Official Shiny Things thread—Part III

[K2DuoXoXo]

IWDA just plunged to 50.69.

oh my...

 

[revhappy]

Today most of MBH trades have been "sell" trades at the market maker's low ball bid price of 1.038/9. The NAV of the ETF is quite high at 1.047. I wonder why so many people are selling, is it risk off or is it to buy stocks on the cheap?

Anyways, if anyone wants to buy MBH in bulk today is a good day, you can get it at one month old price.

 

[psyfy]

Just google it and u will find at least two research articles rebutting the notion of corporate bonds. In summary On the surface corporate bonds appear worthy however when rebalancing is included, the govt bonds did just as well with greater sequential risk protection ! . U will find this consistent in and I bet all research articles comparing Corp vs govt bonds.

And we all know especially when u deal with big money like I do as I’m retired that we r all humans. Many of us get greedy and fearful. Long term returns mean nothing when u bail out. It is too difficult already managing human emotions.

If u have never faced gfc and a money large enough to scare the shits out of u. U will never learn. This year might serve u well. If u r dca and portfolio is still pittance... u will not learn.

I'm with Shiny on this one.

1) MBH may be described as corporate bonds however note that the key constituents in A35 are also in MBH. If you think Temasek, PUB, LTA, HDB and SIA will fail than you shouldn't be buying A35 also.

2) The yields on MBH will be higher than A35.

3) In theory, once MBH has been in the market for a longer time we can then meaningfully gauge it's total returns. Taking a 2 year return vs A35's 15 year return is not really comparing apples to apples.

My personal view is that we should take MBH for the slightly higher potential of yields and total returns when compared to A35 albeit at a slightly(negligible in my opinion) higher risk.

There is no right or wrong, just depends on your risk appetite and strategy.

 

[Okenba]

Resorting to attacking the person rather than the addressing the arguments now?

Actually, I think he's pretty consistent in this.

Pro-shiny good
Anti-shiny bad

The world is simple like that.

 

[BBCWatcher]

Hi BBCW, not sure if i am getting what you mean. Does "accumulating" mean we are getting a little more unit?

It means the fund is.

IWDA, for example, is an accumulating fund that holds the stock shares of just over 1,700 publicly traded companies companies. Many, perhaps most, of these companies pay dividends, and consequently IWDA (the fund) receives those dividends. The fund managers pay the various dividend taxes they must, and then they take the net (after-tax) dividends and go buy more stock shares in all 1,700+ companies, maintaining the weights of those holdings according to the MSCI World Stock Index.

So, what that means for you, if you're an IWDA shareholder, is that every fund share you hold corresponds to a progressively increasing number of shares in these 1,700+ companies over time. If all 1,700+ stocks don't change in price, the share price of IWDA still rises because each share represents more shares of stock, as the dividends are paid and the fund managers reinvest those dividends.

Companies individually do this, too. Instead of distributing their earnings as dividends to shareholders, they often repurchase their own shares then tears them up (sunsets them), at least if it's a genuine share repurchase and not share redistribution (to employees for example). Each remaining shareholder then owns a progressively greater share of the company, and (other things being equal) the value of each remaining share increases.

 

[Purplestars]

looks like cant congratulate you today
was hoping to see the win

Hooray! It finally dipped below $50. That's earlier than I thought it would.

I believe some congratulations is in order! Awaiting your party! Preparing my entry bid as we speak.

Timing the market can beat time in the market. Here's some living proof!

 

[makav31i]

I'm with Shiny on this one.

1) MBH may be described as corporate bonds however note that the key constituents in A35 are also in MBH. If you think Temasek, PUB, LTA, HDB and SIA will fail than you shouldn't be buying A35 also.

2) The yields on MBH will be higher than A35.

3) In theory, once MBH has been in the market for a longer time we can then meaningfully gauge it's total returns. Taking a 2 year return vs A35's 15 year return is not really comparing apples to apples.

My personal view is that we should take MBH for the slightly higher potential of yields and total returns when compared to A35 albeit at a slightly(negligible in my opinion) higher risk.

There is no right or wrong, just depends on your risk appetite and strategy.

I personally feel that SSB is better than A35 or MBH...With zero penalty for redeeming the bond before maturity, I think it should be part of a person's bond portfolio...If SSB were to fail, I'm pretty sure A35 or MBH would not be spared either...

 

[BBCWatcher]

Timing the market can beat time in the market. Here's some living proof!

How do you know that? All you know is the current and past prices.

 

[Purplestars]

How do you know that? All you know is the current and past prices.

Anybody starting their entry now beats the people who have DCAed these past 4 years considering bank interest. It doesn't take a math PhD to figure that out.

Future price is irrelevant as the early starter is bound to lose out with the higher prices paid over the years.

 

[tesarise]

Hooray! It finally dipped below $50. That's earlier than I thought it would.

I believe some congratulations is in order! Awaiting your party! Preparing my entry bid as we speak.

Timing the market can beat time in the market. Here's some living proof!

So bought in already?

 

[Purplestars]

So bought in already?

Actually no, because it just nudged above $50 again.

But you can prepare the party, it's gonna happen anytime now!

 

[ehsevol]

Down side is that USD has gone up again. Do you all time when to change your SGD to USD?

 

[swan02]

if I had a choice not buying a35, I would. A35 sucks compared to what exists in the US or LSE. But we are left with no choice as the research shows in Foreign bonds FX risk provides little benefit, in contrast with taking FX risk in iwda is very beneficial.

A35 is a lesser evil to MBH but both are inefficient and illiquid. I’ve bought mega loads of both and I know the time I have to sell is gonna be a problem. To many of you with pittance a portfolio will not appreciate what I say as it really does not make a diff till u r retired and managing one of large amount.

Regarding returns. U fail to understand what I was bashing about. it’s NOT about returns. It’s everything about emotions and not bailing out when the goings gets scary !. You can’t talk about returns when u have sold sold sold. And don’t anyone tell me they have nerves of steel. The market already tells me most are scared as ****. I only care what it does for me in times like this and the effect it has on rebalancing.

Educate yourself in sequence risk of returns and behavioural finance. Get some experience in times like this.

You should not be looking Mbh and a35 by itself but as a portfolio as a whole. Research have concluded that risk and returns should be taken in equity and not in bonds.

A35 ranks superior when rebalancing is enforced. The long term returns of both portfolios turn out on par but a35 gave the additional benefit of sequence protection. Go find the research. I’ve read a lot and it’s a pain to find it.

assume talk about returns. U can achieve this by increasing your equity allocation. Mbh does increase your risk n potential returns. Similar risk adjusted returns can be achieved with MBH or A35. Just by altering the equity component.

But only safe havens assets can protect u from your emotions and the scary drawdowns u will see. AND many will destroy themselves because of this by selling up on fear.

I'm with Shiny on this one.

 

[tesarise]

Actually no, because it just nudged above $50 again.

But you can prepare the party, it's gonna happen anytime now!

Always ready to party!

 

[BBCWatcher]

Anybody starting their entry now beats the people who have DCAed these past 4 years considering bank interest. It doesn't take a math PhD to figure that out.

You'll have to show your numbers for that assertion. To give you a head start, the daily closing prices for IWDA for the past 5 years are available here. You can also look up reasonable spot exchange rates at Yahoo! Finance. Pick a particular day of the month -- the 8th, let's suppose -- then pick the closing price on the 8th or on the next trading day every month for 48 months.

Moreover, "anybody starting their entry now...."? You do see the problem with that, right? None of us chose our own birth dates.

And why precisely 4 years over a 30+ year accumulation phase? How about 5? Or 6? Or 7.2 years? You aren't trying to reverse engineer the answer you want, are you?

 

[tangent314]

Stop all these pro-Shiny vs anti-Shiny nonsense or there will be infractions.
There will be no further warnings.

 

[swan02]

I personally feel that SSB is better than A35 or MBH...With zero penalty for redeeming the bond before maturity, I think it should be part of a person's bond portfolio...If SSB were to fail, I'm pretty sure A35 or MBH would not be spared either...

Then u do not understand the concept of diversification. Only with diversification can u get something for free via rebalancing. An annualised return of additional one percent !

Also SSB has little benefit protecting u from yourself of selling. It ranks worse than mbh in this. However SSB should b seen as an asset class close to TIPs or cash in period of increasing interest rates decimating bonds. Too bad we don’t have TIPs.

SSB is great but limits to 200k. A shame.

 

[4D.TOTO&BS]

"Investors likely expected more economic stimulus measures as risks of a U.S. and global recession are rising. Trump did say he'll provide relief for workers who have the coronavirus or*taking care of someone who's ill. He's ordering the*Small Business Administration to provide cheap loans to affected businesses and ask Congress to provide more funding. He'll also let some individuals and businesses defer tax payments. He again called for immediate*payroll tax relief."

Nobody: bull is ahead.

 

[BBCWatcher]

SSB is great but limits to 200k. A shame.

That's up to S$400K per couple and S$800K per family of four, which is really quite a lot. At S$400K that's equivalent to the whole 25% down payment on a S$1.6 million home!

Other Singapore Government Securities are available if you want more, in basically unlimited quantities.

 

[swan02]

I’ve used up 400k. Now my kids can open ? They r below 10 yo.

We have spoken about Fixed coupon sg bonds.They r just illiquid.

I’m gonna have issues when I sell my a35 n mbh to buy equities. shillers cape 20 here I come !

That's up to S$400K per couple and S$800K per family of four, which is really quite a lot. At S$400K that's equivalent to the whole 25% down payment on a S$1.6 million home!

Other Singapore Government Securities are available if you want more, in basically unlimited quantities.