Official Shiny Things thread—Part III

[BBCWatcher]

There is a disconnect between the economy and the stock market.

Is there? On a global index basis, stocks are currently well off their peak, and so is global GDP.

The economy is in bad shape while the stock market has been on a rally since March.

More precisely, on a global index basis, stocks are above their recent low. But doesn’t that make sense? Stock valuations are supposed to reflect, on average, consensus outlooks on the net present values of real businesses. The expected trajectory of real businesses, broadly speaking, is that the future will be improving. That seems logical, doesn’t it?

Stocks tumbled a pretty good amount, and they should have tumbled given the uncertainties and impacts associated with COVID-19. But now the world is at least understanding this virus better and adjusting to it — some better than others, for sure — and so the future is brighter. Brighter doesn’t exactly mean bright yet, but brighter. If you want to use a war analogy, it’s kind of like mid to late 1943 World War II from the Allies’ perspective. There was an awful lot of fighting and dying to come, but it was pretty clear by then that victory would come eventually. Italy officially switched from the Axis to the Allies on September 3, 1943, for example — the day when the Allies landed on the Italian peninsula. (The surrender was publicly announced 5 days later. It took nearly two more years before World War II ended, and Singapore specifically had to endure the full term of occupation.)

Then there are the businesses that did rather well in 1943 and beyond, and there are analogies today. COVID-19 has been wonderful, overall, for Amazon for example. I keep reminding people that we’re dealing with real businesses here, and to look at the biggest stocks as one sanity check for your thinking. Does anyone want to disagree that COVID-19 has been/is fabulous for Amazon? How about (random large company example) Visa? Or a “boring” company like Kroger, a publicly traded supermarket chain? There are many, many examples of real businesses that have triumphed in these times, in some cases also with COVID-19 wiping out weaker competitors with stocks that already weren’t worth much. (Certainly true of Amazon.)

 

[dullthings]

Hi all, I just “double-checked” with IB customer service. So the way to transfer from
IB to IB Singapore is to (1) open a Singapore account and (2) request for transfer from existing account to Singapore account (there are no fees involved in transfer), then (3) close the existing account.

I will likely go ahead with the above. May I ask if there are any other considerations?

Thanks for your help!

 

[hwckhs]

Hi all, I just “double-checked” with IB customer service. So the way to transfer from
IB to IB Singapore is to (1) open a Singapore account and (2) request for transfer from existing account to Singapore account (there are no fees involved in transfer), then (3) close the existing account.

Thanks for the info.

I wanted to ask if you managed to ask whether they will migrate existing IBKR US accounts to SG automatically in future?

As I was typing this post, I found a post (#8580) in the IBKR thread that says existing accounts will be migrated eventually.

" So to confirm, existing SG clients with IBKR LLC will be moved to IBSG?

"eventually Yes"

If that is true, I will just wait. I have no intention to use IBKRSG to buy SG stocks. Still prefer to use DBSV (CDP-based) for SG stocks.

 

[yourplaceormine]

Correct me if i'm wrong but from what I have read so far, it would not make sense to buy SG stocks/bonds if I intend to retire overseas eventually, therefore what should I invest in, in place of the SG stocks/bonds component? Thanks.

 

[crystalnox]

Thanks for the info.

I wanted to ask if you managed to ask whether they will migrate existing IBKR US accounts to SG automatically in future?

As I was typing this post, I found a post (#8580) in the IBKR thread that says existing accounts will be migrated eventually.



If that is true, I will just wait. I have no intention to use IBKRSG to buy SG stocks. Still prefer to use DBSV (CDP-based) for SG stocks.

I recall reading somewhere that they intend to do the migration by year end, but I can’t seem to find the post anymore and that was before COVID-19 hit.

 

[dullthings]

On IB SG again, I managed to speak to them.
(1) Automatic migration from IB LLC to IB SG will definitely happen in the future, but there’s absolutely no fixed time frame for that at the moment.
(2) To open a second IB Account in IB SG, you need to create a separate login name using a different email account. I tried to create a second account using the same email address but was directed by the website to open an account under my existing username (which is still under IB LLC, not IB SG).
(3) If we request to transfer from existing IB LLC to a new IB SG account now, it is a “manual” process that’s subjected to extensive checks and may not always be successful.

Thanks for the info.

I wanted to ask if you managed to ask whether they will migrate existing IBKR US accounts to SG automatically in future?

As I was typing this post, I found a post (#8580) in the IBKR thread that says existing accounts will be migrated eventually.



If that is true, I will just wait. I have no intention to use IBKRSG to buy SG stocks. Still prefer to use DBSV (CDP-based) for SG stocks.

 

[RuiQi_91]

Stock yield only for US stocks/etf/cef

There’s no downside to switching the stock yield enhancement program on

Thank you both. The IWDA is a US ETF right? Or is it not because it contains companies from all over the world ?

 

[viventa]

On IB SG again, I managed to speak to them.
(1) Automatic migration from IB LLC to IB SG will definitely happen in the future, but there’s absolutely no fixed time frame for that at the moment.
(2) To open a second IB Account in IB SG, you need to create a separate login name using a different email account. I tried to create a second account using the same email address but was directed by the website to open an account under my existing username (which is still under IB LLC, not IB SG).
(3) If we request to transfer from existing IB LLC to a new IB SG account now, it is a “manual” process that’s subjected to extensive checks and may not always be successful.

Thanks for the update. Sounds like a lot of things are still in the works...

 

[tesarise]

Thank you both. The IWDA is a US ETF right? Or is it not because it contains companies from all over the world ?

IWDA is listed in UK, not in US

 

[crystalnox]

Thank you both. The IWDA is a US ETF right? Or is it not because it contains companies from all over the world ?

It’s an ETF containing companies from all around the world, is domiciled in Ireland and listed on the London stock exchange. https://www.ishares.com/uk/individual/en/products/251882/ishares-msci-world-ucits-etf-acc-fund

 

[peipei1]

On IB SG again, I managed to speak to them.
(1) Automatic migration from IB LLC to IB SG will definitely happen in the future, but there’s absolutely no fixed time frame for that at the moment.
(2) To open a second IB Account in IB SG, you need to create a separate login name using a different email account. I tried to create a second account using the same email address but was directed by the website to open an account under my existing username (which is still under IB LLC, not IB SG).
(3) If we request to transfer from existing IB LLC to a new IB SG account now, it is a “manual” process that’s subjected to extensive checks and may not always be successful.

Hallo, why should anyone want to transfer from IB LLC to IB SG when we will lose SIPC protection?

 

[BBCWatcher]

Hallo, why should anyone want to transfer from IB LLC to IB SG when we will lose SIPC protection?

Some residents of Singapore are anxious to trade SGX-listed securities, and Interactive Brokers Singapore Pte. Ltd. will be a good broker also for those purposes.

 

[viventa]

Hallo, why should anyone want to transfer from IB LLC to IB SG when we will lose SIPC protection?

You might be overrating SIPC insurance. It's great to have, of course. But it's not the end of the world if you don't have it.

IBKR offers some of the lowest fees in the market. Also, shifting to IBKR SG can help investors hit the US$100,000 net liquidation value mark much quicker, due to consolidation of both global ETFs and Singapore ETFs purchases under one IBKR account.

 

[zoneguard]

You might be overrating SIPC insurance. It's great to have, of course. But it's not the end of the world if you don't have it.

IBKR offers some of the lowest fees in the market. Also, shifting to IBKR SG can help investors hit the US$100,000 net liquidation value mark much quicker, due to consolidation of both global ETFs and Singapore ETFs purchases under one IBKR account.

Downside to SG investors who are currently with IB LLC and already hit US$100K AUM: They will lose the SIPC coverage and will be charged GST henceforth. The new access to SGX may not necessarily be a big plus if the same investor has SCB's PB status and no min commissions at 0.18% compared to $2.5 min/0.08% from IB SG.

Wondering for IB SG for inward deposit in USD, can investors deposit a local USD cheque?

 

[viventa]

Downside to SG investors who are currently with IB LLC and already hit US$100K AUM: They will lose the SIPC coverage and will be charged GST henceforth. The new access to SGX may not necessarily be a big plus if the same investor has SCB's PB status and no min commissions at 0.18% compared to $2.5 min/0.08% from IB SG.

Wondering for IB SG for inward deposit in USD, can investors deposit a local USD cheque?

The very idea of having to pay GST on IBKR transactions is certainly irksome. But SCB PB transactions already incur GST anyway. So what's crucial is that if you opt for IBKR SG over SCB PB, you pay 0.08% instead of 0.18% worth of commissions (in addition to GST on top of whatever applicable fees are incurred). As for the minimum S$2.50 commission per order with IBKR SG, if you're already at the US$100,000 mark with IBKR AND you have PB status with SCB, it's probably not that difficult to purchase S$3,125 worth of Singapore securities at a time on IBKR SG.

So it still comes down to lower fees (including FX spreads etc.) in exchange for giving up SIPC coverage. There are other factors at play, of course, but I'm just keeping it simple. Is it worth paying higher fees for SIPC insurance? For most people, I don't think it is.

 

[chrisloh65]

https://www.marketwatch.com/articles/the-u-s-dollar-index-is-poised-to-plunge-51595239201

Be prepared for eventual USD crash!

 

[chrisloh65]

Yes, you would have to compare the risk of your assets with SCB (a bank that is highly regulated and where Temasek is the majority shareholder) vs IB (a broker which would be of much higher risk compared to SCB - like MF Global (which went bankrupt and people took 3 years or more to get back their assets in custodian (some said they didn't receive all assets back, like cash in MF Global accounts!))).
The choice is up to people here.

The very idea of having to pay GST on IBKR transactions is certainly irksome. But SCB PB transactions already incur GST anyway. So what's crucial is that if you opt for IBKR SG over SCB PB, you pay 0.08% instead of 0.18% worth of commissions (in addition to GST on top of whatever applicable fees are incurred). As for the minimum S$2.50 commission per order with IBKR SG, if you're already at the US$100,000 mark with IBKR AND you have PB status with SCB, it's probably not that difficult to purchase S$3,125 worth of Singapore securities at a time on IBKR SG.

So it still comes down to lower fees (including FX spreads etc.) in exchange for giving up SIPC coverage. There are other factors at play, of course, but I'm just keeping it simple. Is it worth paying higher fees for SIPC insurance? For most people, I don't think it is.

 

[BBCWatcher]

Yes, you would have to compare the risk of your assets with SCB (a bank that is highly regulated....

By whom?

....and where Temasek is the majority shareholder)....

First of all, Temasek has made lots of mistakes and really hasn’t done too well. Second, Temasek is not even close to a majority shareholder of Standard Chartered.

 

[Shine.gdj]

Thanks for the replies on the 'economy vs stock market ' query.

Has anyone used the IBKR snapshot? I read that we will receive $1.00 worth of snapshot quotes free of charge per month. Each snapshot on LSE equities costs $0.03. So we get 33 quotes per month? Is this correct?

 

[iceblendedchoc]

https://www.marketwatch.com/articles/the-u-s-dollar-index-is-poised-to-plunge-51595239201

Be prepared for eventual USD crash!

Time to go shopping !