Official Shiny Things thread—Part III

[_dXter]

hi guys I'm trying to buy IWDA (LSEETF) through IBKR app, however it states that my order is not accepted as a minimum of 2000 USD required to purchase on margin, sell short, trade currency or future...

I saw that many of yall DCA-ing less than 2k USD per month into IBKR, please advise! Thanks!

Is there a need to convert SGD to USD prior to purchasing?

Yes, you need to convert to USD first before you can purchase USD denominated securities without incurring margin charges.

 

[chrisloh65]

https://www.scmp.com/print/comment/opinion/article/3095534/why-us-dollar-slide-may-be-sign-real-danger-time

"Why the US dollar slide may be a sign of real danger this time
The rare event of a general depreciation of the world’s leading currency suggests a fundamental lack of faith that could sink financial markets and undermine the global economy
Recent events suggest the dollar could erode from within as the US retreats from international obligations and its domestic economy weakens
Anthony Rowley
Published: 2:00am, 3 Aug, 2020
"

For people who do not need to use USD to spend (because you are not Americans - If you are Americans then too bad because you are stuck with needing to own USD!) - Better watch out the sliding USD!

Is this any wonder why Americans will keep telling you that USD will sure go up and US stock prices will sure go up? (because Americans are stuck with USD and need to spend in USD and have no choice!)

 

[crystalnox]

https://www.scmp.com/print/comment/opinion/article/3095534/why-us-dollar-slide-may-be-sign-real-danger-time

"Why the US dollar slide may be a sign of real danger this time
The rare event of a general depreciation of the world’s leading currency suggests a fundamental lack of faith that could sink financial markets and undermine the global economy
Recent events suggest the dollar could erode from within as the US retreats from international obligations and its domestic economy weakens
Anthony Rowley
Published: 2:00am, 3 Aug, 2020
"

For people who do not need to use USD to spend (because you are not Americans - If you are Americans then too bad because you are stuck with needing to own USD!) - Better watch out the sliding USD!

Is this any wonder why Americans will keep telling you that USD will sure go up and US stock prices will sure go up? (because Americans are stuck with USD and need to spend in USD and have no choice!)

So what do you suggest? Hold gold? RMB? bitcoin? Chinese ADR?

 

[Hollowwind]

Kindly advise whether to invest in IWDA or VWRA? Thank you.

 

[chrisloh65]

Expert investor Seth Klarman says US stocks terribly over-priced and being artificially propped up by US Fed!

https://www.marketwatch.com/story/the-fed-treats-investors-like-foolish-children-by-propping-up-stocks-despite-dreadful-fundamentals-hedge-fund-heavy-seth-klarman-says-2020-07-30?mod=mw_more_headlines

"The Fed treats investors like ‘foolish children’ by propping up stocks despite ‘dreadful fundamentals,’ hedge-fund heavy Seth Klarman says
Published: Aug. 1, 2020
By Shawn Langlois
"

https://www.scmp.com/print/comment/opinion/article/3095534/why-us-dollar-slide-may-be-sign-real-danger-time

"Why the US dollar slide may be a sign of real danger this time
The rare event of a general depreciation of the world’s leading currency suggests a fundamental lack of faith that could sink financial markets and undermine the global economy
Recent events suggest the dollar could erode from within as the US retreats from international obligations and its domestic economy weakens
Anthony Rowley
Published: 2:00am, 3 Aug, 2020
"

For people who do not need to use USD to spend (because you are not Americans - If you are Americans then too bad because you are stuck with needing to own USD!) - Better watch out the sliding USD!

Is this any wonder why Americans will keep telling you that USD will sure go up and US stock prices will sure go up? (because Americans are stuck with USD and need to spend in USD and have no choice!)

 

[swan02]

Since it’s Seth Klarman, Ok I’m gonna double down on gold and idtl. (strategy not advisable for the faint of heart)

Expert investor Seth Klarman says US stocks terribly over-priced and being artificially propped up by US Fed!

https://www.marketwatch.com/story/the-fed-treats-investors-like-foolish-children-by-propping-up-stocks-despite-dreadful-fundamentals-hedge-fund-heavy-seth-klarman-says-2020-07-30?mod=mw_more_headlines

"The Fed treats investors like ‘foolish children’ by propping up stocks despite ‘dreadful fundamentals,’ hedge-fund heavy Seth Klarman says
Published: Aug. 1, 2020
By Shawn Langlois
"

 

[xinheli]

For money need to be used 1 or 2 year later

Is it ok to buy MBH or ES3 or some others?

 

[swan02]

If u lack understanding of passive investing or unsure of your own risk appetite, I’ve always encouraged using all available Cash within a week to purchase MBH only after putting aside emergency cash.

So after buying MBH , u then buy shinys online book and read all about it as well as read everything from shiny part one to three in this forum.

May take 3-6 months but don’t fret as u will be always invested ie MBH.

Then you would be able to answer your question n even create your own portfolio tailored for you and only u N make adjustments. Your opportunity cost will be minimal.

Is it ok to buy MBH or ES3 or some others?

 

[celtosaxon]

Another approach is to dip your toe in the water and immediately start investing 5% of your cash hoard into a broadly diversified, low cost, passive index equity fund.

This way, if the market drops, you win - you get to buy more shares at a cheaper price next month with the same amount of money. If the market rises, you also win (on the sweet gain) but you buy fewer shares next month with the same amount of money. Repeat this for 18 more months and you’ll be fully invested.

During this time you can also read & learn, but it will be more meaningful since you have some skin in the game.

 

[ftpofmpo]

how do we protect our sing dollar savings? earlier gov took a monetary stance of not lettign it appreaciate against usd;

if usd drops sgd drops too; how can we protect our savings? buy a global basket of ultra short term gov bond etf?

 

[swan02]

For me since I do not want or yet be confident with the intricacies of derivatives, I find being fully invested rather than having cash on sidelines is your best bet against impending sgd weakness. U don’t want the currency to overwhelm the risk of your portfolio.

Weak sgd In time makes SG properties and stocks and even bonds attractive to overseas investors. It all balances out.

I at time of writing feel through observation that being in broad base equity, gold, tips and USD bonds and Sgd cash as an all weather portfolio suits this purpose best. The proportions need to b adjusted according to your country of domicile.

Eg Australians likely do not need as much or even nil gold and USD bonds likely needs to be hedged and a percentage of international shares hedged due to the very risk on nature of the aud.

how do we protect our sing dollar savings? earlier gov took a monetary stance of not lettign it appreaciate against usd;

if usd drops sgd drops too; how can we protect our savings? buy a global basket of ultra short term gov bond etf?

 

[cfleee]

Hi Shinythings, do know how to create an account on US inland revenue to claim back divided witholding taxes on index (both US and ireland domciled etfs) looking into it to save the 30% and 15%. The savings will defenitely be worth the trouble (significant amount)

Sent from Samsung SM-N960F using GAGT

Because your not a us tax resident you can claim back the witholding taxes on dividends, stashaway and autowealth does it for you and they hire a tax company to do so for their clients

Sent from Samsung SM-N960F using GAGT

I don’t think that’s a thing you can do? I’ll defer to BBCW on this since he’s the tax expert, but I’m pretty sure there’s no way individual investors can claim back the DWT, either at the 30% or the 15% level.

Out of interest, where did you hear that you can do this?

Given the reference to StashAway/Autowealth, should almost certainly be referring to the refunds they got under the Qualified Interest Income (QII) rule. It's certainly not "the 30% and 15%" regardless of domicile, more like only some portion of the dividends of certain specific U.S.-domiciled primarily-bond ETFs like TLH/TLT. I think this specific thing really should only matter if you're owning the U.S.-domiciled bond ETFs, as presumably the Ireland-domiciled ones hold the underlying Treasury notes/bonds or muni bonds directly and so already fully benefit from the exemption without having to use the QII rule?

This was previously briefly discussed at least once in BBCWatcher's thread just over two years ago, see that linked post and the adjacent posts.

 

[alex22]

-snip-

4) Pick the Vanguard Target Retirement fund that matches your date when you think you’re going to retire. They’re great. They mix stocks and bonds, local and global, for a ridiculously low fee, and you literally don’t have to do any thinking; it’s just “buy one fund and you’re done”.

-snip-.

Hi, ST.
How do I gain access to this product as a nonresident alien?
Will buying through IBKR SG be any different from using any other DIY platform?
Do I need to be a Accredited Investor or something like that?

The topics here are a bit over my head but I'm reading wih interest...

TIA

 

[Han Shot First]

Also, value tends to underperform growth and momo factors when capital is cheap. So... I dunno. Intuitively, small-cap and value factors should work... but they’ve stopped working, and I don’t see them starting again any time soon.

So Fama and French are wrong?

So the ideal investment portfolio should tilt to growth and large-cap stocks?

 

[swan02]

They are wrong until they are right.

Might as well own everything.

So Fama and French are wrong?

So the ideal investment portfolio should tilt to growth and large-cap stocks?

 

[BBCWatcher]

How do I gain access to this product as a nonresident alien?

I know you addressed your question to ST, but I think I have an answer: I don’t think you can, or at least it’s very hard. U.S. brokers and mutual fund providers don’t seem to want to market U.S. mutual funds to non-U.S. persons. I don’t think there’s any regulatory barrier, but it seems to be something of an industry practice. I think you have to wait until your U.S. personhood is in place before you can do this.

When that time comes, I want to recommend Schwab’s target date index mutual funds in this role due to their lower expense ratios. Just look for the target date index fund with the year that most closely matches your planned (and realistic) retirement year. You can buy that fund directly with as little as US$1 to start and US$1 increments.

Do I need to be a Accredited Investor or something like that?

Nope.

As an aside, as I was digging into this, I see that Interactive Brokers has many Vanguard Ireland mutual funds listed in their No Transaction Fee mutual fund program. This could be really interesting for non-U.S. persons! I’ll do some more checking to see if there are some gems to be found. Do we have an even lower cost alternative to VWRA and IWDA without any whole share complications? Maybe, maybe not. “Stay tuned.”

 

[swan02]

So generally IB platform is recommended. But I’m fearful to have assets in IB exceeding the SIPC.

1. TD Ameritrade someone mentioned has zero fees only on USA domiciled which I can see buying gldm and brk b shares. Any other
Types of shares to buy without being or penalize too much by withholding taxes ?

2. I assume TD Singapore insurance is the 75k sgd ?
But on its TD Singapore website it states having SIPC.... begets the question mentioning IB S’pore as having only 75k.

3. Is TD FX conversion cheap enough ?

4. Any other worthy trading platforms for international shares other than SCB (which I dont reckon it’s worthy) ?

5. I heard u can get multiple SIPC coverage with the same broker if u have different CATEGORIES of accounts. Is creating a joint account a different category ?

 

[celtosaxon]

So generally IB platform is recommended. But I’m fearful to have assets in IB exceeding the SIPC.

Brokers like IBKR and TDAM have additional insurance on top of SIPC. You can ask them for details if this is a concern for you.

1. TD Ameritrade someone mentioned has zero fees only on USA domiciled which I can see buying gldm and brk b shares. Any other
Types of shares to buy without being or penalize too much by withholding taxes ?

The average dividend yield on U.S. stocks is currently below 2% annually, so 30% withholding on that is less than a 0.6% drag on performance. Technology stocks tend to pay less dividends, so something like QQQ is going to be less than 1%, so withholding is less than a 0.3% drag on total returns. Most of the FAANG stocks pay zero dividends, same for most growth & speculation stocks like Tesla.

However, I don’t think avoiding the withholding tax should drive any investment decisions.

2. I assume TD Singapore insurance is the 75k sgd ?
But on its TD Singapore website it states having SIPC.... begets the question mentioning IB S’pore as having only 75k.

SIPC coverage is US$500,000 per account.

Maybe you are confusing it with SDIC which S$75,000 per depositor?

3. Is TD FX conversion cheap enough ?

Good enough for me, within 0.5%. IBKR is about the only way to do better, because you can trade forex directly with paper thin spreads.

[QUOTES]
4. Any other worthy trading platforms for international shares other than SCB (which I dont reckon it’s worthy) ?
[/QUOTES]

For trading U.S. shares, you are not going to find anything better than IBKR / TDAM.

5. I heard u can get multiple SIPC coverage with the same broker if u have different CATEGORIES of accounts. Is creating a joint account a different category ?

Yes, unlike SDIC which is per depositor, SIPC is per account.

 

[hellvolhardzelinsky]

How should someone without any insurances (due to pre-existing illness) invest?

My friend has lupus which doesn't allow her to get any insurances and she didn't get any when she was young. No hospitalization, life/CI and DII.

How should she allocate her investment? I believe she should put more into liquid and safer index so during emergency, she can use it?

 

[Kaypohji]

Hmm say for voo and vusd
Both track the same index and have same performance. Then choosing vusd is better right? Because of the WHT... Although its liquidity is lower and expense ratio higher

So I think it depends on if there r alternatives

However, I don’t think avoiding the withholding tax should drive any investment decisions.