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Harvey Tan

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Harvey Tan

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Harvey Tan

58Upvotes
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Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 2d ago
What is your investment objective? The investment objective of the said Phillip ETF and the STI ETF is quite different. Phillip, as the name implies, is for income and STI ETF is for broad market exposure with no style biases.

Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 2d ago
I have laid out a couple of reasons below: - When 3140.HK is trading in the Asian hours, it will not be trading close to its NAV since the underlying securities are all US-listed stocks, ie when 3140.HK is trading, the US market for US stocks like Apple, Google is closed. - Not being able to trade close to NAV means that there will premium/discount to the NAV. If there is a premium, it means that you have to pay more. This will increase your trading cost. - Since it is not as popular, the trading volume will not be as high as the ones traded in the US. As a result, it will increase the bid-ask spread, which once again, increases your trading cost. - 3140.HK cost more to invest than VOO (0.18% vs 0.03%). If you are cost-conscious which you should be for broad-market ETF, then going with VOO makes more sense. But then again, please note that US-domiciled ETF is subjected to a 30% dividend tax withholding. Look to Irish-domiciled ETF which has 15% dividend tax withholding. Hope this helps. On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com

Investment Linked Policies (ILP)

Insurance

Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 3d ago
Some financial consultants like to assert that there are different types of ILPs. Some are more “investment-oriented” and some are not. I agree. However, at the end of the day, ILPs is manure as an investment product. And as the saying goes, you can put a flower on manure, it is still a manure .

Investments

Stocks Discussion

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 2w ago
You are not going to make any serious passive income with 1000 dollars. However, you should still get started with investing. Reason being once you have 'skin in the game', it would put in the right mindset. You can start to train yourself to think like an investor. More importantly, when there is a market downturn, you see how you yourself would react and adjust accordingly. You can't exactly do the above if you do not get started. Consider robo advisory. It is 'good' for beginners since you would require more of a hands-on approach. On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com/

Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 2w ago
The funds that you have chosen are good choices for broad market exposure and for long term holdings. They are efficient and very cheap. However note that these funds, VTI and SPY, are US domiciled ETFs. In other words, there will be a 30% dividend tax withholding. This means that for every one dollar of gross dividend that the fund pays out, you will only receive 70 cents. You might want consider Irish domiciled ETF, as the dividend tax withholding is only 15%. I believe there is a S&P 500 ETF listed on the London Stock Exchange. On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com/

Stocks Discussion

Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Updated 3w ago
For pure-play on the China market, you can consider 2801.HK listed on the Hong Kong Stock Exchange. The TER is reasonable considering you are investing in the China market. The fund size is pretty big so fund closure risk is pretty low. https://www.blackrock.com/hk/en/products/251576/ishares-msci-china-index-etf Full disclosure: I have positions in 2801.HK On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com

Investments

Stocks Discussion

Harvey Tan
Harvey Tan

()

Level 5. Genius
Updated 3w ago
In short, possible but unlikely. Market bubbles often come from speculation and guess who loves to speculate in the market? Active managers. The role of active managers/funds is to take active bets in the market on which securities will outperform and/or underperform the market. That form the basis of an active fund’s composition, i.e. on which securities to overweight and underweight. However, I am willing to entertain the idea that in the event of a 100% market share of passive instrument and every market participants is blindly investing into the market, it may cause a market bubble. Having said that, active managers do have a place in the market, though their market shares are rapidly declining. Rightfully so, I guess. Considering that passive instruments own about 45% of the US market, it is possible that they will distort market behaviour if they continue to gain market share. For example, it will be more difficult to create a market for IPOs. If the market contains 100% passive instruments and/or managers, there will be no way to market IPOs, i.e. IPO cannot take place. https://www.cnbc.com/2019/03/19/passive-investing-now-controls-nearly-half-the-us-stock-market.html Hariz pointed out that outflows from passive instruments will be massive. Imagine what the outflows from active funds will be in a market downturn? Even bigger? Entirely possible. Education and mentality play a big part. Whether an investor is investing in active or passive instruments, they are susceptible to the same human emotions/biasness; fear, greed, euphoria, etc. Active investors are not special human beings. If your investment horizon is more than 15-20 years, you should be praying for a market downturn as I do. A disciplined investor, regardless of active or passive, always take opportunities in the market when they arise. As always, do your own due diligence. On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com

Investments

Harvey Tan
Harvey Tan

()

Level 5. Genius
Updated 3w ago
It depends on your investment portfolio. If your underlying investments are based in foreign currencies, then it may make sense to hold multiple currencies. Most average retail investors at most would have 2 or 3 (maximum I feel) foreign currencies to hold for their investments, if they DIY-ing their portfolio. Alternatively, you may be a globe trotter. Holding multiple currencies of your most frequent cities make sense as well. If you are in retirement and you are retiring in Singapore, then holding just SGD is fine. Do not really see the possibility of SGD collapsing. Touchwood. On a side note, I am starting a financial blog. Do check it out, www.investment-blueprint.com

Savings

Singapore Saving Bonds (SSB)

Investments

Bank Account

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 3w ago
Banks can continue to give attractive rates on the conditions that: 1. They are able to loan out excess liquidity at a much higher rate than what it cost. The net interest margin – NIM (the differential between the lending rate and the borrowing/cost rate). The borrowing rate is what DBS pays to the depositors and lending rate is the rate that DBS earns by loaning out the excess liquidity to corporations, home mortgages, etc. In fact, the NIM in 2019 for DBS is actually increasing. Check out the article linked below. 2. The economy does not go into a recession (point 1 is sort of dependent on this point). In a market downturn, businesses tend to refrain from borrowing from the banks for their expansion and in turn, banks would not be able to loan out its excess liquidity as before. This will impact their earnings and therefore impact the borrowing rate to depositors. https://shentonwire.net/2019/08/01/ocbc-and-uob-can-singapore-banks-pull-a-net-interest-margin-trifecta/ As to your concern, if DBS will alter its rate, I don’t think it is something you should be overly worried about since it is outside of your control. Enjoy while it lasts. That said, if you want to hedge your interest rate risk, you can always go with a fixed deposit to lock in that interest rate. As always, do your own due diligence. On a side note, I am starting a financial blog. Do check it out. www.investment-blueprint.com

Investments

Stocks Discussion

Harvey Tan
Harvey Tan

()

Level 5. Genius
Answered 4w ago
It depends on how much of a hands-on/hands-off approach you are expecting towards investing. If you require more of a hands-off approach, going with OCBC is fine. Though they charge 0.88% on top of the trading fees. And I doubt that the 0.88% includes the cost of investment of the underlying funds (I could be wrong on this). The total true cost of investment should come at around 1% pa which is quite significant (at least to me). If you want a more cost-effective approach towards investing and generally to achieve that, it would require you to be more hands-on. Going with Saxo would be more ideal since the custodian fee is only 0.12%. However, note that given your relatively small account, in order to achieve the same level of diversification with the OCBC portfolio, you would be buying into at least 5-6 funds individually which should incur quite a bit of transaction cost. Not sure what is the transaction cost per trade for Saxo but if it is anything more than SGD10 per trade, I believe you are better off sticking with OCBC. Alternatively, you can look into Interactive Broker (IB) which offers very competitive commission. The catch is they will charge you USD10 dollars on a monthly basis if your account size is less than USD100K. If you have less than 100K to invest, IB is still a very compelling option because when you invest in other markets (US, UK), you would require foreign currency and the spread for FX conversion is near the spot which can help you to save quite a bit (few hundred dollars for me). Hope this helps. On a side note, I am starting a financial blog. Do check it out. https://investment-blueprint.com
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