*Official* Shiny Things club - Part 2

[drkcynic]

So here's the thing: with all the stuff you're asking to hold on to, you're making the bet that those extra things - your stocks you don't want to sell, your growth ETFs, your random bonds - will outperform just sticking it in ES3, or IWDA, or MBH.

How confident are you that you'll do better than the market?

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Seriously, though - a couple of points here. Firstly, just because an investment isn't currently higher than when you bought it is no reason to hang onto it... if anything, it's a reason to ditch it. It's a crap investment; get rid of it. Go full Marie Kondo on it.

Secondly, I'm not averse to having a "fun money" account where you trade stuff that interests you. But keep it small: 5% of your portfolio is plenty; don't do this unless you have a decently-sized portfolio (mid six figures or more); and don't let it take up too much of your time and your mental energy.

(I do that myself! I sometimes trade eurodollars, FX, or single stocks, just to keep my fingers on the pulse of the markets; but I always keep the size tiny compared to the rest of my portfolio, which is all in a 110-minus-age allocation.)

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So my answers to you would be "be realistic; do you actually think you can beat the rest of the market?". If you really do think you can beat the market, then it's fine to do that with a few percentage points of your portfolio; but the rest, you should park in a 110-minus-your-age allocation and leave alone.

And in a year or two's time, look back and be honest with yourself: have you actually beaten the market in your fun-money portfolio? Or have you actually cost yourself money?

Thanks for the inputs @ST, Mike, Mathstutor.

 

[adgjl321]

I will be working in UK for a year and receiving my income in GBP.

Will there be any difference in how I should invest for my time in UK?

In the same situation as you are. What industry are you in?

£ is so weak now...

 

[limster]

In the same situation as you are. What industry are you in?

£ is so weak now...

you should be getting a least your S$ equivalent in salary + housing allowance , if your company is not even giving you that, then why go in the first place, unless you really like the place. when i was there, i met quite a few Singaporeans there, and the apartments they got suggested that the larger companies do give pretty decent overseas packages

 

[angrybrandy]

hi, need some advise, if you have certain amount of USD due to rebalancing i.e. 40k.. what bond can you purchase? in order to get some interest rate.

thank you.

 

[Kopisi_xiudai]

Hi, anyone here buying local etf with srs account?
I find that it's a good deal to benefit from the tax rebate but will it be difficult to rebalance since I can't transfer the money out to buy IWDA or bonds?

 

[adgjl321]

you should be getting a least your S$ equivalent in salary + housing allowance , if your company is not even giving you that, then why go in the first place, unless you really like the place. when i was there, i met quite a few Singaporeans there, and the apartments they got suggested that the larger companies do give pretty decent overseas packages

I’m not an expat/experienced hire. Fresh out of uni so I don’t think any company will give housing allowance, at least not in front office banking roles from what I know

Only got a one off sum for relocation but it’s not an insane amount

Let’s just say the base pay alone is higher in Singapore for the exact role haha. £ dropped 30%+ since and pay wasn’t adjusted unlike in law

 

[lawd2005]

Q on Keeping Rainy Day in Bond

I have a Q about putting rainy day funds in bond:

Imagine I have 6 months living expenses in Rainy Day Fund in case of unemployment - should I take 4 months and store in MBH? I can reasonably expect to be able to liquidate it in waay under 2 months in case of emergency.

I can anticipate a flaw with this - confusing rainy day fund in bond as part of stock-bond allocation. But if can keep the mental accounting right - this is a no-brainer, right?

 

[limster]

I have a Q about putting rainy day funds in bond:

Imagine I have 6 months living expenses in Rainy Day Fund in case of unemployment - should I take 4 months and store in MBH? I can reasonably expect to be able to liquidate it in waay under 2 months in case of emergency.

I can anticipate a flaw with this - confusing rainy day fund in bond as part of stock-bond allocation. But if can keep the mental accounting right - this is a no-brainer, right?

I consider SSB as part of my rainy day fund.

 

[philosopherd]

I will be working in UK for a year and receiving my income in GBP.

Will there be any difference in how I should invest for my time in UK?

I’m in exactly same condition right now!!
Will be relocating to London,UK soon for an indefinite time.
My question for Shiny Things and others: I’m currently investing in IWDA and LQDE. Should I keep those or do I need to make any changes ?

Thanks!!

 

[eD1s0n]

I have a Q about putting rainy day funds in bond:

Imagine I have 6 months living expenses in Rainy Day Fund in case of unemployment - should I take 4 months and store in MBH? I can reasonably expect to be able to liquidate it in waay under 2 months in case of emergency.

I can anticipate a flaw with this - confusing rainy day fund in bond as part of stock-bond allocation. But if can keep the mental accounting right - this is a no-brainer, right?

I consider SSB as part of my rainy day fund.

I agree with SSB being rainy day fund. MBH is not a good place to park emergency funds because

1. its value might go down when you need it the most (i.e. during an emergency)

2. because of its annual dividend distribution, if you liquidate within a year you will get 0 dividends + make a loss on comms + either earn or make loss on price fluctuations

SSB is better because it gives you the accrued interest no matter when you redeem, and it is capital guaranteed

 

[tangent314]

I have a Q about putting rainy day funds in bond:

Imagine I have 6 months living expenses in Rainy Day Fund in case of unemployment - should I take 4 months and store in MBH? I can reasonably expect to be able to liquidate it in waay under 2 months in case of emergency.

I can anticipate a flaw with this - confusing rainy day fund in bond as part of stock-bond allocation. But if can keep the mental accounting right - this is a no-brainer, right?

You can liquidate MBH fairly easy, but there are trading costs involved and your capital is not guaranteed as the price can fluctuate depending on the bond market and interest rates.

If capital guarantee and low-volatility is important to you then SSBs would be more suitable, since you can liquidate at par value + prorated coupons. However, the yield will be lower than MBH.

 

[tangent314]

2. because of its annual dividend distribution, if you liquidate within a year you will get 0 dividends + make a loss on comms + either earn or make loss on price fluctuations

Price of distributing funds accumulates while approaching distribution date and immediately drops after distribution, so timing of the dividends doesn't really give you any loss or benefit.

 

[Shiny Things]

I’m in exactly same condition right now!!
Will be relocating to London,UK soon for an indefinite time.
My question for Shiny Things and others: I’m currently investing in IWDA and LQDE. Should I keep those or do I need to make any changes ?

Thanks!!

Nope, those are fine. If you decide you might end up retiring in the UK you'd want to switch from LQDE to some sterling-denominated bonds... but why on earth would you retire in the UK?

I have a Q about putting rainy day funds in bond:

Imagine I have 6 months living expenses in Rainy Day Fund in case of unemployment - should I take 4 months and store in MBH? I can reasonably expect to be able to liquidate it in waay under 2 months in case of emergency.

I can anticipate a flaw with this - confusing rainy day fund in bond as part of stock-bond allocation. But if can keep the mental accounting right - this is a no-brainer, right?

Hmm... good question. For most people I'd say it's better to keep them separate, for exactly the reason you pointed out. A high-interest savings account might be the best way to go.

hi, need some advise, if you have certain amount of USD due to rebalancing i.e. 40k.. what bond can you purchase? in order to get some interest rate.

thank you.

You shouldn't have money left over from rebalancing in the first place. You sell the funds you have too much of, and use that money to buy the funds you don't have enough of.

 

[eD1s0n]

Price of distributing funds accumulates while approaching distribution date and immediately drops after distribution, so timing of the dividends doesn't really give you any loss or benefit.

I agree with you in theory. But looking at the performance history for the 2 bond funds under NikkoAM (A35 and MBH) for the past few years doesn't give me much confidence that this is actually the case in practice

 

[confusedsuitguy]

I have the same concerns :/ as a foreigner (no access to CPF yet) with a high enough income, but someone who intends to apply for PR/citizenship in the long run, I really want to make use of the tax breaks for SRS! But the investment options are limited and it makes rebalancing difficult.

 

[toolbox03]

Any investment tool for disciplined saving every month for compound interest other than FD?

 

[Shiny Things]

Any investment tool for disciplined saving every month for compound interest other than FD?

If you don't mind doing it yourself, the monthly investments we talk about here are exactly what you're after.

I agree with you in theory. But looking at the performance history for the 2 bond funds under NikkoAM (A35 and MBH) for the past few years doesn't give me much confidence that this is actually the case in practice

What would help persuade you?

On a very practical level: if the price of the ETFs didn't go up and then down like a sawtooth pattern, traders would be able to make free money by arbitraging the dividend payments: hold the ETFs to capture the dividend, short the bonds to hedge your market risk.

You can also look at the price chart - here's A35 for the last three years or so. At the beginning of each year, you can see that the price of the fund abruptly drops by two or three cents (just to the left of each of the orange dots); that's the dividend payment going out.

And in between, you can see that the price of the fund generally trends higher. See how it's behaved in 2017 and so far in 2019, for an example. In 2018, interest rates ground higher at the start of the year, so the fund price didn't start moving higher until later in the year.

The price of anything is obviously not going to go like a straight sawtooth pattern, and I'm not promising it will. But that's the underlying price trend of any bond fund: it's the up-and-down of bond prices and interest rates, and overlaid on that is the sawtooth of dividends getting aggregated and paid out.

 

[longfart]

Hi Shiny, do you happen to know of a cost-effective way of getting a sum of MYR (from a MY bank acct) into IBKR? I thought of using an online money transfer service to send the MYR into my SG bank acct as SGD. Unfortunately, after checking with InstaReM, I'd need to have a face-to-face interview in MY in order to create the acct to send MYR.

 

[Growing&Learning]

Hi. I've been reading about investing in Ireland-Domiciled S&P 500 ETFs.

There are 4 ETFs mentioned in Seedly's article:
1. Vanguard S&P 500 UCITS ETF
2. SPDR S&P 500 UCITS ETF
3. iShares Core S&P 500 UCITS ETF (Acc)
4. iShares Core S&P 500 UCITS ETF (Dist)

I've several questions:

1. May I ask which ETF(s) would you recommend? Would no. 3 be good as the dividends are reinvested back into the funds automatically? Am I right to say that I only need to buy 1 ETF out of the 4 ETFs as they track similar stocks?

2. Which broker would you recommend? I'm using FSMOne as I read that it charges the lowest commissions.

3. How many % of my portfolio should I be allocating to this ETF?

4. I've been DCA-ing into Nikko AM STI ETF via POSB Invest-Saver. I'm planning to sell my holdings. DCA-ing (buy once every month) into one of these Ireland-Domiciled S&P 500 ETFs would be better than investing a lump sum into the ETF. Is my understanding correct?

My sincere apologies if I've asked a question that has been answered. TIA for your help, I appreciate it.

 

[Ilovemathstutor]

Hi. I've been reading about investing in Ireland-Domiciled S&P 500 ETFs.

There are 4 ETFs mentioned in Seedly's article:
1. Vanguard S&P 500 UCITS ETF
2. SPDR S&P 500 UCITS ETF
3. iShares Core S&P 500 UCITS ETF (Acc)
4. iShares Core S&P 500 UCITS ETF (Dist)

I've several questions:

1. May I ask which ETF(s) would you recommend? Would no. 3 be good as the dividends are reinvested back into the funds automatically? Am I right to say that I only need to buy 1 ETF out of the 4 ETFs as they track similar stocks?

2. Which broker would you recommend? I'm using FSMOne as I read that it charges the lowest commissions.

3. How many % of my portfolio should I be allocating to this ETF?

4. I've been DCA-ing into Nikko AM STI ETF via POSB Invest-Saver. I'm planning to sell my holdings. DCA-ing (buy once every month) into one of these Ireland-Domiciled S&P 500 ETFs would be better than investing a lump sum into the ETF. Is my understanding correct?

My sincere apologies if I've asked a question that has been answered. TIA for your help, I appreciate it.

interactive brokers...

could u spare us$8 to buy Shiny Things' book?

your questions are covered there.

diplomatic but lazy doesn't yield u any good either way.