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Better to put your money in the bank
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cashiertan
Elite |
20-Nov-2006 22:29
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oh yes regarding the result of my Strategy, So far so good. IF i cont'd my returns as what i am getting now, i should be millionaire in 3-5 yrs time. I have modelled my Strategy for moderate risk but high returns. Contradicting to what others think, i actually make more than normal becoz of the bear market during may and june.. reason.. very simple. @ may/june, 10k allow me to buy 5 lots of ezra but now in the bull market i can only buy 2.5lots. |
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cashiertan
Elite |
20-Nov-2006 22:21
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haha since CPF is allowed to buy UTS 100%, can use it if u think u can get higher returns than CPF. Now i used 1/3 of my CPF on Stocks and another 1/3 on the UTs and another 1/3 i kept unused (i treat it like my bonds funds w/o the risk) 1/3 of my cash holding is 1/3 my cpf size, which in turn is used for margin acct to leverage it 3-5 times. etc. based on my moderately aggressive money mgmt strategy, one need min. 30k in cpf OA min. 10k - UTs (based on FA than on TA) min. 10k - Stocks (mid to long term holdings / based on FA more than TA) min. 10k - Usually untouched. Will touch it to add UTs and Stocks min. 10k - Cash (leverage 2 - 5 times) 3xMonthly Expense - Cash (untouched and put aside for rainy days) For my CPF portfolio arrangement, it is considered moderate now as i waiting for a bear to come and bottomed before switching it to aggresive. I sell in the bull and buy at the end of the bear. |
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singaporegal
Supreme |
20-Nov-2006 21:59
Yells: "Female TA nut" |
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My money is all in Stocks.... no UTs at all. :) |
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cashiertan
Elite |
20-Nov-2006 19:26
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good strategy which is suitable for certain ppl but not for me totally, i break up my portfolio into 3 parts. 1/3 UTs, 1/3 mid to long term stocks holding and 1/3 short term. thus i can have the fun of "speculating" via TA and at the same time gets some dividend from my value stocks while its price slowly move up and 3rd, i get other experts to invest for me in countries which i am not familiar in. |
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klooloola
Member |
20-Nov-2006 18:28
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I agree Transferring money to or from a cash fund takes time - a week maybe. This doesnt bother me since i dont chase hot stocks. If a stock is in the news then I wont be interested in it. Most of the stocks I buy will continue to remain low in a month or year anyway so i am not bothered about making quick movements. When stocks are makin quick moves, emotions are high and that is not agood time for a fundamental investor to invest. It is too easy to get carried away. I would prefer to wait till when all brokers have stopped covering the stock and no one is discussing it on forums and its price is at a high dividend yeild. |
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klooloola
Member |
20-Nov-2006 18:21
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A cash fund /short term fund is mutual fund (also called unit trust ) That invests its money in the short term interest bearing bonds or governement bonds or interbank deposits. Historically cash funds have a high minimum investment amount ( not so for the dbs fund though ) and they have no sales charge ( unlike some equity funds that have 5% charge). The fund makes money by skimming a small amount usually 0.5% of your total funds every year. Ex if the underlying invested money made 3.5% , unit owners only get to keep 3%.. By investing in these you get the prevailing short term interest rate whatever that may be. It is unheard of for a cash fund to lose money in numerical terms. They may make less than inflation if inflation rises though. Usually short term rates track inflation so it is suitable for people who wish to protect their money against inflation while they think of better places to invest. For the DBS enhanced income fund i saw the following in the prospectus Investment Objective, Focus and Approach The investment objective of the Scheme is to seek preservation of capital and liquidity and consistent with this objective, to outperform the Singapore Interbank Offered Rate (SIBOR) by investing in a diversifi ed portfolio of good quality, short-term bonds and money market instruments. There is no target industry or sector and the Scheme is not country-specifi c. The Scheme undertakes an active approach to managing the trade-off between its liquidity needs and return. Through prudent duration management and careful credit selection, the Scheme provides yield enhancement to fi xed deposit returns. The Scheme is included under the CPFIS - Ordinary Account and has been classifi ed by the CPF Board under the Lower Risk (Broadly Diversifi ed) category. The benchmark against which the performance of the Scheme will be measured is the 3- Months SIBOR. |
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cashiertan
Elite |
20-Nov-2006 18:20
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For some ppl, the disadvantage of buying DBS enhanced income or other cash funds from Online UTS brokers is that they take 3-7 days to transfer the money to u. In fact for me, when i spot a good buy, it is almost immediate thus i couldnt wait for the 2-4 days.( if u uses margin or CFD like me) to earn that misearble few $ more, i stand to lose much more. In fact, u can lose abit of ur capital if u cash out from DBS enhanced income as it is link to bonds, thus it is not totally 100% capital guaranteed. Thus i mostly put the money in my stocks broker cash acct (like Philips capital)for parking or UOB flexi acct which pay me 0.75% pa. |
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klooloola
Member |
20-Nov-2006 18:11
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I think the advantage of short term funds / cash funds over high interest rate fixed deposits is the the minimum amount is much less while the interest rate is the same or better. For DBS enhanced income bought via fundsupermart the minimum is only Sing$1000. |
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IreneL
Senior |
20-Nov-2006 17:10
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Hi klooloola Many thanks for this piece of information. I never knew there were such things as short term funds/cash funds. But what are these? I agree FDs' rates are miserable now that the FED has decided against raising interest rates. If you have some spare cash and wants to put them into FD you might want to consider MayBank. They pay 3% for min. amount of $25K. I have no idea how bonds work so I dont buy them. |
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klooloola
Member |
20-Nov-2006 15:55
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Short term funds / cash funds may be a better alternative than fixed deposits. You can sell anytime without penalty and always earn the short term bond rate minus fees. I own DBS Enhanced Income fund bought via fundsupermart.com. lat year it made around 3.8% , it may make the same this year. These short term funds do not have a sales charge load usually. I use these funds to park my cash until i get a stock idea. I dont know if it is better than using the brokers cash account which also pays you interest. |
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IreneL
Senior |
20-Nov-2006 15:27
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I do hold FDs. However I am not sure there are exceptional companies whose shares are worth buying into now, as they have become overly expensive. |
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scotty
Senior |
20-Nov-2006 15:17
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How about Fixed Deposits? Do any of you have that as part of your investment strategy? |
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awchyeong
Member |
20-Nov-2006 15:16
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i fully agreed with kloolooda point of view. Fund must diversify into two groups. one for long term investment in blue chit. one for fire fighting stock just to maintance ur heart bit regularly. |
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mwzl95
Member |
20-Nov-2006 14:12
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The investment timeframe should be at least 1 year before being able to make some better gains. |
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IreneL
Senior |
20-Nov-2006 13:53
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One must be brave and of course the $$$ to enter the stock market. I have seen some of my stocks went crashing down just a few days I bought into the companies. But I dont believe I should hold on to these shares. Therefore I monitor their performance and dont ignore them. |
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klooloola
Member |
20-Nov-2006 13:40
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One year is too short to guarantee returns. Fundamental stock pickers typically need one complete market cycle to generate good returns. Even exceptional stock pickers like Buffet find that their picks may underperform for years. I typically find that my stock picks may fall say 50% after i pick them , but usually in 3 years after dividend reinvestment they come back and outperform. The dividend reinvestment is very important. So buy and forget exceptional companies which have existed for decades and pay huge dividends and dont give a damn where the market goes. You can safely ignore these contests. |
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jasjasjas
Member |
20-Nov-2006 12:59
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could the results be becos it is hypothetical $ instead of their own $. I guess it will be a different ball game altogether if its real trading. I personally find it hard to believe for real experts not to be achieving above 6% returns. |
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colorado
Member |
20-Nov-2006 12:48
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The returns may appear paltry but at the end of the day, you must have your blue print in place - the number of years you intend to stay invested, % of loss you are willing to stomach, % of gain before you exit the market. Unit trust is recommended if you do not have the $$$ to buy into stocks like OCBC and the likes. The exposure it affords is far wider and thus your risk is reduced accordingly. The returns to the highly aggressive investor is peanuts but if the gains are consistently in the 10% range,it is a viable option especially with compounding. How many people have the means to buy property to invest? Not many but the Henderson Property UT allows you to buy property into the different parts of the world. That sounds pretty good to me! I'm not advocating you all avoid trading in stocks per se rather consider this as an alternative, especially those who don't have the time to monitor the market. Or even better, use this to diversify your risk. I think it is a good move. I'm still quite new to stocks per se and will have to learn more before I can manoeuvre with ease like some of the veterans here. |
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IreneL
Senior |
20-Nov-2006 09:19
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Hi lewsh88 The only difference I note, and this is my personal opinion, among the 4 investors, is that Mr Chan's choices of products were highly speculative. The other 3 had a mixed of speculative as well as slightly risk-averse investment portfolios. And I am not surprised at the % of profits derived from investing at some of the unit trust, notably Aberdeen Global Emerging Markets Fund and Henderson Global Property Fund. I have been monitoring, in particular, Aberdeen Global Emerging Markets Fund, and would be interested in it. |
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lewsh88
Senior |
20-Nov-2006 09:10
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Hi Folks, Those of you who have read the article Invest (pages 24 & 25) in yesterday's (Nov 29) Sunday Times will agree that it is better to put your money in the bank and earn 3.5% rather than getting mild heart attacks in stock trading each time there is a market correction. The article reported that nine months ago, four high powered stock players were given a hypothetical sum of $100,000 each to invest in the Singapore stock market. These players include: Mr. Sebastian Chong - a retired accounting professor; Mr. Chan Wai Chee - head of research at a stockbroker; financial advisory firm Providend and unit trust distributor Fundsupermarket. The result published yesterday show that there were three winners - 2.3%; 3.9%; 3.7% and one loser 77%. If these highly qualified and well informed investors can only manage to gain such a paltry sum and one suffering a heavy loss, what will happen to us "kuching-kurap" ill-informed babes who are trying to fight the market forces? |
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