2022 Market Sentiment & Positioning

[revhappy]

Anyone know any good S&P 500 etf in euro??

Good market cap, liquid and tracks well.

USD is kinda expensive now, rather park some in euro. Euro to USD is around 1.0 now.

Unless you don't convert SGD to EUR it won't make a difference. SPY in EUR will fall when EUR goes up. So if you convert SGD to EUR, then net no difference to you. If you don't convert then it is like a margin loan, you will be short EUR and you will lose money when you have to buy EUR again.

The correct trade would have been, to buy SPY in EUR when EUR was 1.2 and not convert SGD to EUR. So even though SPY fell, in EUR it would have fallen less and since are short EUR, you can buy it back cheap now.

 

[churnmaster]

Not an expert but can try to answer your questions . . Yuan is a controlled currency and for decades the authorities have prevented its appreciation to keep exports competitive. Otherwise based on trade and current account it should have been much higher, despite concerns about the debt fueled economy which has been slowing.

Regarding the USD, it’s the ultimate safe haven during crisis. US being the largest economy and the largest consumer of good and services meant that most stuff internationally traded is USD denominated. That has created a constant / perpetual demand for USD even for bilateral trades between far away nations. So for eg. an oil importing nation is S Asia / S E Asia importing from the M East, have to pay in USD for their oil imports. In order to earn those USD, their goods and exports are also traded in USD terms. If they are not able to earn enough USD, then they have to borrow that’s again in USD (sovereign debt) creating an ongoing short exposure. Majority of external commercial borrowings by corporates around the world are also in USD. In times of crisis, most of which stems from high energy prices, there’s a short squeeze which leads to USD rally against such currencies.

For many large nations, energy import bills are significant and if they can import energy either with their own currency or some kind of bilateral / barter arrangement, then the need for USD goes down substantially for them and it also gets reflected in their currency’s strength during such times of energy crisis.

https://www.business-standard.com/a...ade-with-russia-sri-lanka-122071101185_1.html
https://www.timesnownews.com/busine...e-in-local-currencies-report-article-92850102
India's central bank has come out with formal procedures for settlement in its domestic currency and now discussions are on among other Asian nations.

 

[occifer]

Unless you don't convert SGD to EUR it won't make a difference. SPY in EUR will fall when EUR goes up. So if you convert SGD to EUR, then net no difference to you. If you don't convert then it is like a margin loan, you will be short EUR and you will lose money when you have to buy EUR again.

The correct trade would have been, to buy SPY in EUR when EUR was 1.2 and not convert SGD to EUR. So even though SPY fell, in EUR it would have fallen less and since are short EUR, you can buy it back cheap now.

Hmm need to find an index where spy does not fall when euro goes up against USD.

Otherwise gotta do 2 trades, buy spy in USD and then long euro, short USD. I rather just the index do it hmmm. Or maybe just convert spare USD to euro.

 

[churnmaster]

Plan is to convert SGD to euro and buy S&P 500 index in euro.

Euro to SGD is 1.4, about 1.6 a year ago
USD to SGD is 1.4, about 1.35-1.4 in previous year
Euro to USD is 1.0, not seen in 20 years, about 1.2 a year ago.

Chances are that it will revert to around how it was a year ago for all 3 currencies.

Yes, spy in euro will fall when USD strengthens. But euro to SGD should then be about 1.6 and I bought at around 1.4. I make that difference.

Chances are that euro will strengthen against USD again in a few years and SGD will move back to 1.35/1.6 against USD/euro.
I have enough spy in USD anyways.

Looks like you are betting on EUR to rally vs SGD. If that's the case, then a simpler method is to just go long EUR / USD.

Your current position with SPY being long USD / SGD. By going long EUR / USD, you'll be long EUR / SGD.

Better have a relook at the numbers and also the logic.

 

[occifer]

Looks like you are betting on EUR to rally vs SGD. If that's the case, then a simpler method is to just go long EUR / USD.

Your current position with SPY being long USD / SGD. By going long EUR / USD, you'll be long EUR / SGD.

Better have a relook at the numbers and also the logic.

I re-edited the post to make it simpler.

Need to get an spy index that does the forex part as well, else has to be 2 trades.
Buy spy in USD and buy eur/short USD.

 

[occifer]

https://www.google.com/search?q=s&p...HaG2A9UQBSgAegQIARAC&biw=412&bih=783&dpr=2.63
https://www.ssga.com/de/en_gb/insti...P 500 EUR Dynamic,at one-month forward rates.
It says "The index is 100% hedged to EUR on a monthly basis, by selling USD forward at one-month forward rates". Not sure how well it works though. Listed on euro exchanges.
Anyone used before?

https://www.ishares.com/uk/individual/en/products/251903/ishares-sp-500-eur-hedged-ucits-etf

 

[ctan84]

Yea mine is an ILP under Manulife (investready wealth II) and can be transferred. if you are looking to invest in fund for the long term, I think is still worth considering at a discount. I would have kept it if not that I needed the cash. Let me know if you are interested!

Don't understand your logic. Your premium is $1k a month and you have paid 2.5 yrs, so that's $30k. Your surrender value now is $31k, so you are profitable. Then you can just surrender and get your $31k lah.

 

[poposlel]

Don't understand your logic. Your premium is $1k a month and you have paid 2.5 yrs, so that's $30k. Your surrender value now is $31k, so you are profitable. Then you can just surrender and get your $31k lah.

No la… surrender only 7k cos the full term is 10 year mah, the plan is making profit just that I needed money so cannot continue paying the 1k a month and wanted to cash out.. if not I won’t look to sell! Haha

 

[ctan84]

No la… surrender only 7k cos the full term is 10 year mah, the plan is making profit just that I needed money so cannot continue paying the 1k a month and wanted to cash out.. if not I won’t look to sell! Haha

But your first post u said it has 31k in value no? Value is NOT the premium you paid. How is the plan making profit when surrender value now is 1/4 of your premium paid? Basically, you are just getting someone else to tank your **** leh. Terrible siah.

 

[revhappy]

https://www.google.com/search?q=s&p...HaG2A9UQBSgAegQIARAC&biw=412&bih=783&dpr=2.63
https://www.ssga.com/de/en_gb/insti...P 500 EUR Dynamic,at one-month forward rates.
It says "The index is 100% hedged to EUR on a monthly basis, by selling USD forward at one-month forward rates". Not sure how well it works though. Listed on euro exchanges.
Anyone used before?

https://www.ishares.com/uk/individual/en/products/251903/ishares-sp-500-eur-hedged-ucits-etf

Okay, lets take and example to make it easy, you have 2 instruments
1)SPY denominated in EUR and it is unhedged. Lets call it SPYEU
2)SPY denominated in EUR and it is hedged to EUR. Lets call it SPYEH

Lets say 1USD = 1EUR and SPYEU and SPYEH are both 100.

Scenario 1) SPY(the original in USD) goes up 5% and USDEUR rises 5%.

In this scenario SPYEU = 110, this is because the underlying is up 5% and the denomination currency is down 5%. So you get double kicker 10% gain.
SPYEH on the otherhand because it is hedged to the EUR, will be 105

Scenario 2) SPY goes up 5% and USDEUR falls 5%.

In this scenario SPYEU = 100, this is because the underlying is up 5% but the underlying's currency is down 5%. So in EUR terms net net is same.

SPYEH on the otherhand will be 105.

So when you hedge against a currency, you will only get the move in the underlying but you will not feel any move from the underlying's currency.

In your case your currency is SGD, unless you are going to retire in Europe or have some spending to be done in Europe, your purchasing power is in SGD terms. So hedging in EUR wont be of any use for you, hedging in SGD could be useful, if you believe SGD is going to rise against other currencies.

 

[poposlel]

But your first post u said it has 31k in value no? Value is NOT the premium you paid. How is the plan making profit when surrender value now is 1/4 of your premium paid? Basically, you are just getting someone else to tank your **** leh. Terrible siah.

Hmmm is just like endowment plans what if you take out earlier from the term then you are penalised, the surrender value is not linked to how much value the funds carry..

 

[ctan84]

Hmmm is just like endowment plans what if you take out earlier from the term then you are penalised, the surrender value is not linked to how much value the funds carry..

Your logic is fuzzy. Assuming you sell it at say 25k (a 20% discount to your total premium paid) and the next few months as a new owner, suddenly I need money I need to surrender, the surrender value is still $7k. VS I use 25k just upfront buy the same China Funds, even if the next few months the value of the funds were to drop by 20%, I "panic sell" or surrender my funds, I still get back $20k.

Good luck trying to smoke pple here to buy this crap product.

 

[occifer]

Okay, lets take and example to make it easy, you have 2 instruments
1)SPY denominated in EUR and it is unhedged. Lets call it SPYEU
2)SPY denominated in EUR and it is hedged to EUR. Lets call it SPYEH

Lets say 1USD = 1EUR and SPYEU and SPYEH are both 100.

Scenario 1) SPY(the original in USD) goes up 5% and USDEUR rises 5%.

In this scenario SPYEU = 110, this is because the underlying is up 5% and the denomination currency is down 5%. So you get double kicker 10% gain.
SPYEH on the otherhand because it is hedged to the EUR, will be 105

Scenario 2) SPY goes up 5% and USDEUR falls 5%.

In this scenario SPYEU = 100, this is because the underlying is up 5% but the underlying's currency is down 5%. So in EUR terms net net is same.

SPYEH on the otherhand will be 105.

So when you hedge against a currency, you will only get the move in the underlying but you will not feel any move from the underlying's currency.

In your case your currency is SGD, unless you are going to retire in Europe or have some spending to be done in Europe, your purchasing power is in SGD terms. So hedging in EUR wont be of any use for you, hedging in SGD could be useful, if you believe SGD is going to rise against other currencies.

?
Dude, if it works, user will make more when eur to SGD strengthens and goes back to 1.6 again. It is 1.4 now. USD goes back to 1.35ish against USD hopefully.

Product exists. I just dunno how well it works, especially the "hedging by selling 1 month USD forward"

Retire in Europe? U are ridiculous. U wrote something this long that makes no sense and seems u write similar stuff in other threads. Anyways, ignoring your future posts....


Euro to SGD is 1.4, about 1.6 a year ago
USD to SGD is 1.4, about 1.35-1.4 in previous year
Euro to USD is 1.0, not seen in 20 years, about 1.2 a year ago.

Idea is that it reverts.

 

[limster]

As a Singaporean investor I have no interest in mixing S&P500 investing with EUR:USD forex rates.

The reason long term investors buy S&P500 is because you believe in the fundamentals of the US Economy and the companies the S&P500 contains, including companies that sell all over the word and get revenue in different currencies. And of course, you try to buy at a fair price.

Investing in good companies bought at a fair price will make you money in the long term. It really is that simple.

Overthinking your investing strategy and missing the forest from the trees usually happen at the start of one's investing journey... fortunately the capital outlay when starting is likely to be low. Learn from the experience.. what really matters in investing, and what doesn't.

 

[revhappy]

Inspite of bad CPI data for Jun markets didn't go down this week, which is quite heartening. So market believes inflation will come down as oil prices are down a lot. Now if earnings are okay, I think markets will just stabilize around these levels. If we end the year around this level and adding salary savings for the next 6 months, which get invested at these levels. It won't be such a bad outcome for me.

If markets indeed go down to the feared SPX 3000-3200 levels, that would be scary a real test of nerves.

That's my personal sentiment summary this weekend

 

[occifer]

As a Singaporean investor I have no interest in mixing S&P500 investing with EUR:USD forex rates.

The reason long term investors buy S&P500 is because you believe in the fundamentals of the US Economy and the companies the S&P500 contains, including companies that sell all over the word and get revenue in different currencies. And of course, you try to buy at a fair price.

Investing in good companies bought at a fair price will make you money in the long term. It really is that simple.

Overthinking your investing strategy and missing the forest from the trees usually happen at the start of one's investing journey... fortunately the capital outlay when starting is likely to be low. Learn from the experience.. what really matters in investing, and what doesn't.

?
I already have alot of spy in USD. Diversifying into a euro spy makes sense at these currency prices. I have some euro dominated stock too as not all stocks are listed on us exchanges. This is the best currency price for EUR USD in 20yrs. Your choice if u dont wanna hold any euro, even in spare cash. Easy to convert on ibkr. This is simple compared to options, leaps, covered calls, etc as it is just buying an etf stock lol. I been trading/investing for more than a decade. Anyways, only interested in extracting info and not gonna bother with long posts that try to act smart or something. Question is if there is info on an etf instrument and not why I should form the same portfolio that u did.

 

[limster]

Inspite of bad CPI data for Jun markets didn't go down this week, which is quite heartening. So market believes inflation will come down as oil prices are down a lot. Now if earnings are okay, I think markets will just stabilize around these levels. If we end the year around this level and adding salary savings for the next 6 months, which get invested at these levels. It won't be such a bad outcome for me.

If markets indeed go down to the feared SPX 3000-3200 levels, that would be scary a real test of nerves.

That's my personal sentiment summary this weekend

like churnmaster said, 3600 is a key level.

to get 3000-3200, there has to be a liquidity crisis added to inflationary worries.... but I think markets now believe that Fed will never let liquidity dry up.

I'm still optimistic and plan to buy more next week if markets dip further.

 

[ctan84]

Inspite of bad CPI data for Jun markets didn't go down this week, which is quite heartening. So market believes inflation will come down as oil prices are down a lot. Now if earnings are okay, I think markets will just stabilize around these levels. If we end the year around this level and adding salary savings for the next 6 months, which get invested at these levels. It won't be such a bad outcome for me.

If markets indeed go down to the feared SPX 3000-3200 levels, that would be scary a real test of nerves.

That's my personal sentiment summary this weekend

3000 -3200 Maybe if China n Europe chibabom one after the other then can reach that level lah.

 

[revhappy]

This is good news!

 

[limster]

This is good news!

https://seekingalpha.com/article/4440012-a-closer-look-at-the-covid-related-surge-in-m2
https://fred.stlouisfed.org/series/M2SL
What would be interesting is whether the Fed has mastered 'liquidity' (the GFC being primarily a liquidity crisis) and is able to control inflation without hurting liquidity.

There is so much cash sloshing around the system ready to fuel a stock rally. So from the monetarist perspective, this is a cause for optimism. Added to that would be the macro view of Covid related recovery order books are still being filled which will be a 'recession buffer'.