Official Shiny Things thread—Part III

[flowerpalms]

Meaning if i were to calculate the shortfall, i should be looking at the balance based on the average price against holdings, instead of last price against holdings?

The true balance in the securities account will be based on the average price against holdings? Apparently in SCB it is showing P/L of the holdings based on the last price.
Eg. It is a negative amount if based on last price
It is a profit if using average

If you are talking about the current balance of your securities account, it is probably showing you the mark to market value which will be based on the last available price against your holdings to calculate value at that point in time. The price you bought at doesn't matter, only the price you can sell at to calculate your current balance/value. If SCB needs you to maintain 50k balance for example then this balance should be above 50k or any shortfall would need to be topped up. If you are talking about some other balance then it depends on which one you are referring to.

 

[pcslacker]

Meaning if i were to calculate the shortfall, i should be looking at the balance based on the average price against holdings, instead of last price against holdings?

The true balance in the securities account will be based on the average price against holdings? Apparently in SCB it is showing P/L of the holdings based on the last price.
Eg. It is a negative amount if based on last price
It is a profit if using average

I don't think I mentioned average price anywhere. Can you clarify what you mean by that?

If you have a security that you bought 10 units at $1/unit as an example and the last price is $2/unit then your balance is $20 versus cash invested of $10. Or if the price now is $0.5/unit then your balance is $5 versus 10$ invested. If you want to keep you allocation to $10 then you will need to top up another $5 to buy up another 10 units of the stock to bring your balance up to $10 again

Last price above will be the closing price of the previous day if outside trading hours or the bid price currently during trading hours for an actively traded instrument. For a fund it will be the closing price of the day you sell.

 

[flowerpalms]

Ahh ok thanks!

I know.i am on right track

I don't think I mentioned average price anywhere. Can you clarify what you mean by that?

If you have a security that you bought 10 units at $1/unit as an example and the last price is $2/unit then your balance is $20 versus cash invested of $10. Or if the price now is $0.5/unit then your balance is $5 versus 10$ invested. If you want to keep you allocation to $10 then you will need to top up another $5 to buy up another 10 units of the stock to bring your balance up to $10 again

Last price above will be the closing price of the previous day if outside trading hours or the bid price currently during trading hours for an actively traded instrument. For a fund it will be the closing price of the day you sell.

 

[hkchew03]

Is there a reason you're suggesting not to change to FSMone for STI ETF? It's definitely cheaper by a fair bit. POSB charges 0.082% IIRC, so that's $4.10 per month (assuming $500). FSMone charges $1 as its min fee for RSPs. Even at this low amount that's a difference of $37.2 a year, or over 10 years at 7% returns that's another 600+ dollars.

I mean sure not THAT significant but as your RSP amount goes up it gets more and more significant. For example at $750 a month, the difference in fees amounts to $1000 over 10 years at 7% returns. Unless the issue is with reliability of FSM? Kindly advice, I'm new to this.

FSM $1 is Min, not Max.. base on $500/mth, its still 0.08%, almost the same as POSB 0.082%. U less u are Anni g to go less than $500/mth

Posted from PCWX using Redmi K20 Pro

 

[spvnnn]

FSM $1 is Min, not Max.. base on $500/mth, its still 0.08%, almost the same as POSB 0.082%. U less u are Anni g to go less than $500/mth

Posted from PCWX using Redmi K20 Pro

ya i typo, is min, not max. I'm saying the difference is still 3 bucks a month because POSB charges you flat .82% which is $4 a month, so FSM cheaper at $1.

 

[chemtt]

Thanks for the answers guys!

I’m 25 this year. I’d like to follow ST’s method but won’t be buying bonds as I’m using my CPF as the bonds part and also have endowment plans bought from long ago.. so I’ll be investing in equities purely.

Currently I’ve a warchest of around 60k SGD which imma DCA into IWDA for the next 1 year (?), so around 5k every month. I’ll be using IB for this as the spread is better.

After which I intend to DCA around 1k SGD every month. I know that I’m supposed to buy both global and local (ie IWDA and ES3/G3B) in a 50/50 allocation, but the thing is I want to quickly hit the minimum USD 100k in my IB account, so does it make sense if I only DCA 1k SGD into IWDA for the next few years and not buy ES3/G3B first? Then after I’ve hit the min 100k USD in my IB account, I can buy more ES3/G3B to makeup for the shortfall.

Thanks in advance!

 

[spvnnn]

Thanks Joshua for your book, enjoyed reading through it. One big question I have is nowhere in the book do you ever talk about investing in individual stocks (in fact it sounds like you're somewhat discouraging it). Aren't there cases where it'd be prudent to invest into individual stocks, either for growth or dividends? If so, do you have any guidelines that you'd follow (e.g. how much you invest, when do you do it, etc.) Or would you genuinely recommend always sticking to ETFs 100% of the time?

Thanks for the book once again.

 

[cassowary18]

FSM $1 is Min, not Max.. base on $500/mth, its still 0.08%, almost the same as POSB 0.082%. U less u are Anni g to go less than $500/mth

Posted from PCWX using Redmi K20 Pro

POSB is not 0.082%, it's 0.82%, more than 10 times higher.

FSMOne RSP wins out at high amounts.

 

[tangent314]

After which I intend to DCA around 1k SGD every month. I know that I’m supposed to buy both global and local (ie IWDA and ES3/G3B) in a 50/50 allocation, but the thing is I want to quickly hit the minimum USD 100k in my IB account, so does it make sense if I only DCA 1k SGD into IWDA for the next few years and not buy ES3/G3B first? Then after I’ve hit the min 100k USD in my IB account, I can buy more ES3/G3B to makeup for the shortfall.

Yes, some of us (including myself) have focused on reaching US$100k with IB before starting to put some into STI ETF.

 

[makav31i]

POSB is not 0.082%, it's 0.82%, more than 10 times higher.

FSMOne RSP wins out at high amounts.

FSM charges 0.08% or minimum $1...POSB Invest Saver charges 0.82%...So if you invest at least $200/month, FSM is cheaper than POSB Invest Saver...

POSB Invest Saver investment amount is in multiples of $100...FSM can be any amount at $50 and above; e.g. $123.45...

I won't say $200 is a high amount as anything from $200 onwards, FSM will beat POSB Invest Saver...The only advantage that POSB Invest Saver have over FSM is that POSB Invest Saver don't charge you when you want to liquidate...FSM charges minimum $10 when you want to sell...

 

[buaytuckchek]

POSB Invest saver having promotion now. I just restarted it, to take advantage of the rebate of sales charge.

https://www.posb.com.sg/personal/promotion/invest-saver

 

[chemtt]

POSB Invest saver having promotion now. I just restarted it, to take advantage of the rebate of sales charge.

So if we cancel our existing POSB invest saver RSP and set up a new RSP to get this promo, there won’t be any administrative charges right?

 

[MichealScott]

POSB Invest saver having promotion now. I just restarted it, to take advantage of the rebate of sales charge.

https://www.posb.com.sg/personal/promotion/invest-saver

Oh good sic thanks! Didn't mention that can't stop and restart to earn the rebate. Will do it now

Sent from Stamford Bridge using GAGT

 

[12retire]

IB - withdraw money

Im setting up my IB withdrawal.

Which method is suitable fo Singapore investors - Giro/ACH or Wire?

I have a DBS multicurrency account - I sometimes need USD to pay someone in US. Is it better to transfer SGD or USD to my DBS account?

 

[BBCWatcher]

Which method is suitable fo Singapore investors - Giro/ACH or Wire?

Both work, but wire is faster and also free on the IB side if it’s the one free withdrawal per month.

I have a DBS multicurrency account - I sometimes need USD to pay someone in US. Is it better to transfer SGD or USD to my DBS account?

It’s better to use an ICBC Global Travel Mastercard (for example) directly from Singapore dollars if the entity you’re paying accepts Mastercard with no markup. Also better to withdraw to a U.S. bank or U.S. credit union account if you have one or can get one since they typically offer free “Bill Pay” service. Otherwise, U.S. dollars with DBS’s “USA Remit” service.

 

[Shiny Things]

Hi guys, I’ve got a question. I’m actually no longer residing in Singapore and relocated 4 months ago. Right now my IBKR account details, address, etc still using my old Singapore address. Do I actually need to update that? Is there any tax implication or whatsoever that I need to be aware of? Thanks

You'll want to update it, because now that you're not in Singapore, you can trade SGX stocks using IBKR if you choose to. (Also, if you've moved to the USA, you'll want to change your address ASAP so that IBKR correctly reports your tax to the IRS.)

Thanks. These portfolios are running at different time frame and hedging against one another. As VIX options has shorter time frame until Nov and personally felt that the delta are not fantastic, will buy only when the future reaches certain price. Hence, thinking of replacing VIX options with huge spread iron condor.

OK, so just to be clear: you're closing out a long-VIX-puts position and replacing it with an iron condor on the SPX? That sort of makes sense.

 

[Shiny Things]

Hi st

Why I never invest in Europeans and Japanese sovereign bonds is because most developed indebted nations will try to inflate away debt with negative real interest rates. They might wanna push for inflation at 2% while nominal rates continue to pay under 1%, or report cpi lower so they don’t have to pay higher nominal rates

OK, so that rules out non-USD bonds as your inflation hedge. That doesn't rule out equities or TIPS. Those both seem like pretty clean long-inflation plays, and they have better yield than the yellow rock.

Hi guys!

Bought and read Shiny's book, really helped me as i just started out investing.
Just want to check a few things on taxable income

1) I bought IWDA etf on IB and some US stocks like AMZN, MSFT. Do i have to file tax on the dividend or declare it?

2) Bought some ES3 on FSMONE as well, no need to file it for taxes right?

1) You'll pay tax on the dividends from the US stocks, but IBKR withholds that for you automatically; you don't need to do anything.

2) No, you don't need to do anything. Singapore doesn't charge taxes on dividends or capital gains.

Why is the balance in Securities trading account in SCB not taken based on Average price × total no. of stocks?

But based on last price x total no. of stocks

Because the value of your stocks is what they're worth now, not what they were worth when you bought them.

It's the same as when you rebalance your portfolio. You rebalance based on what your portfolio is worth at the time of rebalancing.

Hi Shiny! I am 22 years old, just starting to invest.
Using the 110-Age rule, my Stock/Bond Allocation will be rounded off to 90/10.
I have decided on a 5 fund portfolio consisting of
SPDR STI ETF – ES3.SI
iShares Core MSCI World UCTIS ETF – IWDA.L
iShares Core MSCI AC Asia ex Japan Index ETF – 3010.HK
Nikko AM Straits Trading Asia ex Japan REIT ETF – CFA.SI
Nikko AM SGD Investment Grade Corporate Bond Fund – MBH.SI 10%

1) What your recommendations on the % of each fund I should have?

2) Have your views on SWRD or VHVE changed? Should I use them instead of IWDA?

1) Owning the AXJ ETF is just like doubling up on the STI ETF and the IWDA ETF. Get rid of it.

1a) Why do you need an allocation to real estate?

2) VHVE only has about $3 million in assets; I think it's too small to be investible. There isn't a reason why either of them is better than IWDA, as far as I can tell.

 

[BBCWatcher]

You'll want to update it, because now that you're not in Singapore, you can trade SGX stocks using IBKR if you choose to. (Also, if you've moved to the USA, you'll want to change your address ASAP so that IBKR correctly reports your tax to the IRS.)

It’s also VERY important to file a new IRS Form W-9 (when someone becomes a U.S. person) or IRS Form W-8BEN (for non-U.S. persons tax resident in some other country) when moving around. The dividend withholding tax rate for tax residents of Singapore (who are not U.S. persons) is tied for highest in the world, as it happens. It’s very important to make sure your tax withholding and reporting is always correct from your broker(s).

OK, so that rules out non-USD bonds as your inflation hedge.

There are many countries besides the U.S. (TIPS, I Bonds) that offer real return bonds (a.k.a. inflation-indexed bonds), although the TIPS are by far the most heavily traded. There are definitely TIPS index funds available (Irish domiciled for example), and some rainy day I’ll have to check whether there’s a global inflation-indexed bond fund.

 

[LoUsyGamER]

You'll want to update it, because now that you're not in Singapore, you can trade SGX stocks using IBKR if you choose to. (Also, if you've moved to the USA, you'll want to change your address ASAP so that IBKR correctly reports your tax to the IRS.)



OK, so just to be clear: you're closing out a long-VIX-puts position and replacing it with an iron condor on the SPX? That sort of makes sense.

Hi ST,

Yes. you are right. I'm super tempted to further liquidate a portion of my puts to get calls and etfs.

 

[sslc20th]

Assuming you are Singaporea.

You won't need to pay tax on dividends for IWDA, those are paid for by the fund managers.

For AMZN and MSFT I believe, IBKR will automatically withhold the tax from you.

You do not need to pay tax for SGX listed counters.

1) You'll pay tax on the dividends from the US stocks, but IBKR withholds that for you automatically; you don't need to do anything.

2) No, you don't need to do anything. Singapore doesn't charge taxes on dividends or capital gains.

Yeah, im singaporean. Thanks for the clarification guys! Awesome book ST