Hi ST, bought and read you book recently. I have a particular question on re-balancing. If we apply step 6 (buy whichever share we are short of), are we re-balancing our portfolio (if we only have ES3, MBH, IWDA) every month?
By the half-yearly re-balancing exercise, our portfolio should be around the same allocated ratio unless there is a crazy movement in the market before it.
Once your portfolio gets bigger - like into the mid-six or seven figures - the change in ratios from market movements will become much more substantial relative to the monthly amount you invest, and that’s when the six-monthly rebalancing becomes more important. But even when your portfolio is small, it’s a good habit to get into.
I'd just like to understand the risks / downsides involved to lenders. from what I can see, it seems that, if lenders have successfully loaned out their securities, they can't attend AGMs during the duration of the loan,
Correct.
and any sale of loan securities would be delayed such that you might end up making a loss (selling at a price lower than your purchase price)
Not correct. When you sell your shares, the CDP immediately calls the loan in, so the borrower has to recover the shares, either by buying them back or finding another lender. If the borrower can’t find the shares in time, that’s their problem.
Hi, for SCB it states that their minimum fee is $10, does that mean a total of $10 is charged for opening and closing the trade? Or does it mean $10 to open and $10 to close which amounts to $20 total?
The latter—$10 to open and $10 to close. A buy trade is one trade; a sell trade is a second trade.
Hi everyone in this thread, I just want to ask when calculating the performance or the weightage of each holding in the portfolio. Does the exchange rate from SGD to USD be factored into the calculation?
Yep. Pick a base currency—any base currency, it doesn’t matter which, though SGD is the natural base currency for Singaporean investors—and convert the prices of every one of your ETFs back into that base currency.
Hi all,
I'm looking to buy some MBH. It has been hovering around $1.02 of late, but I note that its 52 week range is between $1.006-$1.055. Does it make sense to wait till the price falls further before buying? Assuming it pays a certain dividend once a year, buying at a lower price would mean the yield is higher, so does it make sense to wait for a lower price?
Oh man, I quoted this one and forgot to answer it, which is a shame because it’s a good question. The answer is “no”, but the reason is twofold:
1) Like any other investment, you don’t know when the price will bottom out. The price might go lower, but it might also go higher. And if you get your “lower price”, then you’ll say “oh, I should wait for it to go lower again”... and you’ll never end up buying! Also,
2) All other things being equal—if interest rates didn’t move—the price of MBH would look like a sawtooth pattern. It would grind higher over the course of a year, then gap lower when it pays out the dividend. This happens because the interest on the underlying bonds slowly adds up over the course of the year. So if you wait, the price is generally gonna go up while you’re waiting.
Lastly, I understand that MBH pays out its dividend in 1Q each year, so is there any value to waiting a bit and investing a bit closer to the dividend payout date?
No, because if you wait, then (all other things being equal) the price would be higher as more interest accrues on the bonds in the portfolio. There’s no free lunch here.
Hi people!
Would like to just seek some opinions with regards to investing in IBKR. After reading through IBKR's pricing structure for students/young adults aged 25 and below, they only charge USD3 for its monthly activity fees.
Hmm... y’know, this is a good point. I don’t think there’s a hard-and-fast rule here, because the fee will abruptly jump to USD 10/month when you turn 25, but given how good IBKR is, I think you might as well take advantage of the cheap fees while you can.
US is clearly artificially supporting the S&P500 stock market like Japan supporting Nikkei in 198x, so you can expect US stock index to be like Japan Nikkei in future
Then you should be short S&P 500 futures and limit long US treasuries. Short Nikkei / long JGBs was the trade of the century when Japan imploded, and you’d impress a lot of people if you really put the short stocks/long bonds trade on and made a ton of money when your view came true.
With IBKR you need to pay US$10 p.m. charge, that is continual charges every month, which will add up over say a total 50 years investment period.
IBKR’s $10/month charge only applies until you reach $100k account value, which... how do you not know that?
Have you ever heard the phrase “all hat and no cattle”?
There's a conversion in, and there's a conversion out. Conversions, actually.
