Financial resolutions for 2020

[malthead]

Anyone has set aside his for 2020? Mine is to lower my cash holdings allocation in my assets.

I finally did a stock take for my financial health for 2019. Net asset increased by 11% due to salary/bonus and a good run up in financial market. But due to the bullish run in 2H 2019, I slipped up in doing my DCA in a disciplined manner (I even took profit on some overseas ETF and market prices are now higher ) Now my cash component is at 34% (it was actually lower than end 2018 which was 36%).

It would be a challenge mentally for me to increase my DCA under current record high environment for BOTH equities and bonds. Have been waiting for that pull back since late Q4-19 but that hasn't really happened. Ideally I would like it down to below 30% for a start. Fortunately, the cash component so far has been yielding almost 2% due to parking them at high yield current accounts with banks but we seem to have hit the peak in Q419.

Non-liquid component like SRS and CPF have increased in line at 10% and should provide baseline retirement needs by 55 if I stay employed till then.

 

[jacky5297]

You need to learn how to close 2 eyes when doing DCA.

 

[limster]

the low fees for FSMOne RSP of ETFs looks good. I am seriously considering signing up RSP for one ETF so that it'll be on 'autopilot'. need to find out more, like how easy to configure/ change RSP amounts / stop RSP etc.

 

[malthead]

You need to learn how to close 2 eyes when doing DCA.

Hard to do if the amount is big

 

[SBC]

Wanted my CPF interest to cross 15.5k within 3 years.

 

[BBCWatcher]

It would be a challenge mentally for me to increase my DCA under current record high environment for BOTH equities and bonds.

Only if you don't appreciate how dollar cost averaging (DCA) works.

*IF* markets are going to fall any time relatively soon, then DCA'ing works. You're going to be buying while markets are falling, and isn't that great? You'd be getting progressively better pricing over the next several months.

*IF* markets aren't going to fall any time relatively soon, then DCA'ing...also works. You're going to be buying while markets haven't yet reached new highs, and you're buying more shares when there are whatever blippy dips there are. (Markets *should* always reach new highs over the long-term. If you didn't expect them to, you wouldn't be investing in them. If markets merely tracked inflation over the long-term, they'd reach new long-term highs.)

If you feel that you can sustain a new, higher monthly savings/investment flow, then you should increase your monthly savings/investment flow. Then, as Shiny Things advises, "go to the pub."

 

[eyepower86]

create a online website to make money

 

[malthead]

Only if you don't appreciate how dollar cost averaging (DCA) works.

*IF* markets are going to fall any time relatively soon, then DCA'ing works. You're going to be buying while markets are falling, and isn't that great? You'd be getting progressively better pricing over the next several months.

*IF* markets aren't going to fall any time relatively soon, then DCA'ing...also works. You're going to be buying while markets haven't yet reached new highs, and you're buying more shares when there are whatever blippy dips there are. (Markets *should* always reach new highs over the long-term. If you didn't expect them to, you wouldn't be investing in them. If markets merely tracked inflation over the long-term, they'd reach new long-term highs.)

If you feel that you can sustain a new, higher monthly savings/investment flow, then you should increase your monthly savings/investment flow. Then, as Shiny Things advises, "go to the pub."

I completely understand the logic but it is just hard to execute consistently and without hesitation. I basically need to pile an amount that's at least 150% of my salary each time into one of the 3 in order to reduce the cash holdings.

Do you guys tell yourself to execute the trade
(1) on a certain date?
(2) within a certain period of the month?

And on that date, what limit price do you choose to execute?

 

[ocs_woodlands]

Resolution - to endure through and earn the salary for another 2608 working days before retirement

 

[malthead]

Resolution - to endure through and earn the salary for another 2608 working days before retirement

somehow it doesn't sound like a long time despite being more than 10 years more...

 

[BBCWatcher]

I completely understand the logic but it is just hard to execute consistently and without hesitation.

Why is that? You eat and brush your teeth (I hope) regularly. You pay your electric bill monthly and presumably don't give it a second thought. You get an annual physical, and you get your flu shot every year. Why is paying yourself monthly a special challenge?

I basically need to pile an amount that's at least 150% of my salary each time into one of the 3 in order to reduce the cash holdings.

Well, a couple points:

1. If there are any distributed dividends, take them off this particular table. They don't count toward that "150% of salary" figure. Just reinvest them. This is part of the reason why many people prefer accumulating funds such as IWDA and VWRA (or the U.S. functional equivalent in my case).

2. OK, then if it'd still take you 6 months (for example) to whack your cash hoard down to a more reasonable size in the circumstances at, say, a 120% of salary pace, how would you feel about upgrading from 60% of salary to 70% of salary as your new, higher monthly savings flow -- for example? Yes, it'll take longer to clear your cash hoard, but the accumulation of your cash hoard was fundamentally caused by a long-term sustainable monthly savings/investing flow that's set too low. So could you start with fixing that part at least?

3. Look, I get it. It's still a bit "weird" that my retirement investment portfolio can and often does wobble in value on a merely average trading day by way, way more than my monthly salary. But that just means I'm not paid enough salary. In which case, if I were, the wobble would be even bigger in absolute terms (because I'd be saving and investing even more), and the daily wobble would be even bigger relative to the higher monthly salary. This is just the basic math of becoming wealthier, and it's a wonderful, beautiful thing to behold -- even though initially it might freak you out. Jeff Bezos's wealth can wobble daily by literally billions of U.S. dollars. I'm pretty sure he's in good financial shape.

Do you guys tell yourself to execute the trade
(1) on a certain date?
(2) within a certain period of the month?

The former, and it's all but fully automatic for me. (The currency conversion part is only partially automatic.) Here's the "science" involved: I picked a random number between 1 and 24, and I set the automatic instructions to execute on that day of the month (or the next business day). Why 24? Very hypothetically there could be some oddball 4 day weekend holiday that falls on the last four days of February in a non-leap year, so a random number from 1 to 24 works.

Same as your electric and credit card bills, really. Which are set for automatic full monthly balance payments, right?

And on that date, what limit price do you choose to execute?

For the funds themselves, I don't. (There are certain benefits to U.S. personhood, like low cost U.S. mutual funds that technically distribute dividends but with custodians that'll automatically reinvest dividends if you simply direct them to. So this part you'll be doing partially automatically.) For currency conversions I usually place a Good Til Cancelled limit order very, very close to the current bid price, and at least 9 times out of 10 the currency order gets filled within a day or two. But I'm probably being silly, really. The current asking price while the market is open is fine. I maintain some buffer in the buying currency (U.S. dollars) so that if the monthly currency conversion doesn't happen for a month or even a couple, that's OK, the fund buying will still happen at standard pace.

 

[highsulphur]

How does one set automatic instructions on IB to execute buy order say on iwda?

 

[BBCWatcher]

How does one set automatic instructions on IB to execute buy order say on iwda?

You probably don’t, but technically it is possible using their APIs (Application Programming Interfaces). You’d have some computer, such as your home PC or a virtual server in the cloud, run a monthly task on a scheduled basis to issue buy orders to IB’s APIs, after your bank has processed its monthly payment instructions to IB so that you have the funds to trade (and with IB having a recurring deposit notice on file). It’s geeky programming stuff, though.

Maybe somebody who has done it, or will do it, would like to share his/her code examples with a write up.

 

[highsulphur]

You probably don*********t, but technically it is possible using their APIs (Application Programming Interfaces). You*********d have some computer, such as your home PC or a virtual server in the cloud, run a monthly task on a scheduled basis to issue buy orders to IB*********s APIs, after your bank has processed its monthly payment instructions to IB so that you have the funds to trade (and with IB having a recurring deposit notice on file). It*********s geeky programming stuff, though.

Maybe somebody who has done it, or will do it, would like to share his/her code examples with a write up.

Thanks. Probably more likely for me to just fix one day no matter what to execute that dollar amount (fx conversion and etf purchase)...

 

[hwckhs]

I completely understand the logic but it is just hard to execute consistently and without hesitation. I basically need to pile an amount that's at least 150% of my salary each time into one of the 3 in order to reduce the cash holdings.

I started DCA since Jul 2018. I used to have hesitation in the first few months. "Trump just announced new tariffs and the market is dropping, why don't I wait for a few more days?" After a few months, I found that good and bad news happen unexpectedly, and the market is unpredictable in the short term. All time high does not mean it cannot go any higher or remain range bound. Nowadays, I no longer have hesitation and I do DCA like clock work.

Do you guys tell yourself to execute the trade
(1) on a certain date?
(2) within a certain period of the month?

For me, it's (1), on the first Monday of each month. Trades are executed 1pm-4pm for SGX and 7pm-8pm for LSE.

I don't work on Mondays, so I can afford to sit in front of my PC to execute trades. The weekend before my "big" day, I will update my complicated Excel file on my bank account balances, dividends received, portfolio value etc. My assets are spread across multiple places (IBKR, SCB, joint CDP, individual CDP, my SRS and my wife's SRS). So, I need to make some preparations and preliminary calculations to avoid making execution errors on the following day. It's manual work, but I'm still happily doing it.

And on that date, what limit price do you choose to execute?

For A35/MBH, usually the spread is tight and there is no gap. If so, I just order at ASK price. If there's any gap, I will try to fill the gap, and wait for a while. If the order is not filled within certain amount of time, I get impatient, cancel the order and buy at ASK price. If you try to calculate, you will see that the saving is actually very little. I am just doing it for fun. Mind you, the market may move unfavourably while you wait, so you may end up buying at a higher price than the original ASK price. I'll just quote ST: "don't be a dick for a tick".

My target is to hit $X00k at the end of this year, and $Y00k next year. Seeing my portfolio (and recurring dividends) grow in size makes me happy and motivates me to diligently follow DCA.

 

[Thoreldan]

Don't have any drastic change to my investment strategy. Good old dca once my salary comes in each month.

Probably down size my local etf %

 

[malthead]

Don't have any drastic change to my investment strategy. Good old dca once my salary comes in each month.

Probably down size my local etf %

Same for me. Need to tilt towards overseas equities more this year

 

[crystalnox]

My resolution for 2020 would be to further reduce my STI to 20~25% of my total portfolio, down from 40% at present.

I started DCA since Jul 2018. I used to have hesitation in the first few months. "Trump just announced new tariffs and the market is dropping, why don't I wait for a few more days?" After a few months, I found that good and bad news happen unexpectedly, and the market is unpredictable in the short term. All time high does not mean it cannot go any higher or remain range bound. Nowadays, I no longer have hesitation and I do DCA like clock work.

I had the same experience when I first started 4-5 years back too and often ended up delaying and purchasing at an even higher price than I would have if I had just bought at the start of the month. So now I also pick a fixed day and time(before noon for SGX, before 8pm for LSE) every month and buy regardless. Not checking back the next few days helps alleviate pain if the prices went down further after.

For me, it's (1), on the first Monday of each month. Trades are executed 1pm-4pm for SGX and 7pm-8pm for LSE.

I don't work on Mondays, so I can afford to sit in front of my PC to execute trades. The weekend before my "big" day, I will update my complicated Excel file on my bank account balances, dividends received, portfolio value etc. My assets are spread across multiple places (IBKR, SCB, joint CDP, individual CDP, my SRS and my wife's SRS). So, I need to make some preparations and preliminary calculations to avoid making execution errors on the following day. It's manual work, but I'm still happily doing it.

It's kinda crazy but I enjoy it too, big excel sheet with current fx rates, ratios and prices calculating how many I should buy the next day.

 

[malthead]

Year is almost over. Did a stock check and managed to get the cash ratio down to 12%. Covid allows me to dca aggressively into iwda and es3 over the last 10 months.

 

[Thoreldan]

Don't have any drastic change to my investment strategy. Good old dca once my salary comes in each month.

Probably down size my local etf %

Local etf at nil as i type this msg.

Portfolio consists of global/us etfs and a couple of us stocks