Wednesday, June 6, 2018

A travel service that I enjoyed using the most

In this post I am going to talk about some non-investment topic, more of lifestyle. 

Many of us Singaporeans have enjoyed travelling, taking it as a form of escaping from the fast-paced and stressful lifestyle here.


Source: Today

While overseas, especially in less-developed countries in South-east Asia, many of us encountered this problem of transportation -- how do we get around comfortably and conveniently? 

Well I personally prefer to book a private transport in cities such as Cambodia, Phuket and Bali, as they do not offer good public transport. 

The benefits of having a chaffuered private transport:
  1. Very affordable prices with a private car and English-speaking driver:
    • It costs only about S$60 for a 9-hour trip in Bali, including pick-up from the airport. If there are 3 persons in the car, that's only $20/pax !
  2. 100% according to your own itinerary.
    • Stop as and when you like along the way to take photos, take a break, etc.
    • No need to stop by those annoying souvenir shops that tour guides often bring you to.
  1. Comfort: Very comfortable ride in an air-conditioned car
    • You can rest well to conserve energy while in the car!
  2. Safety: No need to drive the car yourself on the poorly maintained and narrow rural roads.
It is very convenient to book. You just input the dates and timings and search for a suitable driver. It is instant and no time-wasting phone calling needed.

You pay a small booking deposit (10% of the fee) to reserve the driver and pay the rest during the trip.

Currently they are running a promotion: Use 50OFF to get 50% off the booking deposit. 


Check out their website https://hop.asia and Facebook page https://www.facebook.com/hop.asia.travel/

Disclaimer: This article is solely based on my personal views.

Saturday, March 10, 2018

2018 New Buys

Below shows the trades I entered so far this year (as at Mar) which are only a subset of my portfolio.

Counter
 Entry Price  Units  Market Price   Capital invested excl fees    P/L   ROI 
Sembcorp Ind  $       3.170 1700  $         3.060  $        5,389.000  $       (187.00) -3.47%
Singtel  $       3.370 2300  $         3.350  $        7,751.000  $         (46.00) -0.59%
Venture [sold]  $     23.050 600  $       28.020  $      13,830.000  $      2,982.00 21.56%
A Reit  $       2.590 2800  $         2.610  $        7,252.000  $           56.00 0.77%
UOL  $       8.400 1100  $         8.700  $        9,240.000  $         330.00 3.57%
ST Eng  $       3.300 3300  $         3.390  $      10,890.000  $         297.00 2.73%
HMI  $       0.635 8800  $         0.635  $        5,588.000  $                -   0.00%
Thai Bev  $       0.910 11000  $         0.815  $      10,010.000  $    (1,045.00) -10.44%
Capitaland  $       3.590 1900  $         3.600  $        6,821.000  $           19.00 0.28%
Total capital invested  $        76,771.00
Total profit  $      2,406.00

During the correction in Feb I bought some counters at a discount to their prices before the correction. These are the counters I bought using CPF, SRS and cash.

In this uncertain climate, I am switching to an active short-term trading style and will take profits as soon as possible. I also invested more $ this year as I became more comfortable with deploying more $ after 2 years of intermittent dabbling in stocks. I am still holding on to a large amount of cash though, looking for bargains to buy. Seems like a lot of good stocks have rallied quite a bit, am waiting for them to cool down first.

Venture
Last year I traded Venture and netted a profit of $471 (200 units) which translates to ~11% ROI in several weeks.

Similar to last time, I was not greedy and wanted to take profits as soon as possible at $26 due to the volatile nature. However, it exceeded my expectation and shot up to $28 due to institutions' $$ buy-in which perhaps helped to boost the rally.

I was quite lucky able to exit at $28 before it dropped back to $27 and hovering there til now.
I actually bought at $23.05 right before the correction and it dropped to $21.xx at one point before rallying up to $28.20 after the correction. As a counter that has shot up so quickly since last year (literally woken from hibernation), I was afraid it may fall a lot during the correction and never recover.

I think it will drop back to $26 or even $25 and I'm waiting for a good reentrance.



Thai Bev
This is a disappointment, it dropped sharply by $0.05 right after I bought it due to an institution dumping the stocks because of the dismal earning result. The sharp drop triggered others to follow suit. I think everyone was waiting for consumption to resume and for the company to post higher or normal earnings. With the high acquisition costs and the dismal consumption, the sharp drop in earnings just make it look very bad.

However, I think there is still hope as the acquisitions should bring long-term market share and hence greater earnings in the future. Some analysts including OCBC even maintained a BUY rating, albeit with a lowered target price than before.


UOL
This had quite a strong uptrend, I managed to enter when it dipped down to $8.4 from $8.6. I was waiting patiently for the fish to bite the bait. Hopefully it can rise by 10-15% after which I will take profit and rotate to another stock.


DBS & OCBC
I bought these last year and they rallied up as the dark period for banks is over. I think my ROI is around 50% since I entered. I missed the chance to sell at $29.5 for DBS before it dropped to $28.xx. I think it will fall further to perhaps $27 before rallying up again. Perhaps I can average down.



Thursday, March 1, 2018

Best brokers to buy/sell stocks

DBS Vicker Cash Upfront



Pros:

  1. Stocks you buy will be credited to the CDP by T+3. Currently there is a promo as shown until the end of June 2018.
Cons:
  1. Inconvenient: Have to login through Internet Banking website. Authenticate 2FA twice.
  2. Order type: No stop loss.

FSM One

They have revamped their offering and they allow selling of shares from CDP for 0.12% only.

Buying of shares is currently only with cash and will place shares under their custody. CPF IS is not supported. 

I clarified the above with FSM's customer support.

Buying of stocks using CPF IS is still expensive at 0.28% (DBS) or 0.275% (OCBC).

Conclusion

Buy using Vicker and sell using FSM! Beat Stan Chart's 0.20% hands down with CDP protection! However, Stan chart offers stop loss order type which Vickers and FSM One do not.



Saturday, February 24, 2018

Jan Expenses

I'm always too lazy to tabulate my expenses, but this time round I had some time to do it.




Food 180
Meals at home (est.) 200
Entertainment 14.5
Transport 50.25
Gadgets 1.15
Housing 69.5
Property tax (est.) 10
Total 525.4




I didn;t include insurance costs this time. Anyway for non-saving insurance, my cash expenses are only < $80 for AVIVA term and PruShield + Extra -- more than enough to cover any terminal illness. 

Food & Groceries
This is the amount spent on meals outside on working and non-working days, including restaurants. I hardly eat at restaurants nowadays, so I just go have a drink and chill. I sometimes go coffeeshops to chill as well -- get a cheap beer or tea like a true "uncle". I hate noisy places so I don't go to crowded bars, clubs, etc. You can hardly talk over there. I enjoy quality conversations as a form of bonding rather than superficial enjoyment.

I regularly buy groceries such as milk and snacks. I always buy soya milk (with the 2 cartons for $3.xx promo).

Meals at home
This is just pure estimation. My mother does all the cooking and she often cooks salmon and other good stuff, so I put it at a higher estimate. Sometimes she gets salmon fish head for free or at a very low price and it's yummy when pan-fried!

I don't pay her directly for this expense but it is paid as the monthly allowance.


Entertainment
This is for one movie on Tues at GV for 2 pax. $6.50/pax + $1.50 for booking fee.

Transport
One ez-link topup with a convenience fee of $0.25. This happens once every few months as I sometimes take bus from my workplace to other places for lunch.

Gadgets
One 2m iPhone charging cable bought from Qoo10. Yes only $1.xx including delivery by mail. Better than Challenger which sells for $5. The factory price is probably only $0.10 haha .. imagine the margin!

Housing & Property tax
Help my mum pay for the town council fee and property tax as part of the allowance.




Car-related expenses


Car 432.44
Parking 86.88
Cash Card 20
Parking (work) 110
total 649.32

These include petrol, car washes, regular polishing package (instalment) and insurance. The insurance is on the high side as my license is quite new.
The parking is for outdoor season parking at home and at work as well as adhoc parking paid using the Parking@SG app.
Cash card cost is for adhoc parking outside (estimated).


Looking at my expenses, it is quite hard to reduce further. Food is easily the largest category (non-car) but it is hard to reduce without resorting to eating economical rice or sandwich every day (although I do eat them quite often).



When I move out and have my own housing, the expenses will go up due to utilities. I intend to use fans to save $.


Saturday, February 17, 2018

Why I do not buy festive goodies

I have become more and more frugal over the years since the days of splurging on excesses that I did not really need. In fact on hindsight I regretted my financial choices and wondered what's the point of spending money on moments that do not last. For example, I had once splurged $80 on a crab buffet -- it was only enjoyable at that moment. I'm pretty sure I couldn't and didn't consume $80 worth of crabs and hence I would be better off achieving the same economic utility or satisfaction somewhere else with a much smaller budget. Satisfaction only increases marginally on increasing expenditure beyond a certain point, so why not save most of the money and spend somewhere else?

Sometimes I do spend slightly more depending on the situation, for e.g., outing with strangers and "important people", as I do not want to convey an impression of stinginess. But when I'm with familiar friends and family, I always go for the cheapest. I find that most often, I can go with the cheapest options without compromising much on quality, if at all.



It's the same with over-priced festive goodies. It's Chinese New Year again and I did not buy a single goodie although my family did. I wouldn't buy even if they didn't. Festive goodies used to be my favorites but not anymore as I realised I could derive the same satisfaction with a smaller budget. As I have reached a third of my expected lifespan, I need to start taking care of my health by avoiding such foods.

I also did not celebrate Valentines' Day as I think it is really just another ordinary day. If you wish, any day could be Valentines' Day. It seems to me it is a trap designed to rip off consumers with over-priced flowers and goodies.

How to save on income taxes

My philosophy of managing wealth is to maximise the income and investment returns while aggressively cutting costs. Always go for the cheapest while not compromising on quality if possible. In this case, taxes contribute to nation building which has little direct visible impact on myself.


Parent Relief

The most common I can think of is the Parent Relief since many of us still stay with parents here in Singapore. Yes as long as your parents are no longer working (< $4,000 annual income) and staying with you, you can claim relief for it. See the page for the exact criteria. You'd have to manually submit this claim in your annual income assessment as the government won't know automatically you fulfill the criteria or not (although technically they have the means to do it).

I realised it only after a few years of working which fortunately wasn't too late as I was able to retro-claim the relief up to a few years back (i.e. IRAS giving you back your $$, rare isn't it?)


SRS Relief

You can contribute to SRS and do investment for the long-term while saving taxes. SRS contribution cannot be backdated, i.e., contribute beyond the limit now and claim back the relief retroactively. The max contribution for Singaporean Citizens and PR is $15,300.

CPF Cash Top up Relief

Instead of giving allowance to your parents as cash, you can consider topping up the SA (below 55 yrs old) or RA (above 55 yrs old). You can get tax relief for up to $7,000 contributed.  There is a way to do this sustainably I can think of but I shan't share it here.

Friday, February 16, 2018

Why I am forced to buy Unit Trusts

As a Singaporean, a large part of our cash (about 37%) from income will be locked away in the CPF.
Most of the money in the Ordinary Account (OA) will be earning a guaranteed and meagre 2.5% interest rate which barely beats inflation. The first $60,000 in aggregate across your CPF sub accounts also earns an extra 1%.

The first $20,000 in your OA and $40,000 in your Special Account (SA) are NOT investible. (Source: https://www.cpf.gov.sg/Members/Schemes/schemes/optimising-my-cpf/cpf-investment-schemes )

According to https://www.cpf.gov.sg/Assets/members/Documents/CPFISInvestmentProducts.pdf , CPF-OA money can be used to invest in :
  1. Insurance (e.g. ILPs, Annuities, Endowments)
  2. Government bonds and T-bills
  3. Fixed deposits 
    • I can't be bothered to find out which banks offer this
  4. "Safe" ETFs with limited choices
    • Straits Times Index (SPDR and Nikko)
    • SPDR Gold ETF (GLD) 
    • ABF Singapore Bond Fund (A35)
  5. Stocks and other ETFs 
    • listed in SGX mainboard and traded in SGD only
  6. Unit Trusts with limited choices
  7. HDB flat 
  8. ...and others
and CPF-SA:

  1. Insurance (e.g. ILPs, Annuities, Endowments)
  2. Government bonds and T-bills
  3. Unit trusts with even more limited choices
At one glance, the CPF Investment Scheme (CPFIS) seems to be designed to lock our money away in the local markets.

100% of the investible amount can be used for Unit Trusts and the 4 "safe" ETFs.  However, only 35% of the investible amount can be used for stocks and other ETFs.

I think it is very weird that high-risk Unit Trusts are considered "safe" (as 100% can be invested in them), when other local stocks are not. Perhaps they think unit trusts are actively managed by professionals hence "safe" and yet often they cannot beat the benchmark despite being paid hefty fees. 

Of course, to beat the 2.5%, I would like to invest in instruments with the highest potential gains. Only equities can yield the highest returns (which come along with the highest risk as well).

We all know about the high management fees of Unit Trusts. In fact, on average, the total expense ratio for many high-performing Unit Trusts is about 1.7% (based on my observation from Fundsupermart's fund selector) which eats into your returns.

Even though there are Unit Trusts with high returns of at least 10% per annum,  I want to avoid them due to the high expense ratio.

Unfortunately, the 4 ETFs are not exactly good alternatives since they will probably yield less returns than Unit Trusts even after taking into account the high expenses, based on the ETFs' historical performance.

In summary, constrained by CPF policies and the lack of better alternatives, I have to reluctantly put 65% of the investible amount in Unit Trusts.

I also invest in Unit Trusts using cash ($300 / month) via Maybank as I want to get the 3% p.a. interest rate under its SaveUp programme. Again, I am compelled to do so as I do not have any better way to fulfill the SaveUp programme criteria. Much of the criteria involve taking up loans (i.e. spending more money rather than saving)

How I choose the Unit Trusts to invest in?

Due to their high-cost nature, I'd want to buy those with the highest potential returns (often comes with the highest risk). I use Fundsupermart's fund selector (for free even though I am not its customer), to find funds with the following in mind: 
  1. Consistency: check the 3-yr, 5-yr and 10-yr returns for consistency. I generally ignore funds with very high 1 or 3-yr returns but low 10-yr return. 
  2. Underlying portfolio: look at the equity holdings to ensure the fund is investing in trustworthy and high-growth companies preferably ones which control a large market share of their respective industries.
    • avoid those so-called "high-yield bonds" as those are usually non-investment-grade bonds. I think only our CPF-SA is an exception.
  3. Fees: check that there is no redemption charge so you can sell without any sale charge. 
    • There is a risk that the redemption charge may change anytime at the fund manager's discretion.
Many people lost money because they entered at the wrong time, chose the wrong funds or their so-called advisors recommended the wrong funds (usually to line their pockets).

I wonder why there are people buying crappy funds that have been going sideways for years. Such funds still exist today probably because many people are gullible, not financial savvy, and/or they lack the courage to sell to realise their losses. 

Regular Savings Plan?

Many platforms offer some form of regular investment plan that I have since terminated and will avoid for now as I prefer to have more control over the price to buy and sell at (not 100% control though).

Downside

The biggest disadvantages of unit trusts are they don't offer limit orders and the settlement is extremely slow compared to instantaneous buying and selling over exchanges.

Avoiding more fees

I use POEMS as there is no sale charge, no platform fee and no switching cost. It is also a CPFIS administrator meaning you won't incur the $2 / counter / quarter fee from the CPFIS agent bank. FSMOne is also a good alternative with a better user interface and same offering as POEMS.

CPF-SA

I do not invest the SA money as I consider it a 30-year almost-risk-free high-yield "bond". The only risk comes from any CPF policy changes and economy instability.

Anyway there's nothing good to invest in. The only way to beat a guaranteed 4% is to buy unit trusts as CPF-SA cannot be used for stocks and ETFs. There is a limited set of unit trusts for CPF-SA that is different from that for CPF-OA. In this set, there are very few unit trusts with consistent performance over 4%. The best performing, First State Bridge, only had a 5.4% p.a. ROI for the past 10 years. I think the risk-reward ratio is not worth it.



A travel service that I enjoyed using the most

In this post I am going to talk about some non-investment topic, more of lifestyle.  Many of us Singaporeans have enjoyed travelling, t...