*Official* Shiny Things club - Part 2

[tangent314]

However, what about your alternative recommended UT of "Lion Global All Seasons Fund (Growth)"? Why use this UT if it does not track the same index as the ETF?

Just lower TER, although it's 70% equities and 30% bonds, and while the equities don't exactly track MSCI World, it's close enough.

 

[Han Shot First]

So which UT should the small investor choose - "Lion Global Infinity Global Stock Index Fund" or "Lion Global All Seasons Fund (Growth)"?

Or flip a coin and let the coin decide?

Or split 50%-50% investment money between the two UTs?

 

[Calpha K]

err... aviva saf is the cheapest term insurance as long as u did your NS or your spouse did his NS.

the rest don't come close.

Can one opt back in if one cancelled previously?

Still at a cheaper rate?

 

[Shiny Things]

Wouldn't you risk getting screwed by a rise in inflation though?

Yeah, if you put all your money into (non-inflation-linked) bonds, that certainly is a risk. So… don’t do that! A mix between equities and bonds gives you the best protection against inflation.

Whats the best, or cost efficient way to invest in iwda for small investor? Or is this meant for ppl with bigger capital?

Just use Stanchart. Ten bucks a month, every two or three months, is a tolerable price to pay.

I think Tangent’s method of buying unit-trusts and then switching into IWDA is overly complicated.

hi ST,

a couple of beginner questions to a trade vet...

1. how do u find High Frequency Trading, is it a win only outcome?
Have u dabbled in this?

2. I remember that you mentioned options and crypto are in your realm, so have options and crypto been overall profitable to you?

3. is trading / investing an overall life-changing activity that can free us from active income? Or do you advise against that, as it means undertaking a huge element of risk?

4. Do you agree with the following? I found short term trading a under-performance activity as it means I leave a lot on the table for magnificient companies. The best way to capitalise on them seems to be to buy & forget.

kindly let me know your thoughts on the above, thanks as usual!

My “thoughts on the above” is that there’s no such thing as a get-rich-quick scheme. Specifically:

1 - LOL nope. High-frequency trading is an incredibly capital- and labor-intensive business. Firms have hundreds of quants and traders dedicated to this stuff. They literally build their own microwave networks, dig their own fiber-optic cables, and build their own custom network cards(!!!) to get a few nanoseconds’ latency advantage over other firms. Neither you nor I nor anyone on this board can compete with that, and it’s not worth trying.

2 - You’re asking ‘do you trade these things and do you make money doing it?’. The answer is no I don’t. I chuck it around in futures and options and single-stocks occasionally, using my “fun money” allocation, but that’s only ever a small amount.

The vast majority of my personal portfolio is in the exact same 110-minus-your-age portfolio that I recommend to everyone else.

3 - No. The vast majority of people who take up trading will end up underperforming the market, and would have done better overall if they’d stayed at their day jobs.

4 - Asking me “do you agree with xyz” is a bit of a weird way of phrasing it? What are you trying to understand, exactly?

Hi ST, sry if this has been asked before. How do you find Stashaway? Other than the 0.2-0.8% that they'll eat away from you,[…]

Two big problems:
1 - their fees are too high for what they do;
2 - they insist on using US-listed ETFs and paying the extra dividend hit, for absolutely no good reason that I can discern;
3 - they charge a SGD-USD conversion fee. Whyyyyy?

Should I go with MBH, SSB or stick to A35 on POSB if I intend to keep my bond allocation to 10%?

MBH.

Would like to seek opinions on in view of us China trade uncertainty. I Bought Iwda currently if now I sell can still lock in a bit of profits first. Then I can buy again on expected price drop. But if continue to hold this lot will soon incur paper loss. So which is better sell first buy again on dip or hold and expect to do DCA? Im quite new to investing hence the questions. Thanks for your advice

The point of dollar-cost-averaging, and of investing for the long term, is that you don’t sell unless you’re ready to retire (or you actually need the money). You’re not trying to actively trade, and you’re certainly not trying to predict the market, because most people are really bad at that.

Hi everyone,

Read somewhere that one should only put 10%net worth into offshore accounts.

I’ve never heard of this before; I don’t think it’s a thing.

Since IBKR is not MAS regulated[…]

IBKR is regulated by the US Securities and Exchange Commission, and the US Commodities and Futures Trading Commission, both of which are (in my opinion at least) a lot stricter than the MAS’s light-touch regulatory regime.

 

[Ilovemathstutor]

hi hi,

you can buy back into aviva SAF term insurance, but they will be adjusted to your entry age.

meaning if u buy at 20 years old and if u buy at 40 years old, the latter will be more expensive.

but aviva SAF has the largest pool for term insurance, that's why they are the cheapest.

this is the low down dirty truth of why your first 1-2m sgd coverage for term life which comes w tpd, total perm disability, should come from them.

ignore the insurance sales as they will point u for something more expensive as they include life insurance component into it for their commissions.

term life = up to 65 years old coverage, cheapest + most effective.
life = 99 or 100 years old, but it's really if u are high networth and need an instrument to hedge your investments due to whatever compulsory estate tax.

that's how i see it, you can disagree but you can't deny Aviva SAF insurance is the best term insurance cause it's the cheapest, which is the objective.

 

[Ilovemathstutor]

hi ST,

as usual, thanks for sharing your thoughts.

clears up alot for me as it lays the Out-Of-Boundaries markers for me to adhere to!

 

[BBCWatcher]

IBKR is regulated by the US Securities and Exchange Commission, and the US Commodities and Futures Trading Commission, both of which are (in my opinion at least) a lot stricter than the MAS’s light-touch regulatory regime.

This question, and variations, appear a lot. I’d like to elaborate a bit.

One characteristic of U.S. brokers is that they’re SIPC insured. That means among other things that the cash, in any currencies, you might have on deposit at IB is insured up to US$250,000. And that’s good, of course. SIPC membership requires significant regulatory oversight.

How about cash held at a broker in Singapore? Is there any equivalent to SIPC? Nope, sorry.

But let’s consider banks in Singapore. Surely they’re safer, right? Well, U.S. deposit insurance (FDIC or NCUA) has a US$250,000 limit, and it’s not all that hard to raise that limit effectively. (That involves strategic account title variations and, if that’s not enough, CDARS.) The limit in Singapore is S$75,000, only recently raised. And that limit in Singapore is much tougher to lift (basically impossible) and only applies to Singapore dollar deposits. All other currencies on deposit at a bank in Singapore are completely unprotected. FDIC and NCUA coverage, just like SIPC, will make all depositors whole up to the insurance limit and at the current U.S. dollar exchange rate. And they do it over a weekend. (Ordinarily U.S. federal marshals and a parade of accountants arrive on a Friday afternoon and close the failed bank, and by Monday morning it reopens — usually as branches of another, acquiring bank. Everything still works for consumers in the meantime, including ATM access and electronic payments. They’re very good at this on the few occasions it’s necessary.)

Anyway, while I and others think U.S. regulators need to be even better, they are very good at these basics — and much better than the Monetary Authority of Singapore is.

Oh, here’s one more: U.S. state regulators are sometimes involved also, and that’s good. The best example of that is in Massachusetts where deposits at state chartered savings banks are state insured to a limit of ... well, there’s no limit! Yes, that’s right, the Commonwealth of Massachusetts will step in and protect depositors at state chartered savings banks who have deposits above the FDIC limit, 100%. I don’t think there are any other banks in the world with unlimited government deposit insurance (from a government of reasonable or better quality), but there you go.

It’s a big world out there, and there are some — OK, many — better, stronger regulatory protections than the rather weak ones in Singapore. If you’re looking for greater regulatory safety then you really ought to transfer most of your wealth out of Singapore as fast as you can and put it some place safer.

 

[mousepad_88]

Hi Shiny, as your an Aussie, i have the below question for you...
Assuming the following scenario: A Singaporean migrates to Australia as a Permanent Resident still hold part of his asset in Singapore like CPF, Investments and money in SG bank account etc.

Will he be taxed on capital gain on them when he eventually liquidate his portfolio of ETF, shares and interest earn on CPF, interest earned on SG bank account etc?

 

[revhappy]

Hi Shiny, as your an Aussie, i have the below question for you...
Assuming the following scenario: A Singaporean migrates to Australia as a Permanent Resident still hold part of his asset in Singapore like CPF, Investments and money in SG bank account etc.

Will he be taxed on capital gain on them when he eventually liquidate his portfolio of ETF, shares and interest earn on CPF, interest earned on SG bank account etc?

I am not sure about CPF, but I am pretty sure everything else is taxable. Otherwise, Australians with one of the highest tax rates in world would stashaway everything in tax havens.

My suggestion, would be just before migrating, do a reset and realize those gains while you are a SG tax resident. When you start in Australia, then you pay capital gains tax only on new gains.

Another thing, capital gains tax is paid only when the gains are realized. If you don't sell there is no tax. Maybe just before retirement, you could come back to SG for a year and become a tax resident here for that year and then again do a reset.

So there are ways to avoid tax especially since you belong to this wonderful tax haven called SG.

All the above is my view only. Consult you tax advisor before doing anything.

 

[Zink00]

thanks, Shiny. Is there a better way to transfer SGD to USD for scb settlement account? Or just use scb's rate?

 

[Ilovemathstutor]

This question, and variations, appear a lot. I’d like to elaborate a bit.

One characteristic of U.S. brokers is that they’re SIPC insured. That means among other things that the cash, in any currencies, you might have on deposit at IB is insured up to US$250,000. And that’s good, of course. SIPC membership requires significant regulatory oversight.

How about cash held at a broker in Singapore? Is there any equivalent to SIPC? Nope, sorry.

But let’s consider banks in Singapore. Surely they’re safer, right? Well, U.S. deposit insurance (FDIC or NCUA) has a US$250,000 limit, and it’s not all that hard to raise that limit effectively. (That involves strategic account title variations and, if that’s not enough, CDARS.) The limit in Singapore is S$75,000, only recently raised. And that limit in Singapore is much tougher to lift (basically impossible) and only applies to Singapore dollar deposits. All other currencies on deposit at a bank in Singapore are completely unprotected. FDIC and NCUA coverage, just like SIPC, will make all depositors whole up to the insurance limit and at the current U.S. dollar exchange rate. And they do it over a weekend. (Ordinarily U.S. federal marshals and a parade of accountants arrive on a Friday afternoon and close the failed bank, and by Monday morning it reopens — usually as branches of another, acquiring bank. Everything still works for consumers in the meantime, including ATM access and electronic payments. They’re very good at this on the few occasions it’s necessary.)

Anyway, while I and others think U.S. regulators need to be even better, they are very good at these basics — and much better than the Monetary Authority of Singapore is.

Oh, here’s one more: U.S. state regulators are sometimes involved also, and that’s good. The best example of that is in Massachusetts where deposits at state chartered savings banks are state insured to a limit of ... well, there’s no limit! Yes, that’s right, the Commonwealth of Massachusetts will step in and protect depositors at state chartered savings banks who have deposits above the FDIC limit, 100%. I don’t think there are any other banks in the world with unlimited government deposit insurance (from a government of reasonable or better quality), but there you go.

It’s a big world out there, and there are some — OK, many — better, stronger regulatory protections than the rather weak ones in Singapore. If you’re looking for greater regulatory safety then you really ought to transfer most of your wealth out of Singapore as fast as you can and put it some place safer.

in summary, if u think local stock brokers, be it philips capital or local bank brokers are a safe place to park your stocks...

u are so wrong.

they have 0 insurance.

at offshore brokers, like Interactive brokers or TD Ameritrade... they have SPIC which insures your first 250k usd.

and if u have excess, there's a fallover insurance for that too, till 2.75m usd.

so ya, do the right thing!

 

[peipei1]

US feels like growing more protective inwards, there are laws in place, but do they work in favor of overseas persons, i also think US have too many laws actually, more complicated means more loop holes, so having some insurance on paper do not always ensure we get the same level of protection?

The last 2 great recessions were caused by US because of how their business functions, so even MAS have light touch, our local companies are more conservative and law abiding, insurance is good only after bad things happen.

 

[BBCWatcher]

....our local companies are more conservative and law abiding, insurance is good only after bad things happen.

You mean local companies like Hyflux, Noble, and OSIM?

 

[tangent314]

So which UT should the small investor choose - "Lion Global Infinity Global Stock Index Fund" or "Lion Global All Seasons Fund (Growth)"?

Or flip a coin and let the coin decide?

Or split 50%-50% investment money between the two UTs?

Just remembered the LGI GSIF has a minimum initial investment of $1000 while All Seasons is $100, so ir's probably easier to go with All Seasons

 

[happylcw]

This is my very first post in this forum.

Have been following this forum for quite some time and I have recently just finished reading this thread. I must first say thank you to Shiny Things, BBCWatcher and all other forumers who spent their precious personal time to share, answer and discuss their views on personal finance here.

I have seen some discussion on the brokerage firm esp between SCB and IB. Please allow me to share my personal experience. I was one of the victim of the MF Global saga. That time I attended an advertised stock investment course T3B and followed their suggestion to open a CFD account with MF Global in order to adopt the method taught in the course. I had around 20K SGD in opened positions and cash when MF Global went into trouble. I remembered it took 2 years before I finally get back the money (not all) and the opened positions were closed at a price that we did not have any control of.

During the 2 years time, the affected account holders were invited to at least two briefing conducted by the appointed liquidator KPMG on the progress of getting the money back. I remembered the first briefing, we had to sign some documents to authorize the liquidator at act on our behalf. Eventually the money were returned in 2 (or 3 batches) and before we were offered the final repayment, we were asked to sign an agreement witnessed by the liquidator not to pursue the matter further (otherwise you would not get the money).

I fully agree with Shiny Things that this could happen to any brokerage firm. A brokerage firm affiliated to bank may not be any safer than an online brokerage firm.

However, after going through the MF Global saga, I was thinking if this happens to IB which does not have a Singapore office, I cannot imagine the hassle someone has to go through with the liquidation process and paper works as well as the psychological stress while waiting for an overseas liquidator to sort out the money. The situation will be worse if I have a much larger positions (say few hundred thousands), and if I am already not working at that time and have to depend on selling the holdings regularly to fund my living.

I have just opened the IB account this week, but after some thinking today I personally will choose SCB to start my IWDA accumulation journey.

 

[hwckhs]

Please allow me to share my personal experience. I was one of the victim of the MF Global saga....

Thank you very much for sharing your experience. I am a newbie and didn't know what MF Global is. Google sends me to this Wiki. Not sure if there is a list some where that lists all brokers that went broke in the past.

Do you mind to let us know how much you managed to get back (in terms of %) after liquidation?

 

[tangent314]

I suspect there is a big difference between having your money tied up in derivatives when MF Global goes down, and having your money tied up in long positions if IBKR goes down.

 

[Mecisteus]

I suspect there is a big difference between having your money tied up in derivatives when MF Global goes down, and having your money tied up in long positions if IBKR goes down.

Even if IB goes down, you need to accept some risks that you may not be able to sell or close your positions in time while waiting for the settlement or during the transfer process.

 

[hwckhs]

It's funny that we diversify so much with ETFs to reduce risks with a single stock/issuer, but if all holdings are held in the same broker, that becomes a significant risk. Haven't thought much about this risk until hearing this story.

That's why I like CDP; it can't go broke.

 

[Mecisteus]

It's funny that we diversify so much with ETFs to reduce risks with a single stock/issuer, but if all holdings are held in the same broker, that becomes a significant risk. Haven't thought much about this risk until hearing this story.

That's why I like CDP; it can't go broke.

CDP can't go broke but the stocks you hold in there got higher chance to go broke if you hold stocks like Noble, Hyflux, etc.

Those long positions into well known ETFs and big names are safer but the broker risk is minimal.

Your positions are still intact. The only trouble is the transfer or settlement process.