OK, time to hop back on. Getting away from everything for a week has been a very nice change.
As for myself, due to the complexities, i have decided for now a simple equity/nominal bond is good enough without any TIPs but I do fear stagflation especially if I'm retired.
I think this is a good take, and it’s what I’d recommend if you were a paying client. Stagflation (high unemployment and high inflation) is a country-specific problem, so holding US linkers will only help you protect against stagflation
in the USA, which doesn’t seem like something you’ll care about. If you’re retired in, say, Europe or Taiwan, owning US linkers isn’t going to be much help.
A good hedge against high-inflation low-growth outcomes is just to own overseas equities. You don’t need to over complicate these things.
I’m struggling in splitting my money on getting insurance saving which promise high guarantee return and a track record of around 4%~ non guarantee return. While also invest accordingly to shiny’s guide.
You’ve got a good handle on where you want to go with your investments, which is great - it makes it easier to figure out how you should invest to reach those goals.
A couple of things to keep in mind about insurance-linked investments:
* The penalties for early withdrawal are HUGE. If you need the money early - or even if you just don’t like how the insurance company invests your money - they’re going to make you pay hefty amounts to get out of their grip.
* Insurance companies mostly invest in bonds, and bonds have done very well over the last few years (well, decades!) because interest rates have collapsed. Interest rates in most of the world are basically zero right now; there’s not a lot of yield left out there, so those 4%+ historical returns are not going to happen in the future.
Still not sure what he's advocating, hold cash and China stock?
He mostly advocates yelling at people who don’t care to listen, tbh.
Hello, I am new to investing late 20s - looking at IWDA vs VWRA? but not really sure which to pick since IWDA has no exposure in China, any advice appreciated!
Both of them are very good ETFs. I recommended IWDA back before VWRA existed, and VWRA isn’t quite mature enough for me to change my default recommendation. You don’t need exposure to China, though.
Hi Shiny Things,
As I don't know yet where I'm going to retire, I'm planning to add VAGU/AGGU as my global bond portion. What are your thoughts on them?
I prefer LQDE, because I don’t think it’s particularly appealing to invest in government bonds with zero or negative yields—especially when there are good-quality high-grade corporate bonds out there that yield significantly more. Over the long term, owning high-grade corporates will make you more money than hiding under the bed in treasuries.
Hi all,
Anyone came across and traded using trading212 with experience to share?
Absolutely not. No. Don’t ever use random CFD brokers.
Hi shinny and all, thinking of doing a 80/20 vwra/sti split. Currently 29 this year. Only planning to add bonds later on at around 40. Is this not advisable?
Yeah, I don’t think this is advisable. Bonds are useful, even for young investors (I’m only a few years older than you!)—they give you a war chest when stock markets dip, and they take some of the volatility out of your portfolio if there’s a big dip. People who were 100% in stocks in March had to grapple with much bigger drawdowns than people who had even a small allocation to bonds.
Hi,
I have a ibkr us account for my IWDA and my local stocks are in cdp. I am inclined to open a ibkr sg to consolidate all my stocks in ibkr sg, to accumulate towards USD100K. Any opinion if this is the way to go, or anything i may be overlooking?
Thank you.
Yep, IBKR Singapore is the way to go.
Anyone familiar, thanks.....
VWRA/VWRD vs IWDA+EIMI combo
Is there an update where perhaps VWRD/VWRA cannot be replicated by an IWDAa+EIMI combo ?
I can poke around at this if you’d like, but this seems pretty unlikely; I think it might be a data quality issue. What specifically are you seeing?
Instead, I would most likely be putting $5k lump sum and DCA the rest(together with my usual DCA sum) in over 5 months. Would this be a sound strategy?
Sent from Samsung SM-G985F using GAGT
That is a very sound strategy. Go for it.
Hi ST or anyone else.
My father signed a pruactive saver. Good thing I went to see the plan and I'm going to activate the free look. He's putting in almost 50k a year.
He's past his retirement now. Where should he put his money?
“Where should I put my money” is always a really broad question, and it varies depending on what the person needs from their investments - do they care about having income now, do they want income in a few years’ time, do they want to leave it to their kids...?
In general, the rule for someone who’s retired is that they want it mostly in local-currency bonds (for stability and income), with a little bit of equities for capital gains.
Anyone here changes his mind about gold and think we should be buying now?
Only momentum traders are still looking at metals - the sort of people who pile on trends and ride them until they stop, then immediately turn around and sell out.
For small investors (like us) it may be better to buy Junior Gold Miners. There could be more upside potential (to make more profit) than a large gold mining company.
OK, I’m going to go on a bit of a rant here - mining companies are TERRIBLE investments. Like, systematically terrible. If you disregard every other bit of advice I give on here, just pay attention to this: don’t buy miners, and especially don’t buy junior miners.
The mining sector is full of spivs and spruikers, unethical practices, pump-and-dumps, and straight-up frauds. And even if you manage to pick a company that’s not a fraud, mining companies’ hedging practices make them counterproductive investments: when metal prices are low, they lock in those low prices by hedging, and when metal prices are high, they unwind all their hedges because their investors want exposure to those go-go metals markets, which costs squillions of dollars and just locks in losses.
In the mid-2000s, I worked on the gold desk at ANZ. We wrote billions of dollars of hedges dated as far out as ten years for gold companies who were disillusioned with gold prices and were quite happy to lock in $400-an-ounce gold prices, because they thought it was never going to go up ever again. You’d think gold mining companies would be better at trading gold, but... gold-miners are the second-worst gold traders in the world, behind emerging-market central banks. Don’t invest in them.
If I went with the Efficient Market Hypothesis, I should be using EIMI.
However, I am not so sure about the future of Brazil, Russia and Saudi Arabia. Their individual country ETFs seem to be going nowhere. As such, I am thinking of using just an Asia ex Japan (e.g. 3010.HK) or a MSCI China ETF (2801.HK).
Does this make sense?
Use EIMI. You don’t have any knowledge of what the Brazilian, Russian, or Saudi markets are going to do.
An ETF that holds large-cap stocks is highly liquid regardless of its trading volume. A common misconception is that ETFs with low volume are illiquid. What really determines an ETF's liquidity is its underlying securities.
ETFs are open-ended funds, which means that new units can be created or redeemed as needed on the secondary market. Because of this, an ETF's liquidity is largely determined by its underlying securities.
This isn’t quite right. An ETF can be stuffed full of mega caps and still be illiquid if there’s no market-maker for it. It’s easier to market-make large cap equity ETFs, so they’re more likely to have market-makers, but it’s not a guarantee.
swan02, I’d like to seek your opinion on the counter VDCP, since you clearly know a lot about bonds, far more than the average retail investor on the street anyway.
You’d want to compare VDCP to LQDE, because they’re basically direct competitors. If you want a global-bond allocation, “USD IG corporates” is a good way to get it, but when it comes to
how you get your USD IG corporates exposure, you’ll want to look at which one has a lower expense ratio, a tighter bid-ask, etc etc.
Dear All and Shiny, first time poster here, have gotten so much out of your book and everyone's discussion on the thread
Thanks!
I'm looking for a 1.5k/month dividend to cover my monthly expense, and my RM is recommending PIMCO income fund hedge on SGD (Bloomberg PIMESHI). It's the largest bond fund on 67 billion AUM.
That’s... not the largest bond fund. Your RM is making stuff up.
There are several things I like:
* Monthly dividend
* high and stable dividend (the fund is really large)
So, let’s get a couple of things clear here:
1) Your RM is not working in your best interests here - your RM is trying to sell you things so that they earn fees. They’re going to make big fees on the unit trust, and bigger fees on the loan. We’ve seen lots of people coming in here asking about leveraged bond unit trusts before, and we can usually figure out that the salesman is making gargantuan fees without telling them.
1a) This investment can go wrong in all sorts of interesting ways. The fund could cut its dividend; the interest rate on the loan could go up; the value of the fund could drop... either way, you’ll either be forced to sell the fund and repay the loan and lock in a huge loss, or you’ll have to put in more money to secure the loan again.
2) The size of the fund doesn’t have anything to do with how stable the dividend is. Pimco could cut their dividend at any time - and because interest rates are dropping, they probably will. (Either that, or they’ll sell assets to pay the dividend, which means your investment will be worth less.)
3) “Monthly dividends” isn’t really a selling point, unless you’re such a spendthrift that you can’t make $4,500 last for three months. And you’re smarter than that, right?
Is there other ways I can achieve this? I checked LQDA and SDIA, their dividends are not monthly, and they are lower, plus no leverage to achieve the 6.6%.
This isn’t correct. You can absolutely get leverage to buy ETFs. (SDIA isn’t what you want: it’s a “short duration” fund, which means it has lower yield as well.)
To be frank, there is no safe way to get a 6.6% yield out of investment-grade SGD bonds, no matter how hard you leverage them. You’re taking a lot of risk; my advice would be to lower your expectations. (Hey, I’m just being honest, because your RM isn’t.)
(Also, LQDA and SDIA own USD-denominated bonds, so they have currency risk as well. They’re not the appropriate investment for someone in your situation.)
If you need $1500 a month, safely, you can get that by buying $800k worth of MBH. That’s safe, and sensible, and it won’t go wrong and you won’t have to pay tens of thousands a year in hidden fees to do it.
Any good clean energy etf and irish domiciled? I only found INRG but its in GBP.
You might have to construct this yourself. What’s a “clean energy” stonk, in your definition?
If I want to plan for my kid's retirement (~ 50 years later) instead of my own retirement, is there a different investing strategy to adopt?
Firstly, congratulations on being so well-off that your own retirement is already taken care of! Setting your kid up for retirement is something you’ll want to think about very carefully; you don’t want your kid to become lazy because they think they’ve got their entire life already paid for.
I’d advocate a very different strategy in this case—teaching your kid the value of money, so that they don’t become spoiled and idle, and preparing them to inherit. And I’d also make sure that you really have covered your own retirement; the only thing worse than having a spoiled kid would be a spoiled kid who doesn’t want to support his parents.
Dear all,
I am trying to perform my first trade of iShares Global Corp Bond UCITS ETF USD (Acc) (CRPA) on LSE using IBKR platform. However, it seems like there is no trades done as there is no volume. It is the same on Yahoo finance and other sites.
Anyone here buying this ETF? What am I missing?
Volume in CRPA isn’t zero, but it’s pretty low - I see about 6,000 shares traded Tuesday (about $30k USD worth). Compare that to LQDE or LQDA, which do $5 million to $10 million USD of volume on an average day. Use those instead.
