(Post 79/week 61)Learning investing/trading together part 13:A35(ABF SINGAPORE BOND INDEX FUND)

I am currently writing a guide on how to purchase POSB invest saver due to the numerous PM that I have received on Facebook. But before that, I need to explain a little bit about A35. I am sure everyone is pretty familiar with STI ETF(ES3 and G3B). You can refer to this link here if you need more information about the STI ETF. 

But, what about ABF Singapore bond fund index? Without further ado, let's get straight to it!

Overview of the A35

• It is the first exchange-traded ("ETF") bond fund in Singapore, 
• The Fund seeks to track the total return of the iBoxx ABF Singapore Bond Index
• iBoxx ABF Singapore Bond Index tracks a basket of high-quality bonds issued primarily by the Singapore government and quasi-Singapore government entities.

What does iBoxx ABF Singapore Bond Index comprise off?

• It comprised of Singapore dollar bonds issued by the Singapore Government or Singapore Government-linked entities  such as e.g Singapore government bond, Housing Development Board, Temasek, and Land Transport Authority, SP Power
• It also comprised of Singapore dollar bonds issued or guaranteed by other Asian government, a quasi-government or supranational financial institution (e.g. Danga capital Berhad, Export-Import Bank of Korea, Korea Development Bank)
• In short, It contains bond from Singapore, Malaysia and Korea
• The pictures below from the annual report shows what does the iBoxx ABF Singapore Bond Index comprise off

• You can download the annual report of A35 here, it contains the portfolio of the iBoxx ABF Singapore Bond Index

Reasons to invest in A35(ABF SINGAPORE BOND INDEX FUND)

Diversification

• Investors achieve diversification in one single transaction with minimum investment versus having to build a similar portfolio by purchasing individual stock, bonds or commodities which could require a huge investment outlay

Cost-effectiveness

• The cost of investing in ETFs are generally lower than actively managed funds(for example, Units Trusts) in the same markets of assets

Accessibility

• ETFs offer access to a variety of local and global markets, as well as asset classes, both broad and specific, which may be inaccessible to individual investors

Did you know?

• You can invest in A35 using CPF SRS(supplementary retirement scheme)?
• Read more about using SRS to invest in A35 here

Fund performance of A35

• 1yr performance=2.01%
• 3yr performance=2.85%
• 5 yr performance=2.55%
• I will be honest here, the fund performance return is not very impressive considering that the above performance is taken into account after reinvesting the dividend.
• However, if you look below the chart in yahoo finance, it is pretty stable being that its min is at 1.00(red line) and its max is at 1.30(black line)

Dividend of A35(One of the most exciting parts of investing is the dividend!)

• Dividend yield for 2017:1.89%
• Dividend yield for 2018:2.31%
• Dividend yield for 2019:2.31%
• There is some mistake in the dividend yield for 2019, hence I have edited and replace it with the actual percentage of the dividend that I have received:2.31%
• For more information about the dividend that I have received for 2019, do read more about it at my updates for POSB invest saver Jan 2019 here

Conclusion

• I am pretty surprised that this index contains HDB and LTA, truly AAA rated!
• History has shown that housing market has collapsed before(yes, I am referring to 2008 financial crisis), but Singapore housing market price is controlled by the government hence it is "rather" safe(take note of the word rather)
• The fund performance may not be very impressive but it provides a better interest rate than most saving bank account or Singapore government bond.
• Moreover, it provides the liquidity of selling away anytime should you need the money.
• Ultimately, the decision to invest or not lies with you, remember to dyodd(do your own due diligence!)

The next post on learning investing/trading together will be on how to purchase from POSB invest saver, do look out for it!

(Post 78/week 60)TipforThought:how to mail and selling on carousell tip and tricks

This week tipforthought is about how to post a mail and some carousell tip, tricks, and hacks that I have research and used

Please do visit my carousell page if you would like to purchase any cheap second-hand book
My carousell:carousell.com/eric996

How to post a mail?

Actually posting a mail is quite easy, you need to purchase the envelope and the stamp and off you go!

Step 1.Purchase the envelope

• You can choose to purchase an envelope from either popular bookstore(around $3.50 for 10 pcs of A4 envelope if my memory serves me right) or any stationary shop or even Daiso(Try not to purchase from singpost outlets itself as it is a tad expensive).
• In my case, I purchase A4 envelope from the Tesco supermarket in Malaysia when I make my monthly trip there due to it being cheaper than Singapore envelope price
• Below is an example of the envelope that I have purchased

Step 2: Purchase the stamp

• For purchasing of the stamps, you can easily do it at the nearest sam machine(see pic below)

                                                    

• Here are the postage rates, for more information refer to the singpost website here

• As I am using A4 envelope which also means C4 envelope, I will be purchasing $0.60 stamp from the SAM machine

Step 3:Write the buyer address,your return address and paste the stamp

• Write the buyer address in the red box,e.g Pasir Ris drive 51 Blk 123 #02-01 s600123
• Paste the stamp in the orange box
• At the other side of the envelope,write the return address (your own home address) for return mail just in case, in the orange box,e.g Tampines drive 52 Blk 456 #03-02 s601456

Step 4:Mail it out

• Mail it out at the nearest posting boxes, you can google the location for the nearest posting boxes

In the second part, I will be talking about some tip that I used to sell on carousell...

1. Regularly update your carousell

By regularly updating your carousell with listing, this has enable my carousell to have more sales.

As this article from Sonia point out, this is due to 3 reasons

1. Your followers get your updates in their browse views
2. Your new listing will show up on the homepage for random browsers
3. Newer listings appear higher when one uses the ‘recent’ filter

2.Updates on weekend

The best time to post on carousell is on a weekend as most people would have time to browse through the listing during the weekend

3.Delete and re-update your listing that is old

For those items that you have listed more than 3 month and above, you should delete and re-upload the listing so that it would help to boost your sales more

4. Share your listing on gumtree and facebook group

Gumtree and facebook group selling second-hand book has a lot of potential buyers, some of my buyers come from gumtree.

5.Create a template to handle customers to save time

In my personal experience, I have created a template to reply to customers to save some typing energy(think of it like an answer or an automated chat bot).

If the buyer makes an offer, this is how I will reply...

1. Meetup is at an extra charge of 50 cents and mailing is at an extra charge of 1.50

2. Hi meetup is at xxx MRT only due to the low cost of the item

If the buyer chooses to meet up, this is how I will reply...

1. Hi, I will only be able to meet up on the weekend

and continue to  discuss with him on the arranged timing, however, if the buyer opts for the mailing option

1.Ok sure, pls make payment via paylah at xxx

2.Would I have your address for mailing purpose?

If the buyer does not have pay lah, this is how I will reply...

1. My bank acc is xxx, please let me know when you transfer

2.Would i have your address for mailing purpose?

And last but not least, remember to thanks your buyers...

1.Please notify me when you have received the item and thank you for purchasing from me

That's all for this week tipforthought!

(Post 77/week 59)Investment project update:Posb invest saver JAN 2019 summary + dividend

Posb invest saver update(JAN 2019)

My POSB invest saver update for the month of Dec, read here

Regular saving plan updates for ABF Singapore Bond Index Fund(A35)

Breakdown of my regular saving plan(A35) this month(JAN 2018)
Total amount(regular saving plan)A35:$100
Price per share:$1.129300
Gross sales charge:0.5%
Net sales charge amount:0.5% of 100=$0.50
Net amount invested: Total amount-net sales charge amount=$100-$0.50=$99.50
Units issued: Net amount invested/price per share=$99.50/$1.129300=88 units

Summary: As of 19 JAN, the share price of A35 was at 1.131, has drop from last month, but still quite at the middle with its maximum at 1.25(2011) and its lowest 1.00(2008). Will be watching it for any further movement, once below 1.100 will make a bulk purchase.No change in sentiment from last month.

And also the dividend!

Fund name: ABF Singapore BOND index

Units held:2,255.00000

Dividend per share:$0.026200
Dividend amount:$59.09

Regular saving plan updates for Nikko AM Singapore STI ETF(G3B)

Breakdown of my regular saving plan(G3B) for this month(DEC 2018)

Total amount(regular saving plan)A35:$100
Price per share:$3.280000
Gross sales charge:0.82%
Net sales charge amount:0.82% of $100=$0.82
Net amount invested: Total amount-Net sales charge amount=$100-$0.82=99.18
Units issued: Net amount invested/price per share=$99.18/$3.280000=30 units

Summary: As of 19 JAN, the share price of G3B is at 3.274 and ES3 is at 3.29. Both ES3 and G3B has been on a Uptrend,but how long will this last? 

And also the dividend!

Fund name: NIKKO AM SINGAPORE STI ETF

Units held:235

Dividend per share:$0.059700
Dividend amount:$14.03

(Current regular saving plan portfolio)

(When you trade long term through dollar cost averaging, no need to worry about the red:D)

Don't forget to DYODD(Do your own due diligence!)

(Post 76/week 58)Zero dollar project updates:carousell,Bitcoin Faucets,Short Link,Online survey and Adsense update

Updates for last week week of zero dollar project
1.Carousell
2.Bitcoin faucets
3.Short link
4.Online survey
5.Adsense update

1.Carousell

My carousell:carousell.com/eric996

Been doing some heavy marketing everywhere, gumtree, facebook, you name it...

Total earnings for carousell from last update:$1 + $0.50 + $2=$3.50

2.Bitcoin faucets

Current coinpot holding

Bitcoin core: 6391 Satoshi
Bitcoin cash: 13446 bch
Dogecoin: 65.77 doge
Litecoin:  0.00228080 ltc
Dashcoin: 0.00080555 dash

3.Short link

Last update

current update

Total earning for short link last update:$4.3859-$3.836=$0.5498

For more information on how's I use both short link on my blog and YouTube, read here

4.Online survey

Current online survey on my list...(Bold mean that these survey websites have been verified for payout)

4.1 Toluna
4.2.surveyon
4.3 YouGov
4.4 mobrog
4.5 ipanelonline
4.6 viewfruit
4.7 mysurvey
4.8 millleu(App on google play store)

Survey that payout:viewfruit,YOUGOV

The total payout for survey:$5.00+$25.16=$30.16

5.Adsense

Last week earning for Adsense:$1.89

Total earnings for this zero dollar project updates:$3.50+$0.5498+$30.16+$1.89=$36.01

That's all for the updates for my zero dollar project! stay tuned to my investment project updates for this week!

(Post 75/week 56)Investment project updates(Peer to peer lending):Moolahsense(My twelfth campaign)

Moolahsense(My twelfth campaign with Moolahsense)

Note*the company name will not be revealed just like the previous post as my money are still inside moolahsense, haha(this is not a sponsored post by the way)

Issuer summary
Date of listing:Mar 2018
Amount:S$50,000.00
Tenor: 6 months
Note type: Equal installment

Quote from moolahsense website

• Equal installment:A promissory note by which an installment of the principal subscription amoung and/or interest accrued and due up to the date of payment shall be payable on such dates as set out in a repayment schedule specified in the promissory note, and on the maturity date, the principal subscription amount would have been paid in full

Repayment frequency: Monthly

• Repayment frequency: Will be paid monthly

Target interest rate:24%P.A

• Target interest rate: The maximum rate the issuer is willing to provide the interest on the principal subscription amount which the issuer wished to obtain, as notified in writing by the issue to Moolahsese

Purpose: Working capital

Quote from valuepenguin:https://www.valuepenguin.sg/what-is-working-capital

• Working capital: It is a concept to describe a business ability to cover its short-term operating costs
• E.g For this campaign, I have funded $100 into it
• As the target interest rate is 24% PA, this means that at the end of the tenor, which is 6 month I will expect to receive $112
• 100%=$100
• 12%(Interest for 6 month)=$12.00
• 112%(The Principal + the interest)=$100+ $12.00=$112.00
• Since the tenor is 6 months, each month I will receive $18.76(inclusive of interest) in payment/equal installment
• 1month=$112.00/6=$18.66

Summary company profile

• The issuer is a company incorporated in Singapore in 2014
• The Issuer is in the manufacturing industry and has around 10 employees.  
• The Issuer specializes in the manufacture of wooden containers and crates for industrial packaging purposes.

Detail of purpose

• The Issuer seeks working capital for the performance of various container manufacturing contracts which have been awarded to the Issuer.

Financial statement

Will only reveal a part of the financial statement due to confidentiality. As I have mentioned a few weeks ago in my post, that I only mainly use this three ratio: current ratio, quick ratio and debt to equity ratio to decide in investing in a campaign, hence I will be showing its ratio below

The ratio is as follow(left side of the column is for the year 2017/right side of the column is for the year 2016)

Year 2017/Year 2016

(Current ratio 2017:2.57),(Current ratio 2016:5.2)

• A simple ratio of current asset divide by current liabilities
• Current liabilities are debt that needs to clear in the short term(in a year)
• If a company has a current ratio less then 1.0, do not invest in it
• If a company has a current ratio more then 2.0, May consider investing in it
• The higher the current ratio, the better
• For the current ratio of 2016:2.57, it is higher than the recommended range(>2.0)
• For the current ratio of 2017:5.2, it is higher than the recommended range(>2.0)

(Quick ratio 2016:2.57),(Quick ratio 2015:5.2)

• The quick ratio is almost similar to current ratio except that it is assumed that the company does not sell its inventories(e.g Toyota inventory is its car) or stock, it is still able to fulfill its debt
• If the company has a quick ratio of 0.75 and below, do not invest in it
• If the company has a quick ratio of 1.25 and above, May consider investing in it
• The higher the quick ratio the better
• For the quick ratio of 2016:2.57, it is higher than the recommended range(>1.25)
• For the quick ratio of 2017:1.3, it is higher than the recommended range(>1.25)


(Total liabilities/equity 2016:1.44),(Total liabilities/equity 2015:1.16)





• The debt ratio is calculated by total liabilities divided by the equity
• If the company has a debt ratio of 1.5 and above, do not invest in it
• The company should essentially have a debt ratio of 1.0, if the debt ratio is below 0.75, do consider investing in it
• The lower the debt to equity ratio the better
• For the Total liabilities/equity of 2016:1.44 it is out of the recommended range(<0.75)
• For the Total liabilities/equity of 2017:1.16, it is out of the recommended range(<0.75)

Why did I invest in this loan?

• The current ratio and quick ratio of 2016 along with total liabilities/equity is out of the recommended range,however the current ratio, quick ratio are within the range, taken in to consideration that the loan is only 6 month, I have subcribe to this loan and in fact, the campaign has already ended some time ago and I have received the principal along with the interest

Repayment schedule?

link on how too read the effective interest rate for moolahsense:http://letscrowdsmarter.com/understanding-interest-rates/

Monthly interest rate:interest/start balance=$2/$100=2%(Percentage conversion must *100)

Effective interest rate:2%*6=12%(almost the same as the target interest rate at 12%(see the top of the post))

From the above picture, you can see that the Net repayment is at $17.67 instead of the $18.66 that I have mentioned above at the working capital, hence I will do a calculation here again

1-month repayment:$17.67

6-month repayment:$17.67*6=$106.02

$100(the amount I put in this campaign=100%

$100=(100/100)*106.02=106.02%

106.02%-100%=6.02%

The target interest rate as you can see in my above post is at around 24%P.A, after taking into account of the tenor rate being 6 months, which is 12 % and comparing it to 6.02% its almost 6% difference(i shall call this net interest rate instead)in this campaign. To conclude, this means that if you invest in a (24%P. A) high-interest rate campaign in moolahsense which has a tenor rate for 6 months, you will get only about 6%

Stay tuned to my next week post:moolahsense(my eleventh campaign)!

(Post 74/week 55)Learning investing/trading together part 12: Boglehead investment philosophy

This post serves as a summary of the Boglehead investment philosophy, which I believe is a good and easy to understand investment strategy, that an amateur like you and me can follow

Please refer to this link to learn more about boglehead investment philosophy

What is a Boglehead investment philosophy?

• Boglehead investment philosophy simply follows a small number of simple investment principles that have been shown over time to produce risk-adjusted returns far greater than those achieved by the average investor.
• The basis of all of these principles is the idea that successful investing is not a complicated process, and can be accomplished by anyone with a small amount of effort.
• These ideas come from the investing philosophy of Vanguard-founder Jack Bogle, hence it is called the Boglehead investment philosophy

1.Develop a workable plan

• The Bogleheads approach to developing a workable financial plan is to establish a sound financial lifestyle.
• To summarise, live below your financial mean and avoid bad debt

2.Invest early and often

• Establish a regular saving pattern, minimum about 20% of your income should be enough
• Arrange automatic saving deduction for your bank account, if you are forgetful like me, like in my case with posb invest saver
• The graph below is a great example of why you should start saving early

3. Never bear too much or too little risk

• You need to be honest with yourself on how much risk you would like to take if the stock drop will you be able to sit through it without thinking about it all day? (I been through that and it wasn't a pleasant experience haha)
• In summary, you can either follow shinything advice on having 110-your age in stock(e.g my age is 22 this year, hence 110-22=88% in stock and 100-88%=12% in bonds) You can read more about shinything thread here
• Or, you can simply follow benjamin graham, father of value investing advice of simply either putting 25 % in bond or 75 % in stock or the other way around

4.Diversify

• Rather than picking individual stocks,Bogleheads buy funds that are widely diversified or even approximate the whole market.
• This guarantees they will receive the average return of all investors. Being average sounds bad, but it is actually a great thing. That's because most investors perform worse than average after taking into account the high fee that they can pay for actively managed funds.

5. Never try to time the market

• Simply put, don't try to time the market unless you are a trader and have a very good plan

6. Use index fund when possible

• The best and lowest cost way to buy the whole stock market is with index funds (either through traditional mutual funds or ETFs)
• One of such ETFs is our STI ETF (ES3 or G3B) OR Vanguard Total Stock Market Fund Which is the largest mutual fund in the world

7. Keep costs low

• Choose the index fund with the cheapest fees
• Refer to my post on how to choose a brokerage here

8.Minimize taxes

• There is no capital gain tax or dividend tax for Singapore stock(that's the only great part about buying stocks in Singapore)
• However, there is 30% dividend withholding tax for buying US stock if you're a Singaporean, for more information for dividend withholding tax please refer to my post on shiny thing thread here

9. Invest with simplicity

• The boglehead investment philosophy is simply following a 3 fund portfolio, a local stock market index fund ETF(Which in my case is the STI ETF: ES3 or G3B), a local stock market bond index fund ETF(Singapore bond index fund: A35) and an international bond index fund(Vanguard ETF)
• For more information about the STI ETF: ES3 or Singapore bond index fund: A35, please refer to this post here
• I do not own any international ETF as I do not have the capital yet(still working on it) 
• The picture below shows an example of a 3 fund portfolio

10. Stay on course

• Do not panic when the stocks prices drop
• Do not be distracted by other funds that are performing better, in short, only invest within your circle of  competence as Warren Buffett put it

11.Conclusion

• Simply put,boglehead should  (1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
• One of the wonderful things about Boglehead investing is that it generally only requires a part of a day to set up, and then about an hour a year of effort to rebalance. Beyond that, there is no need to watch the markets or follow financial news. Even better, it works. Although Bogleheads investing may seem strangely simple, it is based on decades of comprehensive research showing that buying and holding the whole market consistently outperforms many of the alternatives.
• To understand more about rebalance,do refer to this post on the shiny thing thread here

Remember to DYODD(Do your own due diligence!)

(Post 73/week 55)Learning investing/trading together part 11:Shiny things thread summary from hardwarezone part 2

Continuing on from the last post here...

Tip 10:On Insurance

• Buy Term Insurance + Personal Accident Insurance.
• Buy Hospitalisation Insurance.
• Buy Mortgage Insurance, if you have any outstanding mortgage loans
•  Invest the rest.
• Do not buy Life Insurance.
• Do not buy ILP, Investment-Linked Products
• Mixing Protection ( essentially, Insurance ) & Investment in a product, e.g.. ILP, Life Insurance, Endowment Plan, is a terrible idea because these events are mutually exclusive & it should not cause liquidation.
• Cheapest Term Insurance in SG: Aviva SAF(The only good thing that NS has provided)
• This is the first insurance you should get if you don't have any for Death & TPD. ( Total Permanent Disability )

Tip 11: Growth-Centric / Dividends-Centric?

• If you are near retirement age, opt for dividends-centric stocks / Bonds ETF.
•  Generally, you buy stocks for growth gains, not dividends.
• One of the most dangerous things an investor can do to a portfolio is to seek bond-like returns from the stock market while taking de facto equity risk on the fixed income side. In English - to turn their bonds into stocks & their stocks into bonds.
• Buy high-yielding dividend stocks for their current income and pretending they are "bond-like" is a recipe for nasty surprises at some point down the line. But this is precisely what many in the industry have been doing - Financial advisors, ETF providers, money managers - everyone's playing. 

Tip 12. Diversify

• Hold diversified assets in different countries.

Tip 13. ETF

• ETF: Exchange traded fund, basically tracks / holds a bunch of something.
• ES3 is an ETF the tracks 30 sg-based companies, i.e. DBS, OCBC, SingTel, Keppel, etc.
• It's safer than buying 1 company and rises with the economy.
• During a crisis, you can be sure this ETF won't disappear, can't say the same about any single company.
• A35 is a bond ETF, it holds many bonds to maturity. One can treat it like a bond. It's stable and yields about 2%.
• ES3 and A35 are stock code.
• Their name is STI ETF and ABF SG BOND ETF. You can buy/sell them on the stock market.
• The Top 7 of STI are heavily weighted in Banks and a smaller spread on Telco's, Real Estate, Oil & Gas where they made up of 60% of STI.

Tip 14. on SG Reits (Aug 2015)

• If you buy a bunch of REITs, you're explicitly making a bet on real estate prices - they're nothing to do with the STI really.
• The STI is mostly banks, real estate companies (not REITs, the companies like CapitaLand that run the REITs) and SingTel.
• REITs are a tiny slice of the index, like 3.5% of it.

Tip 15. Avoid punting on FX if you are an unsophisticated Long-Only blue chips / ETFs investor.

• Compared to investing in equities, when the price goes below your FX position, you have to fund it. Meaning you have to pay to maintain the position OR cut loss and sell the position.
• Going Long-Only on blue chips, ETFs, REITs, won't make you rich, but it won't make you poor either. 
• From 1928 through 2014, the S&P 500's compound rate of return was 9.8%, enough to transform a $100 investment at the start of 1928 into $346,261 over 87 years.

Tip 16. Pro Tips About Trading.

• Don't trade after-hours OR in the pre-open. Spreads are WIDE & you don't know what the "real" price is.

Tip 17. SeekingAlpha.com for US-centric stocks / investment-related news.

Tip 18. the most basic books about investing.

• Millionaire teacher
• The coffeehouse investor

Talking about investment books, one of the next few posts will be about investment books that I have read, I would try to provide the eBook version if it is available, do look out for it!