*Official* Shiny Things club - Part 2

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Mmm, that's not what I'm getting at - I'm not saying you should diversify. I'm saying this particular thing is quite risky in ways that I don't understand, and I personally wouldn't buy it.
Hi ST, well noted! Thank you for sharing your thoughts. Really got me thinking about it seriously. I am still not set on my directions on this yet. I will read more and check more. Will update on my course of action once I have it. Thank you!!

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smart_alex

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Bt I dun count my CPF as "saving", so my actual pay is only 2800 after CPF

anything in the CPF account I take it as donation to the govt, no chance take out

so just ignore whatever in the CPF and focus on my cash salary of 2800

I only invest + save around 1.3k per month

is it sufficient?
 

BBCWatcher

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- term insurance and some accident insurance, CI and all that
I didnt count it as my expense
It is.

Longtime readers will know by now that I consider disability income insurance (DII) to be core, essential insurance, particularly for early and mid-career working adults. I rank it much higher than practically anything else. I’m repeating that point here.

Term life insurance is not required if you don’t have dependents, although it seems that your parents are that.

so I should spend my $200 on where? IWDA?
Probably, but are you sure you can afford the additional savings?

Bt I dun count my CPF as "saving", so my actual pay is only 2800 after CPF
anything in the CPF account I take it as donation to the govt, no chance take out
Then you won’t mind making a nomination of your CPF assets to me, as your heir, correct? :s22:
 

BBCWatcher

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the logic I was going with was that this $1000 would serve the purpose of being a war chest in case a bear market were to happen. The "thereafter" happens after 1 year from now, so I am making the assumption that the bear market would happen within 4 years (given how the bullish the market has been), while considering that SSB's average yield would not >2% within the first 3 years.
Doesn’t your dollar cost averaging into the market already take care of that? And what if the bear market never comes? What if it’s a fairly stagnant market for a while, then it charges ahead again? How will you know it’s a bear market?
 

ohmyjoshh

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Doesn’t your dollar cost averaging into the market already take care of that? And what if the bear market never comes? What if it’s a fairly stagnant market for a while, then it charges ahead again? How will you know it’s a bear market?

Indeed, I do have DCA as my base strategy. However, I also thought of setting aside some spare cash (beyond my emergency funds) as a war chest to make additional purchases when the market goes on discount. Certainly, no one knows when (and even if) it would happen, but majority of sentiment seems to indicate that we're in the late cycle of the bull run.

I do however, think I get your point.

In the event the bull run surges on:
I benefit from being invested in the market, while my cash earns a decent 2-3% in SSBs.

In the event a bear market comes:
I would cash out my SSBs, earning less interest there but I benefit from being able to buy cheaply in the market.

I'm not that sure on how to tell if a bear market has come, but I suppose there are indicators like major downward corrections in stock markets.
 
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Shiny Things

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$1000 will go into an SSB bond ladder for 6 months, earning interest of 2-3% p.a.
Thereafter, the $1000 will go into DBS multiplier account, earning interest of 2% p.a.
I also have existing savings, also in DBS multiplier account, equivalent to 5 months of emergency funds.
$1200 to IWDA (as global developed equity)
$100 to EIMI (as global developing equity)
$500 to IUIT (as technology equity, because I believe in the growth potential in tech over the long run)
$600 to ES3 (as local equity)
$300 to individual stock picking/riskier investments
Additionally, I would have $1600 going into CPF.

This is pretty confusing to me. You seem to have said "I want a huge wide range of products", instead of starting with "I want x in stocks, y in bonds". Buying $100 or $500 clips of UK ETFs is going to cost you a truckload in fees - you're paying like $50-$60 a month just in transaction fees! And after a few months you’ll end up with a bunch of random little positions that you’ll end up getting bored with and sell because you want to chase the next big thing. I’ve seen it happen.

On top of that:
1) You want exposure to tech and China, which is fine, but you're already getting that exposure through your other ETFs;
2) You're putting money into a save-as-you-earn bank account that could get a lot more interest elsewhere.

I think you might be sort of missing the point. The point is not to jump into the deep end by buying EVERY SINGLE ETF and adding your own market views on top of that. The point is to start simple! Maybe even start with just ES3 and MBH, because that’s already a balanced portfolio by itself (though, as BBCW would be quick to remind us, it’s pretty insular).

I would just do the following, without even challenging your allocation percentages:
1) $1000 a month into either SSBs or the MBH corporate-bond ETF;
2) $2500 a month into either IWDA (don't overthink this; if you're just starting out, having a tiny allocation to EIMI or IUIT won't make any meaningful difference to your returns) or ES3. Since you want about a 2:5 ratio, buy IWDA for five months and then ES3 for two months.

Boom, you've just cut your monthly transaction costs to <$10. I've just saved you $600 a year.

$300 (prioritizing shield plan, followed by disability income insurance, then term insurance)
That seems like a lot. I know BBCW asked this already, but what on earth kind of goldplated insurance are you getting for this money?

I find that VEUD is listed as LSE instead of LSEETF and also IB margin is 100% for VEUD instead of 25%. I am afraid, when we try selling VEUD we will be hit with 0.5% stamp duty.

Firstly, UK stamp duty only gets applied on buy trades, not sell trades.

Secondly, why not just drop a ticket to IBKR and ask them?

It is just so convenient with the phone apps to log in and check and then read more finvis news, i know more about US politics in the past year than my whole life before, it is addicting to watch the numbers grow up green and red, and watch the news development on trades and crisis!

This being said, do you know why yesterday IWDA and EIMI spike up and down between 2.30-4.30pm london time, as i seen on google finance chart?

  1. I totally get that. I’m a news junkie myself. But you need to draw a line between your news consumption and what the news means to your portfolio. What you need to learn is that most news makes no difference. When Donny Two Scoops got elected, the S&P tanked 50-60 handles in a couple of hours, and then rallied 20%(!!) over the next year. The S&P is near its all-time highs this morning despite trade wars, Argentina and Turkey looking shaky, etc etc etc.
    You have not learned this, and you need to learn it. The best thing you can do right now is to throw your portfolio out the window and start again; that will help you break the link between the news and your portfolio.
  2. No. And why does it matter to you anyway?

I need some advices regarding investing in S&P500 and China Index, I have been reading around online and such but the information is too overwhelming for me, thus I could not reach a conclusion on how it is best to invest in S&P500 and China Index.

OK, there’s a lot going on here.

Firstly: why do you want to specifically invest in the US and China in the first place? Which “China”—greater China, H-shares, A-shares? Why do you think they’ll do better than the rest of the world’s stock markets? And more importantly, why do you think you know something that the rest of the world doesn’t?

Anyway. If you’re not just investing based on what you read in the news:
[*]The right broker is Interactive Brokers;
[*]The right investment vehicles are CSPX, listed in London (for the S&P 500); or 2828 HK (for “China” - that’s an index fund of HK-listed Chinese stocks).

About forex/CFDs,
I’m gonna stop you right there. FX trading, and trading using CFDs and other leveraged instruments, is a flat NO. Do not do this. You will lose all your money.

1. Will this strategy of investing ever fail? I would imagine if it was time for me to drawdown but the market crashes badly and everything I've got would be withdrawn at a loss. Am i right?
So there’s no guarantee that this strategy will make money, no. It’s the most sensible way to invest, and over the long term, it lets you ride out swings and roundabouts in the markets. But you’re right, any investment strategy will have trouble if “the market” crashes just before you take your money out. That’s why this strategy diversifies between stocks and bonds, between local and global investments—so that if one market goes down, that won’t affect the rest of the portfolio as much.

2. What other broker would be recommended for trading the local etf other than scb as it is not an approved broker by my company.

DBSV’s cash upfront account is fine if you can’t use Stanchart.

Regarding Standard Chartered, or any brokerage that deals with foreign stocks, what will happen to one's stocks if the brokerage closes?

Why does everyone seem to think that brokerages can just run off with your money? What do you think will happen?

Anyway, the short answer is that probably nothing will happen; most likely is that your account’s going to be transferred over to another broker, and your positions will be intact. That’s what tends to happen if brokerages go bankrupt, because the brokerages don’t have access to your money. It’s held in segregated accounts; the broker can’t just raid them.

In the mean time, I wish to allocate a small amount of money monthly into REITs. I know your views on REITs but I really want regular dividend coming into my bank account (helps alleviate my anxiety about not having enough money).

I’m going to double down on what everyone else has said: if the problem is your anxiety about “not having enough money”, what does that mean? Not enough money in your brokerage accounts? Not enough income each month? If you tell us what you want, we can tell you how you can get it.

Looking to seek your advice on whether it is good to go ahead with an ILP which will use 100% of the monthly premiums into 2 unit trust funds that was handpicked by a wealth planner?

No. You’re going to be paying most of your first two years’ premiums in commissions to the planner, and the planner doesn’t have any bloody idea about what funds are going to do well; if he did, he’d be working at a hedge fund instead of a sleepy insurance company.

Tear it up while you still can.

I save $1000 in my bank account each month

- $500 CIMB
- $500 POSB SAYE
- $300 for ETF
- $500 give parent allowance

I earn $2800 (after CPF), so
Wow, yeah, like people are saying, you’re putting way too much into bank deposits. That’s overly conservative for your age; that’s not going to leave you enough to retire on.

Hi ST! Just finished reading your book and it is really an eye opener for someone who doesnt know personal finance at all. Thank you!

Hey - glad you liked the book! Let’s see if we can’t help you with these questions…

1) I'm 23 this year. Just in case, 20/30 years down the road, the global ETF is delisted from the exchange (is it actually possible for ETF to be delisted like stock?). What should we do in that situation? Do we sell everything and lump sum to new global ETF? Or just add the lump sum to local ETF since we are nearing retirement?

When an ETF gets delisted, it sells all of the shares that it holds, and hands the cash back to the shareholders. You could just take that cash and reinvest it into a similar ETF. It’s a pretty minor headache.

2) I still couldn't get the logic behind why IWDA as an accumulating ETF is better than VWRD. Let's say both unit price and dividend yield is the same.

Because when you’re still working, you don’t need—or want!—dividends. If you have an ETF that’s throwing off a stream of dividends, you’re going to have to take those dividends and pay money each month to reinvest them. If you own an accumulating ETF, they reinvest the dividends for you.

When you reach your retirement, more of your portfolio’s going to be in bond ETFs, which tend to pay out dividends anyway, so that solves part 1 of the issue. And part 2: it’s totally OK to sell some shares! The point of retirement saving is to save for you, you’ve spent your whole life working to save that money so that you can use it when you retire and you’re not earning money. If there’s some left over for the kids, that’s fine, but support yourself first.
 

smart_alex

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It is.

Longtime readers will know by now that I consider disability income insurance (DII) to be core, essential insurance, particularly for early and mid-career working adults. I rank it much higher than practically anything else. I’m repeating that point here.

Term life insurance is not required if you don’t have dependents, although it seems that your parents are that.


Probably, but are you sure you can afford the additional savings?


Then you won’t mind making a nomination of your CPF assets to me, as your heir, correct? :s22:

So what do u suggest then?

what do u mean by "are you sure you can afford the additional savings"?
 
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smart_alex

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Wow, yeah, like people are saying, you’re putting way too much into bank deposits. That’s overly conservative for your age; that’s not going to leave you enough to retire on.

Hi Shiny thing,yup I read the ebook, so is it still recommend to buy some IWDA for current times?

not sure did you have the most updated strategy at the moment

I plan to save $200 a mth buy some IWDA maybe every 3 month

is it recommended? or should i use the addition $200 to buy more G3B?
 

smart_alex

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if my age is 30,

then this the recommended allocation of my stock and bond right

d0Fm5Wa.png
 

revhappy

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if my age is 30,

then this the recommended allocation of my stock and bond right

d0Fm5Wa.png
It should be A35 20.

110-age % should be stocks so it means 80% stocks and remaining 20% bonds.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT
 

smart_alex

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It should be A35 20.

110-age % should be stocks so it means 80% stocks and remaining 20% bonds.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

Ohh okay I will change it
 

BBCWatcher

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In the event the bull run surges on:
I benefit from being invested in the market, while my cash earns a decent 2-3% in SSBs.
In the event a bear market comes:
I would cash out my SSBs, earning less interest there but I benefit from being able to buy cheaply in the market.
Right, I think that's at least better. You can revisit this question a year from now, as you point out.

I don't like the whole idea, though. You're trying to time the market, and that's quite hard. Well, perhaps with once-in-a-lifetime exceptions like the Global Financial Crisis. Buying practically anything in early 2009 was a good time to buy, and that was fairly clear at the time. But that "never" happens. You can wait 30+ years, or more, for that sort of event to come along. What can happen much more often is that the markets muddle along at +/- 0% for a few years, then they surge again. So how do you know when to buy in that common scenario? You don't, actually.

Yes, there is a bit of a "problem" that U.S. stock markets are hitting all-time highs and with a fairly strong U.S. dollar. But my strategy amidst that reality is not to settle for 2.X% (much) on long-term money but, rather -- and I know I sound like a broken record -- to give 4+% CPF (and with tax relief) a little extra love than otherwise. I'm also a little more non-U.S. skewed than I have been in the past, but that's also because I'm not a U.S. resident. If circumstances and future expectations change, it's OK to make a minor adjustment or two at the margins. And I've had a few life changes (all for the better), so I've made minor adjustments to my "program." All that said, the basic monthly savings flow into stocks that I set many, many years ago is still running, automatically, uninterrupted.
 

BBCWatcher

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So what do u suggest then?
Focus on core insurance needs first, and skip the non-essentials until you can afford them (and perhaps not even then). Here's my view on what's core for most working adults, and in the Singapore context:

* An Integrated Shield plan, with public hospital B1 ward coverage. Skip any "zero dollar" riders. (We have Medisave Accounts.) If you want to bump that to public hospital A ward coverage because it's $3 more per year, or whatever, I wouldn't get too upset.

* Disability income insurance, which three carriers in Singapore sell. Pick the longest deferral period available, age 65 term. Consider any escalation option if available since that makes some sense to combat inflation. Last I checked, Great Eastern offers the best DII policy terms, and Aviva tends to be the price leader. Shop around, and sometimes it makes sense to mix coverage from two carriers.

* Simple term life insurance, in "Direct" form since you can comparison shop online -- and ONLY if you have at least one dependent. Term to age 65 is fine.

* If you venture outside Singapore, travel medical insurance that provides medical repatriation/evacuation coverage. I currently like Bupa Global's "Basic" policy.

what do u mean by "are you sure you can afford the additional savings"?
Can you afford to live on only $800/month or even $1,000/month? Are you comfortable with that? It's OK to enjoy life at least a little, especially if you can afford it.
 

Listopad

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Right, I think that's at least better. You can revisit this question a year from now, as you point out.

I don't like the whole idea, though. You're trying to time the market, and that's quite hard. Well, perhaps with once-in-a-lifetime exceptions like the Global Financial Crisis. Buying practically anything in early 2009 was a good time to buy, and that was fairly clear at the time. But that "never" happens. You can wait 30+ years, or more, for that sort of event to come along. What can happen much more often is that the markets muddle along at +/- 0% for a few years, then they surge again. So how do you know when to buy in that common scenario? You don't, actually.

Yes, there is a bit of a "problem" that U.S. stock markets are hitting all-time highs and with a fairly strong U.S. dollar. But my strategy amidst that reality is not to settle for 2.X% (much) on long-term money but, rather -- and I know I sound like a broken record -- to give 4+% CPF (and with tax relief) a little extra love than otherwise. I'm also a little more non-U.S. skewed than I have been in the past, but that's also because I'm not a U.S. resident. If circumstances and future expectations change, it's OK to make a minor adjustment or two at the margins. And I've had a few life changes (all for the better), so I've made minor adjustments to my "program." All that said, the basic monthly savings flow into stocks that I set many, many years ago is still running, automatically, uninterrupted.

I echo you on the waiting for the stock market, am a real life example of waiting for "that event" but never got round to putting money on the table (the fortunate is I "invested" a lot of time/efforts to grow my dayjob income instead, which is equally important). Everyone is waiting for the big "crash" to vest.
 

smart_alex

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Focus on core insurance needs first, and skip the non-essentials until you can afford them (and perhaps not even then). Here's my view on what's core for most working adults, and in the Singapore context:

* An Integrated Shield plan, with public hospital B1 ward coverage. Skip any "zero dollar" riders. (We have Medisave Accounts.) If you want to bump that to public hospital A ward coverage because it's $3 more per year, or whatever, I wouldn't get too upset.

* Disability income insurance, which three carriers in Singapore sell. Pick the longest deferral period available, age 65 term. Consider any escalation option if available since that makes some sense to combat inflation. Last I checked, Great Eastern offers the best DII policy terms, and Aviva tends to be the price leader. Shop around, and sometimes it makes sense to mix coverage from two carriers.

* Simple term life insurance, in "Direct" form since you can comparison shop online -- and ONLY if you have at least one dependent. Term to age 65 is fine.

* If you venture outside Singapore, travel medical insurance that provides medical repatriation/evacuation coverage. I currently like Bupa Global's "Basic" policy.


Can you afford to live on only $800/month or even $1,000/month? Are you comfortable with that? It's OK to enjoy life at least a little, especially if you can afford it.

thanks for the insurance suggestion, I already brought for sometimes, so not changing it anytime soon, I know there will always be value for money Disability insurance from time to time by different insurer, I just buy the best policy of the best of my knowledge at the time. So yeap, not changing my current policy anytime soon

I am more concern abt how should I allocated my monthly salary and investment issue
 

smart_alex

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ask u guys something

To open a standard charter trading account

I need to open a normal banking account in SC right?

is there any recommended bank account I shld open in SC?

any step by step guide?
 

StarSeven

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Hi ST and other experts,

I already have a substantial holding in IWDA and will continue to DCA into the ETF.

In the mean time, I wish to allocate a small amount of money monthly into REITs. I know your views on REITs but I really want regular dividend coming into my bank account (helps alleviate my anxiety about not having enough money).

What REIT ETFs do you recommend?
So far, I have looked at the LION-PHILLIP S-REIT ETF and iShares Developed Markets Property Yield UCITS ETF.

All help appreciated.

Sorry for the lack of clarity. My monthly salary is more than enough to cover my expenses. However, what I want is to "see" a monthly dividend that is sufficient to cover my monthly expenses. That way, I would feel at ease if I'm ever retrenched etc (this relates to my anxiety). Of course, I have an emergency fund but it's always nice to know I can take my time to look for another job. I work in a field where it can take very long to find another job.
 

BBCWatcher

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However, what I want is to "see" a monthly dividend that is sufficient to cover my monthly expenses. That way, I would feel at ease if I'm ever retrenched etc (this relates to my anxiety). Of course, I have an emergency fund but it's always nice to know I can take my time to look for another job.
You're still getting dividends, but it's only a question of whether they're automatically (and much more cost-effectively) reinvested, or manually reinvested. If you exhaust your emergency reserve fund then you sell a very small portion of your asset base to raise funds, that's all. (A terrific time to do some portfolio rebalancing in the process -- just sell a bit of the asset type that's "too high" according to your desired, age-appropriate asset allocation.)

I don't understand you on this one, really. You'd just be incurring extra cost with no additional protection. Indeed, less protection, because the extra cost reduces your wealth. If you want the assurance that you're receiving a dividend flow, just look at different lines in online reports. This stuff is all going to be electronically reported anyway, so it's all just numbers on your screen. You can still find those numbers.
 

Eternit

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Hi ST, BBCW and other gurus

I have been following the advice of buying STI ETF through POSB invest saver every month. It's over a year now and from my observation, most of the time it's "in the red"....

I'm just wondering, on what basis is this advice given and why do the advisers think this is a way to grow wealth in the long term? I'm not doubting anyone but just afraid that after many years of injection it will still be in the red or merely break even (which is a loss considering inflation).

I ask this because I really wanna know what my money goes into and exactly how it will benefit in the long run, coz right now I just don't see it, but buys every month coz the guru here says so, just worried it's blind faith...
 
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