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Postby Beeroclock » Fri, 11 Jul 2014 2:25 pm

GSM8 wrote:Vanguard, Fidelity and most other US investment companies have begun strictly enforcing a policy of not letting US citizens living abroad invest in mutual funds if they truthfully declare their foreign address. Of course, one could try giving a relative's US address but that would not be completely legal and raises exposure to various liabilities


Exactly as per PNG post... just buy the ETF instead of the fund itself. I bought VAS ETF the other day, an Australian share index / with a US fund manager / bought by a Singapore resident address ... it is easily doable.

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Postby zzm9980 » Sat, 12 Jul 2014 12:41 am

JR8 wrote:So why don't you do the same, rather than paying him fees so he can send his grandchildren to posh schools :wink:

-- Difference is he's obviously maintaining a 'physical' portfolio that tracks the S+P .... whereas most everyone else has to pay a fund manager to do that for them...


Exactly why you said: I don't want to buy the individual S&P500 stocks when I can just pay someone a fraction of a % to maintain it for me.

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Postby Wd40 » Sat, 12 Jul 2014 11:46 am

My portfolio is 17% equity based mutual funds(unit trusts) and rest all fixed income banks deposits. The equity mutual funds are over diversified, I have atleast 15 different unit trusts.

No property in my portfolio. The entire portfolio is India based and its big enough to buy 2-3 decent 3 bedroom apartments in a city like Pune or Bangalore, outright without loan. I know I should have property in my portfolio, but I have no conviction to buy one, especially for investment.

Also most analysts say equities should be like 60% of your portfolio especially if you are young in 30s, but with 17% itself the kind of fluctuations that happen in Indian equities is like crazy.

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Postby JR8 » Sat, 12 Jul 2014 3:14 pm

zzm9980 wrote:Exactly why you said: I don't want to buy the individual S&P500 stocks when I can just pay someone a fraction of a % to maintain it for me.


Ah ok. As I've said before I'm very opposed to much of the fee-levying that goes on on financial products... it's a dirty game (esp concerning things like 'trailing commissions' which are paid by the managed product issuer, to your broker, year-in year-out, for as long as you own that product: And which are completely invisible to you, but that money is coming from somewhere right?)

That's the very reason I started following Motley Fool, their whole ethos being akin to 'You really can do most of this stuff yourself for no fees'. In fact in a double irony the broker I worked at used to circulate 'press news-cuttings' every morning, stuff of relevance to our operation, and it was within those very cuttings that TMF first came to my attention.

Anywayz, onwards ho! :)

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Postby JR8 » Sat, 12 Jul 2014 3:38 pm

Wd40 wrote:My portfolio is 17% equity based mutual funds(unit trusts) and rest all fixed income banks deposits. The equity mutual funds are over diversified, I have atleast 15 different unit trusts.

No property in my portfolio. The entire portfolio is India based and its big enough to buy 2-3 decent 3 bedroom apartments in a city like Pune or Bangalore, outright without loan. I know I should have property in my portfolio, but I have no conviction to buy one, especially for investment.

Also most analysts say equities should be like 60% of your portfolio especially if you are young in 30s, but with 17% itself the kind of fluctuations that happen in Indian equities is like crazy.


I don't know what age you are but why on earth have you 83% of your savings in bank deposits? What is your return on that after tax (and currency depreciation, maybe vs something like gold?)

15*unit trusts ... lol! (sorry) 8-[
If you want exposure to property you could always consider buying the stock of a listed house-builder. That can function as quite a good proxy. i.e. for the same but opposite reason I own physical investment property, and so have intentionally (to date) not bought any stocks in property companies so as not to double-up on that sector.

The rationale you allude to is that when you're in your 30s you can afford to take an aggregate higher risk, as there's more time for temporary fluctuations to correct themselves - that tends to mean equities. With a say 30 year view, what happens this week.. next year is irrelevant. Stick them in a drawer and forget about them (apart that is, from reinvesting dividends). As you go up the age curve you'd usually be advised to come down the risk curve, hence bonds, fixed rate deposits and so on. But being 80%+ in fixed deposits is the territory of pensioners and a missed opportunity... 'Risk vs Return'; when you're younger you can afford to be risk-on.

'Crazy fluctuations' are fine, as long as you buy what you've confirmed as reasonably as you can are reputable/solid companies. The reason it's not a problem is because of $CA or Dollar Cost Averaging. So if you're putting in say a fixed US$100, US$1000, what ever, a month, you're buying more when the market is cheap, and less when it's expensive, and hence it all kinda evens out over time.

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Postby Wd40 » Sat, 12 Jul 2014 5:26 pm

I am 35 years. In India non-residents don't need to pay tax on the interest earned on fixed deposits(for residents it is 33% for the max tax slab). Fixed deposits in India earn 9% returns(quarterly paid out, so annualized its about 10%). Also the INR has depreciated enough and with the new govt and reforms path they are going to take, I don't think the currency will depreciate anymore. Even if it does, India is my base country so it doesn't matter. Interest rates in India is directly tied to the inflation rate, thank god for that, its not like Singapore with inflation 4% and interest rates near 0%.

I started out with the right mindset about investing i.e. I started out with 35% equities and 65% FI and then wanted to increase gradually, then came the GFC and that 35% became half in value and ever since I stopped putting money in equities, luckily I didn't pull out that money, most of the people I know pulled out their money at the wrong time and never went back in again. Its only recently, the last 1 year, after I saw my portfolio returning back to old levels and actually outperforming my FI portfolio, that I have gotten interested again.

But I am afraid, that another crash is lurking somewhere. I don't mind doing the SIP(Systematic Investment Plan) and actually planning to start one right away, for my future earnings.

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Postby JR8 » Sat, 12 Jul 2014 9:57 pm

Ah, so a generous investment horizon in front of you.
Interest rates are usually closely correlated with depreciation. So there’s often little point earning just say 10% on Indon Rupees*, vs 2% on S$, when the Indon Rupee is going to devalue 8%+ vs the S$ over that period of time. That was why I was asking about how the Indian Rupee performs against the S$, as I have no idea, but 10%+ returns usually suggest a pretty ailing economy and hence currency.

If you think the Indian Rupee likely won’t depreciate more, then it might follow that interest rates will soon come down. India might be your ‘base currency’ but you could consider investing in something that depreciates less. So that when you choose to repatriate those funds they’re worth relatively more. Yes SG has terrible deposit rates. The currency is micro-managed, i.e. it’s value vs major trading partners is specifically managed, and there is little or no competition between deposit taking institutions (banks) etc to offer better deals. Most people don’t even save for their own retirement here (outside of CPF), so I suppose that’s one result... maybe you could call it a policy of 'actively managed depreciation'.

I got burned in the stock-market in 1999/2000, despite being diversified/lower-risk. But my property got knocked too, well, everything did I think ... they say not to expect such events more than once in a generation... we'll see. The markets do correct over time. Selling up is the reflex action, but down the line with 20/20 hindsight it’s usually the precisely wrong thing to have done. There’s an adage... something like ‘fill your boots (i.e. BUY!) when others are flinging themselves out of windows, and the very idea of buying seems completely insane’. In some respects it’s counter-intuitive... but just consider it a bit more and you’ll see the logic of it (it takes some balls though buying into a market that’s just tanked, and *could* do the same again tomorrow – I suppose that's the point, grab the chance, the income stream, and forget about the possible capital value tomorrow).

There’s ‘always another crash looming’, that's what makes all of this such fun lol. But people will always need toilet paper, petrol, to read a newspaper, have a bank account, use laundry detergent, light their homes, and buy a bottle of Coke etc*100. Year in year out.


* I'm using that as an example, as you see the silly newspaper ads offering '***10%/15%!!! 12 month fixed deposits on IDR!!!!!***' which completely ignores the fact that the currency is going to debauch itself by about that much over the same period as well. So putting your funds into some no-name dog of a bank into a crappy currency really won't earn you much at all...

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Postby Beeroclock » Sat, 12 Jul 2014 10:30 pm

I've been thinking there's a crash lurking for over a year now, but it ain't happening...... Yet.

Central banks have done a fine job, if you're an investor that is. Maybe not so much so for all those young kids starting off and asset-less folks out there.

Yellens recent comments to the effect that it's not her responsibility if an asset price bubble is forming, as employment it a higher priority, basically means it's onwards and upwards for the markets for another year or two.

I'm guessing 2016 or maybe late 2015. There tend to be 5-8 year cycles. 1997, 2002/3, 2008, ....

Around this time when P/E ratios start getting too lofty and the taxi driver is giving you stock buying tips, I will shift some equities into cash/fixed interest and wait to fill my boots.

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Postby zzm9980 » Sat, 12 Jul 2014 11:14 pm

JR8 wrote:
zzm9980 wrote:Exactly why you said: I don't want to buy the individual S&P500 stocks when I can just pay someone a fraction of a % to maintain it for me.


Ah ok. As I've said before I'm very opposed to much of the fee-levying that goes on on financial products... it's a dirty game (esp concerning things like 'trailing commissions' which are paid by the managed product issuer, to your broker, year-in year-out, for as long as you own that product: And which are completely invisible to you, but that money is coming from somewhere right?)

That's the very reason I started following Motley Fool, their whole ethos being akin to 'You really can do most of this stuff yourself for no fees'. In fact in a double irony the broker I worked at used to circulate 'press news-cuttings' every morning, stuff of relevance to our operation, and it was within those very cuttings that TMF first came to my attention.

Anywayz, onwards ho! :)


Can't say I follow them closely, but a few people I know who seem to be doing pretty well (yourself included) all strongly endorse fool.com.

I'm actually planning to follow something akin to this, except with a bit more of my company's stock in the mix (since I need to hold it as it vests for at least the full year to avoid shortterm capital gains): http://www.fool.com/news/foth/2000/foth000425.htm

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Postby brian_singapore » Sun, 13 Jul 2014 10:27 am

Slightly off-topic, but in the first 3 months living in Singapore I've been cold-called by a surprising number of investment advisers whose elevator pitch includes things like 'minimum lump-sum investment of SGD$50k'.

All of them of course, work exclusively with new arrivals to Singapore, helping them navigate the foreign investment landscape here...

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Postby Brah » Sun, 13 Jul 2014 11:46 am

This begs the question, and what I say to these people when they call me, is who would trust their money to a stranger who contacts you and will not tell you how they got your information?

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Postby brian_singapore » Sun, 13 Jul 2014 11:57 am

I thank them for reaching put to me and politely inform them I'm very happy with my current investment strategy. But if that changes, I'd be happy to discuss it with them in the future.

Two have left me contact details, the rest I never heard from again.

I'm pretty sure most found me on linkedin (i think one may have told me this). My linked in profile has been visited by a lot of 'financial advisors' and recruiters since I moved here.

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Postby Brah » Sun, 13 Jul 2014 12:17 pm

The thing is, I would very much want to work with someone who could advise me sensibly, as I am not doing myself any good trying this on my own (I tried, I failed, and I know other people know this stuff much better than I ever will).

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Postby brian_singapore » Sun, 13 Jul 2014 12:40 pm

I completely get that. Somehow I don't think the guys cold calling are the ones to do that though. I work in financial services which probably colours my view a bit (negatively). Very early on when I first graduated, I tried a couple of different advisors. The first couple were from the major fund companies in my home country and even with my then limited knowledge, I couldn't bring myself to hand money to them. I always walked away feeling (rightly or wrongly) that I understood more then they did. I just couldn't understand what I was getting in return for an annual cut of my savings. I then tried my bank and it felt even worse.

Finally I invested money with an investment advisor recommended by a friends father who was doing well for himself despit mis-givings after talking with the advisor. As much out of despair that I needed to go with someone... After 4 years of negative returns in a bull market, i called him up, he didn't know who I was. So I took my money back, fired him and since then have been doing it myself.

It would be wrong to say I have a strategy... I buy stuff and hold onto it..... in the current market this looks like a fine strategy, but we'll see after the next down turn. At least in this bull market I'm not loosing money like lsst time when I had a 'professional' advising me... which I take as a positive step in the right direction. :p

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Postby JR8 » Sun, 13 Jul 2014 2:12 pm

zzm9980 wrote: Can't say I follow them closely, but a few people I know who seem to be doing pretty well (yourself included) all strongly endorse fool.com.

I'm actually planning to follow something akin to this, except with a bit more of my company's stock in the mix (since I need to hold it as it vests for at least the full year to avoid shortterm capital gains): http://www.fool.com/news/foth/2000/foth000425.htm


I hadn't heard of that strategy before, but can see the logic of it from the linked article. I did a one-off search to see if they have a discussion forum for the strategy (my own choice of TMF (UK) strategy has two dedicated fora), but instead of getting a hit on that, I got distracted by ... http://www.fool.com/investing/general/2 ... 1&mrr=1.00 The latter seems to be an update or slight variant on your link, and I thought it might be of interest.

What I was actually hoping to find was a discussion board for the strategy, and from that, their board FAQ. If intending to follow the strategy I'd also trawl some recent months of discussion (esp. 'Well rec'cd' posts from that boards hard-core regulars) to try and get the latest views on what trackers people are using, and also how they have and are choosing their '+A Few'. IIRC the discussion boards on TMF-US became subscription-only in the early 00's though (when I, and several other long-timers quit and flipped to the UK version which remains free), so they may only be accessible if you 'Join'...

p.s. On TMF-UK there is a forum called 'Does Anyone Know' [DAK] where you can pose any (civil) question. It's for direct Q+A, not OT chatter, so focused and useful. I couldn't find an equivalent on TMF-US (just a weird discussion on the board 'Land Of Off Topic Posts' [LOOTP] about lactating women... :???:
If interested you could ask on the UK version > http://boards.fool.co.uk/does-anybody-know-50937.aspx if there is a DAK on the US site, or indeed if anyone happens to know if there is a 'Index+A Few' forum on the US site. Some people post on both the US and UK sites, and the peeps on DAK tend to be very helpful... you would be amazed at some of most extraordinarily obscure stuff that can get answered there, so asking a question re: TMF itself should bear fruit! :lol:


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