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*Official* Shiny Things club - Part 2

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Old 10-08-2018, 02:07 AM   #1471
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This is obviously wrong. As long as you are buying IWDA every month, it is always better to go with IB. If you want to buy every 3 months, SCB may be a better option, depending on how much you are going to buy and how much you already have inside.
I will say, most people won't be buying IWDA every month. More likely is that you're going to be buying, for example, ES3 one month, then IWDA, then ES3, then IWDA, then A35, etc etc etc. That way, you get to your target allocation pretty quickly (within a few months) and you don't have to pay three sets of brokerage fees every month.
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Old 10-08-2018, 10:15 AM   #1472
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I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?
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Old 10-08-2018, 10:43 AM   #1473
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Hoe does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit

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

If you can commit to buying IWDA every month, then you should just start off with IBKR because the monthly cost is the same to you whether IBKR or SCB: USD 10 each month. Unless you have other assets with SCB that can push you into priority banking, that is; at 0.18% with no minimum commission, your SGD 2k investment, or about USD 1,526 will generate commissions of USD 2.74 a month per transaction with SCB. This is before factoring in the USDSGD spread, which based on what forummers who use SCB here have said in the past, runs at about 0.5%.
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Old 10-08-2018, 12:05 PM   #1474
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I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?
IWDA covers only developed markets. Normally, you would combine IWDA with EIMI which covers the emerging markets. Recommended would be about 10-20% of your portfolio in EIMI and the rest in IWDA.

Make sure you are using tiered pricing, or you will incur US$12 of commission per month instead of US$5.40

Hoe does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit
Exchange rate is about the same, but min commission is $25 with Vickers. Before GST. Should probably check if SCB also charges GST on their commissions.

Last edited by tangent314; 10-08-2018 at 12:09 PM..
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Old 10-08-2018, 06:19 PM   #1475
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How does DBS Vickers look compared to SCB for IWDA? Any idea on the exchange rate for vickers? 0.5% is quite a bit
Let's see...

DBSV (for trading on LSE):
Commission - Minimum GBP 25 / USD 36 / EUR 33; or 0.35% of trading principal
Dividend Collection - 1% of Net Dividend (Minimum GBP 3, Maximum GBP 30)
Corporate Action Service Fee - GBP 15 per counter
Custody Fee (charged quarterly) - SGD 2 per counter per month, capped at SGD 150.00 per quarter. Waiver based on combination of Singapore & foreign market transactions: (a) 2 x transactions per month or (b) 6 x transactions per quarter

SCB (for trading on LSE):
Commission - 0.25% (0.20% with Priority Banking), minimum GBP 10, USD 10 or EUR 10 (no minimum for Priority)
Dividend Collection - 0
Corporate Action Service Fee - 0
Custody Fee (charged quarterly) - 0

If you still insist on using DBSV, sure go ahead. As a small, small shareholder of DBS, i thank you
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Old 11-08-2018, 01:14 AM   #1476
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I'm thinking of allocating between USD2-3K each month in ETFs. Would it make sense to put everything in IWDA or find one more ETF to combo it with?
You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.
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Old 11-08-2018, 08:03 AM   #1477
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You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.
It could be a good idea. “It depends.”

Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).

IWDA includes a small component of Singapore-listed stocks since Singapore (the SGX) is classified as a developed market. If by some miracle the next Apple or Amazon is SGX listed, IWDA will ride it.

Last edited by BBCWatcher; 11-08-2018 at 09:00 AM..
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Old 11-08-2018, 09:37 AM   #1478
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Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).
It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.

What Shiny Things has posted is meant to be a generic guide, geared to the average Singaporean who is just starting out on his investment journey. Obviously his life direction and goals may also change along the way.

If you would like to post about retirement in the Bahamas, perhaps a US-based forum would be more suitable for you
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Old 11-08-2018, 01:21 PM   #1479
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It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.
I try not to assume anything absent evidence. SpringCleaner hasn’t indicated her/his investment objectives, and nobody bothered to ask first. Shall we ask first, or would that be “bewildering”?
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Old 11-08-2018, 01:29 PM   #1480
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Thank you for all the useful replies!

IWDA covers only developed markets. Normally, you would combine IWDA with EIMI which covers the emerging markets. Recommended would be about 10-20% of your portfolio in EIMI and the rest in IWDA.

Make sure you are using tiered pricing, or you will incur US$12 of commission per month instead of US$5.40
I will be opening an IB account soon. If I want to select tiered pricing, do I choose it upfront during the application process or is there an option for me to convert from fixed to tiered pricing in the account settings?

You need a balance between Singapore stocks (ES3), global stocks (IWDA), and bonds. Plowing everything into global stocks isn't a great idea.
I do understand the need to diversify but if my investment objective is capital appreciation and can stomach a medium to high risk, would it still make sense to put money in SG stocks and bonds?

It could be a good idea. “It depends.”

Narrow, Singapore-specific investments are only suitable for people who reasonably expect to retire in Singapore (or who are saving for some other Singapore dollar-based purpose, such as a down payment on a home in Singapore or a child’s educational expenses at NUS, NTU, etc.) If SpringCleaner already knows she/he is not going to do that (or, due to immigration status, won’t be allowed to do that even if preferring retirement in Singapore), then there’s no merit in overweighting Singapore.

I have no idea what SpringCleaner’s drawdown goals and constraints are, and it’s important to ask first. In fact, it could be advisable for SpringCleaner to overweight in some other country-specific vehicle(s).

IWDA includes a small component of Singapore-listed stocks since Singapore (the SGX) is classified as a developed market. If by some miracle the next Apple or Amazon is SGX listed, IWDA will ride it.
Pardon me for not giving more details. I am in my early 30s, single with no dependencies or debts. What I am trying to achieve is financial independence as early as possible so of course, besides saving the bulk of my salary, increasing my earnings is also one of the things in the pipeline. I am not adverse to the idea of retiring in a country other than Singapore. In fact, I had been giving it a serious consideration and may actively pursue the thought. If I truly can retire early one day, I do see the need to move to a lower cost country in order to lengthen the drawdown horizon.

Of course, my objectives may completely change if I do get married one day and have kids but at this point of time, I am okay to have as little SG stocks exposure as possible.

It is truly bewildering how you like to assume that everyone who posts in this forum, for some reason, would like to retire in a country other than Singapore or has some difficulty in retiring in Singapore.

What Shiny Things has posted is meant to be a generic guide, geared to the average Singaporean who is just starting out on his investment journey. Obviously his life direction and goals may also change along the way.

If you would like to post about retirement in the Bahamas, perhaps a US-based forum would be more suitable for you
As mentioned above, I am entertaining the idea of retiring in another country.
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Old 11-08-2018, 02:26 PM   #1481
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If you have 30 years to retirement and expect your expenses for the next 30 years to be denominated in S$ (housing, healthcare, transport, food, education for children, to name a few big ticket items), then i would think that Singapore-specific investments are equally important.

You should of course diversify your portfolio, but STI ETF should still be one of your core holdings.

the reason why I would recommend Shiny Things' book to Singaporeans is because he has tailored it to Singaporean circumstances, unlike Coffeehouse, Gone Fishing, etc portfolios which are US specific.
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Old 11-08-2018, 03:01 PM   #1482
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If you have 30 years to retirement and expect your expenses for the next 30 years to be denominated in S$ (housing, healthcare, transport, food, education for children, to name a few big ticket items), then i would think that Singapore-specific investments are equally important.
No, it’s not important, and for the same reason(s) holding cash and cash equivalents is not important with long time horizon money.

An emergency reserve fund in that currency and a steady income flow that exceeds local spending needs are both important, but long-term money has its own separate role to play.

You should of course diversify your portfolio, but STI ETF should still be one of your core holdings.
No, not unless there’s a future drawdown in Singapore dollars, and then you’d adjust your portfolio to ease into a drawdown appropriate position anyway (i.e. gradually shift from stocks to bonds) as drawdown age approaches.

the reason why I would recommend Shiny Things' book to Singaporeans is because he has tailored it to Singaporean circumstances....
OK, but SpringCleaner has already told us that he/she is not interested in a particularly highly Singaporean investment orientation at the present time. And that’s a perfectly reasonable point of view. We are all different in at least certain respects, with different preferences and goals, and that’s all fine.
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Last edited by BBCWatcher; 11-08-2018 at 03:04 PM..
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Old 11-08-2018, 05:46 PM   #1483
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Firstly, thanks all for the helpful replies!

Erm...the costs and effort of trying to hedge probably won't be worth it. And you can't have a perfect hedge anyway because you have no idea what the S&P 500 will be at the point you want to sell your ETFs...

Just go with the flowww
Yes, I did see an article but as you mentioned, too much cost and effort!

So you want only large cap U.S. listed stocks and emerging market stocks? If a stock is listed in Europe, Japan, Canada, Hong Kong, or elsewhere in the developed world it’s off limits? Why?
I was thinking of a mix of IWDA, EIMI and CSPX. Seems like in recent years the IWDA has mainly been helped by the U.S. growth, since the EU was still coming out of their own flat growth stage?

You’re not buying U.S. dollars when you buy stock funds. You’re buying stocks, which are shares of companies that typically/often do business around the world. Those funds can be quoted and traded in any currency.

At some point decades from now, presumably, you might retire in Singapore and then want to support a retirement lifestyle predominantly oriented in Singapore dollar spending. As you approach that drawdown age, you would gradually rebalance into more conservative assets that are strongly correlated with Singapore dollars (or with the local currency if you retire elsewhere, assuming it’s a decent or better currency). Your owner-occupied home in Singapore, CPF, SSB, SGS, and Singapore bond fund holdings are all examples of assets with strong (or perfect) Singapore dollar correlation.
Yes, I was thinking of the USD that you pay to buy the ETF, and the USD you will get when you choose to sell off the ETF...if you put in USD 10k @ 1.36 that'll be 7.35k sing but when you sell at USD 20k @ 1.5 that'll be 13.33k sing, which is a 80% return instead (still good, but what about those really unlikely scenarios where USD/SGD erodes your returns even more?). But I think your point on having SGD makes a lot of sense, will remember that as I grow older

Hey, glad you enjoyed the posts!

Don't bother. Hedging the FX is surprisingly expensive, for one; and for another, having some SGD assets (your A35 and ES3) is the natural hedge. If SGD strengthens over the time you're investing, then your SGD assets will help you out; if SGD weakens, then your overseas assets will help you out.
Thanks!
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Old 11-08-2018, 11:19 PM   #1484
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I will be opening an IB account soon. If I want to select tiered pricing, do I choose it upfront during the application process or is there an option for me to convert from fixed to tiered pricing in the account settings?
Yes you can change it in account settings. It may take a day or two for the change to take effect though.

For buying ETFs on the LSE, you should be using:

Fixed pricing for purchases of over US$6250
Tiered pricing for purchases of less than US$6250
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Old 11-08-2018, 11:53 PM   #1485
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I was thinking of a mix of IWDA, EIMI and CSPX.
IWDA already includes CSPX (and a bit more), to the tune of about 61% of IWDA. You’re not missing U.S. listed stocks in IWDA; far from it.

So why would you want to raise U.S. listed stocks to >61% (of IWDA)? That seems quite weird to me.
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