect the stock market", that's silly; anyone who lived through the Asia crisis or '08 knows that recessions can and do hurt stocks. But look how far we've come since the lows of March 2009. Anyone who stuck to a strategy of diligently buying—sitting on their stocks and bonds, rebalancing every so often, and reinvesting the dividends and coupons—is in great shape, even if it felt bad at the time. (I still have the ticket for some SPY I bought at seventy bucks or so back in '09.)

If you might need the money within a few years, then you shouldn't be in stocks anyway - money you need within 3-5 years should be invested in bonds. But if you're saving for retirement, then you should be thinking "oh boy, next downturn I'm going to be able to buy stocks for cheap".

So: I give you permission to chill out and not think about the yield curve.

Hi guys, help me if anyone has any hint of guidance thanks.
OK, my first piece of guidance is that you should have a drink and chill out. Wow there’s a lot going on here.

1. GOLD etfs
Recommended gold etfs recommended seem to be listed in nasdaq such as GLDM and GOLD since there isn't any capital gains tax as a non resident for tax purposes of USA and low TER. I also get there is the 60k USD estate tax onwards.

For reasons of not wanting to do the paperwork for USA stocks.
THIS IS A DUMB REASON. You literally have to fill out one form (the W8-BEN), and you’ve probably already filled that out to open your IBKR account in the first place. Take some advice from Chopper and try a muggaccino of harden-the-f*ck-up.



Look, gold is a dumb investment and I can tell you’re just jumping on the bandwagon because it’s gone up so much in the last few weeks. This is a really bad idea, but if you’re absolutely hell-bent on this then GLDM, listed in the US, is the right answer.

2. Fixed income

for this question, i'm not into MBH or any form of corporate bonds like CORP,
This, also, is not very well thought out. MBH provides significantly higher returns than A35; it more than adequately compensates for the extra risk of corporates over govvies. Buy MBH.

a. are long durations bonds such as IDTL advisable, knowing that FX risk can be problematic and also the small likelihood of interest rate rise ?.. b. or intermediate bonds more advisable ? c. or also mixtures of cash or short term treasuries ? or should i keep a mixtures of JPY, USD and SGD in equal ratios ?
Mate, no, this is loony. All of these questions are loony. Stepping up from A35 to MBH adds fractional extra risk over the long term - maybe a percentage point of extra volatility - in return for a pretty consistent 50-100bps a year of extra return.

Going to foreign-currency bonds adds FX risk, which is going to magnify your swings by as much as five or ten times.

c. since I have 80% in fixed/gold income...what would you have in your asset allocation in ratio between, intermediate bonds, long duration bonds, cash and gold ?
That asset allocation is far too conservative unless you’re, like, ninety years old. I would not do this at all.

Hi Shiny what do you think of my 3 fund portfolio consisting of CSPX (Accumulating S&P500), IWDA and ABF SG Bond. Decided to omit out STI ETF as I have a portfolio of SG stocks.
No. IWDA already owns a bunch of US stocks, so you’re doubling up on exposure to US stocks there. Count your portfolio of SG stocks as your “ES3 equivalent”.

Does anybody know how do you calculate your cost basis in SGD for the LSE ETFs and how to calculate the returns?
You’ll need to track this yourself - track the FX rate you used to convert - but why do you want to track the cost basis in the first place?

MBH and ES3 bought via SCB and IWDA/VWRA bought via IBKR.

Retiring in Singapore, what are some of the upsides and downsides of allocations A and B.

What about if one starts adding ES3 into allocation A after AUM$100k is achieved.
The reason to have Singapore equities is that you’re going to retire in Singapore, so you want something that tracks the Singaporean economy and Singaporean costs of living.

If all your assets are in overseas stocks and the Singaporean economy booms, you’re going to be left behind.
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Old 14-08-2019, 01:07 AM   #6168
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Not really sure how you got the idea that MBH has equity-like risk...

But maximum protection is always cash I guess, which seems like what you are concerned about.
Cash or short term bonds are only useful in increasing interest rates/inflation. It is an asset class by itself and not to be conflated with other asset classes. It exhibits zero correlation and yes I keep a good amount as a diversifier.

What I want are good diversifiers that exhibits more negative correlation to equity and safe haven govt bonds are just what I needed along with controversial : Gold.

MBH is not a AAA SGD govt bond period......It is a corporate bond investment grade etf. It can never compare itself to a AAA govt debt in the event of a major risk off.


On the other hand, look at ABF etf, it is largely made up of SGD govt AAA bonds (I would hope quasi govt institutions were left out), designed to be a great diversifier when investors move from risky assets to safe havens.

I own both MBH and ABF and monitor daily. ABF returns is a lot greater than MBH due to the fact of investors factoring a much higher recession risks in this current risk off event. ABF behaves as it should, as a potent diversifier. One that exhibits close to negative correlation if possible. Corporate bonds do not, it exhibits positive correlations to both bonds and equity.

I have an extremely low level of risk. Only good etf with great diversifying features should stay in the asset allocation, i.e. a mixture of cash, gold, intermediate and maybe long duration bonds.

I have nothing against MBH. If one wants to incorporate MBH into the portfolio. There are research that corporate bonds exhibit great risk adjusted returns. Hence in the grand scheme of asset allocation: one can actually lower the equity component, incorporate a lot more MBH and yet able to obtain a greater risk adjusted return. But I prefer to keep it simple and search for ETFs that exhibit great diversifying features.
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Old 14-08-2019, 01:14 AM   #6169
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Bonds should be in sgd or sgd hedged

Due to lack of good etf, i actually consider unit trust such as eastspring sg fixed income (sorry dont know exact name, go fsmone.com to find)
Thank you very much. I'm aware of the FX risk and I've been searching for a global bond etf hedged into SGD for ages.

Will look into it. I just hope the TER is not too expensive. Or else I would have to have a large amount in ABF etf.
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Old 14-08-2019, 01:33 AM   #6170
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THIS IS A DUMB REASON. You literally have to fill out one form (the W8-BEN), and you’ve probably already filled that out to open your IBKR account in the first place. Take some advice from Chopper and try a muggaccino of harden-the-f*ck-up.

Look, gold is a dumb investment and I can tell you’re just jumping on the bandwagon because it’s gone up so much in the last few weeks. This is a really bad idea, but if you’re absolutely hell-bent on this then GLDM, listed in the US, is the right answer.

This, also, is not very well thought out. MBH provides significantly higher returns than A35; it more than adequately compensates for the extra risk of corporates over govvies. Buy MBH.

Mate, no, this is loony. All of these questions are loony. Stepping up from A35 to MBH adds fractional extra risk over the long term - maybe a percentage point of extra volatility - in return for a pretty consistent 50-100bps a year of extra return.

Going to foreign-currency bonds adds FX risk, which is going to magnify your swings by as much as five or ten times.

That asset allocation is far too conservative unless you’re, like, ninety years old. I would not do this at all.
1. True, being lazy is dumb. I did not fill up that form and never had intention to trade in the USA market initially.

2. I'm aware of the FX risk, hence kept largely in ABF. However, someone just pointed out to me a hedged SGD bond etf though in the form of unit trust and likely high TER.

3. I'm an early retiree. I'm aware a high asset allocation to equities is warranted to last minimum 60 years. However, I'm of one who has been through year 2000 and 2008 crashes and have very low appetite for risk and do not subscribe to jack bogle of 110 - age or 100- age that sort

but prefer a V shape glide path to manage sequential risk. The range i've researched is between 20-50% equity at start of retirement.

While maintaining a SWR of 3.25%, I will reach 80 percent equity in 10-12 years. In other words a 80/20 asset allocation which I'll maintained forever. The fixed income component would be in 3 years worth of cash and 2 years worth of bonds giving me 5 years worth of emergency before touching the equity component. If I have become very rich, a 100% equity portfolio permanently while still maintaining SWR 3.25%.

4. Lastly, I still prefer ABF. I have ABF for its diversifying ability not of its returns. I prefer to increase my equity asset allocation if I wish to increase my portfolio expected returns.

5. As for gold. Its controversial. I have been thinking about this for a long time and have always had a 10% asset allocation to this metal. Bonds and gold look frothy, but so is equity...only MSCI HK and EM stocks left for the killing.
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Old 14-08-2019, 01:42 AM   #6171
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Hey! So, first: let's talk about inverted yield curves - the US curve is going to be all over the news for the next few days, so let's get ahead of it and understand what it means and how it should affect you (spoiler alert, it shouldn't).

So before Lighthizer and the Mnook dropped their tape bomb this morning, the US treasury yield curve—specifically, the spread between the yield on 2-year and 10-year bonds—was the flattest it'd been in a long time, with 10s yielding just three-and-a-half basis points more than 2s. It traded a little steeper, but it's back at two-and-three-quarter basis points now (and, shameless plug, you can see the current level of the 2s-10s spread at www.istheyieldcurveinverted.net, designed and built by your favourite mouthy ang-moh and powered by Amazon Lambda).

The thing that has everyone freaked out is that that's very close to zero - a "flat" yield curve, where long-dated bonds don't yield any more or less than short-dated bonds. (When long-dated bonds yield more than short-dated bonds, that's called a "normal" yield curve; when short-dated bonds yield more than long-dated bonds, that's called an "inverted" yield curve.) Parts of the US yield curve have already been inverted, un-inverted, and inverted again; but the spread that everyone pays attention to is the 2yr vs the 10yr.

Why is everyone soiling themselves about this? Because, in the past, a flat or inverted yield curve has been a pre-emptive signal of economic slowdowns. (Think about why this is. Bond yields are, very roughly and leaving a lot of things aside, a forecast of where interest rates are going to go in the future. And if the yield curve is inverted, that means interest rates will be cut in the future... and interest rates tend to get cut when an economy is slowing down.)

Over the past forty years or so, an inversion in the 2s-10s US treasury yield curve has tended to precede a recession. Here's a chart from the St Louis Fed's absolute solid gold FRED statistics database: you can play with it yourself at this link here.



And that sort of makes sense. If you think the bond market is pretty good at predicting interest rates, and if you think interest rates are generally correlated with the state of the economy, then it follows that the bond market should be a leading indicator of the economy.

So. Should you freak out about this and sell everything? Obviously the answer is "no, you can sit back and relax". But here are some reasons why it's okay to relax and ignore anyone freaking out about an inverted yield curve.

1) This is the US yield curve, not Singapore. The US yield curve is for the US, it's not going to do a very good job of forecasting economic conditions in a country twelve timezones away.

2) Inversions come as much as two years ahead of recessions. Get a load of this chart right here. I've lined the 2s-10s (scaled) up against the year-on-year change in the Wilshire 5000, a broad US-stock-market index (because FRED doesn't have S&P 500 data back far enough). You can see that when the curve inverts, it can take as long as twp years before the year-on-year return on stocks becomes negative!

US 2s-10s first inverted in June '98, eighteen months before US equities peaked; and again in February 2006, again, a year-and-a-half before the peak in US equities.

Hiding out in cash for two to three years is silly. You're missing out on dividends and capital gains in the meantime while you wait for the next recession/downturn/whatever.

3) Even when it comes, a stock market downturn is a buying opportunity. I'm not going to say "recessions don't affect the stock market", that's silly; anyone who lived through the Asia crisis or '08 knows that recessions can and do hurt stocks. But look how far we've come since the lows of March 2009. Anyone who stuck to a strategy of diligently buying—sitting on their stocks and bonds, rebalancing every so often, and reinvesting the dividends and coupons—is in great shape, even if it felt bad at the time. (I still have the ticket for some SPY I bought at seventy bucks or so back in '09.)

If you might need the money within a few years, then you shouldn't be in stocks anyway - money you need within 3-5 years should be invested in bonds. But if you're saving for retirement, then you should be thinking "oh boy, next downturn I'm going to be able to buy stocks for cheap".

So: I give you permission to chill out and not think about the yield curve.



OK, my first piece of guidance is that you should have a drink and chill out. Wow there’s a lot going on here.



THIS IS A DUMB REASON. You literally have to fill out one form (the W8-BEN), and you’ve probably already filled that out to open your IBKR account in the first place. Take some advice from Chopper and try a muggaccino of harden-the-f*ck-up.



Look, gold is a dumb investment and I can tell you’re just jumping on the bandwagon because it’s gone up so much in the last few weeks. This is a really bad idea, but if you’re absolutely hell-bent on this then GLDM, listed in the US, is the right answer.



This, also, is not very well thought out. MBH provides significantly higher returns than A35; it more than adequately compensates for the extra risk of corporates over govvies. Buy MBH.



Mate, no, this is loony. All of these questions are loony. Stepping up from A35 to MBH adds fractional extra risk over the long term - maybe a percentage point of extra volatility - in return for a pretty consistent 50-100bps a year of extra return.

Going to foreign-currency bonds adds FX risk, which is going to magnify your swings by as much as five or ten times.


That asset allocation is far too conservative unless you’re, like, ninety years old. I would not do this at all.



No. IWDA already owns a bunch of US stocks, so you’re doubling up on exposure to US stocks there. Count your portfolio of SG stocks as your “ES3 equivalent”.



You’ll need to track this yourself - track the FX rate you used to convert - but why do you want to track the cost basis in the first place?



The reason to have Singapore equities is that you’re going to retire in Singapore, so you want something that tracks the Singaporean economy and Singaporean costs of living.

If all your assets are in overseas stocks and the Singaporean economy booms, you’re going to be left behind.
Thank you Shiny for your detail explanation.
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Old 14-08-2019, 03:22 AM   #6172
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Hi ShinyThings!
I just bought your book off Amazon and am reading it on my Kindle! Firstly, I would like to thank you for the detailed explanations as to what and how to buy! I am now planning to start my very first investment according to your advice

I am around 30 so looking at putting
40% ES3
20% MBH
40% IWDA

You've suggested MBKE but they have discontinued the monthly plan so should I go with SCB for all three or look into POSB Invest Saver too? I am starting from scratch and looking at 1k per month for investment!

And I would like to thank u again for the book! It is a good read!!
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Old 14-08-2019, 04:48 AM   #6173
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Hi ShinyThings!
I just bought your book off Amazon and am reading it on my Kindle! Firstly, I would like to thank you for the detailed explanations as to what and how to buy! I am now planning to start my very first investment according to your advice

I am around 30 so looking at putting
40% ES3
20% MBH
40% IWDA

You've suggested MBKE but they have discontinued the monthly plan so should I go with SCB for all three or look into POSB Invest Saver too? I am starting from scratch and looking at 1k per month for investment!

And I would like to thank u again for the book! It is a good read!!
You're on the right track! And yeah, it's annoying that MBKE have discontinued the MIP; your best bet for now is POSB for ES3 and MBH (actually it'll be G3B and A35, for stocks and bonds respectively), and Stanchart for IWDA.

4. Lastly, I still prefer ABF. I have ABF for its diversifying ability not of its returns. I prefer to increase my equity asset allocation if I wish to increase my portfolio expected returns.
There's a lot going on here.

Firstly, you're fixating on having as little correlation and as little volatility as possible, which I don't understand. You say you're "early retired" but you only have six figures in your portfolio; that's not enough to retire on! You need to be thinking about absolute return, not minimum volatility.

Look at gold. If you just looked at gold's correlation over the last few years, you'd say "great, it has zero correlation, I'm gonna buy some"... but that's because gold has gone nowhere since 2011! You're confusing "low correlation" with "good investment".

Same with cash. Cash has zero correlation with anything, but if you hold a bunch of cash, all it does is drag down your returns. If you have a 3.25% target withdrawal rate, holding cash yielding sub-2% is only going to make it more difficult to hit your target withdrawal rate.

Secondly, I'm trying to understand your investment preferences, because they're not consistent. You're hellbent on owning ABF instead of MBH because you don't want to take corporate bond risk (that is what you're saying when you say "I want no equity-like risk"), but you're looking at Eastspring funds (which are not ETFs) that have much higher risk levels (they're full of corps, prefs, whatever) and have TERs anywhere from 1% on up.

You say you want low risk and you're an early retiree, but you own gold (which is volatile and doesn't produce income) and you're looking at high-cost unit trusts.

If you were one of my consulting clients, I'd sit you down and I'd be blunt with you: I'd say "the things you're investing in do not align with what you say you want, or with what you need. Let's start from absolute scratch: how much money do you have? What do you want to do with that money? And let's go from there."

On the other hand, look at ABF etf, it is largely made up of SGD govt AAA bonds (I would hope quasi govt institutions were left out), designed to be a great diversifier when investors move from risky assets to safe havens.
A35 is full of quasi-government institutions. It owns SP Power, Temasek, HDB, LTA, and even some Danga Capital (which is a subsidiary of Khazanah Nasional, which is the Malaysian SWF).

I'll be totally honest mate, you sound like you're just repeating things you've heard elsewhere. A35 is designed to be a SGD govvy bond ETF. It's not "designed" to be a "diversifier when investors move from risky assets to safe havens" (that's not even a thing! That's gibberish!).

I own both MBH and ABF and monitor daily. ABF returns is a lot greater than MBH...
..over the last two weeks. Your investment horizon is sixty years.

I have an extremely low level of risk. Only good etf with great diversifying features should stay in the asset allocation, i.e. a mixture of cash, gold, intermediate and maybe long duration bonds.
What are you diversifying away from, though, given that you have minimal exposure to equities?
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Old 14-08-2019, 09:02 AM   #6174
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There's a lot going on here.

Firstly, you're fixating on having as little correlation and as little volatility as possible, which I don't understand. You say you're "early retired" but you only have six figures in your portfolio; that's not enough to retire on! You need to be thinking about absolute return, not minimum volatility.

Look at gold. If you just looked at gold's correlation over the last few years, you'd say "great, it has zero correlation, I'm gonna buy some"... but that's because gold has gone nowhere since 2011! You're confusing "low correlation" with "good investment".

Same with cash. Cash has zero correlation with anything, but if you hold a bunch of cash, all it does is drag down your returns. If you have a 3.25% target withdrawal rate, holding cash yielding sub-2% is only going to make it more difficult to hit your target withdrawal rate.

Secondly, I'm trying to understand your investment preferences, because they're not consistent. You're hellbent on owning ABF instead of MBH because you don't want to take corporate bond risk (that is what you're saying when you say "I want no equity-like risk"), but you're looking at Eastspring funds (which are not ETFs) that have much higher risk levels (they're full of corps, prefs, whatever) and have TERs anywhere from 1% on up.

You say you want low risk and you're an early retiree, but you own gold (which is volatile and doesn't produce income) and you're looking at high-cost unit trusts.

If you were one of my consulting clients, I'd sit you down and I'd be blunt with you: I'd say "the things you're investing in do not align with what you say you want, or with what you need. Let's start from absolute scratch: how much money do you have? What do you want to do with that money? And let's go from there."

A35 is full of quasi-government institutions. It owns SP Power, Temasek, HDB, LTA, and even some Danga Capital (which is a subsidiary of Khazanah Nasional, which is the Malaysian SWF).

I'll be totally honest mate, you sound like you're just repeating things you've heard elsewhere. A35 is designed to be a SGD govvy bond ETF. It's not "designed" to be a "diversifier when investors move from risky assets to safe havens" (that's not even a thing! That's gibberish!).

..over the last two weeks. Your investment horizon is sixty years.

What are you diversifying away from, though, given that you have minimal exposure to equities?
My six figures AUM mentioned pertains to only investment to stocks and bonds. It is a high six figures and on top of money set aside for an investment property. Even so, this AUM money is large to me as it is all hard earned.

I hope you understand the central theme here is my low risk preference. Before I start my financial plan, I start with understanding my risk profile. I have gone through the GFC being very painful. Back then I knew never to sell out and I'm glad I never did but it was many sleepless nights !!. It took close to 3 months to understand myself and the risk appetite I have and it was a very difficult exercise. Only with knowing surely my risk, can my Asset Allocation be determined.

Many of your readers here have not gone through 1997, 1998, 2000, 2008 crisis. And even if they did, how many have had large enough AUM to begin with ? in 2008, having been a good saver myself, were already six figures. Only has one faced a large red paper loss would you understand your appetite for risk.

Again, I reiterate, I want to sleep at night.

And sleeping at night is the very reason for being pedantic over good diversifiers. A good diversifier would be one to smooth out my returns allowing me to sleep. Great safe haven government bonds fits this perfectly.

Yes I agree Gold isn't that great, that's why I don't keep a high amount of it. Even thinking of selling them due to frothy. But then again, are bonds as well ? I try not to dwell too much on valuations, once started, will cause me to buy and sell and buy and spend too much time on market news and fundamentals..soon enough start to pick single stocks and keep awake many hours in my retirement, something I do not want to. I just stick to a preset asset allocation and rebalance.

If you recall back then in May 2019 risk off, I harped about ABF being lousy during the risk off. ABF wasn't let say performing as well as IGLO or IBTM during the risk off because as you already mentioned, it has large amounts of Quasi govt Institution but So is MBH which is even more Quasi Institution. I took the lesser evil. ABF though not perfect, still did what its supposed to in May and Aug risk off.

I wish there were a 100% SGD AAA govt bond ETF, but there isn't and have no choice but to rely on ABF along with its high relative TER. Hence my search for global govt safe haven bonds hedged to SGD began. At least, in Aus. VIF was available along with VGS and VAS to make life simple. Singapore wanting to become a financial hub is a joke. And yes, Unit trust eastspring isn't a great product, and this relates back to why the hell isn't there isn't a global bond hedged SGD etf in SGX ??

I'm more interested in the success of my portfolio on a SWR 3.25 taking into account sequential risk instead of a solely total return risk/adjusted return perspective. Based on a 60/40 asset allocation, one with MBH and the other ABF, are you certain that MBH has a greater success rate than an ABF even for a 30 year retirement?

I totally agree if the AUM is never touched i.e. applies to most of your readers who are working, it is likely over a long period the AA with MBH will likely have a larger annualised return over a long time frame. I'm not so sure MBH will be good in the event of sequential risk for one such as I a young retiree.

Since I have to prepare for a 60 year retirement, I can't find adequate material on retirement planning except some retirement authors such as Wade Pfau et al, even so, their perspective covers only a 30 year.

The best I can find on info to 60 year retirement pertains to Early retirement now blog on https://earlyretirementnow.com/

I have come across reads covering early retirement of the benefits of a constant 80/20. There were also good evidence that a 100% equity asset allocation fixed for life is warranted although with very high sequential risk in the first 5 years especially...Most of your readers will retire at approx 65 and hence a L shape or 60/40 AA is viable.

However, I can only survive on a V shape glide path, and CPF life if all things fail for a 60 years retirement plan.
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Old 14-08-2019, 09:44 AM   #6175
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Cash or short term bonds are only useful in increasing interest rates/inflation. It is an asset class by itself and not to be conflated with other asset classes. It exhibits zero correlation and yes I keep a good amount as a diversifier.

What I want are good diversifiers that exhibits more negative correlation to equity and safe haven govt bonds are just what I needed along with controversial : Gold.

MBH is not a AAA SGD govt bond period......It is a corporate bond investment grade etf. It can never compare itself to a AAA govt debt in the event of a major risk off.


On the other hand, look at ABF etf, it is largely made up of SGD govt AAA bonds (I would hope quasi govt institutions were left out), designed to be a great diversifier when investors move from risky assets to safe havens.

I own both MBH and ABF and monitor daily. ABF returns is a lot greater than MBH due to the fact of investors factoring a much higher recession risks in this current risk off event. ABF behaves as it should, as a potent diversifier. One that exhibits close to negative correlation if possible. Corporate bonds do not, it exhibits positive correlations to both bonds and equity.

I have an extremely low level of risk. Only good etf with great diversifying features should stay in the asset allocation, i.e. a mixture of cash, gold, intermediate and maybe long duration bonds.

I have nothing against MBH. If one wants to incorporate MBH into the portfolio. There are research that corporate bonds exhibit great risk adjusted returns. Hence in the grand scheme of asset allocation: one can actually lower the equity component, incorporate a lot more MBH and yet able to obtain a greater risk adjusted return. But I prefer to keep it simple and search for ETFs that exhibit great diversifying features.
since u already have a fixed mind of things... err, why are u here?

it's so hilarious.

seriously, your problem is ego and inability to learn.

lose on!

&

thanks for losing, it amuses me no end when i see people with an inability to learn because of their perceived notion of intelligence rooted in deep ego.

haha.
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Old 14-08-2019, 09:44 AM   #6176
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You’ll need to track this yourself - track the FX rate you used to convert - but why do you want to track the cost basis in the first place?
Do I use the average rate? Since I change a fixed USD amount, there would be leftovers that are used the next month. Just for tracking purposes as well as to calculate returns % in SGD basis. Or is there a better way to do this?
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Old 14-08-2019, 09:57 AM   #6177
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wait, is this for real?

old man went through 1997, 1998, 2000, 2008 & she's crying like a bitch?

haha...

and to diss jack bogle even before reading about what he wrote just shows more sillyporean stupidity.

what do i mean by sillyporean stupidity?

let's face it, most locals are stupid.
they don't have the ability to learn, unlearn and relearn.
that's the key reason why the gov has to open up to both tiers of the foreigners, those who are brilliant and those who will exceed the local's contribution by shear diligence.

coming here with a what? high 6 digits and thinking a world about yourself with some other funds stashed for what, another investment pty?

don't make my toes laugh off its feet, pls.

old man talks as if he lead an exemplar life and is at least sitting on a 5m usd funds...

thinking that anyone who hasn't been through 08 and earlier bubbles don't have the experience... is just a bigot.

cause bubbles happen all the time and the top losers are gold hodlers, next, fixed-income losers.

let me know if I am wrong.

oh ya, I don't even bother about CPF, I just treat that as a write-off. (though it is not, just in case, some Roy Ngerng madman use this opportunity to spew crap about how money at CPF is locked away perpetually.)


[QUOTE=swan02

My six figures AUM mentioned pertains to only investment to stocks and bonds. It is a high six figures and on top of money set aside for an investment property. Even so, this AUM money is large to me as it is all hard earned.

Many of your readers here have not gone through 1997, 1998, 2000, 2008 crisis. And even if they did, how many have had large enough AUM to begin with ? in 2008, having been a good saver myself, were already six figures. Only has one faced a large red paper loss would you understand your appetite for risk.

Again, I reiterate, I want to sleep at night.[/QUOTE]
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Old 14-08-2019, 10:42 AM   #6178
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wait, is this for real?

old man went through 1997, 1998, 2000, 2008 & she's crying like a bitch?

haha...

and to diss jack bogle even before reading about what he wrote just shows more sillyporean stupidity.

what do i mean by sillyporean stupidity?

let's face it, most locals are stupid.
they don't have the ability to learn, unlearn and relearn.
that's the key reason why the gov has to open up to both tiers of the foreigners, those who are brilliant and those who will exceed the local's contribution by shear diligence.

coming here with a what? high 6 digits and thinking a world about yourself with some other funds stashed for what, another investment pty?

don't make my toes laugh off its feet, pls.

old man talks as if he lead an exemplar life and is at least sitting on a 5m usd funds...

thinking that anyone who hasn't been through 08 and earlier bubbles don't have the experience... is just a bigot.

cause bubbles happen all the time and the top losers are gold hodlers, next, fixed-income losers.

let me know if I am wrong.

oh ya, I don't even bother about CPF, I just treat that as a write-off. (though it is not, just in case, some Roy Ngerng madman use this opportunity to spew crap about how money at CPF is locked away perpetually.)
I'm an early retiree planning for a 60 year time frame, not 30. Easier to say Jack bogle works with 5 mil USD. Many do not have that and neither do I, but many do want to FIRE asap, as such jack bogle methods won't last a survival of a 60 year time frame.

Exactly, you don't have the experience if you hadn't experienced severe recessions before ! simple as that. I'm not talking of technical experience, you seem to be boasting as if ya some fancy trader. Investing is very much a behavior finance than some fancy chart or fundamental analysis. Most of us here follow the system of simple passive investing, and starting to know your risk appetite (which changes over time) is the first step. To follow blindly let say Jack bogle, but unable to maintain the required asset allocation consistently will lead to the many instances of people giving up on stock/bond investment. I've seen this enough amongst normal people with professional jobs with decent pay.

if you hadn't gone through 2008 and before, you are likely to overestimate your risk appetite as I did. I was at 100% equity and young and spewing like you did thinking I'm invincible with a trader mindset. Have you ever seen red -500k ?....I saw red 50k and could not sleep and that's why I know my balls isn't too big. Don't boast if yours is any bigger. It is unlikely.

let see how you face your next 50% drop. But wait, do you even have 100k minimum to begin with to understand your risk appetite. You are likely mired with debt like so many Singaporeans and can only dream to FIRE. Stick to your bogle and 65 or maybe 70 yo retirement planning. At least bogle theories suit.

I do not know a single person ( all young with AUM < 100k) who invested back then in 2008 and continues to invest today. All deviated into properties.

I believe I'm being normal, even with a greater risk appetite than those many friends who gave up. It is likely than not that many readers here INCLUDING YOU would belong to similar risk appetite as I am once AUM reaches an amount high enough for you to retire (without cpf life). It is being retired that severely brings down your risk appetite. Previously I was a high 80-90 risky asset appetite asset allocation while working.
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Old 14-08-2019, 10:57 AM   #6179
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since u already have a fixed mind of things... err, why are u here?

it's so hilarious.

seriously, your problem is ego and inability to learn.

lose on!

&

thanks for losing, it amuses me no end when i see people with an inability to learn because of their perceived notion of intelligence rooted in deep ego.

haha.
i have learned a lot here. My original post asks about the ETFs pertaining to gold and Bonds and asset allocation ratios optimal for a high fixed income component.

Most people here are of high equity component and young and work and such questions do not come about. Can't I ask questions and feedback as a young retiree ?

Instead, I receive replies why my AA is so equity low, why not MBH (which I expected), gold etc. I just want to gather feedback on how people allocate in a high fixed income portfolio. Why so many have allocated to high duration bonds for e.g. Are people such as Ray Dalio stupid, I think not.

It is a lot harder than a high equity AA which I used to have.

at least, Shiny has got me thinking of discing any allocation to high duration bonds and even gold.
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Old 14-08-2019, 11:01 AM   #6180
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dear swan02,

just to let u know, i think my networth exceeded yours...
and sorry, i didn't even participate in 2008's recession.
and to add salt to the wound... I didn't even start at 2008, haha.
in short, you have been working in an extremely inefficient manner, i guess?

however, to think that just because i didn't go through that, it makes me any less experienced than you is a joke.

from what u are investing in, it's a losing instrument.

gold & fixed-income instruments (are they capital-guaranteed as well?) are losing instruments.

I haven't worked for hmm, closed to a decade too. but that's not to say it affected my income at all. work being defined as anything more than hmm, 25 hours a week.

welcome to the gig economy, where cycles are really short and you learn fast, apply and catch the next wave while you are at the first wave.

when you wrote on this thread, it's obvious that you are incapable to learn and that's the problem.

i guess you went all gov-loving and invested in whatever the sg gov took interest in? can't blame us for that, no?

any average joes who went w temasek... would die v badly, because temasek is a freaking whale.

i know some clowns and mind u, those dumbos are schooled from nus and work in the local loserish banks... they followed temasek when they invested in msia's slumland and look where are they now? crying.

now, now, if u are one of those sg gov-loving type, you only have yourself to blame.

go pick up jack bogle's tome, random walk to wall street and undo the damage you did to yourself, old man. not too late yet.

or if u have problems reading, at least, pick up shiny thing's rich by retirement.

but i think i know your kind, it's us$10 and it's too expensive for you, right?

cheaper to lose on big with your failing ways in punting at paper gold and fixed-income tickets then?

which brings me to ask u, so why are u here since u are a stick-in-the-mud?

???

oh ya, so sorry, i am against day-trading too.
but i guess some people can trendspot and most can't.
so stay out of it, if u can't.
just stick w Shiny Things... he makes it really simple for us to adopt the winning ways.

and be nice and buy a copy of his book because it's only decent that we pay him for his effort.
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