Asked on 06 Feb 2020
What's the belief that underlies your investing strategy? Mine's in the answers below!
My private investing philosophy.
DISCLAIMER: Complete losses possible with any strategy. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this piece constitutes a solicitation, recommendation, endorsement, or offer by me.
-to be completely free of debt
-to have emergency funds available anytime for several months (6-12 mo)
-to NEVER invest into the following (rationale: too risky and/or fees too high and/or too inefficient):
Unit Trusts (mutual funds), single stocks (though most of us hold some), options, bonds, structured products/derivatives, CFDs (contracts for difference), ETNs, commodities, currencies, cryptocurrencies, actively managed or „smart“ ETFs, leveraged/inverse ETFs
-when investing seriously the invested funds should be left untouched for at least 5-10 years
… not much remains:
-priority: passive (in the good sense!) stock index ETFs & REIT ETFs
-physical gold (5-10% of assets, current times substitute for bonds as a means for stability, if any)
-property (via REIT ETFs or even property of one's own)
-to spend money for things one likes, though one better live healthy and eco-/animal-friendly. The material world rarely gives longstanding deep satisfaction.
-for ETFs: safe & cheap online broker (TD Ameritrade, Charles Schwab, POEMS, Saxo)
notice: U.S. based brokers withold 15% + 15% witholding taxes from dividends, of those only 1 x 15% can be avoided to be subtracted by filling in form W-8 BEN every 3 years.
-for physical gold: safe & cheap dealer (not a bank, they charge high fees up to 2%)
ETFs general selection criteria:
-only passive stock index ETFs or REIT ETFs (no bond ETFs etc.)
(For the stock market there is good evidence by studies, that active managers cannot beat the market robustly over longer periods.)
-assets under management (AUM) should be high (more than 100 mio USD)
-total expense ratio (TER = annual fees) should be lowest possible (ideally less than 0.30%)
-the indexes should be replicated physically, not by SWAPs
-the ETF should ideally not lend stocks to other parties
-proven track record (excellent past longterm performance, ideally for already 5-10 years)
-to diversify (countries, asset classes, sectors) to mitigate risks (most ETFs are already well diversified), don't succumb to home bias.
Chart: 10 year performance singaporean STI ETF (ES3) versus U.S. S&P 500 index
-to not buy&sell, but buy&hold ultra-longterm instead
-to not (!) rebalance, letting winners run, most of the time
-to not panic when the markets are going down, the crashes will come, be patient then and don't sell, after few years the markets in the past recovered completely most of the time (see ultra-longterm chart of SP500 with big crashes visible ... but negligible for the longterm investor)
#1 single ETF strategy
MSCI World (VT)
still tilted much towards U.S. companies
#2 single ETF strategy with more upside potential and possibly more risk
SP500 (VOO, IVV)
#3 ‘balanced‘ global ETF strategy
50% SP500 (VOO, IVV)
50% MSCI World ex-USA (VEU, VXUS, IXUS)
#4 focused ‘leader countries‘ ETF strategy
40% SP500 (VOO, IVV)
20% China (PGJ, GXC)
10% S-REIT ETFs Singapore (Lion-Phillip S-REIT)
10% Switzerland (DBXS, EWL)
10% Sweden (OMXS, EWD)
5% Germany (OXDA/DBXD, EWG)
5% Japan (EWJ, EUNN/IJPA/SJPA)
#5 interesting ETFs with higher risk but past good performance (sector funds must be classified as risky because of less diversification and high volatility)
QQQ (not pure tech ETF)
ARKG (caveat: risky & actively managed)
Exceptional Nordic Technology focus Unit Trust (no ETF, actively managed, risky, not cheap):
Core Ny Teknik (Sweden) https://www.youtube.com/watch?v=1C7DyWdky_Y
Disclaimer: Think for Yourself.
All private opinions, total losses possible with any strategy.
DISCLAIMER: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this piece constitutes a solicitation, recommendation, endorsement, or offer by me.
Walter Benjamin: "... The storm irresistibly propels him into the future to which his back is turned, while the pile of debris before him grows skyward. This storm is what we call progress."
14 Feb 2020
14 Feb 2020
There are some great answers here, so I'll just link to this:
compound returns to nearly 62,000 global common stocks during the 1990 to 2018 period, documenting that the majority, 56% of US stocks and 61% of non-US stocks, under perform one-month US Treasury bills over the full sample. Focusing on aggregate shareholder wealth creation measured in US dollars, we find that the top-performing 1.3% of firms account for the $US 44.7 trillion in global stock market wealth creation from 1990 to 2018. Outside the US, less than one percent of firms account for the $US 16.0 trillion in net wealth creation.
Almost all the gains come from about 1.3% of stocks, so be careful what strategy you choose!
27 Feb 2020
Personally, my investment strategy will be to invest in Singapore blue chips companies who pays dividends consistently every year. I do not like to invest in ETFs as i do not have control over my portfolio. All the dividends gained will be reinvested in counters to compound over the years.
25 Feb 2020
Invest in yourself (can invest by doing better in your career, can invest on knowledge for investing asset.
use the cash to invest in something you believe (for non professional, investment is only a part of your life. Don't let it rule your life. ) Such as high yield and stable REIT. Blue chip stocks.
use other asset to invest, such as your CPF and house. I am comfortable to top up CPF for minimum 4% annual interest. For housing, invest with your limit, my belief is that housing is always for use first not really for speculation. But as house is quite a sizeable amount to spend / invest. So choose a house that is comfortable and mitigate the inflation of CPI.
Step 1: Build Cashflow
Step 2: Invest Cashflow into Cashflow Generating Assets
Step 3: Protect and Insure Assets
Step 4 : Repeat Step 1-3
A tree is an asset, the root's of the tree will determine whether the tree will survive. And I see the tree's roots as cashflow, which is the fundamental basis for a strong financial philosphy.
Click here to find out more about me!
Dividend Stocks and Dividend growth stocks
One for income and another for income and capital appreciation.
I make videos about interesting stuff at youtube here
11 Feb 2020