*Official* Shiny Things club - Part 2

[hwckhs]

1. should I sell off some of my ES3 to purchase more IWDA? Or do I slowly buy and accumulate more IWDA with my monthly wages?

Assets-wise, personally, I have about $350k of ES3, $25k of IWDA (just started in April 2019 after reading ST's book and is convinced by his method, intending to hit USD100k in IBKR asap),..

I was in the same situation, and coincidentally also started buying world stock ETF since April this year after learning from ST (but I choose VWRD instead of IWDA).

Your ES3+G3B is worth $390k. At the pace you are buying IWDA, it will take about 5 years (sooner if you get a pay rise) to make it equal to ES3+G3B in size.

In my case, I don't have such a big ES3 holding. All I do is pause ES3 and buy VWRD for 9 months, and I will reach my target allocation. Given that you need a much longer time (5 years), I am not so sure. One thing to bear in mind, is that, you cannot rebalance your portfolio while you are transitioning to the new allocation. I tried to do it and made some mistakes in calculations. Also, changing allocation is a big move. Make sure the new allocation is something you can stick to, as you don't want to change it every now and then.

I am not qualified to directly answer your questions. Leaving them to the experts.

 

[foozgarden]

Curious, What's the reason of VWRD instead of IWDA?

I was in the same situation, and coincidentally also started buying world stock ETF since April this year after learning from ST (but I choose VWRD instead of IWDA).

Your ES3+G3B is worth $390k. At the pace you are buying IWDA, it will take about 5 years (sooner if you get a pay rise) to make it equal to ES3+G3B in size.

In my case, I don't have such a big ES3 holding. All I do is pause ES3 and buy VWRD for 9 months, and I will reach my target allocation. Given that you need a much longer time (5 years), I am not so sure. One thing to bear in mind, is that, you cannot rebalance your portfolio while you are transitioning to the new allocation. I tried to do it and made some mistakes in calculations. Also, changing allocation is a big move. Make sure the new allocation is something you can stick to, as you don't want to change it every now and then.

I am not qualified to directly answer your questions. Leaving them to the experts.

 

[hwckhs]

Curious, What's the reason of VWRD instead of IWDA?

I wanted exposure to emerging markets (China, BRIC etc), and don't want to manage IWDA+EIMI separately

 

[Shiny Things]

Fantastic advice - thank you. I was trying to figure this out myself, and you have saved me a lot of time, and I may not have arrived at this conclusion which seems perfect for me. Will have to be IBKR.

No worries - happy to help.

Ticks showing 224 at the moment at 1.24 strike and 304 at 1.26 strike
N00b Question: what currency is this? My IBKR is SGD

That's in USD ticks, so the premium will be (for example for the 1.24 strike) $0.0224 * 62500 = about $1400 USD, and your worst-case rate will be 1.2400 - 2.24 = about 1.2176.

Also, from my circumstances and current bid at 1.2467 - which would you go for?

That one's up to you. A higher strike means you pay more upfront, but you have a better (higher) worst-case rate.

If you really don't have any preference, I'd pick the strike closest to the December futures price, which is about 90 pips above spot right now.

--

One thing to note is that you might want to unwind the option (sell it back) when the payment comes in. This is easy to do - just sell it in IBKR the same way you bought it.

Edit: One other thing I forgot about: the strikes I pointed you to are December 6th expiry. If you don't know when in December the payment's going to hit, you might want to go longer than that so that your hedge doesn't expire (or pop into a futures position) before the payment comes through; the next expiry beyond the Dec 2019s is the March 2020s. If you buy the March20s instead, you'll definitely want to take off your hedge (sell the option) as soon as the payment hits your account and you've converted it to SGD.

Side note: this is the sort of service I provide to consulting clients. If you're reading this and you could use this sort of hedging advice for your company, shoot me a DM.

Just finished reading RbR, and am attempting to buy IWDA shares through the Stanchart platform. However, upon submitting the request, I am required to complete a Customer Account Review form to determine if I am eligible to trade Specified Investment Products - now I have no formal finance creditation or experience, and therefore failed the reviewed, and am unable to buy shares. Is there a workaround for this?

Just tell them you've traded six times before. It's a CYA exercise; they don't actually check.

Separately, does anyone know why broad-based equity index ETFs get marked as SIPs? It seems a bit dumb to lump things like IWDA in with the wack-ass murderholes like XIV that the SIP program is actually supposed to protect you from.

 

[Shiny Things]

Dear ST and BBCW, thank you for selflessly sharing your financial knowledge and advice. I have two questions:

1. should I sell off some of my ES3 to purchase more IWDA? Or do I slowly buy and accumulate more IWDA with my monthly wages?

Either is fine. I'd say the easiest thing would just be to buy IWDA with your monthly wages, though.

 

[orangbulu]

I have about 6k gbp in my Citibank account. Is it advisable to remit it directly to IB and purchase swda? Or should I convert it to usd To buy iwda

 

[BBCWatcher]

I have about 6k gbp in my Citibank account. Is it advisable to remit it directly to IB and purchase swda? Or should I convert it to usd To buy iwda

The former.

 

[iceblendedchoc]

No worries - happy to help.



That's in USD ticks, so the premium will be (for example for the 1.24 strike) $0.0224 * 62500 = about $1400 USD, and your worst-case rate will be 1.2400 - 2.24 = about 1.2176.



That one's up to you. A higher strike means you pay more upfront, but you have a better (higher) worst-case rate.

If you really don't have any preference, I'd pick the strike closest to the December futures price, which is about 90 pips above spot right now.

--

One thing to note is that you might want to unwind the option (sell it back) when the payment comes in. This is easy to do - just sell it in IBKR the same way you bought it.

Edit: One other thing I forgot about: the strikes I pointed you to are December 6th expiry. If you don't know when in December the payment's going to hit, you might want to go longer than that so that your hedge doesn't expire (or pop into a futures position) before the payment comes through; the next expiry beyond the Dec 2019s is the March 2020s. If you buy the March20s instead, you'll definitely want to take off your hedge (sell the option) as soon as the payment hits your account and you've converted it to SGD.

Side note: this is the sort of service I provide to consulting clients. If you're reading this and you could use this sort of hedging advice for your company, shoot me a DM.



Just tell them you've traded six times before. It's a CYA exercise; they don't actually check.

Separately, does anyone know why broad-based equity index ETFs get marked as SIPs? It seems a bit dumb to lump things like IWDA in with the wack-ass murderholes like XIV that the SIP program is actually supposed to protect you from.

The bank error. Etf are considered units in a collective investment scheme under the securities and future acts.

 

[mr_beanz]

Either is fine. I'd say the easiest thing would just be to buy IWDA with your monthly wages, though.

Thanks, ST. I probably will take the lazy way out too.

 

[IStayInHougangChalet]

hello all, understand stanchart is the hot pick for the <100ks.
but i'll also like to know why Saxo is not popular. appreciate some input

SAXO
+ referral bonus. $350 for referring, $150 referred.
+ lower commission click > for the list
+ (??) forex spread blahblah which i still have 0 clue about. but seen chatter on saxo being better in this department? your thoughts?

- charges an ANNUAL FEE of 0.12% of your stock for non SGX (im guessing this is the deal breaker?)
- weak physical presence in singapore


am i missing something big? very new to these stuff so please let me know, thanks!

the referral really drawing me in i should be able to get at least 2 referrals.



my background:
>>26yo
>>15k sgd prepped for investments
>>little to no investment knowledge. just read 1 of the Shiny Things summary thread and some of the posts in here. ++ couple hours of googling
>>likely going for IWDA:ES3:A35 w 42:42:16 over a period of time as per suggestion

 

[Shiny Things]

but i'll also like to know why Saxo is not popular. appreciate some input

- charges an ANNUAL FEE of 0.12% of your stock for non SGX (im guessing this is the deal breaker?)

Yes, that's the dealbreaker. Charging 12bps for doing literally nothing is outrageous.

Saxo used to be great - I used to use them! But when their brokerage fees started ticking higher and they started charging custody fees, they got much, much worse.

 

[IStayInHougangChalet]

Yes, that's the dealbreaker. Charging 12bps for doing literally nothing is outrageous.

Saxo used to be great - I used to use them! But when their brokerage fees started ticking higher and they started charging custody fees, they got much, much worse.

what about using it for a short term of say 1-2 years? switching before the annual fee "catches up"

is it recommended to do that? anyone else out there doing this?

thanks!

 

[unhinged_loon]

what about using it for a short term of say 1-2 years? switching before the annual fee "catches up"

is it recommended to do that? anyone else out there doing this?

thanks!

Are you doing high speed trading or investing? You choose a broker and stick with it for investing. Why be switching brokers in such a short time period.

 

[kram62]

I opened at saxo last year before I knew about IBKR. I like their trading software and the app works quite well. With the small AUM that I have now, the custody fee is definitely not a significant issue. Plus I got some referral money.

However I know realize that because of the minimum commission per trade, I tend to delay my purchases more than I ought to because I unconsciously feel like I need to maximize the usage of the commission (by buying enough to be just at or near the min commission)

I now see that at IBKR, because the fee is there anyway, I'll not have this unconscious reluctance to wait for bigger sums to invest, and will be more likely to properly DCA.

Not to mention the way tighter FX conversion spread which actually make IBKR cheaper for monthly investment.

Did anyone already transfer positions from saxo to IBKR before? What would be the total cost (I only have one counter, IWDA) and where do I initiate it?

 

[lawd2005]

Edit: One other thing I forgot about: the strikes I pointed you to are December 6th expiry. If you don't know when in December the payment's going to hit, you might want to go longer than that so that your hedge doesn't expire (or pop into a futures position) before the payment comes through; the next expiry beyond the Dec 2019s is the March 2020s. If you buy the March20s instead, you'll definitely want to take off your hedge (sell the option) as soon as the payment hits your account and you've converted it to SGD.

Side note: this is the sort of service I provide to consulting clients. If you're reading this and you could use this sort of hedging advice for your company, shoot me a DM.

Great advice again - it will actually land a few days later, so will look in to the March option as well.

It's actually a once off personal payment for me. But - I can clearly see the value of your advice (I bet a helluvalot of FAs wouldn't point to this) , I will keep an eye and an ear open if I can refer anyone for consultation.

 

[lawd2005]

No worries - happy to help.

Just tell them you've traded six times before. It's a CYA exercise; they don't actually check.

+1 on this, I set up my first account a few years ago and was relieved that my degree passed the bar. But, they never asked me for any proof etc. So just fill in whatever is convenient - they don't check. As Shiny says it's a cover your ass exercise.

 

[Shiny Things]

what about using it for a short term of say 1-2 years? switching before the annual fee "catches up"

is it recommended to do that?

No, it is not recommended to do that. Just pick a good broker (i.e not Saxo!) and stick with them.

 

[littleredboy]

I'm looking at EIMI, and am unsure of something.
It seems to be weighted towards China, but in currency wise is HKD. Why not the RMB? I think Xi will make the yuan much stronger in the next 10 years.

My CPF is 75% vested in emerging already (with Prulink), should I still consider adding this EIMI into my portfolio, retiring in 30 years? I do have IWDA already.

 

[BBCWatcher]

I'm looking at EIMI, and am unsure of something.
It seems to be weighted towards China, but in currency wise is HKD.

EIMI is quoted/priced in U.S. dollars, actually.

Why not the RMB? I think Xi will make the yuan much stronger in the next 10 years.

Whether that happens or not, it doesn't matter except to the extent it affects the real businesses (and their valuations in any/every currency). You're not buying or holding any currency when you buy a stock fund. You're buying stocks, i.e. fractional shares of real companies and their businesses.

My CPF is 75% vested in emerging already (with Prulink)...

How much does that cost?

...should I still consider adding this EIMI into my portfolio, retiring in 30 years? I do have IWDA already.

Probably not, although it'd depend on your overall exposure and whether it makes sense (from a cost point of view especially) to maintain that CPF-based holding.

 

[Kopisi_xiudai]

I've just finished reading RbR and and wondering how many % of your income do you put into this retirement investment?
If I'm saving some money to buy a car or to upgrade to a larger property, should I put that into investment as well?