Official Shiny Things thread—Part III

[Shiny Things]

Hello Shiny,

Is NYSE:FTEC and VT, worth investing at this current period.

No. Come on, we've had this discussion a million times: Singaporean investors shouldn't buy US-listed dividend-paying equities, the tax treatment is BAD.

More generally though, are you asking "should I buy these specific stocks" or "should I buy tech stocks generally (FTEC is a tech-sector ETF) and global equities generally (VT is like IWDA but with worse dividend treatment)"?

Definitely not asking for permission. You still stubbornly living in your own world and make the assumptions.

Don't fight in this thread, RF; you will get yellow-carded. If you want to fight, take it to EDMW.

No the Fed fully intends to buy individual junk bonds.

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a2.pdf

Yeah, I stand corrected; though let's be clear, the Fed is not paying "full face value" like JPM said.

I still think JPM is being alarmist, though. He's been saying "everything is broken, central banks should stop interfering in the market" for years now, and I strongly disagree with that. Central banks' job is to be a lender of last resort, to keep banks and markets functioning; it's their job to stop the economy seizing up.

While I'm not accusing JPM of being one of these people, I have absolutely no sympathy for hard-core "liquidationists" who think central banks should just step back and let everything fall where it may. They want to see the economy burn to the ground because it suits their financial-Calvinist moral code.

Hi everyone,

I'm new to investing so I was hoping I can get some feedback on my current plan.

Hey, welcome aboard!

The idea is that I can start opening positions in ES3 and IWDA while using 50% of my capital in individual stocks, 25% in SG for future dividends and 25% in 25% in US for capital gains.

I'm curious - why the focus on dividends with Capland and the DBS prefs? Unless you're getting toward retirement already, you really don't need to worry about yield, and you'll get more value out of focusing on capital gains.

you are right about what i am asking, and i could have been clearer about it. i guess in the absence of those data, and from a technical analysis perspective, what would be some of the indicators that you would look at? A/D + MFI + RSI?

Um. I don't have a good answer for this unfortunately; anything you try to divine from price action is going to be a guess at best.

 

[RuiQi_91]

Your investment horizon is years or decades. Over a long period like decades, a bank account (which isn't paying 2% any more!) is going to get absolutely blown out of the water by stocks and bonds. The key is being able to hold on and be patient through downturns like the one we're seeing now.

My 2 cents:

3) Edit this part cause i read wrongly:
I suppose you are talking about high interest savings bank account. It is a good way of preserving wealth but not increasing/creating wealth.
Also note that they have a cap limit and may not return as much if you have much more savings in future. And 2% may be just good enough to offset inflation.
Stock assets had proved to increase one’s wealth by higher average returns over long periods of time. Which comes with a higher risk as you have recognized. As advised by ST/BBCW and many others, the allocation (what and how much you buy) of stocks/cash or bonds is important which also depends on your age/investing timeframe so that market crashes like this will not impact your financials too much and have enough time to recover.

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Thank you so very much. I have read Shiny's ebook and will most probably be DCA-ing for 36 years till retirement at the age of 65 following the "110-age" rule. I believe that would be considered long enough right?

One more question. I recall reading the answer to this but it was a very long time ago and can no longer find the exact post and answer but do you live off dividends once you are retired or do you sell off some of your stocks every year? The STI ETF gives out dividends but the IWDA does not and so I was just wondering what the advice would be.

 

[311290]

Hi ST,

As i’m working in Thailand.

There are taxes rebates if buying certain funds & holding it for >10years.

May i know avg mutual fund fees is reasonable? These mutual funds doesign have foreign exposure.

https://translate.googleusercontent.com/translate_c?depth=1&nv=1&rurl=translate.google.com&sl=auto&sp=nmt4&tl=en&u=https://www.kasikornasset.com/TH/mutual-fund/fund-template/Pages/K-SUPSTAR-SSFX.aspx&usg=ALkJrhint3ae3YMa3l30I8f9GIIt_zb-cw

Fees Charged to the mutual fund (% per annum of NAV)
The management
Not more than 3.2100% per year
Trustee
Not more than 0.1070 % per year
Registrar Not over 0.1338 % per year
Other As actually paid

 

[Shiny Things]

May i know avg mutual fund fees is reasonable? These mutual funds doesign have foreign exposure.

Fees Charged to the mutual fund (% per annum of NAV)
The management
Not more than 3.2100% per year

OH MY GOD

That is honestly bordering on unethical, those are hedge-fund-level fees. Run, don't walk, in the other direction.

Thank you so very much. I have read Shiny's ebook and will most probably be DCA-ing for 36 years till retirement at the age of 65 following the "110-age" rule. I believe that would be considered long enough right?

Yes, absolutely.

do you live off dividends once you are retired or do you sell off some of your stocks every year? The STI ETF gives out dividends but the IWDA does not and so I was just wondering what the advice would be.

It's absolutely OK to sell stocks to fund your retirement; that's the entire point, in fact. You've been saving up for years; now you can cash in.

 

[wannabelazy]

Hi ST, for someone in drawdown mode, does your recommended 3% withdrawal rate assume that all dividends that are paid out are reinvested or can the dividends be kept and the amount withdrawn is simply 3% of the account size?

 

[megdang]

Hi ST,
I'm currently staying in Singapore and buy IWDA on IBKR every month

But from next year I have plan to shift to Australia and stay there permanently as PR (if my work visa got approval, now waiting for result).

I know there are 3 ETFs on AX:
Local stock etf: VAS
Local bond etf: VAF
International stock etf: VGS
(All these etf are on IBKR as well)

I would like to ask should I switch IWDA to VGS after I shift to Australia? Or keep buying IWDA for my international portion?

Thank you

 

[chickenessence]

Er, no. IWDA tracks the MSCI World index, not the S&P 500.

The two will be close, because the S&P 500 is a pretty big part of the MSCI World index, but not identical.

Thanks. Noted on the bond part.
Did a read up on prospectus of the ABF and MBH.. i guess i will leave it with MBH.
It is like fixed deposit, but with a little risk of having the "dropping in stock price". It will be concern if the companies default in the bond payment, which is unlikely too right?



On the IWDA question i am trying to learn more about the accumulating dividend (re-investing the dividend.)
So the following is what i found out:

Jan 2013 / ATH price / Return
32 / 64 / 200.000% / IWDA
2611 / 6788 / 259.977% / S&P 500 TR
1472 / 3330 / 226.223% / S&P 500

Aug 2000 / ATH price / Return
2072 / 6788 / 327.606% / S&P 500 TR
1500 / 3330 / 222.000% / S&P 500

Price for IWDA is taking as of 2013 as that is the inception date.
For S&P500 TR vs (non-TR) the difference isn't that significant, compare to if looking at Aug 2000 vs ATH price.

 

[rotatingfan]

I totally agree! Then an alternative would just be to increase the proportion of IWDA in your portfolio and decrease the proportion of ES3. That's what I do personally.

Remember that the S&P 500 is already a significant proportion of IWDA already.

Thanks for the short but useful insight.

 

[rotatingfan]

I was like you. Had plans to ditch sti etf for sp500 tech (iuit). In the end i just up my monthly allocation to iwda instead of leaning towards a particularly sector.

Sti etf is shiatz. Whahha.

I already have quite a bit of my sgd in cpf and real estate, so going all out to iwda.

I see. Thanks for the useful advice.

 

[rotatingfan]

Why buy s&p when you already have IWDA? Those two have a big overlap.

I see. I had not much experience in ETFs but your comment clear one of my questions that I have. Thanks.

 

[lo3xlo2x]

May I ask as a Singaporean investor invested in the Euronext (France) stock market, how much dividend and capital gains tax would I have to pay?

 

[applecore7]

Hey, welcome aboard!



I'm curious - why the focus on dividends with Capland and the DBS prefs? Unless you're getting toward retirement already, you really don't need to worry about yield, and you'll get more value out of focusing on capital gains.

Thanks

Hmm i'm in my 20s, so not near retirement yet. I suppose my rationale is that I'm more risk averse and i'm not sure that I want to put everything into IWDA. I realise now I might be misguided; would love to hear your advice!

Edit: Oh and I'm still a student for 2 years, no income, so I thought having some dividends would serve as nice pocket money too.

 

[Johnpierpontmorgan]

No the Fed fully intends to buy individual junk bonds.

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a2.pdf

I guess this is in anticipation of the large number of downgrades that will hit the market in the months ahead, roughly about 1T of investment grade debt is at risk of being downgraded to junk, that is worth nearly as much as the HY debt market, the HY debt market has no hope of absorbing such a big increase in supply without the fed coming in as the lender of last resort.

I don't agree with you on the "market price" bit either, many HY bonds (and some IG bonds) have had no bids on them since early March, what is a fair "market price" for these bonds under these circumstances?

Haha Precisely.. fed is buying at any value. Even if the market decides to offload to the fed at above face value. They will buy to support the companies from default.
Purely zero bids. Fed giving black rock the free IOUs to bail whichever high yield etf the ceo deem fit.

Even if solely junk bond etf. It’s still junk bond purchase
Eg; Whatever we buy from SPY is still investing in the individual shares in the index basket

The fed can never taper a Ponzi scheme.
This year balance sheet confirm exceed 8 trillion. Or even high at 10 trillion by 2021. Market is addicted to ultra low interest rates that even a slight taper will topple the market. There’s no normalisation, they can’t taper a 4 trillion without having to reverse and inject hundred billions of repos last year September. Whoever believe this fairy tale still believes in Santa

I’m not objecting to fed buying up everything and being lender of last resort. Just curious when will this artificial economy collapse, by stagflation or whatever outcome it may be. The central bank independence facade is ripped off already. Politics And high debt burden also favors inflation than uncontrolled deflationary collapse.

Neither do I advocate selling everything. I’m into all weather portfolio (heavier cash allocation) and that’s all I will reveal

Neither am I a conspiracy theorist. I did my master thesis on the international monetary system and it’s interesting how the dollar will unfold. I doubt it will get dethrone anytime soon(perhaps multi reserve currency system?) But it’s interesting how international players will respond with China rising influence and weakening us and western alliance.

 

[Shiny Things]

Neither do I advocate selling everything. I’m into all weather portfolio (heavier cash allocation) and that’s all I will reveal

Hold on, then I’m missing something. If you’re convinced that monetary systems are going to implode and central banks are going to lose control of their currencies, why are you in cash at all? Cash is going to be the first victim if your stagflation scenario comes true; you’d want to be in inflation hedges—TIPS et al—and long low-delta equity strangles.

(Even if you get an “uncontrolled inflation then deflation” scenario, TIPS are going to explode higher first.)

Also, is this really the right thread for this? If you start a thread over in SSI we can chat over there.

 

[Shiny Things]

On the IWDA question i am trying to learn more about the accumulating dividend (re-investing the dividend.)
[snip]

I’m not sure what the question is - can you clarify?

May I ask as a Singaporean investor invested in the Euronext (France) stock market, how much dividend and capital gains tax would I have to pay?

CGT: none.

Dividend tax: I don’t know. BBCW, you got any idea?

I know there are 3 ETFs on AX:
Local stock etf: VAS
Local bond etf: VAF
International stock etf: VGS
(All these etf are on IBKR as well)

I would like to ask should I switch IWDA to VGS after I shift to Australia? Or keep buying IWDA for my international portion?

Switch to VGS. I don’t know for sure, but I suspect the tax treatment will be easier if you’re buying a local-listed fund.

Hi ST, for someone in drawdown mode, does your recommended 3% withdrawal rate assume that all dividends that are paid out are reinvested or can the dividends be kept and the amount withdrawn is simply 3% of the account size?

It assumes dividends are reinvested.

 

[Johnpierpontmorgan]

Cash gives me the flexibility to add on more to the various asset allocation as the events unfold. Fortunately I can buy assets if I find value now

It was my warchest and cash savings. Modified all weather cater to my risk appetite

It doesn’t seem I am trolling now that I claim Fed is buying junk bonds.

US keeps abusing its exorbitant privilege of the dollar.
Now we are almost reaching full blown MMT, when only two years ago, most academics were laughing at this idea.

The weakening western alliance is one of the key geopolitical event to monitor which will determine the fate of the dollar

 

[LostnConfused123]

Funding of SC Securities Settlement Account

Hi all,

I'm a newbie looking for some guidance over here.

On certain trading platforms like Saxo, one is able to bypass currency conversion fees or large forex spreads by funding their accounts via Revolut, which offers transfers at interbank rates. I'm wondering if there's a way to do this for Standard Chartered as well.

Thank you!

 

[cassowary18]

Hi all,

I'm a newbie looking for some guidance over here.

On certain trading platforms like Saxo, one is able to bypass currency conversion fees or large forex spreads by funding their accounts via Revolut, which offers transfers at interbank rates. I'm wondering if there's a way to do this for Standard Chartered as well.

Thank you!

Unfortunately, not that I know of. Previously, someone mentioned that you could use SC Remit to transfer money to your USD Settlement account, and that has better rates than the normal currency exchange facility. Another possibility is to open a USD account with SCB and then transfer the money via Revolut into the account. I know priority banking customers who open a USD High account just to do that since that account has no fall below fee (but only open to priority banking customers). The USD $aver account, which is open to all customers, has a minimum balance of USD 10,000 which is prohibitively expensive.

 

[news4use]

Hi, please help me clarify what does Joshua mean by "no USD component in global stocks and global bonds".

If you’re planning to retire in a country with less-developed markets (for example Thailand, India, or Indonesia), I generally recommend to my consulting clients that they not have an allocation to local stocks or bonds—that the split should be between “global stocks” and “global bonds”, with no USD component. This is because these less-developed countries may have less stable markets, and occasionally have currency crises (remember 1998?) which hurt the value of local investments.

Giersch, Joshua. Rich By Retirement: How Singaporeans Can Invest Smart and Retire Wealthy (p. 107). Kindle Edition.

Background: Living in Singapore, plan to retire in India.
Also, could you suggest some examples of such global stocks and bonds

 

[lupster]

Hi! Hope someone can help me out.

1. Is there any reason to use fixed fees when using interactive brokers for IWDA? Not sure if I'm understanding IB's commissions page correctly but seems like tiered fees is on par/better in every way, same rate even for the lowest tier, lower min and there's a cap too.

2. Also, are we able to switch between fixed and tiered fee structure instantly? Or does it take awhile to be processed before being applied to the account?

Thanks!