AMA The Fifth Person

This AMA will be held on 21st February 2019. Ask your questions here!

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AMA The Fifth Person

(AMA ENDED) I've made 16 profitable stock investments in just 3 years! Ask Me Anything!

Victor will answer all the questions tagged to him on 21st February 2019! This is part of a series in a lead up to our Seedly PFF2019 happening in March this year as we feature some speakers.

Hello Seedly community!

I'm Victor, and I am an equity investor and co-founder of The Fifth Person. The Fifth Person believes in spreading a message — that sound investment knowledge, financial literacy and intelligent money habits can help millions of people around the world achieve financial security, freedom and lead better lives for themselves, their family and their loved ones. In 2018, The Fifth Person won best independent investment website in the ‘GoTo.com’ category at the inaugural SGX Orb Awards organised by the Singapore Exchange (SGX). The award recognises the independent investment-related website or financial blog that most empowers investors to make educated decisions with their money.

Other than investing, I represented Singapore in the 2008 TAFISA World Games in Busan, South Korea and was the 2008 IFMA World Muay Thai Championships bronze medalist, kicking some serious ass along the way. 

Feel free to ask me any questions related to:

  • How to invest?
  • Which countries to invest in?
  • How to look at investments?
  • Risk of investments?
  • Building a dividend portfolio?
  • Dividend investing

NOTE:The host may choose at his/her preference to not answer particular questions. The AMA is moderated by Kenneth from Seedly, so let’s keep the questions friendly and open!

  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    234 Answers, 337 Upvotes
    Answered 4w ago
    Always remember. In life, you are presented with tools. How you use them dictates the good and bad. Give a man a fish Instead of teaching them, you create dependency. Or you could give them 1 fish and ask them to create value from it (resell and repackage, make a cooked fish etc). Or even teach him to fish, if fishing is his intention. So for leverage, it's a tool that the wealthy commonly use. It's how the grow their wealth. However, its a difficult tool to use, because it magnifies whatever result that you get. E.g if you are a chef, you use the correct knife to cut the correct stuff. If you didn't take precaution, you cut your fingers (sometimes by accident). But with proper training and knowledge, the risk is reduced (having finger protection). So proper risk management (the skillset and knowledge) can help you to leverage (knife).
  • Asked by Anonymous

    Leonard Tan
    Leonard Tan

    Top Contributor (Feb)

    83 Answers, 118 Upvotes
    Answered 4w ago
    Bonds are much safer than stocks - largely due to bonds not being exposed to market risk- which is of course compensated with greater return. That being said there are still a multitude of risks bond investors are exposed to: Default risk - Non govt bonds hold small % of default risk no matter how insignificant it might be. Interest rate risk - This is the main risk! While bond interest payouts will not change , the real yield and prices of bonds will drop as interest rates(or inflation) increases. Call risk - Only applies to callable bonds. Bonds may be prematurely terminated. Reinvestment risk - Coupon value might not be able to be reinvested at same rate as original bond.
  • Asked by Anonymous

    Zann Chua
    Zann Chua

    Top Contributor (Feb)

    103 Answers, 143 Upvotes
    Answered 4w ago
    Hello! Some of the available places to invest are SSB, STI ETF and Robo Advisors SSB involves the invesment in the future of Singapore by loaning the government some money. The minimum sum to start is $500. The risk level of this is rather low. STI ETF would be recommended to those with low commitment investing and for those taking a passive way for long term investment. It involves the betting on an index fund which tracks the top 30 companies in Singapore. The minimum sum to start is $100. This carries a rather moderate risk. Robo Advisors is similar to the purchase of the STI ETF but it is for those who wish to diversify globally. There are currently 3 players offering this service, StashAway,Autowealth and Smartly. The minimum investment can go as low as $1. This carries a moderate risk. It would be good to research more and see which type of investment that you are most comfortable in.
  • Asked by Anonymous

    Zann Chua
    Zann Chua

    Top Contributor (Feb)

    103 Answers, 143 Upvotes
    Answered 4w ago
    Firstly, you can look at the fees charged by both. Traditional investment advisors typically charge anywhere from 1% to 3% of the value of your portfolio, while robo advisors charge less than 1%. You are essentially paying more for more personalised services. Next, if you are someone that likes personal contact with your investment, financial advisors would be a better choice. If you are contended with not having personal contact, Robo Advisors would be a better choice. If you are willing to let someone else do your investment, then a robo advisor would work . When you invest in a robo investing platform, the site will handle all of your investment activities for you.
  • Asked by Anonymous

    Richard Woon Tian Jun
    Richard Woon Tian Jun

    Top Contributor (Feb)

    93 Answers, 148 Upvotes
    Updated 2w ago
    Hello! Regarding this question, I definitely think that if you are a beginning investor, most professionals would advise you to invest in the S&P 500, and by proxy its ETF. This is because the S&P 500's composition is made up of the United State's 500 largest companies by market capitalization, which essentially provides fantastic diversification opportunities, and create stable market returns. More importantly is the ability of the S&P 500 to bounce back from recessions - thus far the S&P is on a long term uptrend, and after every recession we see that the S&P is able to bounce to twice, even thrice the previous high before the next business cycle hits. This general uptrend gives you great certainty that a "buy and hold" strategy will be able to generate positive total returns at the end of the day if you hold in for the long term. International stock markets may not have ability to do so, as evidence by Japan, whose stock price have yet to really break out from the real estate bubble highs of the 80s. Essentially, it is on the assumption that the market will continuously grow at a steady pace that buy and hold strategies, and thus passive trading strategies, can provide steady returns in the long run. The ETF that is recommended by Mr Victor Chng is an excellent example of a passive ETF that has low fund management costs, ensuring that you obtain the maximum returns.
  • Asked by Natalie Huang

    Victor Chng
    Victor Chng, Co-Founder at Fifth Person Pte Ltd
    104 Answers, 126 Upvotes
    Answered 4w ago
    Hi Natalie, I personally don;t buy unit trust so I may not the right person to answer this question. You may want to check out fundsupermart or Philip. I think they should be quite competitive in term of unit trust.
  • Asked by Anonymous

    Cheng You Yi
    Cheng You Yi, Financial Advisor/Remisier at Phillip Securities Pte Ltd
    7 Answers, 13 Upvotes
    Answered 3w ago
    You are right, the rate applies to interbank borrowing. But it does have spillover effects to the economy at large. If fed rate increases, it becomes more attractive for banks to lend/deposit with the central bank. Hence, lesser funds are available to loan out to public. To make it more attractive for banks to lend out to consumers/businesses, loan rates will have to increase. Another spillover for this is that for banks and companies to get more funds from the public, they will naturally increase interest rate/bond coupons rate. The opposite will occur when fed rate reduces; banks will choose to lend more funds to the public, lowering loan rates to attract more lenders and deposit rates since they do not need that much funds.
  • Asked by Anonymous

    Sandra Teo
    Sandra Teo

    Top Contributor (Feb)

    102 Answers, 156 Upvotes
    Answered on 17 Feb 2019
    The most basic method would be to look at the equity/stock ratio. In simple terms, the percentage of stock to bonds in the portfolio. This ratio implies that as equity (stock) exposure increases, risk increases. Another method would be to calculate the standard deviation . S.D. is a measure of volatility that is the spread of returns around the average return. The higher the standard devaiation, the greater the uncertainty in annual returns, translating to a higher risk. Stocks typically exhibit larger standard deviations than bonds. Apart from looking at the standard deviation, another measure of risk is the beta . Beta measures how sensitive an asset's return is to an index. This method is often used as it is easily quantifiable, allowing investors to ascribe a number to the market risk and compare assets.
  • Asked by Anonymous

    Leonard Tan
    Leonard Tan

    Top Contributor (Feb)

    83 Answers, 118 Upvotes
    Answered 4w ago
    In my opinion, investors should steer clear of India and look to many other countries for more stable bonds- given bond investors are generally risk averse and ultimately value stable secure returns. Looking beyond bad debt percentages , investors also need to watch out for currency rate risk . For benchmark comparison, Indian rupees have been steadily depreciating against the US dollar from 2007 highs of 0.026 USD per rupee to 0.014 USD today. Investors need to factor the downtrend of rupees to calculating their real expected bond yield, which would be significantly less attractive if the current trends prevail.
  • Asked by Anonymous

    Yixiong Chang
    Yixiong Chang
    205 Answers, 268 Upvotes
    Answered 4w ago
    In a simplistic explanation: Normal yield is 'rising curve' - rate is higher the longer the duration. Becos people expect higher rates the longer the lock-in duration. 'invert' just means that any of rates of the long term are lower than its shorter term. This is becos investors might expect recession or deflationary environment ahead. They would rather accept a lower rate (guaranteed) than risk losing in stocks or other vehicles. Therefore demand for the longer term bonds increases, pushing down yield.
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