Official Shiny Things thread Episode V, The Empire Strikes Back

highsulphur

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That's a good point... thanks.


Good to know! Thanks for sharing. I've been watching out for favorable exchange rates but I realize that causes more anxiety than DCA should cause.
Yes sometimes it's not worth chasing that few pips and missing the buying opportunity
 

shallow

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That's a good point... thanks.


Good to know! Thanks for sharing. I've been watching out for favorable exchange rates but I realize that causes more anxiety than DCA should cause.
Once your portfolio has reached a substantial size, you can try to do this small exercise that I like to do. Try to simulate the amount you plan to convert and buy, you will realize it does not change your average price much even if you wait for that small 1-3% dip in conversion or etf price.
 

zissou

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I converted my IB account to a margin account, and I bought some VWRA today. My USD amount is showing a negative amount (only few dollars). My SGD amount is definitely more than enough to cover the negative USD amount. Nonetheless, I don’t wish to assume that all is well, and I hope to get some insights from others here as to what would happen from now (or what I should be doing to cover that negative amount, if needed), so that I do not incur any penalty fees or anything like that.
 

highsulphur

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I converted my IB account to a margin account, and I bought some VWRA today. My USD amount is showing a negative amount (only few dollars). My SGD amount is definitely more than enough to cover the negative USD amount. Nonetheless, I don’t wish to assume that all is well, and I hope to get some insights from others here as to what would happen from now (or what I should be doing to cover that negative amount, if needed), so that I do not incur any penalty fees or anything like that.
You will be incurring interest on that small negative usd amount
 

chrisloh65

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ES3 can be considered as a holding in your SRS since you can’t buy UK or HK listed ETFs with SRS money. You could also make that transition over time if it makes sense.

IWDA contains over 1,500 stocks and covers about 90% of the world, that is why it should be your biggest holding of the three.

ES3 is just replicating the STI 30 which is a hodgepodge of comparatively small local and regional stocks. Even though these stocks are listed on SGX and traded in SGD, many have little connection to the Singapore economy or the Sing dollar. I think the reason it is popular is due more to familiarity than fundamentals. TBH, I haven’t seen a truly compelling argument for why ES3 should be a prominent holding in anyone’s portfolio.
It is a myth that IWDA covers 90% of world stock market since it does not cover emerging markets and China stock market being considered "emerging" is already >20% of world stock market.
 

Shiny Things

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Hi Shiny Things, just wondering on your personal portfolio allocation.

Is the bulk of it into VWRA/IWDA too? If it's too sensitive, you can pass the question. Haha

Celtosaxon’s right: because I’m a US taxpayer, Irish-domiciled ETFs aren’t appropriate for me (the tax treatment for US taxpayers owning overseas-domiciled ETFs and funds and such is absolutely monstrous). I use US-listed equivalents instead—mostly from Schwab’s ETF lineup, which has low fees and decent yields from IBKR’s stock lending program, which gives it a tiny edge over other ETF lineups.

I do everything else the same though: 110-minus-my-age, a 50-50 split between local and global stocks, twice-yearly rebalancing, etc etc etc. It’s the same strategy, just implemented using different ETFs.

@Shiny Things , could you share why you left your former organisation?
My new company offered me a big step up in compensation and responsibilities - it was a great offer, and I couldn’t turn it down.
 

RedsYWNA

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INt
Celtosaxon’s right: because I’m a US taxpayer, Irish-domiciled ETFs aren’t appropriate for me (the tax treatment for US taxpayers owning overseas-domiciled ETFs and funds and such is absolutely monstrous). I use US-listed equivalents instead—mostly from Schwab’s ETF lineup, which has low fees and decent yields from IBKR’s stock lending program, which gives it a tiny edge over other ETF lineups.

I do everything else the same though: 110-minus-my-age, a 50-50 split between local and global stocks, twice-yearly rebalancing, etc etc etc. It’s the same strategy, just implemented using different ETFs.

Interesting on the Schwab part. I was also thinking that some of its ETFs seem slightly better priced than Vanguard, though differences are v close betw Schwab, Vanguard, Fidelity. Thanks for sharing!
 

revhappy

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Can somebody suggest to me which is the best Ex-US ETF which is efficient from DWT perspective? I mean I need the equivalent of EAFE
 

celtosaxon

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I do everything else the same though: 110-minus-my-age, a 50-50 split between local and global stocks, twice-yearly rebalancing, etc etc etc. It’s the same strategy, just implemented using different ETFs.

Shiny, curious whether/how you take any future public pension payments into account in your 110-minus-age formula.

I know there are a lot of opinions on this, but Bogle said he thinks one should use 120-minus-age and that social security should be considered in that.

Without considering future public pension payouts, I am currently at 124-minus-age, but if I consider the present value of future pension payouts, I’m not even at 100-minus.
 

revhappy

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Has anybody thought of this idea as a way of currency hedging?
Use your SGD cash to buy MBH with Interactive Brokers and use margin to buy IWDA.
You pay whatever the USD margin rate is with IBKR so for 1yr you pay like 1.7% or whatever and earn a yield from MBH which is decent 2%. So you kind of dont have to ever worry about currency conversions. Any excess cash you have you just sweep it into your IBKR account and keep buying MBH and then every month you buy IWDA as per your DCA plan.

The main advantage I see here is you never have to look at exchange rates ever. USDSGD can keep going up and down as much as it wants and you are pretty much insulated from it.

Edit: I just realized, IBKR SG margin rate is 2.6% for USD, 1 full percentage point higher than IBKR LLC, so that kind of screws up the plan :(
 
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celtosaxon

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Can somebody suggest to me which is the best Ex-US ETF which is efficient from DWT perspective? I mean I need the equivalent of EAFE

I don’t believe such an ETF exists outside of the US. I think you’d have to cobble something together with a few ETFs.

Even a simple thing like Euro Stoxx 600 Index (closest thing to a S&P 500 of Europe) doesn’t trade in London, you have to go to Germany, symbol EXSA.
 

thelittlemonkeye

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