tag:blogger.com,1999:blog-6658991406619889409.post6918092645407043519..comments2022-02-22T15:42:27.567+08:00Comments on Singapore Permanent Portfolio Investment Strategy: What to invest in to start Singapore Permanent PortfolioEppshttp://www.blogger.com/profile/04240900475803378173noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-6658991406619889409.post-64219193044343684262017-02-05T00:01:36.110+08:002017-02-05T00:01:36.110+08:00Hi. As written above, to minimize commission cost:...Hi. As written above, to minimize commission cost:<br />"25% Gold: <br />i. Invest 1 lot (10 share) of SPDR Gold Shares GLD ETF 10US$ (SGX symbol O87)."<br />Alternatively, consider buying the physical gold from UOB or others, if you have a safe place to keep it.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-23441650352465273462017-01-02T21:40:01.994+08:002017-01-02T21:40:01.994+08:00Hi
Thanks for sharing your knowledge on the Perm...Hi<br /> Thanks for sharing your knowledge on the Permanent Portfolio. I am planning to get started with $10K in each asset. Which option should I choose for Gold?<br /><br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-50245293017718560532015-02-03T02:04:52.381+08:002015-02-03T02:04:52.381+08:00Hi, thank you for your comment. This blog is meant...Hi, thank you for your comment. This blog is meant to contain information for making informed decisions about investment. I haven't been tracking my 2014 returns closely, been busy with (nice) events in life. Frankly, some time back I made amateurish mistake of chasing after returns by investing in more gold than I should in my cash portfolio. Now I learn better, I will just stick to the investment ratio and plan... investment is a long term thing, better learn now than never. Even without my mistake in gold, the rapid drop in gold price did put a noticeable dent in portfolio performance... again, investment is a long term goal, the flip side of assets decreasing in value also mean they are cheaper to acquire at the moment...<br /><br />I wonder why you use A35 bond... according to PP logic it is not sufficiently volatile enough to counter drops in stocks, unless you are willing to suffer more volatility to the downside or upside in total portfolio over time.<br />I like my 30 years Singapore Long bond PH1S (for now), it is doing great now - macro reason being, worldwide economies are facing deflationary forces, and deflations are very good for long bonds and not so good for gold. <br /><br />Haven't time to blog about it yet, I have been following A. Gary Shillings, esteemed economist with track record for forecasting major economic trends - according to him the world is in age of deflation now, with at least 3 more years to go, perhaps more. Point is, I won't bet hugely on gold now (figuratively speaking), and with the issues in global economies especially Europe, bonds, especially U.S. bonds and long bonds, are still looking quite favourable in medium term. for stocks...no idea where its heading, and doesn't matter for this portfolio.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-50828942145680233822015-01-26T18:38:46.840+08:002015-01-26T18:38:46.840+08:00Hi nice And informative blog. How are your returns...Hi nice And informative blog. How are your returns for 2014? some of us are having negative returns. But we are using A35 Singapore bonds etf to replace SGS bonds.<br /><br />Hope you (and your blog) are still doing well. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-35769342986360422202014-09-17T19:01:03.481+08:002014-09-17T19:01:03.481+08:00CPF OA is more suitable as Cash components in Perm...CPF OA is more suitable as Cash components in Permanent Portfolio, Cash component requires stable value, and CPF OA is stable, with a 2.5-4% returns bonus. The Bond component needs ability to rise significantly in value when stocks are dropping, to negate or minimise drop in overall portfolio value. Hence CPF OA is unsuitable to be bond component since CPF OA value will not fluctuate with market. To balance your portfolio, If your CPF OA and cash is more than 25% of total portfolio, you may consider to use cash and/or CPF OA to buy into STI ETF/30 year long bond/gold to rebalance portfolio back to 25% for each component. Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-85646264202418072602014-09-17T10:41:07.939+08:002014-09-17T10:41:07.939+08:00Hi
If I do not use my CPF OA for my mortgage, can ...Hi<br />If I do not use my CPF OA for my mortgage, can I substitite OA monies as the bond component of my investment portfolio?<br />I do realize I cannot rebalance yearly with respect to my stocks value but I do get a confirmed 2.5-4% returns in my OA and SA accts.<br /><br />What is the "best" workaround to balance my portfolio assuming I have 10k to invest every year?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-62781004588893580412014-03-06T21:25:20.742+08:002014-03-06T21:25:20.742+08:00In DBSV online platform, if the PH1S last done pri...In DBSV online platform, if the PH1S last done price is 94.000, you can only place queue at +/- 30 bids, or between 94.030 to 93.970... just 3 cents away! for a counter trading at near 100 dollars... a bit impractical. I haven't check whether DBSV changed this recently, so can do your due diligence and call them to verify,<br />For UOBKH online platform, they allow to queue at 1 dollar away from last done price,Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-6119024122305045792014-01-17T20:10:07.498+08:002014-01-17T20:10:07.498+08:00Could you please elaborate on the phrase 'Howe...Could you please elaborate on the phrase 'However they are very restrictive on placing bond pricing, so i use UOBKH instead for buying Singapore long bond.'<br /><br />I plan to open a DBSV account shortly and allocate my bond investment into PH1S. Anonymoushttps://www.blogger.com/profile/02855866974181254224noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-73336518479382347972013-11-07T23:35:33.112+08:002013-11-07T23:35:33.112+08:00Sorry, missed out on your comment. Good question, ...Sorry, missed out on your comment. Good question, I bought O87 because O87 is traded on Singapore Stock Exchange, so I can trade it with local brokers and hold the shares in my own Central Depository (CDP) account. Other than that it would seem IAU has the advantage of lower expense ratio which is good. IAU only lowered its expense ratio to 0.25% in 2010.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-49224981276034919112013-09-15T13:12:54.580+08:002013-09-15T13:12:54.580+08:00Hey Epps,
Just curious why you chose O87 for the ...Hey Epps,<br /><br />Just curious why you chose O87 for the gold portion instead of iShares Gold Trust(IAU) which has a lower fee (0.22% vs 0.4%) ?<br /><br />Regards<br />GugzSuccess.https://www.blogger.com/profile/16479772229541266234noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-53529044265016719022013-07-23T13:19:27.203+08:002013-07-23T13:19:27.203+08:00Thanks for your prompt comments. Appreciate it.
O...Thanks for your prompt comments. Appreciate it.<br /><br />One thing to note for using actively-managed funds is taking on fund manager risk. Over the very long-term, it is difficult to tell how that will pan out, but higher costs is guaranteed. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-59465216507168531292013-07-22T20:42:10.656+08:002013-07-22T20:42:10.656+08:00What you say can be true. Tracking may not be perf...What you say can be true. Tracking may not be perfect, but is good enough for me, I accept the minute deviation of ES3 from STI itself. This is because there is no point aiming for ideal tracking or trading condition, because even with perfect tracking, simple things such as one's decision to buy the ETF in the morning or afternoon can cause the one's buy/sell price to be more expensive or cheaper also. Besides, most alternatives funds can be more expensive to own in the long term due to yearly cost.<br /><br />Regarding the volume available to transact, there are different ways you can look at it. Perhaps you can ask yourself whether the maximum volume you may wish to transact is bigger than the average daily trade volume of ES3? If your volume is lower than daily average, I guess you don't have to worry about getting all your orders filled within 1 to 3 days. Realistically, I guess yes your order may not get filled at your queue price that you want given your huge volume. If you want to sell a huge volume, you may get trades at lower and lower prices, which is not optimal but should not be a deterrent to totally avoid using this ETF. I have noticed buy/sell queue volume of 100 or 1000 lots several times - my guess is that could be the market maker providing a backstop price to prevent too much deviation from STI - I could be very wrong that it was a backstop, so please verify this assumption if you need to.<br /><br />So there could be a solution to your concern about ES3 volume. consider splitting your stock portfolio into several funds - some in ES3 STI ETF, some in unit trust of Singapore Companies (I hear there are the rare SG unit trusts that outperform STI), some in regional stocks (if you want), and you may also consider the more expensive iShares MSCI Singapore ETF (EWS) (traded in U.S. exchange, though I am not sure about its liquidity).<br /><br />Final thoughts, to me there is no point aiming for ideal trading conditions, because like driving a car, to me there is no point to aim for ideal conditions to minimise gasoline usage to save money, because there are too many uncontrollable factors throughout journey. So long as I get from Point A to Point B safely and surely, there is little concern whether I use a bit more or less gasoline. Just my personal opinion, I am sure there are other who choose to adopt different opinions from mine, and that's just alright.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-32848290337836697982013-07-22T04:10:23.444+08:002013-07-22T04:10:23.444+08:00Thanks for your comments.
Although Permanent Port...Thanks for your comments.<br /><br />Although Permanent Portfolio is quite a static one with just the occasional rebalancing once set up, this lack of trading liquidity on ES3 is not an ideal situation. On a intra-day basis, I have noted that STI might be up and yet ES3 can be down. So the tracking is not as good as you would like. When you need the volume available to transact, you cannot just queue and be confident that your orders get filled. You will need to monitor the buy-sell queue to get your orders filled. If you have a larger portfolio, it can be a problem. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-26128147959245879242013-07-20T18:02:44.019+08:002013-07-20T18:02:44.019+08:00When buying, if you queue at a price that is lower...When buying, if you queue at a price that is lower than the current quoted sell price, there is no obligation or incentive for market maker or other traders to full your order, so it may or may not get filled.<br /><br />If you really need to get your order filled, you can always buy at the current ask price (sell price) that is quoted. It may be 1 or 2 cents more expensive per share than you wanted, but it may be better than not getting your order filled. If you are investing for long term, 1 or 2 cents extra is not that significant. I may be wrong, but I think the market maker will ensure there is sufficient supply of shares to be sold or bought, to keep the ETF tracking the index closely.<br /><br />Sometimes ES3 may show very few shares for buying and selling at the current buy/sell price only, for example if current buy/sell price of 3.27/3.28 shows few shares being queued, what can happen is that at further buy/sell price there can be more people wanting to buy at 3.26 or wanting to sell at 3.29. so in fact there can be quite a number of orders being queued at further out prices.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-31121556342750492472013-07-19T05:16:26.178+08:002013-07-19T05:16:26.178+08:00Thanks for your response.
On quite a few occasion...Thanks for your response.<br /><br />On quite a few occasions, ES3 buy and sell queue show very few shares for buying and selling. And the trading seems to move very slowly. Seems like a challenge to get your orders filled. Do the market makers play an active role to get orders filled?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-23299984258169083082013-07-16T22:27:37.071+08:002013-07-16T22:27:37.071+08:00ES3 stock index ETF is usually liquid enough with ...ES3 stock index ETF is usually liquid enough with spread of 0.01 so there is no issue. PH1S Long bonds are generally traded less often so liquidity can be lower and spread wider. When buying bonds, I monitored bond price and try to queue a price at mid point of buy and sell price, hoping another person or the market maker will buy from me - this work better for bigger lots. Sometimes if buying just a few lots, I may try to queue at last done price, because the person who traded at last done price might want to trade some more at that price. Last resort is to just buy at which ever the selling price. This is a long term strategy, so buying one time 0.3%~0.5% more expensive for bonds is not that significant in the long run.<br />More important is to keep yearly running cost low.<br /><br />Another thing to note is to use online brokers like UOBKH or L&T that allows to put queue price for bonds up to $1.00 away from last done price. DBSV online is not so good for bond buying because it only allows queuing at a price $0.03 away from last done price (that's a ridiculous +/-3 cents from last done price for something that is trading at near $100!) - but according to DBSV, if bond trading is restricted by their online platform due to this +/- 0.03 limitations, can call them up to help you buy bonds but pay at online rate.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-26311475779989719952013-07-10T12:53:34.145+08:002013-07-10T12:53:34.145+08:00Hi Epps,
I notice that there is very little bid a...Hi Epps,<br /><br />I notice that there is very little bid and offer for ES3 and PH1S. Wouldn't this lack of liquidity lead to larger bid-offer spreads? How do you deal with this problem when you want to buy or sell?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-26304701892939962602013-06-10T21:08:17.719+08:002013-06-10T21:08:17.719+08:00It seems Singapore REITs would be better under the...It seems Singapore REITs would be better under the allocation of stocks, as S-REITs have very high correlation to the STI - when stocks fall, generally REITs fall together too, and vice versa.<br />see this quick comparison table of FTSE Index of S-REITS vs STI yearly returns:<br />http://i.imgur.com/CsSqMR4.jpg<br /><br />You may want to be selective about owning good REITs, or you can consider the REITs fund by Phillip Capital.<br /><br />There are some arguments about not using REITs in PP - you can read about them in Craig Rowland's book on Permanent Portfolio. Personally I am OK with using only STI which seems volatile enough. Although S_REITs outperform REITs in other countries, I have not seen evidence or research yet that adding S-REITs to local PP will make significant improvement, given STI and S-REITs are so closely correlated.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-16174732475019110022013-06-10T03:22:58.944+08:002013-06-10T03:22:58.944+08:00Hi, I was wondering where REITs would fit into thi...Hi, I was wondering where REITs would fit into this allocation model. If I want to hold REITs, would it be under the allocation of stocks or bonds?<br /><br />When this strategy was created in 1980s, my guess is that REITs was not really around/popular, hence it was excluded from the strategy.<br /><br />Any thoughts? Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-56303163420718034172013-05-04T19:54:31.121+08:002013-05-04T19:54:31.121+08:00Hi. Let me give a realsitic example. Let's say...Hi. Let me give a realsitic example. Let's say on Day 1 the PH1S long bond last done price at end of day is 104.50. <br /><br />Then on Day 2, 3 and 4 there are no trades in long bond. On Day 5 you decided to buy long bond, but the market makers / primary dealers are quoting buy/sell price of 103.500/103.800. If you want to put online order now, you can only put 104.47 (on DBSV platform)... well, your online trade request may not go through, or even if you managed to submit the order, you may still get the long bond at 103.800 (i doubt), or, a dealer may take advantage and sell you at 104.470, or your order at 104.47 will not be filled...<br /><br />But when you want to put the online order for long bond at 103.600, then there's no way to do that in DBSV online platform -whereas UOBKH allows you to place the online order at 103.600.<br /><br />It is always good to have at least 2 online brokers - in case one online platform has a problem, you can use the other online platform. I use UOBKH online platform for long bonds. If you are investing for long term, the 7 dollars difference in minimum commission between DBSV cash-upfront and UOBKH should not be much of an issue. Hope i answered your question.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-23492304217119787612013-05-03T15:25:13.720+08:002013-05-03T15:25:13.720+08:00sorry, typo in previous comment
"... price o...sorry, typo in previous comment<br /> "... price of long bonds are NOT fluctuating so greatly within that few secs." Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-6055354201587663612013-05-03T15:23:40.783+08:002013-05-03T15:23:40.783+08:00Hi, as a follow-up to your previous comment that D...Hi, as a follow-up to your previous comment that DBS V is quite restrictive on placing bond pricing, I was just wondering, won't the problem be solved if you placed a market order or limit order and just key in whatever is the current trading price ? I guess it just takes a few mouseclicks in a few secs and of course I am assuming the price of long bonds are fluctuating so greatly within that few secs. <br /><br />For the purpose of rebalancing bonds in the PP strategy, why do we need to be concerned with bidding for the bonds at some price away from last done price ? Shouldn't we just buy/sell at whatever is the current trading price for bonds when rebalancing calls for it ?<br /><br />Sorry, I am a noob here, not sure if I am missing something. As I intend to use a single platform to trade and currently leaning towards DBSV, would appreciate your sharing, thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-62051807797884443662013-04-24T23:19:39.800+08:002013-04-24T23:19:39.800+08:00If bond is trading at $103.500, DBSV online platfo...If bond is trading at $103.500, DBSV online platform only allow placing orders between prices $103.520 or $103.480... that's +/- 2 cents or +/-20 bids in exact accordance with SGX guideline... which in turn is strange because for a counter trading at $100.00, investor is only allowed to trade 2 cents away from last done price? Problem is, long bond price easily moves 20cents, 50cents, 1 dollar from last done price, hence if bond price moves more than 2 cents away from last done price, DBSV online platform is useless for placing bond orders! DBSV management refused to correct this issue and said they are just following SGX guidelines (!), and DBSV said for bonds, if online platform does not allow putting of bond price (due to the +/-2 cents restriction), then please call DBSV broker to place bond trade but insist on online pricing which investor is entitled when current buy/sell price is far away from last done price.<br /><br />I tried UOBKH and Lim&Tan both of which allows placing bond price +/-$1.00 away from last done price, which is more practical and reasonable for bond trading.<br /><br />Yes bond price is same for all trading platform for retail investor, but the 'placing' of bond price is terrible for DBSV online platform - if you cannot place the bond price you want in DBSV online platform, call DBSV broker or use another brokerage online platform.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-63632793234821320962013-04-24T20:16:06.884+08:002013-04-24T20:16:06.884+08:00Hi, you mentioned that DBS V is quite restrictive ...Hi, you mentioned that DBS V is quite restrictive on placing bond pricing, I don't quite understand this point. Shouldn't the bond price be independent of which trading platform you use ? Is there a significant difference or impact to retail investors ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6658991406619889409.post-49270642391354709162013-04-22T00:16:39.474+08:002013-04-22T00:16:39.474+08:00Hi. I believe you should DIY a Singapore Permanent...Hi. I believe you should DIY a Singapore Permanent Portfolio - after reading and educating yourelf as much as possible about the strategy, the assets involved, and the logic behind the strategy. An investment house or financial adviser will likely not understand or agree with the unusual PP strategy because they are not trained and exposed to PP concept.<br />DBSV cash-upfront online account charges the lowest S$18 min. commission. However they are very restrictive on placing bond pricing, so i use UOBKH instead for buying Singapore long bond.<br />Portfolio returns has dropped a few percentage since start of this year, so now is a 'cheaper' time to start portfolio compared to few months back. There is no best time to start the portfolio, so jus start with all assets when the portfolio is 'cheaper'. Just remember this strategy is a long term investing strategy with a good track record (overseas and local) and does not gaurantee 'no risk' - the rest is based on research and 'having faith' in this long term strategy.Eppshttps://www.blogger.com/profile/04240900475803378173noreply@blogger.com