Getting an ILP PLAN from AIA

[Perisher]

I think if the assumptions and variables are added to the above and clearly stated, at least a more balanced offer of idea is presented. What I was appalled at was with how some posts seems to suggest that own investments plus term will always beat ILPs, which I think is technically wrong, because a lot of important assumptions were missing in building the case. False numbers were also presented, which for me is amusing. I hope you see my purpose in highlighting those posts.

If you wanna go into the details, go ahead. Generally most of ILP underperform the market over the long term.

Techincally, you would have to explain every single TnC to paint a full picture, see what's the problem?
You will probably need a lawyer and ask tons and tons of question on every single line of the TnC to see a full picture, technically.

A lot of important assumptions were missing because most ILP generally doesn't provide those informations perhaps? Maybe because they would show how they underperformed? What information do you need from the Index side?

Highlighting is fine.

 

[limster]

What I was appalled at was with how some posts seems to suggest that own investments plus term will always beat ILPs, which I think is technically wrong

I can say that "Index investing plus term" will always beat Toto.

You can throw smoke like you have done and say that is "technically wrong" because every year, some people do win the golden Hongbao $10m draw, and these people's returns from Toto will beat index investing+term over a similar period.


So instead of hiding behind the smokescreen of "technically wrong", show me 1 ILP that has beaten a typical index portfolio + Term (eg: A sample portfolio in Random Walk Down Wall Street + term policy) over the same period? If you can't, then aren't your claims just throwing smoke to confuse people?

I have never seen you mention concrete figures in your posts to back up your claim.

Examples have been given of actual CAGR of various ILPs. Based on the figures disclosed, BTIR has always won when compared over a similar period.

 

[Perisher]

I can say that "Index investing plus term" will always beat Toto.

You can throw smoke like you have done and say that is "technically wrong" because every year, some people do win the golden Hongbao $10m draw, and these people's returns from Toto will beat index investing+term over a similar period.


So instead of hiding behind the smokescreen of "technically wrong", show me 1 ILP that has beaten a typical index portfolio + Term (eg: A sample portfolio in Random Walk Down Wall Street + term policy) over the same period? If you can't, then aren't your claims just throwing smoke to confuse people?

I have never seen you mention concrete figures in your posts to back up your claim.

Examples have been given of actual CAGR of various ILPs. Based on the figures disclosed, BTIR has always won when compared over a similar period.

Perhaps he may just manage to find that one... But overwhelmingly impossible to say BTIR doesn't win against ILP long term.

 

[parchiao]

I can say that "Index investing plus term" will always beat Toto.

You can throw smoke like you have done and say that is "technically wrong" because every year, some people do win the golden Hongbao $10m draw, and these people's returns from Toto will beat index investing+term over a similar period.


So instead of hiding behind the smokescreen of "technically wrong", show me 1 ILP that has beaten a typical index portfolio + Term (eg: A sample portfolio in Random Walk Down Wall Street + term policy) over the same period? If you can't, then aren't your claims just throwing smoke to confuse people?

I have never seen you mention concrete figures in your posts to back up your claim.

Examples have been given of actual CAGR of various ILPs. Based on the figures disclosed, BTIR has always won when compared over a similar period.

This is why I say some have a scope that is pretty limited. Why must you compare fund A vs fund B and conclude which is more efficient when it is far more important to hold a winning hand ?

 

[parchiao]

I can say that "Index investing plus term" will always beat Toto.

You can throw smoke like you have done and say that is "technically wrong" because every year, some people do win the golden Hongbao $10m draw, and these people's returns from Toto will beat index investing+term over a similar period.


So instead of hiding behind the smokescreen of "technically wrong", show me 1 ILP that has beaten a typical index portfolio + Term (eg: A sample portfolio in Random Walk Down Wall Street + term policy) over the same period? If you can't, then aren't your claims just throwing smoke to confuse people?

I have never seen you mention concrete figures in your posts to back up your claim.

Examples have been given of actual CAGR of various ILPs. Based on the figures disclosed, BTIR has always won when compared over a similar period.

Please do not forget the other example of comparing losses during a depressed market vs spending over the same period on toto as well.

 

[parchiao]

If you wanna go into the details, go ahead. Generally most of ILP underperform the market over the long term.

Techincally, you would have to explain every single TnC to paint a full picture, see what's the problem?
You will probably need a lawyer and ask tons and tons of question on every single line of the TnC to see a full picture, technically.

A lot of important assumptions were missing because most ILP generally doesn't provide those informations perhaps? Maybe because they would show how they underperformed? What information do you need from the Index side?

Highlighting is fine.

Not that information about the ILP or index fund is missing. More of not clearly stating the assumptions when making assertions.

e.g. when I read about how someone keeps talking about how good and index fund is vs an ILP, shouldn't those assumptions actually state a like for like investment into the underlying? We know for sure that a savvy investor who rides the cycles of the market through switching funds within his ILPs can beat an index fund holder who keeps his money in a single fund.

 

[Perisher]

This is why I say some have a scope that is pretty limited. Why must you compare fund A vs fund B and conclude which is more efficient when it is far more important to hold a winning hand ?

It is far more important to start and start right than to think about maximizing returns.

Your advise is more suitable for people who wants more, generally these are the self-motivated people who will find out more if they want to. But there are people who are not that investment-savvy or shown any strong interest to read this and that, it will overwhelm them before they even started.
Start them on an easy and generally right path, the rest of it will follow if they have the interest/desire to, leave them to explore.

Don't impose on them that they die die must read this and that, or understand all the DCF model, FCF stuff, explore everything, understand every term before they invest.
Or even ask them to think about property investment, Options or the myriad of scams and whatnot just because 'what's available out there'.

The simple truth is just getting market returns is already better than most people out there already. Explore further if they wish to, if not just be happy one started right.

You may not agree with BTIR DCA ETF as a start (because people do not understand it enough) but I don't see you suggesting any better alternative for people who don't wish to delve deeply into investment.

It's like saying if you don't understand the food, don't eat it even though we are just recommending rice in general. You don't have to know every little detail to know it's generally good as a basic to feeding yourself.
Feel free to explore other food if you want to, just start it right.

You can never finish understanding every single investment product out there anyway.

 

[w1rbelw1nd]

Not that information about the ILP or index fund is missing. More of not clearly stating the assumptions when making assertions.

e.g. when I read about how someone keeps talking about how good and index fund is vs an ILP, shouldn't those assumptions actually state a like for like investment into the underlying? We know for sure that a savvy investor who rides the cycles of the market through switching funds within his ILPs can beat an index fund holder who keeps his money in a single fund.

I don't think your point of view that "there is a possibility that an active investing through funds" is helpful for anyone at all. If you can give some evidence on how to choose a good active fund, your case will be stronger, but I don't see you showing anything like that.

What perisher is trying to flash out is that on average,index funds does better than actively managed funds, which is research proven. While it is not a like for like comparison, one can add the cost of term insurance in (which has already been shared)

Anyway, who says a savvy investor cannot switch between index funds?

 

[parchiao]

I don't think your point of view that "there is a possibility that an active investing through funds" is helpful for anyone at all. If you can give some evidence on how to choose a good active fund, your case will be stronger, but I don't see you showing anything like that.

What perisher is trying to flash out is that on average,index funds does better than actively managed funds, which is research proven. While it is not a like for like comparison, one can add the cost of term insurance in (which has already been shared)

Anyway, who says a savvy investor cannot switch between index funds?

A savvy investor can definitely switch funds, and I would highly recommend that just so to take advantage of market cycles. But in order to do that with minimal risk i.e. to mean do it smartly, one would still have to read up, should not just buy one fund and then sit back and relax. There are always other variables to consider.

I won't comment too much on any specific 'research' because reading into some of such posted on the internet, I cannot help but wonder about how convenient the examples were. Most never mention about the risks and the flip side of what a scenario could look like, just not balanced at all.

As for a specific active fund, it is not my intention to promote any specific investment vehicle. My way is no different from any others, I have an opinion that could be right or wrong and the same applies vice versa. What I have been pointing out right from the beginning is to highlight how skewed some of the comments were, especially for audience with a limited level of knowledge of investing. If the audience cannot understand what I have mentioned e.g. timing the market, then the solution is to read up and learn more.

 

[MaoZeDuo]

bth... this debate is useless without real charts, statistics, peektures.

 

[w1rbelw1nd]

bth... this debate is useless without real charts, statistics, peektures.

I don't think parchiao is going to show us how he intends to switch funds, how to time the market so that one can earn a better risk-adjusted returns etc.

And the research work done is all moot because circumstances are different, assumptions are different etc etc.

Of course what parchiao says is correct and what perisher says is disputable, because the former simply states that there is a possibility that one can do better than index fund while the latter made some assumptions and gave some recommendations.

Agree with you that some comments made are pretty skewed though

 

[MikeZhang]

I don't think parchiao is going to show us how he intends to switch funds, how to time the market so that one can earn a better risk-adjusted returns etc.

And the research work done is all moot because circumstances are different, assumptions are different etc etc.

Of course what parchiao says is correct and what perisher says is disputable, because the former simply states that there is a possibility that one can do better than index fund while the latter made some assumptions and gave some recommendations.

Agree with you that some comments made are pretty skewed though

Ilp fund can be switched but the number of funds are limited as compared to the market Fund houses.

 

[disavowed]

Go read A Random Walk Down Wall Street.

 

[Perisher]

Why should we assume TS wants to learn deeply about timing market and whatever else when all he was asking was about his ILP? Talk about assumptions, it cuts both ways.

And my assumptions that TS just want a generally fuss free investment is closer to what buying ILP is than assuming the other side in which he is actively trying to learn all there is to investments.
Beside the fact that buying funds directly cost less than ilp if he really is that good at switching funds.

 

[parchiao]

Go read A Random Walk Down Wall Street.

But to understand what this book is saying, one would still have to study topics in investment i.e efficient market hypothesis which in turn has a lot of detractors and reasons for such. I stand in the camp that does not believe in it.

 

[parchiao]

Ilp fund can be switched but the number of funds are limited as compared to the market Fund houses.

True. But what I have mentioned was not one set of ILP funds vs all other funds. It was one set of ILP funds vs one index fund. So when someone mentioned why not switch funds outside of the ILP fund universe, I agreed that should be the case.

 

[parchiao]

Why should we assume TS wants to learn deeply about timing market and whatever else when all he was asking was about his ILP? Talk about assumptions, it cuts both ways.

And my assumptions that TS just want a generally fuss free investment is closer to what buying ILP is than assuming the other side in which he is actively trying to learn all there is to investments.
Beside the fact that buying funds directly cost less than ilp if he really is that good at switching funds.

I'll post a link from Vanguard's website to allow others to read. It's neither for or against active and passive investing, but there is sufficient information to highlight what most of us have already mentioned.

https://www.vanguard.sg/documents/etf-active-or-index.pdf

 

[limster]

But to understand what this book is saying, one would still have to study topics in investment i.e efficient market hypothesis which in turn has a lot of detractors and reasons for such. I stand in the camp that does not believe in it.

Your claim that people must study EMH before they can understand Random Walk Down Wall Street is total rubbish. Yes, you're moving from throwing smoke to spouting rubbish.

I guess you're just trying to change the subject as others like w1rbelw1nd are also noticing that you haven't offered any specifics on ILPs that beat index+term policy.

 

[parchiao]

Your claim that people must study EMH before they can understand Random Walk Down Wall Street is total rubbish. Yes, you're moving from throwing smoke to spouting rubbish.

I guess you're just trying to change the subject as others like w1rbelw1nd are also noticing that you haven't offered any specifics on ILPs that beat index+term policy.

Which is why you are consistently missing the point. The counter point to why ILPs can beat an index fund was mentioned because someone mentioned that all that is needed was to buy a single index fund, sit back and relax. I said no and already suggested reasons that are beyond efficiency of index funds. Just look at the Nikkei, all time high at the end of 1989. A poor Japanese investor would have lost much or gained little from investing in it. A smarter one would have just switched out of it and moved it to a better performing market or industry. Such a simple concept still cannot get it?

As for EMH, if you don't understand it, what have you been reading that convinces you it is correct? Please just google up, Finance 101 in an undergraduate course or course book would have already mentioned some counterpoints to this principle e.g. overreactions.

 

[limster]

Just look at the Nikkei, all time high at the end of 1989. A poor Japanese investor would have lost much or gained little from investing in it.

So finally, once you are 'forced' to give concrete examples, you give the example of someone investing in the Nikkei at the top of the Japanese bubble as the example of how ILP can beat Index+term.

You of course ignored my question of what ILP can beat a portfolio suggested by Random Walk Down Wall Street + Term because you can't name one. So in desperation you use the smokescreen tactic and talk about someone who buys Nikkei 225 at the top of the bubble?


Other forummers can judge for themselves whether they think you trying to be helpful and giving advice to others, or just putting up a smokescreen. Already others have mentioned that your so-called 'advice' in this area is 'not helpful' at all.

As for EMH, if you don't understand it, what have you been reading that convinces you it is correct? Please just google up, Finance 101 in an undergraduate course or course book would have already mentioned some counterpoints to this principle e.g. overreactions.

But to understand what this book is saying, one would still have to study topics in investment i.e efficient market hypothesis

When another forummer recommended reading Random Walk Down Wall Street. He is obviously trying to be helpful, to let people following the debate learn more about index investing.

As for your reply, it shows no interest at being helpful. It is another smokescreen to distract people. You are so afraid that beginners will read the book that you want to 'scare' them by telling them you need to study EMH first?

Random Walk Down Wall Street can be read and understood by a beginner with no need to study "investment topics" such as EMH first. The thesis is simple, and the advice is sound. It is not promising you the highest possible returns, but it is promising you that you will not underperform the market, like the majority of funds do. And like I mentioned above, you have yet to name an ILP that can beat the portfolio suggested by Random Walk - which means that Random Walk Portfolio beats ILPs - and still you don't want to concede this, preferring to hide behind the 'technically wrong' smokescreen.

http://fortune.com/2014/02/05/buffett-widens-lead-in-1-million-hedge-fund-bet/


You are probably richer and maybe even a better investor than the average investor, with your 5-figure dividend income. Your portfolio probably outperformed the markets so obviously you think that index investment is not for you because you will continue to outperform the market.

But I fail to understand why you want to continue to troll Perisher who is basically advocating what Random Walk advocates. Random Walk type portfolio, eg: Shiny Thing's local adaptation, is very suitable for average investors and the book will explain why.

Maybe its to show that you are a cleverer investor that doesn't need index investing? In these forums, its better to show how skilful you are in financial matters by being helpful and giving concrete portfolio advice (eg: Shiny Things model ETF portfolio). So if you think Perisher is wrong, suggest your own portfolio.