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Coffee Meets Investing

Held on 7 July 2018, Saturday

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Coffee Meets Investing

Investments

Self-directed means trade executions are done online, either through a desktop/web-based platform or a mobile app. Broker-assisted refers to the more traditional way of calling your broker/remisier to place the order/trade for you (and naturally attracts higher commission since the middle-man needs to be paid too). It is pretty common these days to see more self-directed trading, however in cases of emergency, you can usually still call their hotline for assistance at no extra charges for most.

Investments

General

Coffee Meets Investing

Randall Tan
Randall Tan
Level 4. Prodigy
Answered on 13 Jul 2018
The outcome of investing is to have a better retirement in the future. Think of retirement as a Pyramid - you will need a solid base to work on. My solid base consists of CPF, followed by global index funds (IWDA) and local index funds (STI ETF) - 110 minus your age equals the percentage to be invested in stocks and put the rest in bonds (CPF) - 50-50 split between local and global stocks Why CPF? Contribution to CPF RSTU and MA helps to reduce income tax . https://www.areyouready.sg/YourInfoHub/Pages/News-Voluntary-Contribution-vs.-Retirement-Sum-Topping-Up-Which-suits-you-better.aspx Meeting FRS early means that bulk of your CPF funds during retirement will be from the government. (Rule of 72, compounding interests) Eventually you will meet FRS and MA capped so why not take this chance to reduce your income tax! Why gobal index fund IWDA? - IWDA is an index fund that tracks MSCI World and it is based in London Stocks Exchange. - No tax withholding because of how the fund is reinvested into the fund. https://www.bogleheads.org/forum/viewtopic.php?t=221000 & https://www.ishares.com/lu/individual/en/products/251882/ishares-msci-world-ucits-etf-acc-fund?siteEntryPassthrough=true&locale=enLU&userType=individual Why local index fund STI ETF? - You do not want to expose yourself to too much currency risk

DrWealth

Investments

Coffee Meets Investing

Chris Chin
Chris Chin
Level 4. Prodigy
Answered on 11 Mar 2019
Really depends on your position size or investment into that particular underlying stock and your investment target (short term, medium term or long term). Buy below Valuation. Can set a target at 3 years and sell as planned,regardless of profit or loss. Valuation details - please attend the paid class to find out. Otherwise, why would my friends pay to find out when they can get it free from seedly... 😂🤣

Robo-Advisors

Investments

Autowealth

Stashaway

Coffee Meets Investing

Amanda Ong
Amanda Ong
Level 3. Wonderkid
Updated on 07 Jun 2019
Hi! Just to share, we have just reimbursed the witholding tax refund last week to all clients who are entitled to it for the FY2017. If you received a reimbursement, you would have received an email from us informing you of this :)

Coffee Meets Investing

ETF

Stocks

Lok Yang Teng
Lok Yang Teng
Level 6. Master
Answered on 30 Nov 2018
QDII scheme was created by China to allow domestic investors to invest overseas. So you'll have to be a Chinese national to invest through QDII.

ETF

Robo-Advisors

Investments

Autowealth

Coffee Meets Investing

Tai Zhi
Tai Zhi
Level 4. Prodigy
Answered on 07 Jul 2018
You may wish to note that "period-based" rebalancing is inferior and does not achieve the two main objectives of portfolio rebalancing, namely (i) risk management and (ii) the ability to lock in extra value-add returns. This is well-documented in David Swensen's book “Pioneering Portfolio Management”. FYI, David Swensen was the first institutional investor in the world to adopt and formalise portfolio rebalancing as an investment technique. David Swensen is highly regarded in finance and investments globally. Anyway, here's why "period-based" portfolio rebalancing is inferior and does not achieve the two main objectives. Imagine an investor who experiences the trade tension in 1Q 2018 and subsequently in Jun 2018 markets fully recovered back to where it was before the market correction. (i) Risk management - the portfolio will be underweighted in Stocks and overweighted in Govt Bonds during the heat of the market correction in Feb 2018. This means the risk level of the portfolio will no longer be consistent with what the investor originally wanted and this inconsistent risk situation may well persist for some time (it did persisted till Mar 2018). (ii) Ability to lock in extra value-add returns - An investor who adopt "period-based" rebalancing would have missed out the interim opportunity to sell Govt Bonds when it has appreciated in value and missed out the interim opportunity to buy Stocks when it has declined in value in Feb 2018 at the heat of the correction. Similarly, the same investor who would only spend 5 mins on 30 June 2018 would subsequently missed the opportunity to take profit when markets rebound and Stocks appreciate back to where it was. In "threshold-based" rebalancing, which AutoWealth adopts, portfolios are analysed and monitored daily to identify material deviations from the original intended portfolio allocation weights. Whenever there is a material deviation, the portfolio is automatically rebalanced. This means the portfolio risk is managed and consistent with what the investor originally wanted. This also means AutoWealth can capitalise on excessive day-to-day, short-term market volatility to lock in extra value-add returns for clients. Statistically, portfolio rebalancing achieves 0.5% to 0.7% extra value-add returns on average over the long term, depending on which portfolio risk level the investor selects. We note that the 0.5% to 0.7% extra value-add returns adequately covers the fees we charge our clients. Therefore, it is much more cost-efficient to invest through AutoWealth as compared to DIY.

Robo-Advisors

Investments

Autowealth

Coffee Meets Investing

Tai Zhi
Tai Zhi
Level 4. Prodigy
Answered on 10 Jul 2018
FX Risks At present moment, FX hedging is very costly especially for portfolios below S$1m in size. We do not foresee FX hedging cost reducing to a cost-efficient level over the next few years. As and when hedging cost significantly reduces to a cost-efficient level, we will be more than happy to offer FX hedging option to our clients. You may also note that USD and SGD are major currencies and they tend to be relatively more stable compared to other emerging markets currencies. Therefore, while FX risk is material, FX risk is not significant. This is especially so for investors who have a medium to long term investment horizon. For example, the AutoWealth Balanced Portfolio (60% stocks, 40% govt bonds) achieved 15.7% returns net of fees on a USD basis over the last 26 months since inception. The same portfolio achieved 16.4% net of fees on a SGD basis over the same period. Therefore, the difference of 0.7% due to FX impact is relatively small. Tax Implications The U.S. imposes a withholding tax on dividend payments made out of U.S. listed securities. These are automatically deducted at source before the net dividends are credited into the client's custody account in his/her legal name. Despite a relatively higher withholding tax, ETFs listed in the U.S. are still preferred over ETFs listed in other countries like the U.K. after taking into consideration factors including liquidity, bid-ask spread, expense ratio, ETF fund size amongst other factors.

Robo-Advisors

Investments

Autowealth

Coffee Meets Investing

Tai Zhi
Tai Zhi
Level 4. Prodigy
Answered on 07 Jul 2018
Unlike other robo-advisors with complex strategies and algorithms, AutoWealth adopts a simple, easy-to-understand market-tracking investment strategy. An investor can expect his/her investment returns to approximate the general market returns of world stocks and govt bonds through a market-tracking strategy. The risk of underperformance is strongly mitigated. However, a market-tracking strategy does not necessarily means that investors will certainly not make a loss all the time. At times when general markets are declining, an investor would expect his/her portfolio to decline about the same extent. However, do note that at some point portfolio rebalancing may be triggered to sell govt bonds (take profit on safe haven asset in a downturn) and buy stocks (buy risk assets when its cheap). Eventually when general markets rebound, the rebalanced AutoWealth portfolio will now generate higher returns as compared to general markets. Standard & Poors Dow Jones maintain an extensive research on active vs passive (ie market-tracking) for more than a decade now. The results have been consistent over the years. Due to its comprehensiveness, its extensive coverage and consistency, this research has now became the authoritative conclusion between active vs passive. You may read the research here: https://us.spindices.com/documents/spiva/spiva-us-year-end-2017.pdf

Robo-Advisors

Autowealth

Investments

Coffee Meets Investing

Tai Zhi
Tai Zhi
Level 4. Prodigy
Answered on 10 Jul 2018
Unfortunately, AutoWealth only accept cash investments at this moment.

Coffee Meets Investing

Investments

Loh Tat Tian
Loh Tat Tian
Level 6. Master
Answered on 24 Nov 2018
40% stocks. What kind of stocks? The economy is intertwined. There are economic cycle for different phase of development or seasonal cycles (like O&G, shipbuilding, consumer goods etc) which can fall between defensive or growth (and higher risk). REITS are just 1 segment where you are like a landlord. Rising interest rates can be a concern for higher gearing REITS. Also rights issues, etc. REITS also have sectors from hospitality, industrial, commercial, residential. Unit trust and Funds are similar like stocks but doing a basket, and could be region/country specific. You need to read the prospectus and what sectors they are investing in. Too many questions, so sorry if I can't give you an answer.
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