For unit trusts, the cost of investment is sales charge, management fee, soft dollar commissions, bid-ask spread, impact cost and brokerage fee. My estimate of these cost is between 4.55% pa to 9.2% pa. The cost is even greater if the fund size is small. For ETFs, the cost of investment is bid-ask spread, brokerage fee, management fee, impact cost. My estimate of these cost is between 0.90% pa … [Read more...]
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What is the duty of the investment adviser?
The duty of the investment adviser is to determine a) The clients' financial goals and time horizon b) Determine the clients' risk appetite c) Determine the clients' ability to take risk d) Construct and recommend a suitable portfolio e) Make adjustment to the portfolio based on any changes to the clients' financial situation … [Read more...]
Is it really necessary to invest?
Because investment entail risks, it is not necessary to take such risk if you are not required to do so. For example if you are a high income earner and a good saver and do not mind a modest retirement lifestyle, you do not need to take risk as your savings could be sufficient to support your retirement. You should check with your financial adviser to determine whether is your current savings … [Read more...]
Is fixed deposits the best place to save?
No, fixed deposits could be the worst place to save to. Firstly, when you place money with a bank, the bank will always try to ask you to invest in some structured products and "favor of the month. You will be constantly harassed. Secondly, only the amount insured by the Singapore Government is safe. Anything that is not insured is subjected to the credit risk of the bank. Thus, if the bank … [Read more...]
SGS (Singapore Government Securities) available at ATM from 1 July 09!
I read with great delight that Singapore Government Securities or SGS bonds for short will be available for auction from 1 July 2009 using the ATM! This is great news. Since the financial crisis has proven that banks are not safe and that fixed deposits are merely fixed income instrument subjected to the credit risk of the bank, I've been encouraging my clients to park their FD via the SGS … [Read more...]
Buy Term invest the Rest
Have you guys heard of this strategy called Buy Term invest the Rest ? The idea is this: Purchase a term insurance which covers temporarily over X years (usually during a person working life) and simultaneously invest a certain amount separately to another portfolio so that when the term insurance expire, the separate portfolio would have grown to an amount sufficient to be used for … [Read more...]
Financial Planning for your MARRIAGE
Marriage is a huge undertaking. It might be prudent to know your financial commitments and responsibilities ahead of time. Read what Wilfred Ling has to say about this subject. The article can be downloaded HERE. … [Read more...]
An example of how to create your own structured deposit
Here is how you can create a "structured deposit" or principal protected investment that is better than the bank! You will need two products - a zero coupon bond + a high risk investment product. In Singapore, it is difficult to get a zero coupon bond and so a substitute can be a single premium endowment. Currently HSBC has a product called Guaranteed Saver Plus that gives a guaranteed return … [Read more...]
How to get triple digits in dividends
Let's assume the dividend yield is 3% per annum. To get $100 in dividends per year, you will need to have a portfolio size of 100/0.03=$3,333.00. This assumes that the expense ratio do not exceed 3% in a year otherwise there will be no dividends. Many unit trusts have expense ratio + hidden fee exceeding this amount. It is best to consider using ETFs for a low cost and diversified instrument. … [Read more...]
Land banking company uses many financial advisers to sell
There are many exotic investments that make your mouth water. One exotic is called Land Banking. I was approached by one land banking company to market their product and this is what I was told. They told me that the land banking gives out 11% commissions! Of course the salesman do not get it all because he has to share with his team leader and the team leader has to share with his group … [Read more...]
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