The Straits Times has an article on a group of mostly Singaporeans and Malaysians who bought properties in New Zealand. Not only did they lose all their deposits (downpayment) amounting to NZ$10m but they were sued for another NZ$36m. (NZ$1 = SGD 0.93). To add salt to the wound, none of these investors got any of the properties they wanted! Here is a quote from the article: “Another Singaporean … [Read more...]
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Outlook for Stocks and Bond Returns according to Jeremy J. Siegel
Recently, Professor Jeremy J. Siegel of Wharton School of the University of Pennsylvania spoke on the outlook for stocks and bonds returns at the conference on 18 Nov 2015. The following is a summary of the presentation: Since 1802, the US stock returns was 6.7% per annum in real return (i.e. after adjusting for inflation). For Gold it was 0.5% per annum and the dollar was -1.4% per annum … [Read more...]
What is meant by “monitoring” an investment portfolio?
The word ‘monitoring’ an investment portfolio is often associated with a negative connotation. ‘Monitoring’ sounds like speculation, gambling, trading and its associated terribly high cost. But this is often a misunderstanding of why there is a need to ‘monitor’. There are human factors and technical factors why a portfolio has to be monitored. If the portfolio is not monitored, it is likely … [Read more...]
Is expense ratio all that matter in buying an ETF?
My client asked me this question: The expense ratio of ETF A is around 0.5% vs ETF B which is 0.25%. Why did you recommend the former instead? Answer: First, the index which both ETFs track is not the same. ETF A tracks the MSCI World whereas ETF B tracks the FTSE All World. So the comparison is not apple-to-apple in the first place. Second, expense ratios do not tell the entire story. … [Read more...]
Majority of CPF Investors seems to have lost money in stocks
According to the CPFIS profit and loss annual report, majority of the CPF investors are said to be better off leaving their money in their CPF balances (source: Many CPF investors get their fingers burnt (full page article) , Straits Times 15 June 2015). It was reported by the article that as at 30 September 2014, a whopping 85% of the 900,000 over investors who sold their CPF investments made … [Read more...]
Investors have unrealistic expectations, says Schroders
A recent survey done by Schroders indicate that investors are too overconfident. 93% of investors expect an average return of 10% on their investments on the next 12 months. But they planned to put just 21% of their assets in equities, 42% in cash and 37% in bonds. The survey also saw a biased towards short-term investing with 45% preferring investments that yield outcomes within one to two … [Read more...]
Analysis of Singapore Saving Bonds
Singapore Saving Bonds’ details were released by MAS yesterday. By now, everybody would have read about the details of the Singapore Saving Bonds. Important details to take note of are: Capital guaranteed by the government. Only individuals can apply. Companies are not allowed to purchase. Application to purchase is similar to that of buying an IPO – you need a CDP account and either … [Read more...]
What happens when a fund is merged with another?
Recently, I received an email stating that a particular fund called Fund Blue (the merging fund) will be merged to Fund Green (the receiving fund). The rationale is that these two funds are managed similarly and they wish to avoid having two funds running strategies that are nearly identical. The official reason given for merging the two funds as follows: The reason why the Board has decided to … [Read more...]
Singapore Saving Bonds a.k.a. “free lunch” to be launched by MAS
I read with delight that Monetary Authority of Singapore will be introducing a new investment product unheard of in the financial world. It is called the Singapore Saving Bonds also known as Free Lunch (term is coined by Wilfred Ling). The Free Lunch Singapore Saving Bonds is an investment product that has all the features of a Free Lunch. Features of this Free Lunch are: Principal guaranteed … [Read more...]
Swiss Franc currency surprise and its effects on ETFs
Question: “Wilfred, I suffered more than 10% lost in an ETF when Swiss Franc appreciated in value overnight. Apparently my ETF was denominated in Swiss Franc (CHF). I also don’t understand why I did not make a profit since it was reported that the CHF appreciated significantly. Actually, I am very confused. All the charts show the CHF depreciated value. I think the reporters got it all mixed … [Read more...]
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