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Archive for the 'Investing' Category

Announcing Wikivestor

Published on 5 November, 2005 in Investing, Investing glossary and Online. 0 Comments

For some time I had wanted to spin off my investment and free softwares content into a separate section. The blog format is not as ideal as the wiki format for these purposes.

The ball started rolling with the switch to this new site layout. It took longer than expected to convert the template for Mediawiki but it’s finally done.

So there you have it: Wikivestor, a wiki for investors. Next, to beef up the content.

Still thinking of a name for the free softwares section (suggestion?) but that should follow pretty soon.

Drop by Wikivestor and add a content or two to the wiki.

Technical Analysis Explained

Published on 26 September, 2005 in Investing and Readings. 0 Comments

Technical Analysis Explained
by Martin J. Pring

Started reading this book brought from Hong Kong. (Am surprised to find that books are relatively cheap in HK.)

Over the past few years I had been picking up technical analysis (TA) here and there and had thought of schooling myself more formally.

Happened that while browsing a bookstore in Lan Kwai Fong, I ran into this book which does have most TA topics covered. The price looks alright too.

From my initial flipping of the book today, the book content look dense. It might take a while to digest the content among the many things I’m doing.

Looking forward to pick up ideas and skill from this book and post some analysis soon.

Japan market

Published on 13 September, 2005 in Investing. 0 Comments

Despite the raising oil price risk, Japan market had been rallying strongly since May. It has broken new high since 2001 and still going north. Is this sustainable?

With so many false recovery investors are naturally wary but market pundits are bullish. A recovering Japan could bore well for Asia and China too.

I am happy too. My Japan funds brought early this year are doing well.

Investment in Knowledge

Published on 28 August, 2005 in Investing and Quotes. 0 Comments

"If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest."

- Benjamin Franklin

When on this topic, I think the portfolio theory of investment applies to knowledge investment as well. My current current problem is getting the portfolio mix right. As one can see from the blog topics, I suffers from spreading my capital too thin. Jack-of-all-trades I am, master of some I aimed to be.

Investing with CPF Special Account

Published on 12 July, 2005 in Investing. 0 Comments

Fundsupermart (FSM) recently has an article on investing with the CPF Special Account (SA). I had been investing with my CPF SA so it is nice to read the article and compare notes.

The article is a nice general article that targets no particular investor since this is what they had to do. Here’s my view which agrees generally with theirs.

Before going on, I should state that my view is with respect to my situation alone. The standard caveat of past performance is not indicative of future performance applies.

On the point of investment options, there isn’t really much. It seems
that CFP does not allow investment into equity funds so the only
options are bond and balanced funds. Realistically
speaking, if one just focus on the SA investment alone, there is no
point in investing in bond fund. The return for bond funds are not high
and the risk not diversify. FSM had similar option and went on to
compare the performance of the balanced funds spliting them into Asian
and Global funds.

If one use their fund selector,
it is easy to see that the choice (historically wise) is very
limited indeed.

Firstly, anything that return consistently below 4% is
eliminated since leaving the money in SA already gives 4%. This
selection criteria effectively eliminates bond funds as well as some balanced funds.

Second, to compensate for the risk, I want to look only at those that return consistently above 7%.

AIG Acorns of Asia Balanced Fund is probably the only fund in my opinion worth investing in. PRU Asian Balanced Fund also looks outstanding but since it is also an Asian balanced fund, I would go with AIG’s.

As a more active investor, I prefer not to include global balanced funds into my portfolio at this moment. I believe Asia will outperform the rest of the world in the medium term.

Yes there is more risk, but there is more return. Is it justified to expose SA saving to such risk? Yes, I believe the longer time frame and the active management can counteract the exposure.

The de-pegging of the Chinese Yuan against Dollars

Published on 14 May, 2005 in China, Investing and Startup. 0 Comments

The Chinese yuan exchange rate against Singapore dollars is something I monitor quite closely to me since I spent my Singapore dollars here in China.

Recently there is a heightened expectation that the Chinese will soon de-peg or at least loosen the peg of the Yuan to the US dollars. Many people know that the yuan is in reality stronger than what the current value suggests. So it is expected to raise once the peg is release.

Now, I’m now a big time investor nor do I have millions being transferred. But the implication is no less significant.

World financial & economic climate

Published on 15 April, 2005 in Investing. 0 Comments

Have not been keeping up with what is going on on the bigger picture for a while.

A quick review.

US
The energy price is releasing its grip but is still a threat. Inflationary fear may cause interest rate to raise and growth slowed.
US likely to be full of trouble in the short to middle. Stay out of this market.

Europe
Signal are mxed but Europe’s growth look set to be slowed after some steady growth last year.
Eastern Europe to western Europe is becoming like the developing countries in Asia is to Japan. Providing low cost production, causing companies to move out, unemployment.
Time to take out some money to lock-in gain from investments here.

Asia
When considering Asia, it is customary to speak of ex-Japan. Japan however had been in the back seat for a long time. Sometime one wonders with the raising importance of China if Japan is secondary.

Markets in Asia are a mixed bag. India is growing in importance. The traditional 4 dragons of South Korea, Taiwan, Hong Kong, Singapore are somewhat back in the growth track. Asian market are also much influenced by events in US since US is the major export for most countries.

I believe good opportunities exist in the other markets but question is how to understand them and pick the fund to go in with.
General Asian funds that focuses on the more mature should still enjoy growth and less uncertainties.

Japan
Looking at it only because I have fund in this market in order to have a balanced distribution across the markets.
Raising oil price could put a brake on growth since the country import all its oil needs.

China
Analyst are of the view that China will continues to do well. So do I. Being in China I can see how enormous and unstoppable the economic machine is.
Still there are risk of raising inflation with wages that doesn’t seem to follow up.
Suggest to lock in some profit but keep the bet here.

Singapore
Future looks shakely but knowing Singapore as I do, I believe it will stablise but growth will be subdued. Larger companies that began to look to overseas market should continue to do when with the growth around Asia.

CPF investing charges and Fundsupermart.com

Published on 13 April, 2005 in Investing. 0 Comments

One of the best thing that had happened to CPF investing is the introduction of the ‘IA’ status in Fundsupermart (FSM).

FSM is an online financial portal selling unit trusts in Singapore. While many online sites claim to provide value, passing lower cost to customer, FSM stood out as one that provide value by way of using technology innovatively and coming out with revolutionary new services.

The ‘IA’ status basically refers to CPFIS registered Investment Administrator (IA) status. With this, Fundsupermart can draw monies directly from CPF agent bank when buying unit trust using CPF.

Take a look at this flow chart from Fundsupermart.

Of course if that is all they did, nothing great. But read this.

Summary of Agent Bank Charges

Type of transaction Before 1 March 2005 From 1 March 2005
Per buy transaction *$2.50 per 1,000 units or part thereof subject to a maximum of $25 per fund $2.50 regardless of number of units and number of funds
Per sell transaction *$2.50 per 1,000 units or part thereof subject to a maximum of $25 per fund $2.50 regardless of number of units and number of funds
Per fund switch (This involves a sell transaction followed by a buy transaction) Sell: *$2.50 per 1,000 units or part thereof subject to a maximum of $25 per fund+

Buy: *$2.50 per 1,000 units or part thereof subject to a maximum of $25 per fund

 No agent bank charges incurred whatsoever
Quarterly service charge *$2.00 per fund $2.00 regardless of number of funds

"From 1 March 2005" refers to when the AI status comes into effect.

The banks must be hating them for doing this. High-five for consumer victory!

I always puzzled why banks setup charges like above. I can understand (with objection) if the charge is based on the transaction amount, but why based the charge on the number of units?
Just look at the same investment of $10,000 on unit of $1 and $10. The difference is staggering! The bank charges are $25 and $2.50 respectively. And the unit price has no bearing on the fund performance whatsoever.

This is one of those charges which I labelled as "We charge because we can and there is nothing you can do about it. Use it or leave it". Stinking smell on monopolistic profit-seeking-at-expense-of-consumer company.

What is the incremental cost difference to the bank for processing a $1,000 and a $100,000 unit trust buy/sell? Probably zero, since bytes of one and zero just pass through the system with any intervention.

Kudos to Fundsupermart who really gets it. May they continue to succeed by championing and delivering values for consumers.

Unfortunately, to switch to the ‘IA’ status would first require selling the existing
funds which attracts the bank’s selling charges and the fund’s sales charge.

A quick calculation on an Excel spreadsheet (download spreadsheet) shows that it is not worthwhile to switch if taking into account the fund’s sales charge. Since to switch, the fund has to be first sold and brought again at the market price with it corresponding sales charge. With sales charges averaging about 2.5% it would wipe out any saving.

For more information, refer also to IFAST Financial is a CPFIS Registered Investment Administrator (IA).

CPF investment

Published on 20 March, 2005 in Investing. 0 Comments

One important asset of most Singaporean is the CPF (Central Provident Fund). Having stopped working for almost 2 years now means that my CPF account had stopped growing.

At the same time, because I started on my own right after school for 2 years, I effectively have roughly 3 years worth of work that contributed CPF. The amount in my account is meagre compared to my peers.

In view of future plan to have family, buy house, have kids, retire, it is imperative to increase CPF saving. My only hope of increasing the value of my account is to invest.

Went into Fundsupermart today to check on my investments. Overall the portfolio reported some gain. However transfering the figures to my excel spreadsheet, it is still lossing. The spreadsheet compared the amount to leaving the fund with CPF Board and receiving an annual interest of 2.5%. I will share this spreadsheet when I find some time to clean it up. Fundsupermart should have provided something like this.

Main Portfolio Allocation


Excel chart showing my current portfolio allocation. Naturally I am overweight on Asia of course. Thanks to that I had recovered much of the losses from the tech crash.

The Europe fund had also performed well. Having brought it near the bottom, it now returned over 60% since 2003.

Going forward, this allocation should remain unchanged.

The bond funds are just keeping ahead of CPF interest return. But they help make a balanced portfolio, so they be unchanged.

Situational Funds


I classified funds in my portfolio into Fixed income, Equity, Balanced and Situational.

Fixed income and Equity make up the main portfolio. I had since removed Balanced fund from my holding since I could do that myself with Fixed income and Equity.

The Situational funds are my "bets" on funds that might do well within the short to medium term.

China is one of the best in this group, returning also 60+% from 2001.
Technology and Bio-technology are my worst. Both are still under water.

Going forward, the aim is to reduce percentage of this group to around 30% of total portfolio. That is to say taking less "bets".

Investing - Opening Thoughts

Published on 3 March, 2005 in Investing. 0 Comments

It is everyone’s dream. To have money working for us and not us working for money.

Invest. That’s the only way. Because investing simply means putting money to work.
I like to think I know something about investing. After all I have money invested where my mouth is, have friends asking me for suggestion, have an MBA, have a personal interest in reading and learning about it.

Over the years, I gained some and lost some. Sadly the losses still out-weight the gains, mainly due to the sharp losses during the asian economic crisis in the late 1990s and the tech slump early 2000s.

Now that the financial storm is almost over, rays of sunshine are breaking out of the clouds. I believe another golden era for investing is dawning.

In fact some of my long time investments are turning from red to black. If I could help it (actually I can), I would work and invest the income. But I decided to plunge into the business world on my own, taking along large part of my saving. Tough decision. Yet another part of me is telling to do it. A dream. Well, more about the business soon.

Yes, investing. What I plan to do in this section, as with the others, is to share with anyone whom might be interested, to receive critiques, to learn and improve on investing.

One day, money will be working for me. Me? I will be blogging about it.