Monday, June 30, 2014

[XMM STI ETF Investing] June 2014 Update

As mentioned previously, this will be my attempt at having a monthly update of the small portfolio that I am running for my sister and mother.

My sister started in April, and since that I have helped her get a decent net 0.4% gain on her portfolio in a short 3 months. Total gain is about 1.2% so far, but the one-time 0.75% sales charge was a drag on the gains.

My mother has since requested that I help her manage her money as well, so I am doing just that. Along with some initial money, she has requested that the $400 allowance that I give her monthly be invested as well. Allowance in June will be transferred in at the end of June and added into my mom's portfolio, just in time to be used for investing in the next month.

Here are the current stats of the portfolio as of end June 2014.

30 June 2014        Sister             Mom               Total      
Amount Contributed

30 June 2014   Stocks  Bonds Cash Total
Amount Contributed

I'm pretty excited about managing this new portfolio!

[STI Statistics] June 2014

Hi all, this is going to be the first of my monthly post analyzing the STI.

For now, since it is still my first post, I will be putting up some simple statistics that I am keeping track of, as well as a short commentary at the end. As the months go by, I will add in more statistics or data if I think it is useful. Feel free to send me requests, especially if you the raw data for me to work on. I am looking quite desperately for the old data on P/E and P/B monthly values of the STI before 2008.

As of 30 June 2014

STI Closing Value: 3255.67
P/E Ratio: 13.88
P/B Ratio: 1.34

Monthly Data Series from 2008

Mean P/E: 12.05
P/E Standard Deviation: 3.28

Mean P/B: 1.48
P/B Standard Deviation: 0.22

% of time when the STI is cheaper based on P/E: 71.15%
% of time when the STI is cheaper based on P/B: 26.22%


The P/E and P/B ratios are telling conflicting stories about the index. The STI has been on a tear since early Feb and shot from 2945 to 3319 in June, with just a small hiccup in March. I am skeptical of this rally as it has gone up too fast, too soon for me. I am patiently awaiting a better entry point.

I am considering constructing, adding and maintaining an STI seasonality chart, which can probably include data all the way back to 1987. I will use data from Yahoo Finance and take construction tips from this guide.

*Straits Times Index values from Yahoo Finance
** P/E and P/B Ratios from SPDR STI as a proxy

***Data Series 2008 - 2014 from Bloomberg
****Data Series 2014 from SPDR STI as a proxy
*****Probability calculated with

Too Little Capital To Invest?

If you only had $5,000, should you even bother investing your money?

AK recently wrote a blog post today giving his 2 cent for a reader who asked about information about starting to invest. This is actually a very common questions, and I get this question a lot from my friends as well. AK then referred readers to his final statement in another post that he had titled, "Is investing for stocks suitable for you?".

His final paragraph is which he brings reader's attention to is:
"Although I feel that we should learn about investing as early as possible in life, I agree that investing in stocks, for various reasons, might not be suitable for everybody at one point or another in their lives." - AK
Now, personally because this statement is quite vague, I will have to agree with AK.

Investing in stocks is definitely dependent on the context. Nothing is a perfect fit for everybody at every point of life. This applies to a lot of things in life. You have slippers, dress shoes, sports shoes. Different things for different occasions. Even different people have different preferences regarding the style of sport shoes or dress shoes they want to wear. There is no one-size fit all magical formula.

However, the point that I would like to contest is regarding another portion of his blog post, which is about beginning to invest with a small amount of capital:
"From time to time, I receive emails from readers and, from time to time, there would be a reader who says he has $5,000 or less to invest with. The question is usually what should he invest in? Personally, I feel that the pertinent question is if he should be investing at all? Well, if I had only $5,000 or less to invest with, I wouldn't.  
I think the money is better left in an emergency fund. It is too little to really make any big difference to a person's financial well-being even if he were to achieve, say, a 10% return a year. After 7 years, that $5,000 would become $10,000 perhaps but there is also a chance that he could suffer financial loss in that 7 years. There is no guarantee that he could get back his money if he should need it."- AK
It is not to say that I don't agree with him here again, but I think the point can be misinterpreted by most.

I think the concept and the methods behind investing is the same regardless of what initial capital of your investment portfolio. Whether you have $2,000 to invest or $100,000 to invest, the concepts are the same. The only difference that I can see is that a larger portfolio has (1) better economics of scale, (2) access to more investment tools and (3) less lumpy rebalancing weights.

This means that a larger portfolio will generally incur less costs when making transactions. A larger portfolio can also access different investment vehicles due to minimum dollar amount required by some investments. Finally, and probably the most important, is that a larger portfolio can rebalance more finely to target allocation weights, rather than big chunky lumps due to inability to maneuver with limited smaller lots.

If you've been in the game a while, you would know that the arbitrary dollar amount matter less than the percentage changes. A $5,000 portfolio that makes 10% in a year, will also make 10% a year if it was scaled up to $100,000. Perhaps, the returns would be even more because of access to better investment vehicles (SPDR STI ETF instead of Nikko STI ETF) and finer rebalancing.

My 2 cents

If I had a friend who was asking me about starting to invest, I would recommend to adopt the Bucket Approach.

In the Bucket Approach, one would first create an Emergency Fund that he can draw from in emergency scenarios. Based on his current job security, projected liabilities and some margin of safety for personal comfort, this emergency fund should be filled up with anywhere between 3 months to a year of monthly expenses to help tide over any emergency situations.

Once this emergency bucket is finally fully funded, it should be clearly marked out and segregated from the rest of his funds. I would suggest a Fixed Deposit, Money Market Fund or a conservative short-term bond fund. Keeping your emergency money out of your current account / savings account removes the temptation and ease of accessing your sacred money.

Subsequently, all excess money that is saved can then be channeled towards an Investment Fund. When you know that even if the stock market blows up and goes to zero, you still have enough savings to last you for a while, you're less likely to make behavioral mistakes and therefore succeed in the long run because you are able to stomach the volatility better.

Once you have started your investment fund, definitely think of adding more capital for investing. Whether you add $100 or $1000 a month, and if your portfolio is $1,000 or $100,000, your principles and investment strategy should still be the same regardless.

I think risk tolerance should be irrespective of a portfolio size. What do you think? If you have a smaller portfolio should you be taking on more risks to generate a larger dollar return?

Peter Lynch on Investing

"A stock isn't a lottery ticket - there is a company behind it"

"Just because something is lower in price doesn't mean you have to buy it"

"The stock doesn't know that you own it"

"Cut out all the noise and own good companies"

Pressing Pause - Resisting The Urge

Right here and right now, I will say it to have it on record.

I am going to stop being trigger happy and stop buying equities on the SGX.

I have been quite prudent so far, avoiding equities since late 2013 and resisting the urge to dance with the other bulls this first half of 2014.

I know that soon the party is going to be over, and the repercussions are going to be far and wide. Even though not over-valued, the Singapore stock market will feel the effects for sure.

Rather than paying for growth (I really don't believe in that) or current fair value, I hope to pick up some great finds of under-valued stocks in the near future .

So far, I have purchased almost all of my current stock holdings at discount prices, meaning for less than their Net Asset Value. Sure, their NAV might be inflated due to the inflation of asset prices in the recent times, but some margin of safety is definitely better than none. It is slim pickings out there, looking for companies selling at the discount without anything substantially wrong with their business.

As I look through my shortlisted stocks on ChartNexus, I see quite a few stocks that I am feeling very itchy to pick up. UOB Kay Hian, PEC, Kep Infrastructure Trust and just some of the few tickers that I am looking at today which I wouldn't mind to pull the trigger at these prices.

However, like I said, I do think and I do believe that we are going to be seeing weakness is equity prices in the near future. Whether be it later this year or early next year, a US market meltdown is going to affect everyone. That should then be a very opportune time to go very aggressive in those markets, as well as pick up some great quality names on the SGX priced at discounts.

While just waiting for markets to finally move, I will resign myself to thoroughly educating myself and creating a much much stronger and better framework for evaluating and picking SGX stocks. I think my current framework is a bit haphazard and narrow focused, though I feel quite comfortable with it. I guess I am just lazy to really dig through all the annual reports and extract out all the facts and figures. Once I have constructed a very nice and robust framework for selecting stocks, I will most likely purchase a ShareInvestor account to help myself find the financial information that I need.

So yes, in the meantime I will work on educating myself, stacking precious metals on dips (looking towards getting a physical coin in my safe at home instead of just in the vault to get a feel of it) and also sprucing up my blog and organizing it better, along with better scheduled updates (monthly STI updates and my sister's ETF portfolio). Oh, and yes, probably my own SGX portfolio, precious metals portfolio and maybe even networth as well!

Sunday, June 29, 2014

SGX Retail Bonds

Just the other day, I overhead a son and his mother inquiring about purchasing some bonds. The person they were asking recommended equities instead. No surprise.

Anyway, since the retail bond arena in Singapore is so small and tiny, I thought I'd give it a look at see what options are there for the retail investor like you and since. Only "accredited" investors can invest in the whole array of other bonds available, but of course, you need $250,000 to put into a single bond issue. Don't have that kind of money? Don't sweat it, let me show you what you can get as a small-time retail investor!

The Singapore bond scene is really really small. Like really small.

There are 4 normal retail bonds. There is 1 issue in USD. There are 2 perpetuals.

As you can see, obviously the longer dated bonds have a higher yield. Both the CapitaMalls issues have yields which I think is quite decent. Both the LTA and SIA issue are definitely better than cash deposits, but almost equal to some fixed deposits out there on promotion.

The pricing seems quite fair, but that is probably because all the issues are considered investment-grade. Even though LTA is unrated, it is a government agency. SIA is also majority owned by Temasek Holdings. Even TigerAir is owned largely by SIA. I think all the retail bond issues listed on the SGX are quite safe in the event of any major crisis.

I don't really want to group "perps" into the same classification as bonds, but that's the way that SGX does it, so that's why it is here. I would prefer to compare perps with preferred stocks or annuities. I will probably be doing a follow-up post sometime in the future about preferred stocks and perps, because I find them more along the same lines rather than bonds. Preferred stocks almost seem like callable bonds.

Anyway, on top of my previous recommendation of various bond funds offered by Phillip, I am also now considering to get direct ETF exposure into some bond ETFs offered by iShares.

What is interesting is that their ETFs come in both USD and SGD flavours. The SGD version is not hedged, but you do not incur currency conversion costs to purchase it, which is always good and saves at least 0.5% and the hassle.

Personally, I would invest in the QL0, 1-3 Year ETF because of it's low interest rate risk, low credit risk and decent yields over the bank deposit rates. However, anything below 4% does not really interest me, especially with the availability of the UOB SGD Fund Class A unit trust, which is my go-to bond fund.

The USD ETFs looks like a good one to me, but only if there is a global crisis unrelated to currencies. The main drawback that I see is that its issues are in USD. I think many people out there know that I have extremely low faith in the USD as a currency moving forward.

I was prompted to look into bond ETFs after reading a post by DIY Income Investor about his purchase into an EM local government bond ETF. Unfortunately, there is no such similar ETF product available to us. The best alternatives are the Barclays Asia Local Currency bonds which are all investment-grade and issued by governments in Asia, but not other emerging markets like Brazil or Poland (I briefly checked, don't take my word for it). The only way to get that kind of exposure is through an ETF on another exchange, or through a unit trust. I have an investment with the UOB EM Bond unit trust. It has been doing pretty well for me, up more than 5% since I invested in it during the period where people were freaking out that a QE tapering will destroy emerging markets. Not a bad contrarian bet so far, I must say.

Saturday, June 28, 2014

[XMM STI ETF Investing] A New Investor Has Arrived!

I have mentioned that I will now be giving monthly updates on my sister's portfolio that I am managing. Expect a dedicated page soon!

Although the results of June is of course not finalized until Monday closes next week, I have managed to bump up my sister's returns to come in at roughly 1% in just 3 short months!

With performance like that, I should be expecting to end off the year with a nice decent 3% with almost no volatility!

After updating my sister and telling her how well her portfolio was doing, my mother overhead me and decided that instead of letting some of her money just rot in a bank without earning any interest (0.05% is just sad, really), she will hand over some money to me and let me manage it the same way as for my sister!

Of course, I told my sister about this as well. I am intending to merge their money together and operate it like a small fund, with returns based on percentage of fund ownership at the point of contribution.

Most likely I will be adding a dedicated page for me so that I can keep things more organized and find what I want to find regarding this portfolio that I am managing.

Just a reminder, I am keeping my strategy dead-simple. Cash, short-term bonds and the STI ETF, that's it. I will continue to monitor the market and look for good long-term entry points to buy into the STI, while ensuring ample liquidity and rebalancing. The worst thing that could happen is that if the stock market crashes and I am unable to capitalize on the lower prices!

Thursday, June 26, 2014

Gold Bug Porn (5 reasons to own gold)

Here's a little something that is relevant about gold today. The last point might not be so relevant in the future once prices correct, but it is a fantastic long term point of view to show where we are right now.

If you don't want to buy more gold now, that's all right. As long as you have some of your portfolio in it, that's good. You don't need to make it the core of your portfolio. It is a store of value, not a productive asset.

But by golly, don't even think of selling any gold that you have now! Didn't your parents ever teach you to buy low and sell high?

This is like the briefest, but most accurately broad topic infographic that touches on all the important points of owning gold.

My exposure to precious metals is already rather high, but I am quite ashamed to say that less than 5% of my portfolio is physically allocated precious metals to my name. On that front, I am aware that my portfolio insurance is not enough, so I am actively buying on dips trying to raise my physical allocation.

My precious metals dealer of choice is BullionStar and all my physical purchases go through them.

Full disclosure: If you enter BullionStar through my site, and you buy anything, I get a small commission.

This is my main source of blog revenue. I prefer this to "donations" because I rather you get something that you want as well, instead of a tip.

Whether you buy at BullionStar directly or enter from my site, the price you pay does not change.

My personal precious metals investments are stored with BullionStar and I pay the same fees as any other regular customer.

Housekeeping my Personal Finances (Part II) and Ranting

Since my first post back in early May about me doing some financial housekeeping, I have been busy with tons of things pulling and dragging my attention is 5 different directions.

However, I do recognize the power of listing out the things that I want to get done on a personal basis, and it honestly does help motivate me and remind me of the things that I ought to get done.

So, let me cross out some stuff from my old list:

1) Submit GIRO form for insurance
2) Submit e-statement to CMC
3) e-Self Update for military pay
4) Terminate EPS link of Phillip with DBS
5) Establish EPS link of Phillip with OCBC *processing
6) Go down to DBS branch to close account
7) Fill out W8-BEN form to be ready to trade the US markets

And add in some new ones!
1) ----------------------------------------------
2) Fill out W8-BEN form after that for DBS
3) Nominate other DBS account as main account
4) Test ATM / debit card works, or apply for new one
5) Remove closed-out DBS account from CMC listing
6) Remove closed-out DBS account from SCB payees list
7) Test EPS link to Phillip from OCBC
8) Test withdrawal to OCBC account from Phillip
9) Get personal medical shield insurance (now still paid by my father)
10) Monthly updates on my family's assets that I am helping to manage
11) Monthly updates on my dividend portfolio
12) Finish my book and write down notes
13) Read the rest of my books and give my reviews and notes

I have to say, I am pretty happy that I closed out my DBS account. With a $5,000 account minimum balance, it was holding up a lot of my liquidity. I am really quite happy with my OCBC 360 account that I am using as my main bank account. Together with the Frank credit card, I honestly save quite a bit. I do have to say that I am spending a bit more than my usual self would, but I guess I should try not to be such a tightass about saving money all the time. What's the point of accumulating all of it if you never get to spend it, right?

I have also begun expanding my dividend portfolio. I didn't list down my New Toyo buy because it is a small deal and I have been busy at work. As long as I can, I will definitely try to pre-announce the tickers and target prices that I am looking for, as well as my trades in real-time if possible. I think my portfolio strategy is leaning towards simple fundamental value screens, yields (dividends now, but shareholder eventually) and weightings (most likely equal-weighted with some allowance to drift to minimize transaction costs).

I have kind of dropped off my weekly updates on maximum drawdowns and moving average analysis on the different unit trust asset classes because I don't think that things have been changing much. The only difference so far has been that equities has been getting giddy, and I ain't chasing that train that has already left the station. In fact, I am getting a bit skittish about bonds too. Regardless, I still take down the data for future reference, I can see how it can be useful in the future. The global markets and asset classes are just too... artificial now. It really doesn't feel right.

I am still patiently waiting for a market smash soon. Honestly, just by the math, it has to happen soon. Who knows what will trigger it. It honestly doesn't matter. The wait is really killing me though. Til the party starts, I am patiently building up my war chest and making allocations only into things that I think would hold up well in the event of tail risk. I have to say, patience is tough!

Tuesday, June 24, 2014

From Russia, With Love

Back in March, the whole Ukraine-Russia conflict was being blown way out of proportion and people were selling Russian equities even though they have one of the lowest P/E ratios in the world. Actually, they might have been the lowest, I'm not sure!

I always talk the talk about how my philosophy is contrarian and deep value investing, and since then, this seemed like the first real opportunity that I saw to invest with "blood on the streets", as many would like to say.

On 12th March I took the plunge and made a purchase into Russian equities. Here was my post that day. It felt quite exhilarating!

3 months later, let's see where we are shall we:

Since there is no easy way to invest in the RSX ETF, I invested in Russian equities through a unit trust, the HSBC GIF Russia Equity fund. The RSX chart above is just a proxy, which it tracks quite well.

As you can see, I pretty much managed to get in at the first plunge. Subsequent chart action looked very constructive, and I have been steadily in the money for more than a month now.

My previous price target to cash out was 27-30 just by eyeballing. However, looking back just a year, you can see that we have hit a strong support/resistance that is just below the 27 mark.

Adding that resistance hit along with the fact that the MACD is crossing down, way above it's zero line, I think this is a sell signal for me.

I actually am trying to build up a nice big fat war chest and reduce risky assets exposure, so I think it is good that I am trimming up my portfolio and keeping it lean.

I will be putting in a sell order for this baby tomorrow and smell some nice profits. 20% gains in 3 months is pretty good, eh?

Monday, June 23, 2014

Lippo Malls Retail Trust [Portfolio Buy] June 2014

This is the portfolio summary of Lippo Malls Indonesia Retail Trust. I have been keeping my eye on Lippo Malls for quite a long time (May and June), and today I saw a big trade push down the price to touch the $0.40 mark. There is huge supply at that mark, so I decided to just jump the queue and buy up at $0.405.

Current dividend yield based on the forecasted DPU will give a yield of 6.71%, which is pretty decent considering it is not highly levered (26%) and it is a retail trust. 

Based on Price/NAV, the Trust is currently selling at a 10.5% discount, which is not too bad. I like buying things on discounts.

Based on the 104 week low, the lowest price ever recorded was 0.385. This represents a downside risk of 5% based on capital gains loss.

Of course, there is no gaurantee that the 104 week low will hold and people will buy in at that price. However, if it really is capped to the downside here, the risk reward-ratio is still somewhat decent, since you're going to be getting a yield of 3.3% every half a year.

That means if you hold on for just over half a year and get your dividends, you will almost definitely be in the green as long as the bottom can hold for this stock. 

Compared to Croesus, Lippo has less yield, but it is also much more diversified with more properties in many locations. It has less leverage too. Their properties also look to me to be quite defensive, which I like in a retail trust. Lippo also has a NAV discount, which has since disappeared from Croesus. I'm glad I bought into Croesus when the discount was up for grabs.

Lippo Malls is the second last REIT left in my watchlist of REITs to acquire. The last piece that I am looking to add now is OUE Comm REIT. Based on my prop analysis, the rest of the other REITs do not look attractive to me yet.

Bought D5IU.SI @ $0.90

Fresh New Picks

With the STI seemingly ripe for a nice bigger correction, my eyes are out there on the hunt looking for good levels to pick up some stocks that I have been eyeing.

Presented au naturale:

CitySpring: $0.465
CSE Global: $0.54
Fragrance: $0.20
Hafary: $0.175
Hock Lian Seng: $0.26
Low Keng Huat: $0.63
New Toyo: $0.29
QAF: $0.80
Qian Hu: $0.081
SGX: $6.80
Singtel: $3.51
Super Group: $1.31
UOB Kay Hian: $1.61

My safe picks would be CitySpring, QAF and New Toyo.

My exciting picks would be Qian Hu, Hafary followed by CSE Global.

My long term picks would be SGX, Singtel and UOB Kay Hian.

Just some ideas if you like value picks of decent dividend yielding stocks. These stocks pay out upwards of 3%, with most coming in around 6%. Value trap? Maybe. Your call!

Saturday, June 21, 2014

Comparing the Straits Times Index (STI) vs Gold

Since I was wondering what the relationship between Gold and other asset prices were, I thought I would first look at home and compare the performance of the STI to the performance of Gold.

The STI was created way back in 1987, however the first proper investment vehicle to invest in it was the SPDR STI ETF that was launched in 2002. Therefore, I went back to look for the values of the Gold priced in SGD and set out to compare it to the SPDR STI ETF as a proxy.

Below is an interactive graph of the price of Gold in SGD terms.

Below is an interactive graph of the STI itself in SGD.

So, what is their performance?

In April 2002, Gold priced in SGD was $558.02. As of May 2014, it was $1619.52. This was a 190.22% increase. $10,000 invested in gold then would be worth $29,022 today.

In April 2002, the STI was 1725.37. As of May 2014, it was 3295.85. This was a 91% increase. $10,000 invested in the STI then would be worth $19,102 today.

But of course, the picture is not complete because I did not add the dividends that would have been collected and reinvested back! Checking the SPDR website again and here we go...

Not bad eh, pretty accurate calculations. Just looking at the index increase since 2002, it is roughly 90% capital gains. Reinvesting dividends paid over that entire period would give you 170%.

So, 190% from investing in Gold and 170% from investing in the STI. it seems like quite a close call doesn't it?

How about we try a ratio of the two? Then we can see their relative values to each other.

The ratio is quite telling. We are between the standard deviation, which I would propose is a fair value of Gold and the stock market.

The Singapore stock market have gone almost no where in the past 3 years themselves, which is why they are not over-valued. Therefore even though Gold has been relatively beaten down so badly over the past 3 years, it does not signal that Gold is cheap to equities.

HOWEVER, another scenario that may be possible is that the ratio is in a major downwards sloping channel. That would be supportive the Gold prices head back towards a lower ratio. The only way to tell I guess is to look at a much longer term chart.

In Feb 1988, Gold priced in SGD was $892.94. As of May 2014, it was $1619.52. This was a 81.4% increase.

In Feb 1988, the STI was 888.8. As of May 2014, it was 3295.85. This was a 270% increase. Note that dividends were NOT included, so a rough guess could be anywhere north of 350% if dividends were reinvested.

Looking at the grand scheme of things, gold does look overvalued compared to the Singapore stock market now. Perhaps the reason for outperformance during 2002 was due to the fact that gold started off from a relatively undervalued position.

The ratio seems quite important. If you are buying beyond the standard deviations, you will be getting relative under or out performance based on which side of the ratio you bought on.

I have to admit that I am slightly a bit disappointed that the result of this study does not show gold as being relatively undervalued now. This study has opened my eyes a bit to be more accepting of the relative value of Singaporean equities.

Friday, June 20, 2014

Maybank Platinum Visa Card Review and also CashBack Credit Cards Comparion (CCCC)

If you were like me, this morning you would have gotten a big A4-sized advertorial leaflet from Maybank in the newspaper that looks something like this:

Okay, the big leaflet did not look like this, but roughly! I screengrabbed this from Maybank website.

What really caught my attention was their 3.33% cash rebate. Does this sound quite familiar to you? It sounds similar to the UOB One Card to me, so I went to give it a look!

Although the point of this post is not to compare it to the UOB card, with such a similar product out there, if you decide that this sort of credit card is for you, you would want to know which is the best bang for your buck!

Anyway, let me go down in the card itself proper before I go onto comparisons.

Maybank Platinum Visa Card

This card and it's promotions become effective 1st July 2014. I suppose this is Maybank's way of coming into the foray and battling the likes of all the rebate cards out there on the market, especially with the recent release of the OCBC 365 Card, which I recently reviewed.

Their rebate structure is weird, but it is exactly the same as the UOB Card. Instead of getting back monthly rebates based on a certain amount spend, you will get a one-time rebate every quarter. What this does is that it makes it much harder to get the rebate, since you must consistently spend a certain amount every month.

If you do not hit the minimum spending for that month, you will not get your tier rebate.

If you do not hit the minimum spending for your tier every month of the quarter, you will only get the lowest tier rebate. (example: you spend $1000 / $800 / $1500 in 3 consecutive months. You will only get a one-time $30 rebate.)

Because of the strict spending criteria for the rebate, this (type of) card should only be meant for people with extremely certain spending habits. If you are unsure of spending $300 a month, do not get this card. There will be some months where you realized you have only spend maybe $200 for that month, but because you have already spent more than $300 for the previous two months in that quarter, you will feel compelled to spend another $100 to get the $30 rebate. This card should be used as a tool to help you cut costs, not increase expenditure. If you are have highly variable spending, then monthly rebate cards like the OCBC365 or even Standard Chartered's Manhattan would be good.

The annual income requirement is the standard $30,000 annual income. The fee structure is very interesting though. They stated that they will charge you $20 per quarter, unless you make 1 transaction, then it would be free. If you expand it out over the year, leaving your card idle is $80 a year while is on the lower side of credit card annual fees. However, of course if you are getting this card, you are planning to make transactions every month. So in effect, this card has no annual fees since you would qualify for fee waiver!

My personal take is that this is a good card for people who want to start getting back some simple rebates based on their stable cash outflows. Stable outflows is the key.

So let's see how to stacks up to competitors?


I have stripped out all the special limited promotions and bell and whistles for these 3 cards. These are the basics of the cards, untainted by promotions. Why do I do this? Well, promotions are limited time only, but these features of the card are more concrete and part of the card terms. These cards are in the pure-cash back criteria. (flat cashback, no variation or restriction on spending categories - ie. dining, petrol, groceries)

The Maybank and the UOB card are really essentially the exact same rebate programme. The only difference is that UOB has an extra rebate tier. In that sense, UOB is better if you have a higher stable cash outflow, because you can move up your rebate amount from $30 to $80. *Do note that the 3.33% is a clever advertising gimmick. You will always get less than 3.33% because you will get a flat rebate amount. If you spend exactly $300 a month, then you will get the maximum 3.33% rebate since 30/900 = 3.33%. Try not to look at it as a rebate percentage, but rather a one-time quarter dollar cashback amount.

The reason why I put in SCB's Manhattan World card is that is somewhat similar because it has one-time quarter rebate. The difference is that you spend whatever amount you want every month, and still be assured that you will get at least 0.5% rebate back. You can also spend $6,6667 on the first day of the month, in your first quarter and you will already get the maximum $200 cashback for that quarter. You do not need to spend consistently every month, so I think this gives you good freedom. Also, if you spend on large expensive items as a one-off thing, this is also a great card for those big purchases.

The annual fee for Maybank is very reasonable. $20 a quarter works out to $80 a year, which is much less than UOB. Maybank also has absolutely such a loose criteria to be eligible for fee waiver, so you will definitely get your fee waived! For UOB, this is not so certain. To qualify for the annual fee waiver, you have to chalk up $7,200 of spending a year, which works out to about $600 a month. That is kind of a no-man's land for their rebate tier. Maybank beats hands-down in terms of credit card fees and upkeep. SCB does not state it's fee waiver criteria, although I am sure they will waive your fee if you spend a certain amount a year. Both UOB and SCB have first year fee waiver as a current promotion (probably a forever promotion to encourage people to give it a try)


So, what's the final verdict? Honestly, it depends on your situation.

If you spend between $300-500 a month consistently, this Maybank Platinum Visa Card will be fantastic for you as your everyday card. With no restrictions on spending categories, you will just get a nice $30 cash rebate every quarter, and you will not be paying any credit card fees since you will perpetually get waived with frequent usage.

If your month spending is over $800 consistently, then the UOB One Card would work out better for you. Maybank rules the $300 category with it's easier fee waiver criteria. As the tier increases, you must also assess your spending to see if your spending are really "monthly essentials", so that you will have very certain cash outflows. You wouldn't want to miss a month's spending and drop to a lower tier!

However, if you are a big spender or if your cash flows are not very consistent, the Standard Chartered Manhattan World card might be the one for you. It has a higher quarterly cashback cap, so you get the maximum amount of rebate dollars back. Also, since rebates are accumulated based on the month, but only paid out at the end of the quarter, you don't need to worry about not getting your rebate. Rebate is calculated by month, but paid by quarter. This is special and more flexible than the other cards.

Of course, this is only looking at the pure-play cashback cards available. I personally use CIMB Platinum Mastercard because it has a decent 0.5% rebate with no cap and no annual fees. However, it is not my main card because I use OCBC Frank and get much more rebate because I shop online a lot.

I have long considered getting a 2nd card for non-online spending. I was always undecided between the UOB One and SCB Manhattan, but now I have a new problem. Maybank Platinum Visa or SCB Manhattan? Sorry UOB, I'm just not a big time consistent spender! I guess the card I choose in the future will be highly depend on my spending patterns, and based on what I just wrote above. I must admit, I feel quite tempted to get a Maybank card now and shifting $300 worth of charges a month from my OCBC card to that card and get rebates!

Disclosure: I use the OCBC Frank and CIMB Platinum Mastercard credit cards for my own personal usage. I do not get any special rebates or fees for mentioning any of these products. This review reflects my own personal understanding and opinion of these products.

My Precious Metals Positioning So Far

With Gold up 2.5% or $30USD and Silver up 4% or 80c, I thought now might be a good time to fully account for my portfolio that I have invested in gold and silver. They are all listed in SGD and I think that they are all quite liquid with low counterparty risks.

Here is the breakdown of my portfolio exposure so far:

Gold Miners             - 20.3%
Gold Mutal Fund      - 5.7%
Silver CFD               - 0.5%
Physical                    - 3%

Total: 29.5%

I'd like to share a chart of my accumulation of gold mining equities since late December 2013.

I have to admit that I was a bit trigger happy in Feb and I was scared that this was the real breakout and I would not be in position! Since late December until now, I've managed to roughly accumulate my gold miners equity portfolio at an average price of about $24.50 if using the GDX as a proxy. Representing 20% of my portfolio, this is kinda scary, especially when it dipped to 22. However, since my portfolio is quite diversified, the rest of my positions were in-the-money and cushioned the blow so that my total downside was merely 2%!

I think it's a pretty good average price that I've managed to get in so far, especially if you consider the massive range of the GDX. It's low in the past 5 years was on 16 Dec 2013, printing 20.53. The high was back on 5 Sep 2011, printing up 65.80. If it tags those highs, that is a 200+% upside from my current position!

Miners have been in a disgusting and massive bear market, losing 69% from it's peak to it's bottom. I'm blogged about this way back in December 2013 last year in posts like this and this, and I frequently mention the precious metals on and off on my blog.

Sadly, I was out having dinner today when Silver just freaking exploded, so I am unable to enact my Silver plan that I had planned to carry out. Just a week ago I was saying how Silver is looking pretty fine lately and it might be a good time to start stacking again. Can't believe I missed a great entry point.

Anyway, I actually think that 28.5% is a rather large position of my portfolio to be in for just a single niche asset class, however I can see myself adding on dips slowly but surely. I think I have had enough of leverage (since my miners position is pretty large) and I would like to slowly stack myself by buying physical through BullionStar on dips since it is looking a tad overbought. The best case scenario if it consolidates next week along the 200DMA and then resumes an uptrend.

If this is honestly the start of a much bigger rumbling in the future, it is only prudent for me to lock in some on my wealth in precious metals and have my portfolio properly insured. I am aiming for a rough 1:4 Gold and Silver ratio in terms of currency and aiming for at least 5% of my portfolio converted, and the upper limit is to the moon depending how out of control things get.

Gold and silver are silly barbaric relics are they? Hehehe.

Thursday, June 19, 2014

I'm Calling It Now... MARKET TOP!

You know why it's okay and so easy to call the top or the bottom? People rarely follow up with pundits predictions and forecasts, because there are just so many people out there calling it.

The S&P just came within a hair's length of breaching 1960, but it is at 1955 now. The VIX is ridiculously at 10.5.

There are ton's of reasons why I think that this is IT, and we just see a sideways grind for a while before we fall off a cliff, but I won't list them down, because there is just too many! Margin debt, Q-ratio, credit spreads, sentiments.... oh gawd, the list goes on and on. Check out this post for a summary of many of the points that I use to back my fundamental thinking of this. John Hampson has a great blog and he has done a previous post listing like 40 reasons why the US markets look absolutely horrid. It was actually quite nice to look at all the information together in 1 chart.

I've made similar calls throughout the year, and I have to say that I have put my money where my mouth is at. I'm currently way deep out-of-the-money with puts in the Russell at 1145 and puts in the S&P at 1945. I'm overleveraged and half dead.

We're going to keep playing this massive scam over and over again until we run out of greater fools to pump the market. I hear tons of mainstream media chatter about "money on the sidelines", but the data doesn't add up. Even if you do have money on the sidelines, it is because you realize that hell-no, you ain't buying into crazy valuations like this. That money isn't flowing in, it's dead money.

Sooner (I doubt it will much later) there is just going to be no one left to buy, all the ammunition will be used up. And then, just then, I will finally be right. Now, the real question is, how long can I survive until that happens in my favour?

Going by mathematics, I would say my odds are getting better as each day goes by.

How I am getting ready for the big moves:
-Liquidating all risky assets with positive beta
-Buying precious metals / miners on dips
-Try to stay cool-headed and hawk-eyed
-Ready to ramp up my gambling bits and STFR (Short the f***ing rips!)

Good luck out there guys.

Tuesday, June 17, 2014

Narrowing Down the Investment Universe

While I was earlier browsing the net looking for examples of Singaporean personal finance bloggers regarding their updates to their portfolios and networth, I accidentally stumbled upon this blog called, Mad Stranger the Investor.

Most interestingly I found his post on ranking Singapore REITs based on some criteria. More info on his ranking and scoring system can be found in another post here.

You should definitely check it out to see how he does his REITs valuation, I think this is a great way of putting sound investment theories into a structured framework. Lower P/B is going for value. Higher yield does the same thing as well, since higher yield for REITs is usually indicative of a lower price. Gearing represents risks involved, since they are liabilities and the more a company takes up, the more risk the company has.

My gripe is that his scoring system is based on absolute and arbitrary numbers. Absolute because they are hard and fast numbers, rather than something like a quartile or quintile ranking. Arbituary because increasing gearing from 29% to 31% doesn't increase risk two-fold (scoring drops from 2 to 1). The Mad Stranger must be very careful to constantly remind himself that his scoring system is an rough ordinal one, and not an interval one. Gearing of 0% and 19% also makes quite a substantial difference which is not accounted for. Of course, for simplicity sake, I can understand why he has not made a distinction for that.

I don't think that his framework is perfect, because nothing is. I can see how things could be improved, sure. That still does not discount his work, I think it is fantastic that someone else also has sat down and formulated a thought process and framework to remove emotional bias from decision making. I am confident that his process and ranking system will beat anyone just randomly throwing darts at REITs, which is what I feel many investors out there are doing.

This post by Dr Wealth is also interesting. This is a graph of the performance of the STI compared to different portfolios.

What does it mean? Well, simply put, direct valuation metrics of P/E or P/E is a better indication of value than dividend yield. Although dividend yield is a very good yardstick, Meb Faber has accurately researched and shown that it is shareholder yield that is much more important. With bad enough corporate governance, a company can pay a high dividend, but still erode shareholder yield by diluting shares and taking up debt. Dividend yields is a good quick indicator, but it is definitely by far not the best one.

This article just served to remind me that dividend yield should not be the most important factor, which I always feel that too many people get blindsided by.

Funny as the world is, The Aleph Blog immediately posted an post after I just posted mine, so I'm adding in his post. He exactly talked about just what I talked about, which is blindly chasing yield and the drawbacks of using yield as the ultimate measure. However, it is his final conclusion that is something different which I shall have to think about and read more books on:
Do not rely on stocks for income.  Bonds are designed for income and return of principal.  Stocks are designed for gains or losses depending upon the underlying business performance.  They aren’t income vehicles, but performance vehicles.
Very interesting. Definitely will make me take another look at how I identify stocks.

Portfolio and Networth Updating - Should I start, and how?

After seeing so many people update their portfolios and networth for the month of May ending, I really feel like doing it too, but I am quite embarrassed that a huge portion of my allocation is in unit trusts with higher expense ratios.

I am thinking how I would like to show my portfolio. I'm still not sure how I would like to present the information, so let's look at some bloggers:

15HWW does it on an income basis, which I think is fantastic, because it is so easy to see what the year's income from his investments would be. He lists on current market valuation price and expected dividends for the year. With a portfolio of $221,594. he is generating $7341.45 a year, which works out to be a yield of 3.3%. I think his inclusion of his CIMB Star Saver

Dividend Warrior presents his on cost basis per share, which means you can calculate the yield based on investment cost. He also adds in a portion for his unrealized portfolio gains, not per share. I think this is quite a good thing too, because it helps focus on the portfolio as a whole, which should be the emphasis. However, although it can be diversifying, it can also be detrimental that underperforming stocks on a total return basis might still be in the portfolio. With a portfolio of $212,390 he is expecting 6% yield of his portfolio's value, which is reflective to the higher yielding stocks in his portfolio.

STI StocksInfo runs a table with monthly performance, I think that is amazing information to have, especially if looking towards taking advantage of seasonality, but it does seem like an awful a lot of work. He does not list his portfolio amount, but rather the % of his portfolio in each asset. His focus is on total return and no income, so there is no mention of dividends.

PassiveIncomeFarmer list down his average cost and % allocation, includes dividends collected back into his cost to calculate breakeven and does not list either cost or market valuation. Therefore, you can actually work out his portfolio value and cost, though it is a slight amount of work. I did the math for you already, his portfolio is currently $131,395 and he states he earns an average dividend of $483.29 per month, which works out to be a portfolio yield of 4.4%. That looks quite accurate, given his mix of REITs and blue chips.

OneMillionDiary is one of the few people that updates his entire networth, not just his investment portfolio. He has BTO which will be finish being built in a few years time, and even counting the home loan on it, he has managed to achieve a networth of $100,000. I quite like how he presents his networth, I am actually doing something similar where I break up the holdings of my different savings account. He does not invest aggressively though, but he is a great saver.


Even though all these people are different, varying with age, income, experience and objectives, I think one thing is very clear. All these people are patient, detailed people and fully aware of the whereabouts of their money.

I think one of the most major benefits of updating portfolio performance and net worth (a form of journaling) is that you get to see the gradual change and improvement to your financial well-being. There is a sense of accomplishment because the results are factual and tangible. Did you end off the month with more money than the start of the month? You did? Congratulations!

Once you start with that kind of accomplishments, you feel good about it and want to keep it up. This sort of "winning streak" mentality is an amazing encouragement factor that keeps people on track. Especially if you are looking from a longer time frame (a year, instead of a month), where time has smoothed out market volatility and you can see that increase.

I am now personally very inclined to mimic the layout and style of OneMillionDiary and create pages for my investment portfolio and my networth. I think this will help me be more focused to achieve my goals.

Monday, June 16, 2014

Cashing Out From Toluna

Paid surveys might be lame, but heck, if I'm bored and clicking around on the internet, I don't mind to click around for a few minutes, watch some ads, give feedback and then get paid for it. There is so much data mining that is going on all the time that doesn't pay you anything, so why not get paid?

I previously posted about cashing out from my first choice site to do online paid surveys, and that is MySurvey. The process was simple enough, and a week later I got credited in my Paypal account.

Well, I did mention that the other survey website that I fancy is Toluna. I have to admit, the Toluna website and user experience is much much nicer compared to MySurvey. They actually have more of a community going on in Toluna, though I've never really explored the site much. I just get on, do surveys, collect the points and get out.

I decided today to try and see how the cashing out process would be like, and it was SIMPLE. Here is the only screenshot of the day.

I just went to the rewards centre, I clicked PayPal, and I clicked redeem. That was it. It was so easy to be done!

I will give an update once I receive the money in my PayPal account.

Toluna has a nicer website and feels a lot more fun than MySurvey, but the surveys are longer, not as interesting and pays out less for your time. I suppose if you're enjoying yourself, you shouldn't be paid? Haha!

Sunday, June 15, 2014

Constructing Relevant Gold Ratio Data for Singapore

After re-watching some of the Hidden Secrets of Money episodes and browsing through their Youtube channel, I stumbled across this video that I embedded on top. If you haven't watched the docu-series before, I strongly recommend it because it is very very clear-cut and logical. Plus, he doesn't (really try to) sell you anything.

Anyway, the main point of the video is trying to tell you how you can value your precious metals investments relative to other assets available. He covers housing briefly in the beginning and in the end, while focusing on the stock markets mainly for the video.

I agree with him on his views. Assets should always be looked at relative to something else, rather than in terms of absolute value. However, we mostly look at assets compared to currency, which usually should be okay. But when currency is being debased and distorted, it is then much easier to compare assets with other assets.

I have tried looking for information regarding Singapore specific Gold ratios, but I am unable to find any such information or resources. However, I have managed to find individual data sets for property prices, housing prices and the stock market, so I will be working over the new few days to extract, compile and analysis these data sets. Hopefully I can get them done soon and then I can publish the information for all to see!

My Personal BullionStar Experience and Review

First off, I have to set things straight. I am a BullionStar customer and I do have all my physical allocation with BullionStar. I am definitely not being paid to write this review, but I must disclose that I am a BullionStar affiliate, meaning that I get a tiny commission for directing sales from my blog to them.

My motivations for writing this review is simple: I would like to share my experience and opinion about BullionStar as a precious metals dealer. This article is mainly written for me to share with my family and friends regarding a viable option for precious metals investing in Singapore. If at the end of my article you feel convinced, please drop by BullionStar from my links around here.

So, here we go.

BullionStar Review

The main pros of BullionStar are:
1. Physical precious metals
2. Delivery and Storage options

3. Competitive pricing
4. Wide range of products
5. Excellent customer service and website interface
6. Easy process to invest and divest
7. Multiple currency options
8. Reputable in the industry
9. International

1. Physical precious metals

BullionStar deals with physical precious metals. They do not sell to clients futures, CFDs, ETFs, gold certificates or anything else. Their main business is buying and selling physical precious metals, which is exactly what we are looking for.

While other dealers diversify and try to sell proof coins and bars of gold and silver (GST/Tax applicable), BullionStar remains very largely focused on bullion - investment grade metals (GST/Tax free). Since this is their focus, they really do a rather good job at it.

2. Delivery and Storage options

BullionStar only has 2 options when you decide to purchase some precious metals. Actual physical delivery in which you take possession of the goods, either by courier or personal collection. Storage, of course, is when they store your precious metals in their vault, which entails them documenting, photographing and recording down your items held with them. Of course, storage comes with cost, which is in the next point.

3. Competitive pricing

Among the 9 dealers that I have found online that sell bullion, in terms of the premiums over spot price, BullionStar has competitive pricing in both Gold and Silver (updated 29 Nov 2014). Many of the other dealers does not sell as many gold products, and only some of them are priced well. This information is based on a random price check that I have done:

Random Check 1 for Silver, May 2014
Random Check 2 for Gold and Silver, Aug 2014
Random Check 3 for Gold and Silver, Nov 2014

Bottom line: The spreads for Gold and Silver are very very good. They are the best in Singapore.

Storage cost is calculated very simply based on the amount of bullion and type of bullion stored with them, which is 0.39% pa for gold and 0.59% pa for silver and platinum. The only catch is that physical withdrawal is a one time $149 charge. Many other bullion storage vaults charge a minimum fee per month, which shoots up required capital to make storage costs low. BullionStar does not, which makes them a perfect choice for vault storage to me.

4. Wide range of products and product innovation

On top of gold and silver, BullionStar also offers platinum as well! To my knowledge, I don't think there are any other dealers that offer platinum investments, even though platinum is GST exempt and considered a precious metal investment. There are a wide range of both coins and bars available for sale, with different denominations and from different refiners.

On top of investment grade precious metals, they also sell gold jewelry which is good for easy transport. They also sell coin storage and other accessories. They aren't the cheapest for these by-products, but it is convenient if you just want 1 case to go along with the coin you just bought, instead of ordering a pack of 10 online somewhere else.

Additionally, they are the only dealer so far to offer unallocated, but still physically backed, grams of precious metals. The two largest and most mainstream online precious metal dealers, GoldMoney and BullionVault offer a similar sort of gram product, and I think it is innovative that they are offering something like it. This allows investors to start small, being able to purchase precious metals without paying large premiums and spreads because their small investment amount.

5. Excellent customer service and website interface

Their customer service is top-notch. Email correspondences have been fast and clear, their staff that I have personally dealt with seem very professional. Order placements and invoices are automatically sent to your email, helping you also keep track of your purchases.

The website is clean, modern and easy to use. It is very easy for me to navigate to the pages that I want to go to. The chart on the right is highly interactive, able to show prices in ounces and grams, switch between currencies and move over to different time frames, and of course, switch between the different metals available.

6. Easy process to invest and divest

Investing simply involves clicking on items and moving them into your cart, followed by checking out and confirming your order. Once your order is confirmed, you just bank transfer the amount due along with your order reference number. Within 24 hours they will confirm the receipt of your funds sent, and promptly release the metal from their custody to yours (either ready for delivery or moved into storage), transferring ownership. A day later a proper invoice will come. That's all to it.

Divesting is even simpler. Select the items in your storage vault that you want to sell, confirm the sell order and the sell amount, and just key in the bank account details that you want the funds to be sent to. Selling is immediate and at spot price. About 2-3 days later, the funds would be in your bank account. Done.

7. Multiple currency options

Currencies available are the USD, EUR, BTC and of course, the SGD. I like it that they treat SGD investments with equal priority instead of emphasizing on USD.

With multiple currencies, this means that investments can be made in any currency, and divesting can also be done in any currency. However, I must disclose that I have not attempted to use the other currencies, yet. From my observation, they recognize the currency pairs at spot rate, meaning that they don't act as forex brokers and take a spread from your currency conversion. All they care about is selling you precious metals, in whichever currency you might have.

8. Reputable in the industry

BullionStar has appeared in the Sunday Times and has also been featured on Channel News Asia. Perhaps it is just luck and timing, but I do not see or hear anything about any of the other precious metals brokers in Singapore, although I am familiar with their names through all my research.

They also are very transparent in showing their audit results, their insurance certificates and they now even have a live audit report so customers can see their holdings as part of BullionStar's entire holdings. I think having LMBA approved audits does give it quite good industry credibility, which gives me peace of mind.

9. International 

The final point is the BullionStar is open to customers from all over the world, and they deliver all over the world as well. To investors from the US or in any of the EU countries looking for a safe foreign place to store precious metals or just deal in precious metals off your own country's jurisdiction, BullionStar does offer a very compelling case.


I know my review may come off as a bit biased, especially since I am a customer already. However, I think it is a testament to my review that I personally have used and still use BullionStar as my sole precious metals broker.

They have the most competitive pricing while offering a complete one-stop solution to both gold and silver at great prices. They offer a good range of products, and I absolutely adore the Vault Gram idea. It effectively reduces the cost of precious metals investing much lower, as well as substantially reducing the minimum capital requirements to participant. With just 80 cents, you can buy yourself 1g of Silver already! (My first precious metals investment was 1g of gold which I paid only ~$50!)

They don't cheat you in forex spreads, they deal with only the physical metal, storage costs are very competitive, customer experience is fantastic and they are reputable enough to appear of national media.

The only things that I wish BullionStar would have that can make it the perfect experience for me is to have an automatic GIRO savings plan and to allow conversion and physical delivery of Vault Grams into other products, after they have reached a certain amount.

All-in-all, I think that they are the most modern and competitive precious metals dealers in Singapore that I have seen so far. I do hope they continue to be innovative and competitive, if not, I will just move my holdings and give my business to whichever broker offers the best value. As of now, it is still BullionStar.

Friday, June 13, 2014

Mid Year Goals for End 2014

I think one of the things that I am rather poor at is making goals, especially financial goals.

The purpose of this post is for me to write down some simple year end goals that I would like to hit. I'm doing the current situation + expected savings method, instead of the reverse method, which is to work backwards from my retirement goals, haha. Which, I should get down to forecasting and doing btw. Just not now I guess.

Goals for end 2014:
1. $50,000 cash in OCBC 360 account

2. Open a CIMB StarSaver account ($5,000)
3. Convert 5% of my liquid networth to precious metals
4. Fully insured
5. Health check up

Goal 1: I want to have $50,000 cash in my OCBC 360 account to maximize the amount of on-going interest that they offer. Hitting the $50,000 account interest limit and qualifying for all 3 bonus interest payments will net me an extra $125 a month. Holding cash never felt so good!

Goal 2: After I have reached the $50,000 account limit in my OCBC 360 account, I would not want to keep more than a certain minimum "working capital" amount in that account, since interest will be minimal. I plan to move all my excess cash into a CIMB StarSaver account and yield a higher interest there. Of course, I will also ensure that I deposit at least $100 a month into the account to benefit from the higher 0.8% interest offered. I think this is the best long term base solution to manage my money.

Goal 3: I will be aiming to diversify my entire portfolio holdings by having a position in precious metals. Also with precious metals, it is extremely easy to cash out into other currencies, like the USD or Euro. (BullionStar has a stunningly good spot rate, I am impressed) In a sense, I am basically cementing a portion of my portfolio from growth, but also protecting it from any adverse situation. It's like my personal reserve.

Goal 4: Although I have completed most of my insurance needs, I think there are some gaps here and there that I should have completely sorted out. I think mainly I need to transfer my hospitalization shield insurance from being my father's liability to be fully look after and managed by myself. I will also be looking for a rider to go along with it. Even though I have compared most of the shield plans, I am not absolutely sure yet, but currently I am leaning towards GE.

Goal 5: The last time that I had a proper full medical check up was back in university when the university offered discounted health screenings at the medical centre. Since it has been a while, I think that it is about time that I go get a good proper thorough health screening. I am to do this late November or in December, after I finish my reservist and when things are a bit more lull.

From the look of things, as long as I do my job well, get a decent bonus and don't spend too much money, I should be able to quite nicely meet my goals for the end of the year. I should have started this goal planning a bit earlier, things seem a lot clearer now to me!

Structuring A Silver Plan

Since my recent post on 11th June regarding the potential conclusion of Silver, with bias to the upside, Silver has since rallied 1.5% and is very nicely above it's final 2, line-in-sand resistances of $19.2 and $18.7. My personal take (and mildly invested position) is that silver will take off from here.

However, if silver does take off, what is my plan? I actually don't really have a proper plan regarding my silver strategy, which is why I decided to write a short post to outline my actions in the event of certain outcomes in the market.

Although I invest in SGD, for the sake of simplicity and the KISS protocol, I shall just reference the USD prices.

Spot Reference: $19.50

So, what I'm doing here is that the further the prices in silver declines, the more massively I will build up my position.

From my understanding, cost to mine an ounce of silver is realistically between $15-20 per ounce, so I will really be accumulating at the frontlines. This also limits further downside purely due to simple supply/demand economics. After you take into account yearly inflation, this seems like a hole-in-one!

As of now, silver prices have hit a smaller resistance at $19.60. I expect a pullback, hopefully back down to the $19.20 levels, at which point I will fully load up on silver and increase my physical allocation to 5%. If it breaks lower, my plan above will be systematically executed.

Of course, I will be accumulating through BullionStar. It may take months or even years more for Silver to spike up and reach its potential, so I don't want to be leveraged and sitting in unrealized losses and paying on-going management and expense fees for that. I rather have physical allocation to me. I see this as an opportunity to cheaply increase my networth now by buying a totally undervalued asset that will be a major component of asset valuation in the future.

I have my plan for protecting my future purchasing power, irrespective of whatever foreign central banks are doing, irrespective of my faith of my country's currency. This is a matter of personal "kiasu" mentality. The only person you can count on to look out for yourself, is yourself.

Good luck out there guys, the next few months look set to be crazy!

Wednesday, June 11, 2014

Hi Ho Silver! BTFD!

After reading this post by the Short Side of Long, I am reinvigorated about my convictions regarding silver. Just look at the chart!

As you can see, whenever COT Silver position is very low (low number of long positions), there is usually a tendency to make an abrupt upside move, even if it is only for the short term. However, considering that this looks like a triple bottom consolidation, this might be the last time we see silver within this tight range!

A previous post showing silver's 3 year's rolling performance is also telling me that silver is due for better performance in the future to come!

Finally, Market Anthropology wrote a great post about silver as well. The key takeaway from me? There are 50% more shorts than there were last July when silver came down to this support line. How many more shorts will it take to break it down? And if it does break down, how much further can it drop? What happens when people starts to cover?

Those are all valid questions and concerns if you ask me.

But in any case, I will not be leveraging myself and crazy gambling on this like my previous trade on silver in early May (I am still holding onto my position!). Instead, this time I will be loading up on a nice hefty amount of physically backed Vault Gram Silvers on every slight pullback. I think it is prudent for me to drastically increase the amount of my wealth that is held in precious metals. My current precious metals holdings is a mere 0.63% of my net worth! I plan to slowly reach at least a minimum of 5% within a few weeks if it starts grinding higher. A better case scenario is if it totally crashes through the floor now and finally shake out all the weak hands. I will be loading the boat up in that scenario and probably aim to have more than 10% to even upwards of 20% of my wealth transferred over to precious metals (mainly Silver) before it recovers back to the $19 USD mark!

After watching the Hidden Secrets of Money series again and doing more precious metals research over the weekend, I have much stronger conviction of what is going to happen in the future. It could take months or years, but it doesn't matter. Silver is so beat down, I do find it very hard to see it considerably lower, I dare say $15 should hold its own.

If you are also thinking of investing (note: not speculating) on silver and other precious metals, you might be interested in my post regarding the cheapest silver dealers in Singapore or a more broader article about precious metals investing in Singapore.

Precious metals have been one of the trades that I see enormous risk-rewards, and I bet I will be knocking myself on the head for always being too afraid to accumulate more when it was so cheap.

Good luck out there guys.

Tuesday, June 10, 2014

Phillip Unit Trust Promotions! Bond Funds Galore!

I have to admit, for the past few months I have been so busy studying for my CFA, beginning to dabble in individual stock picking, that I have been neglecting my coverage of unit trusts!

Well, good news today for people that use unit trust as an investment vehicle! (Please don't troll me about the disadvantages of unit trusts. I am WELL AWARE. Unless of course, you have better alternatives for those specific asset classes.)

After hearing my Dad once again got conned at the bank (I shall not say which one, I'm sure they are all equally as bad), and bought a unit trust and paid 3% sales charge on it using his SRS money, I was furious. I have told him about cheaper alternatives, and I have told them to at least consult me first. Feeling very betrayed now. I went to the Phillip website to ensure that my assumptions were right. And they were: You can use your SRS money to purchase unit trusts through Phillip.

Anyway, besides the everyday low discounted rate of only 0.75% on most of their unit trusts, they are often running promotions of certain unit trusts and offer 0% sales charge. Yes, 0% sales charge, I'm not even kidding.

My favourite bond fund is currently in the promotion now, that is why I am so excited.

I have written about this UOB bond fund before. Basically to me, it is a very well-run, actively managed bond portfolio that focuses on total SGD returns, while playing it very risk adverse but targetting upsides. Nominal NAV returns of roughly 4% over the long term, with a negligible 3.4% maximum drawdown in 2011. This data is from 2001. Say whut.




As this is my favourite "safe" bond fund, I have quite a bit of my allocation in it. As long as I'm beating inflation with so little risk, I am pretty happy about it. When my super risk adverse friends ask me about what I would recommend to scared ponies like them, this is always what I recommend because I think I understand this unit trust quite well. I have even read through their annual report. Who else reads through unit trusts annual reports? Come on, raise your hands. None of you. I knew it.

On top that UOB bond fund, there are a few other unit trusts now on promotion that I think could be useful investment vehicles for many people.

Nikko AM Short Term Bond Fund - 0.3% expense ratio
JPM Global Corp Bond Fund - 0.8% expense ratio
JPM US Agg Bond Fund - 0.9% expense ratio

These are all 3 bond funds that I have owned or still currently hold, and I do think that they can be useful for a range of people looking for different attributes.

The Nikko AM STBF is basically the most humji unit trust ever. It's pretty much a fixed deposit or a money market fund, and that is how you should look at it, especially so when now there is no sales charge to purchase the fund. Expense ratio is very low, but returns are low as well, about 1.7% if I recall.

The JPM Global Corp Bond is a compelling case. At just 0.8%, it has one of the lowest expense ratios of all the unit trusts in Singapore, and I think it is quite a bargain, considering that it is a global corporate bond fund. The geographic diversification that you get, as well as exposure to this niche asset class. An extra cherry on the top is that it is monthly distributing, meaning that it is compounding monthly the current yield!

The JPM US Agg Bond fund is another curious case. It has a slightly higher expense ratio at 0.9%, but I must highlight, it's returns are hedged. Hedging is not cheap, but hedging is effective, especially against a single currency that has been steadily depreciating against the SGD. With high credit ratings, the spreads are also thinner, so hedging smooths out returns by removing FX volatility. Again, it is monthly distributing, and hence, monthly compounding as well. I do like it a lot!

I would suggest anyone looking for a notch above super safe investments to look at either the Nikko STBF or the UOB Bond fund. Of course, I would recommend the UOB Bond fund for a variety of reasons. I think the risks stepping up to the Nikko STBF are very similar to the UOB Bond fund, but the UOB Bond fund delivers better risk-adjusted returns.

Those who have always heard of the magical 60/40 portfolio touted by many, the JPM US Agg Bond fund is downright the most fantastic proxy of the bond 40% of those portfolio. I'm not a long run fan, but now it looks good.

I would recommend the JPM Global Corp Bond fund to anyone who would like to take a bit more risks in their bond portfolios and juice up their returns. More risks usually comes with more returns. However, diversification of geography, currency and issuers, all with investment grade status, I think the risks are quite muted and more towards systematic ones, such as a global credit crisis or interest rate spike.

If only my OCBC current account did not offer me 3.05% on my cash, I would definitely jump on the bandwagon and substantially increase my holdings in these bond funds!