Tag: t_del_@

[13]saving1%sales charge ^ buying right fund at right time

Posted on by tiger40490

Sales charge is #1 factor for frequent in-and-out trades. Sales charge is plain old transaction cost, just like VAT or electricity cost. The more often you buy/sell, the higher. High sales charge encourages buy-and-hold. The extreme case was my Commodities day-trading in 1997 — no unit trust.

I guess financial advisors recognize but would resolve/rationalize client’s fixation on sale charge. I guess when you look back at any “completed” unit trust investment,

  • if it’s a negative return, then the 1% sales charge rubs salt onto the injury.
  • if it’s a positive return, then the 1% sales charge doesn’t mean much. Other factors often dominate.
  • if you had to wait (to exit) for MV recovery, then you would resent the sales charge

MAPIC #character

Posted on by tiger40490

 

The best investment home is not necessarily the home you want to live in.

Don’t fall in love with the property; fall in love with the numbers.

cooling measure is a man-made event. Can be introduced and withdrawn any time.

Be the first investor in a new, perhaps undeveloped location, but the timeline could be too long even in SG. Look at what happened in my Brazil project! Better diversify geographically.

— full-time businessman vs part-time investor.
A property is different from eq/mufu/gold because you can customize and improve the asset (43R) but risky. It is a full-time businessman’s perspective. I’m really a small part-time investor.

Both P.L and Avery spend time walking the ground, but I think it’s not very efficient unless you know how to strike up conversations with locals (and trust them), as I did in Bayonne.

P.L said he likes bad-looking properties because the seller didn’t bother to improve or over-sell it. Not for a part-time investor.

Some areas are closer to city but old and rundown. You bet the gov will redevelop the area … relevant in SG only ! As to out-of-radar areas, it is feasible only in place of your expertise (but Robert Kiyosaki probably says he can become an expert in many cities. He is a full-time businessman.) With overseas rEstate, we have to focus on prime locations, to reduce the wide range of risks.

43R is a better model than most of the P.L stories. More realistic, more incremental. It requires active mgmt, almost full-time.

— overseas country risks.. Over the long-run, the relatively safe countries are 1) SG itself 2)UK/Au/US. I have blogged about this for years.

legal .. The Commonwealth (aka British) system is not as “tenant-friendly” as U.S. system or Continental systems, out of 3 main widely adopted legal systems.

In contrast, political (including national economic) risk … is mostly nothing but a category of risks, for the sake of argument. Hard to assess in my opinion, esp. over a long horizon.

— SG^SP500 resilience.. It appears that sg rEstate market is comparable to U.S. stocks — short drawdown, quick rebound, but I doubt it.

Even though P.L will “sell” us overseas properties, he probably believes in the SG prop market for the next 50Y. I feel he is /truthful/genuine/ in his Day 1 closing remarks. SG market is supported mostly by PAP government. The geopraphical location is good, but there are many good geographical locations in the world!

I think SP500 is supported more broadly, by waves of new powerhouse stocks. U.S. economy is more dynamic than other developed economies.

Quantum/diversification and DYOC are much better with U.S. stocks.

You can experiment easily and frequently, and learn fast.

— character, integrity .. am 51% convinced by the evidence presented.

  • company awards
  • P.L asks his staff to /regurgitate/ the 4 questions like “legal/ethical/reputation/right or wrong”.
  • P.L has a passion to teach and share his knowledge.

The training tries to create confidence in the “students” that P.L is trust-worthy, knowledgeable, wise, skillful, so we should trust and invest with GEX. GEX probably make a very good commission and takes no financial risk.

I was told (the lady who worked with P.L for 10Y) that MAPIC program is more for retail investors, and not attractive (or even relevant) to wealthy investors. For big investors, training content would be too boring. The deals could be nothing fancy as they already have many good deals lining up for their attention.

— To email patrickliew77@gmail.com

  • give your name, phone number, Mapic B71
  • background info and question
  • don’t refer to earlier emails. For follow-up, just compose a brand new email and inclue earlier content as standadlone piece.

Facebook “Dr Patrick Liew”

[21]y I feel no urge 2sell #buy-n-forget

Posted on by tiger40490

k_babysit4exit

I do check my purchased stocks, perhaps too often, but luckily without the urge to sell.

I shared with a colleague and fellow investor (Gary) who once mentioned his/her day-trading tendency.

  • Somehow I am lucky to feel no temptation to sell my stocks, perhaps because 1) the number of shares is usually very low (recreational) .
  • In a declining market, I am lucky to be resistant (not “immune”) to panic, trying to get rid of “toxic” asset.
  • Another reason — 2) I spent 5-30 minutes analyzing each stock + pre-clearance, so I don’t want to waste my time by selling soon.
  • Then the dividend factor comes into play — I can hold long term because I believe in the dividend safety of my stock picks.

“Does it make sense to you?” I asked. My colleague nodded. I kinda trust his/her reaction because now I think the temptation is real and widespread. I recall my temptations in 3episodes@ non-recreational trading

Note selling would also require pre-clearance.

SBH= SlightlyBetterHome 4her

Posted on by tiger40490

XA.S is the first to point out that my proposed upgrade to a 4-room flat in the same block is a minor upgrade. Now I recognize it as a SlightlyBetterHome:

  • same rental amount
  • same size
  • same location in every aspect
  • similar age

Q: Why is SBH a potential problem?
A1: we are striking a balance:

  1. If I spend “too little” on this SBH, I am fine as a minimalist, but not my better half. I often feel I have “too much” spare cash, not giving her enough quality life. She sacrificed a lot for the family and deserves a more comfortable, more modern home. She deserves splurge.
  2. If we overspend then ROI is too low. ROI in terms of rental yield or appreciation. In this case, ROI is low but not as low as a bigger upgrade. I do foresee a loss of rental yield. It hurts my self-esteem because subconsciously, I want every dollar to work hard and generate returns.

If we look at maximizing ROI, my wife and I are very different personalities. For me, ROI means rental yield (or appreciation), so $0 spending is maximal ROI. For wife, low-floor living is becoming intolerable, so some amount of investment even without rental increase is a good ROI.

A2: Since late 2019, we have enjoyed a cash flow high ground…

  1. If I overspend on this SBH, I give up a lot of high ground. In this case, the loss is tolerable. Am reluctant not resentful about it.
  2. If I spend “too little”, the home improvement is too much hassle about nothing. In this case, it’s mostly higher floor + better renovation… non-trivial improvements for wife.

[22] dice2b tossed atMost 8x]%%lifetime

Posted on by tiger40490

During a period of uncertainty (up to half the days), I tend to imagine a dice being tossed. It is usually an inconsequential, small dice because the market doesn’t really change direction. However, in every cycle, the real big dice is tossed. Everyone, including those who got out of the market early, has their fortune determined by that toss. Some tosses are so huge that they cause a seismic shift , where the public’s perception of and belief in various eq markets undergo a fundamental adjustment.

I don’t have good examples. Perhaps the Great Depression or the Japanese stock bubble of the 1980s, or the dotcom bubble?

Q: until I pass away, how many times would the big dice roll?
A: Not 10 times. Fundamentally, each stock market cycle lasts 5-10 years, not 1Y. Each decline will likely be global, and followed by a slow n uneven[1] recovery.

[1] Some regional (stock) indices would recover faster. (So far it is U.S.) Others may take decades. I feel the _relative_ ascent or /displacement/ of specific markets [eg: bio sector, EV sector, energy sector, India market, Korea market, junk bonds, muni bonds,,,] often take place during such seismic shift. Therefore, the seismic shift could function like a shake-up across market boundaries. Some markets would crash deeper; some markets would decline much longer; some market would recover earlier; some markets would recover stronger and reach new highs;;

Q: how long will U.S. market maintain its preeminent position?
A: At least 3 more cycles, possibly all the way till I pass

Therefore, contrary to some naïve thinking, the /dreaded/ decline of U.S. eq (esp. relative to other regions) is not based on 100 (major) tosses over the next 50Y, where each toss has the potential to cause a seismic shift, and provide the inflection point of that dreaded decline. In fact, no regional eq market has shown any promise as a /challenger/ to U.S. eq.

Based on my reasoning, RSPs [including DCA] into U.S. eq market (not other markets) will continue to match the U.S. market, and do reasonably well.

[22]next HDB: choosing a flat #bargains, regret

Posted on by tiger40490

— satisfy wife’s needs along with my needs
For wife, we are likely to stay 5Y minimum, so higher floor is important to her. Including lighting, insects, blocked view, traffic noise.

For me, really important factors are 1) rental yield 2) appreciation, so #10-1169 is one of very few units that can match #2-1173.

Q: realistically, what type of units may suit us?

  • size … slightly smaller as long as 4BR possible
  • floor .. higher for wife, but not too high (psf)
  • age .. same as now
  • d2mrt .. same as now.  Further out by 2min is a big sacrifice for me, but doesn’t translate to lower price at all.

— My two investment objectives
1) Rental yield — rental amount depends on location, not so much on age or floor! The newer flats probably have lower rental yield due to higher psf 🙁

Susan said yes although some high-end renters would offer a premium for unblocked view + renovation. However, I think high-end renters usually avoid HDB altogether.

YLZ said higher floor can command a slight rental premium.

2) Appreciation — is also questionable. Given size is about the same as #1173 but purchase price is higher, what’s the valuation 20Y out? I think it depends on location rather than age, so it might be same as #1173. Susan also feels this way.

Location-wise, most buyers don’t prefer TPY central. When they look around, my area stands out due to close proximity and the underpass. So I would say my location beats 79AD.

— newer .. Among units of comparable size in comparable locations, premium is on the currently newest (like on-the-run Treasuries). As the 79AD ages, the premium on it would decay like put/call options. In X years when you sell, it’s harder to sell an expensive flat for a profit. At that time, the Blk 79AD would be viewed as similar to Blk 155.

  • size, location are permanent factors
  • age differential has diminishing effect
  • floor ?

Q: Suppose the newer flat is smaller but higher floor, then in 2041, which HDB unit would fetch a higher valuation? I think the smaller 79AD unit is unlikely to beat my #1173 since the age advantage would diminish over the decades.

Q: Why are the newer units higher in psf?
A: As I told Susan, the buyers who bid up the valuation of newer flats are non-investors with other goals beside 1) current income and 2) appreciation. Their other goals may include comfort, luxury and vanity (feeling superior).

— bargains .. In any investment decisions, we bad better look for bargains. In other words, undervalued assets.

( U.S. housing market has many bargains. ) In HDB resale flats, what bargains can we look for?

  • very old flats .. most buyers worry about depreciation but I want to rent out.
  • Malay/Indian flats
  • low floor

If we can’t find bargains, at least we need to avoid buying overpriced units. The newest flats have the worst investment value.

— when upgrading home, it’s easy to end up with regret in terms of location
I hate higher floors
I hate the road crossing. I also resent the long walk from MRT

— flexibility to carve out additional room is valuable for rental yield and my own private space
Need wide windows in living room.
So far, only the #1169 and the Blk 142 units …

[19] wife+I will prefer Tropical retirement #sun birds

Posted on by tiger40490

grandparents and many U.S. retirees (sun birds) prefer warm. Grandpa said that he was not picky about food or weather. I think aging has made him less tolerant and more “picky”.

In winters, they (either come to Singapore or) prefer staying indoor. They felt very confined and uncomfortable but that’s the lesser of two evils — going out is too risky, as catching the cold is serious.

My wife hates cold weather.

As I get older over the recent years (2017-2019), I have started experiencing a desire for warmer climate like SG / MYS.

— U.S. — Virtually, all the popular retirement destinations among U.S. retirees are tropical including Spain, Latam and SEAsia. Few retirees prefer the cold weather.

Florida has an industry built over decades.

Arizona is another sun bird state.

[15] tanko: investment choices discussed on 9 Oct

Posted on by tiger40490

Hi Keng Oon,

Just a summary of some investment ideas discussed, to be published on my personal blog.

Real estate — my exposure and concentration is rather high. Out of my entire investment portfolio, more than 70% is in this sector, including 200k in Manila, and 30k in Germany+Brazil.

Bonds — offers something close to compound return, esp at the low-yield end. I have about 70k – 90k in bonds.

** High yield bonds — most of my bonds are high yield bonds. Price has dropped 15% – 30% since 2013, so I feel I should buy more, but my existing holding is at a loss, so I am hesitant and cautious.

Equities — I have 30k – 60k invested. I feel now the valuation has improved so I should invest more.

** US equities — is the strongest stock market over long term. I have relatively low exposure now (perhaps 5k – 10k). Should consider a top-up like 10k. However, US stocks are possibly overvalued. Again, I’m hesitant.

** Index tracking ETF — is new to me but I do hope to overcome the initial resistance and give it a try. However the lot size is uncomfortable to me. Luckily I found an index tracking fund with $0 commission and basically no minimum commitment.

Gold — very cautious. I would only consider 1 ounce

Without converting my USD, My SGD may have very little left after the next 90k investment in the real estate deals, as planned. Therefore, I will consider only small investments at the moment.