Official Shiny Things thread—Part III

[swan02]

Your funds were already in USD in Revolut? What's the benefit of using Revolut over IB for forex when IB's is spot rate?

cuz conversion is free below 9k sgd and transfer is also free.

 

[kram62]

cuz conversion is free below 9k sgd and transfer is also free.

But what about the conversion rate? How does it compare to the almost spot rate that can be reached at IB?

 

[beefjerky]

Hi everyone.

I'm currently religiously invested in the 3-Fund Portfolio ES3/MBH/IWDA.

Just wanted to get some opinion if I were to further diversify by investing in another type of ETF, for example IHAK ETF, which tracks cybersecurity industries.

Please let me know your thoughts, thanks!

I really don't see any harm if you want to make a small bet on a specific sector. From what I see, IWDA contains about 0.035 % of the stocks in IHAK so the overlap is quite minimal. These are the stocks already in IWDA:

DOCU
OKTA
FTNT
CTXS
AKAM
BAH
JNPR
4704
PANW
VMW
CHKP
NLOK
CYBR

 

[Wishdom]

Assuming I have 10k interest free loan for 6 months..

Is it advisable to put them all into vwrd and then sell them off 6 months later? If not, what would be the best way to utilise these funds?

Sent from Ilovennp using GAGT

 

[Thoreldan]

Assuming I have 10k interest free loan for 6 months..

Is it advisable to put them all into vwrd and then sell them off 6 months later? If not, what would be the best way to utilise these funds?

Sent from Ilovennp using GAGT

Means u need to return at the end of 6 months ?

Singlife 2.5% suits u lol

U get $125

 

[swan02]

Revolut does interbank rate and conversion is free except markups for weekends and I think thai baht and Ukrainian Hryvnia has markups.

I’ve tested converting sgd to AUD. Yup same as IB.

I can see the usefulness of revolut to b used overseas holiday

But what about the conversion rate? How does it compare to the almost spot rate that can be reached at IB?

 

[Wishdom]

Means u need to return at the end of 6 months ?

Singlife 2.5% suits u lol

U get $125

I've thought about that. It is an excellent option ; but I'm not sure if it's worth the effort for $125

Sent from Ilovennp using GAGT

 

[kram62]

Assuming I have 10k interest free loan for 6 months..

Is it advisable to put them all into vwrd and then sell them off 6 months later? If not, what would be the best way to utilise these funds?

Sent from Ilovennp using GAGT

No really not... Investment in equity should only be for long term (more than 5-8 years, ideally more) because maybe in 6 months we get another big market drop (maybe not, but no one can predict).

For 6 months you can only put that money in something where the principal is guaranteed.

 

[cassowary18]

Assuming I have 10k interest free loan for 6 months..

Is it advisable to put them all into vwrd and then sell them off 6 months later? If not, what would be the best way to utilise these funds?

Sent from Ilovennp using GAGT

If you scared Singlife interest rate drop, can consider fixed deposit...ICBC currently highest for 6 months, 1.25%. http://singapore.icbc.com.cn/ICBC/海...PromotionInfo/latestfixeddepositpromotion.htm

 

[manlymanly]

If I would like to buy a stock that's listed on both NYSE and Toronto Stock Exchange, will it be better to go with TSX to avoid the US dividend withholding tax and estate duty? I am completely clueless about Canadian tax though, and couldn't find much on this forum. Am looking for advice for this.. thanks

BTW the stocks I'm looking at are in pipelines and asset management... not mining stuff.

 

[Magickiller9]

Your funds were already in USD in Revolut? What's the benefit of using Revolut over IB for forex when IB's is spot rate?

SGD. purely for miles previously. top up revolut get miles, transfer to IBKR.

 

[BBCWatcher]

If I would like to buy a stock that's listed on both NYSE and Toronto Stock Exchange, will it be better to go with TSX to avoid the US dividend withholding tax and estate duty? I am completely clueless about Canadian tax though, and couldn't find much on this forum. Am looking for advice for this.. thanks

BTW the stocks I'm looking at are in pipelines and asset management... not mining stuff.

Do you have an example (NYSE and TSX symbols)? I have a provisional answer in mind, but I'd like to check any particular example more carefully.

 

[manlymanly]

Do you have an example (NYSE and TSX symbols)? I have a provisional answer in mind, but I'd like to check any particular example more carefully.

TRP and BAM... many thanks!

 

[newjersey]

hi ST,

can this be a recession where the stock market remains high?

 

[beefjerky]

If I would like to buy a stock that's listed on both NYSE and Toronto Stock Exchange, will it be better to go with TSX to avoid the US dividend withholding tax and estate duty? I am completely clueless about Canadian tax though, and couldn't find much on this forum. Am looking for advice for this.. thanks

BTW the stocks I'm looking at are in pipelines and asset management... not mining stuff.

Hi, I found it should be a 15% tax on dividends from (https://www.opencompanysingapore.com/singapore-canada-double-tax-treaty) Pls confirm on your own end too.

 

[BBCWatcher]

TRP and BAM... many thanks!

Hi, I found it should be a 15% tax on dividends from (https://www.opencompanysingapore.com/singapore-canada-double-tax-treaty) Pls confirm on your own end too.

That’s my understanding as well. Canada and Singapore have a tax treaty, and the dividend withholding treaty tax rate is 15%. So for non-U.S. persons the Canadian shares look better to me, except perhaps for residents of countries that have tax treaties with the U.S. but not with Canada.

Make sure your broker is aware of all your tax residences, because the non-treaty Canadian dividend withholding tax rate is 25%. That’s still a little better than the U.S. non-treaty rate of 30%. If you’re withheld at 25% you might be able to recover the over withholding from Canada’s tax agency.

Canada doesn’t have an estate tax, but it does have deemed capital gains and probate transfer taxes. However, I don’t think either of those apply to nonresidents.

Double check all this, of course.

Finally, I don’t recommend speculation, and punting on Canadian pipeline stocks certainly is that.

 

[zoneguard]

That’s my understanding as well. Canada and Singapore have a tax treaty, and the dividend withholding treaty tax rate is 15%. So for non-U.S. persons the Canadian shares look better to me, except perhaps for residents of countries that have tax treaties with the U.S. but not with Canada.

Very interesting. Thinking aloud on VFV listed on Toronto in CAD. Vanguard S&P 500 Index ETF. Wondering if it is advantageous compared to similar listings on LSE.

 

[BBCWatcher]

Thinking aloud on VFV listed on Toronto in CAD. Vanguard S&P 500 Index ETF. Wondering if it is advantageous compared to similar listings on LSE.

Doubtful. There are some complications:

1. If you're starting and ending with Singapore dollars (or really just about anything not Canadian dollars), then buying Canadian dollars costs more than buying U.S. dollars.

2. There's a 15% dividend withholding tax rate that applies before the fund distributes dividends, because that's the treaty rate between the U.S. and Canada. This is just like CSPX: 15% is taken off U.S. stock dividend distributions at the fund level. However (my understanding), Canada then withholds another 15% (the treaty rate between Canada and Singapore) when the fund holder is a resident of Singapore (and not a resident of Canada). I don't think it's 15% once and done. Please check me on this detail, of course, but if my supposition is correct then this one is a veto.

You might be able to recover the Canadian dividend withholding tax via a tax filing with Canada's tax agency, but that's too much trouble when CSPX is available.

3. That Vanguard fund's annual expense ratio is about 2 basis points higher than CSPX's.

4. CSPX is accumulating, and VFV is distributing. Accumulating is more cost and returns efficient for long-term investors.

 

[xiaohaengbok]

ADVICE REQUIRED FROM THE PROS

Reaching out to all the pros here for advice because I just did my own portfolio review today.

---

Context:

I am a 31 years old new investor who only recently started really reading into different investment strategies before deciding on adopting the three fund portfolio to start. Till date, I've invested around 20K SGD to SWRD.

My intention in the stock market is to reap as much returns as I can before I hit the age of 35 years old to make up for time lost in my 20s, and then revert back to just ETF trades.

However, even before I really read into these, I already started investing through hearsay i.e. you should buy this stock now because it's low!

What shocked me was that my portfolio now consists of a random mixture of ETFs and single stocks.

---

Here's the breakdown:

LSE Market (Interactive Brokers)
(SWRD) SPDR MSCI World UCITS ETF ~ SGD 21,754

NASDAQ (Saxo Capital)
(KBWY) Invesco KBW Premium Yield Equity REIT ETF ~ SGD 66

NYSE (Saxo Capital)
(FFC) Flaherty & Crumrine Preferred and Income Securities Fund Inc ~ SGD 2,927

(RYT) Invesco S&P 500 Equal Weight Technology ETF ~ SGD 285

SGX (DBS Vickers Cash Upfront)
(5SO) Duty Free International Limited ~ SGD 336

(BS6) Yangzijiang Shipbuilding (Hldgs) Ltd ~ SGD 10,200

(C6L) Singapore Airlines Limited ~ SGD 1,296

(CJLU) NetLink NBN Trust - Unit ~ SGD 2,450

(ES3) SPDR STI ETF ~ SGD 22,640

(G13) Genting Singapore Limited ~ SGD 4,980

Total: ~ SGD 42,000

---

Current predicament:

I have deviated too much from how 3 funds portfolio works and do not know what to do.

Dilemma 1. If I sell off the individual stocks now, I'd make a loss. If I don't sell them off, it means ~ SGD 45,180 is just sitting in the reds.

Dilemma 2. I still have around SGD 30,000 for investments. Should I throw all into the SWRD given that the price now is still low or should I bet it on say, C6L, Singapore Airlines Limited to potentially recoup the losses and earn dividends in 5 years' time?

Dilemma 3. Having read up about the Trinity study, I am keen to reap as much returns as I can up till 35 years old (5 years) to counteract the 4 percent rule in the Trinity study, and then revert back to just ETF trades. Because of the lower returns of around 3+% in the STI ETF, I was looking at REITs investments, which brings in about 4-5% of returns. However, given the mishmash of equities I have now, I'm more confused as to what I should do.

Dilemma 4. I have about SGD 67,000 which I could potentially not touch for the next 4-5 years. Should I keep this amount as the bond component or should I take the risk and invest into ES3 STI ETF through CPFIS given the good price now after the coronavirus hit? I'm quite open to risk taking for higher returns. However, doing so might mean deviating further from how 3 funds work and the suggested 10% in STI ETF.

Dilemma 5. I've recently invested using Interactive brokers. However, after reading up, I realised that the stocks held in Saxo Capitals earn the bank yearly management fees. I would like to close the account to avoid the fees but that would mean losing the shares in it. Is there a way to transfer those shares over to IKBR? Is it worth it to do so or should I just sell everything and close the account?

---

Help required:

What would experts like yourself do to bring some balance back to the portfolio while reaping more returns? I'd really like to hear your thoughts. Any help is appreciated!

 

[swan02]

I have faced similar situation such as you and what I'll do in your stead.
Mine may have too many moving parts, but with IB and no minimum fees local trading platforms, it is manageable.

1. Anything you see that is large amount and potential dangerous such as Yangzijiang. I will sell at least halve. Since I have no idea whether it'll go up or down.

2. I'll stop buying STI etf. Instead, if cost is low or no minimum fees such as SCB priority, of equal amounts of ocbc, uob, dbs, mapletree reits-logistics, industrial and commericial. They work beautifully diversifying each other but will crash together...I just don't like having shares like SIA or Singpost or Singtel in STI.

Also since you are into leverage...the REITs are effectively leveraged products and I think they should not be more than 20 percent of your equity component.

If cost is too high, simply STI ETF but have a lower asset allocation to it maybe no more than 40 percent of your equity component.

3. I'll sell all small ones using trading platforms that has no min. trading fees.

4. I won't carry on having SWRD, but prefer VWRD due to USD and liquidity. But rather choose IWDA or VUSD due to the emerging component to me is akin to holding to Singapore stocks.

In fact I would rather hold VUSD, as I need more tech stocks in VUSD as growth, as I believe in the barbell strategy, while your singapore stocks really is merely a dividend helping you to keep your mind sane from crashes and being happy when the dividend arrives all keeping you sane following the strategy.

5. As for bonds, no matter what you have read or heard. In big crashes, all safe haven bonds will crash together with equity and this has happened in GFC and recently as well. Do you need more headaches ?

6. Since you are more steady with your mind and have a long term strategy, I personally would ignore the bonds, the REITs will provide good diversification and counters the banks and growth assets in normal circumstances,

Cash is still a diversifier after all, and it grows with interest rate rise, while your other assets are likely to go down in the event of any interest rate rise.

7. However, if cash amount is too large. I'll consider A35, taking note that it is not a liquid product but provides pretty good diversification and time frame has to be 3 years or more. MBH also suffers from illiquidity and crashing with everything else in a crisis, but can be considered if you wish to up your equity risk. After all, to me its a quasi equity/bond mixed.

Better to keep life simple and focus on equity only, and super safe fixed income such as A35 separately as a ballast serving to keep your mind sane in bad events.

Due to the costly nature of buying Singapore bond etfs unless you use FSMone with 100k as silver member. I would rather buy IDTL from LSE via IB but at a much smaller scale of 1/5. It works beautifully for the last 2 years for me as long you don't hold way too much until your portfolio only prospers in crashes but never in prosperity.

Do note USD is also a diversifier and probably a much more reliable ballast than the bonds in a crisis. The USD is embedded in IDTL and you are faced with pure currency risk in a good way as a ballast.

8. Again....always remember, in severe crisis, bonds will just falter together with equity and gold. I personally would rather fall upon risk mitigating DCA and CASH in SGD. At least, when equity crashes, you expect them to crash.

ADVICE REQUIRED FROM THE PROS

Reaching out to all the pros here for advice because I just did my own portfolio review today.

Context:

I am a 31 years old new investor who only recently started really reading into different investment strategies before deciding on adopting the three fund portfolio to start. Till date, I've invested around 20K SGD to SWRD.

My intention in the stock market is to reap as much returns as I can before I hit the age of 35 years old to make up for time lost in my 20s, and then revert back to just ETF trades.

However, even before I really read into these, I already started investing through hearsay i.e. you should buy this stock now because it's low!

What shocked me was that my portfolio now consists of a random mixture of ETFs and single stocks.

---

!