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> Asset Allocation Investing using US ETF, Basic approach to asset Allocation ETF

dreamer101
post Jun 10 2013, 06:25 AM, updated 4y ago

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Folks,

In this thread, I provide the basic step to step approach on how to use US ETF to do asset Asset Allocation investing.

http://www.investopedia.com/terms/a/assetallocation.asp


The basic assumption here is the person has access to US brokerage and can any US stock including ETF.

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

The ETF to be used in this illustration are VT and BND.

If a person is convinced that they can time the market to buy and sell, this is not the approach that you want. This thread is for people that want a simple low maintenance approach to investing.

Dreamer

This post has been edited by dreamer101: Jun 10 2013, 06:27 AM
gark
post Jun 10 2013, 09:57 AM

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I have VOO bought in several tranches since 2008/2009, have returned ~80% to date. laugh.gif Management fees are rock bottom.

My opinion is that in developed market, index fund perform better than investment managers. For less develop market, investment fund managers is better since there is more market manipulation, insider trades, info leak etc etc. wink.gif

Index funds are one of the many tools for portfolio management. In fact if one buys carefully, you can have a very balanced portfolio based on ETF. Also ETF is a great tool to buy obscure stocks, which is otherwise out of your reach. You want to buy Nigeria or Bangladesh Stock Index ETF.. you can do so.... tongue.gif

This post has been edited by gark: Jun 10 2013, 10:05 AM
dreamer101
post Jun 10 2013, 09:22 PM

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Folks,

In an asset portfolio, most of the return are determined by the stock versus bond ratio. So, for the first step of asset allocation is to determine the stock versus bond ratio.

This has to be decided by each individual. The followings are some of the guideline

A) The stock/bond ratio should be between 80/20 to 20/80. If you go above and below that ratio, you are talking too much or too little risk and do not get the optimal return.

B) Risk versus Return tradeoff.

1) If you take on higher percentage of stock allocation, your portfolio will be more volatile. You need to take the "50% test". Historically, stock can drop 50% of its value at any point of time. Can you stop yourself from selling when that happen??

2) Do you NEED to take risk?? If you have ENOUGH money, you do not need to take on higher percentage of stock allocation.

C) Age in bond rule -> A simple rule is to take you age and use that as your bond ratio.

D) All else fail, do a 60/40 asset allocation. Those are the standard ratio use by insurance company for their investment.

E) When in doubt, lower the stock ratio. The strategy only work if you can yourself from selling in a market crash. If you cannot sleep at night with your aset allocation, reduce you stock exposure...

F) Emergency fund is not part of your asset allocation. You need at least 3 to 6 months of emergency fund. You may keep longer if you feel your income is unstable.

Dreamer


MNet
post Jun 10 2013, 10:16 PM

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u all use which US broker?
jutamind
post Jun 10 2013, 10:54 PM

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which US broker recommended to use?

i think the barrier is that if you are a small timer investor, the cost of trading is probably higher than the investment amount...but i might be wrong here...

but, i'm interested in knowing more on how to invest with US online brokers, especially on funds transfer/payment
dreamer101
post Jun 10 2013, 11:26 PM

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QUOTE(jutamind @ Jun 10 2013, 10:54 PM)
which US broker recommended to use?

i think the barrier is that if you are a small timer investor, the cost of trading is probably higher than the investment amount...but i might be wrong here...

but, i'm interested in knowing more on how to invest with US online brokers, especially on funds transfer/payment
*
jutamind,

The rule of thumb for trading cost is less than 1%. Assuming USD $10 per trade, that means the invest amount should be at least USD $1K.

Dreamer

MNet
post Jun 10 2013, 11:32 PM

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Take a look at the ETF/Mutual fund performance, at MY mutual fund market also can get that kind of return.

why need the hassle to invest in US mutual fund/etf?
dreamer101
post Jun 11 2013, 12:29 AM

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QUOTE(MNet @ Jun 10 2013, 11:32 PM)
Take a look at the ETF/Mutual fund performance, at MY mutual fund market also can get that kind of return.

why need the hassle to invest in US mutual fund/etf?
*
MNet,

1) VT invest on 4,500 largest companies in the world. It is highly diversified. It is protected against any single country failure like Malaysia. Annual expense = 0.19%

2) BND invest on the whole US bond market. Annual expense = 0.1%

Their costs and diversification is unmatched by offering in Malaysia.

<<MY mutual fund market also can get that kind of return.>>

3) Return is NOT the main goal of this approach. The main goal is Risk Adjusted Return with minimal expense and maintenance.

Dreamer

dreamer101
post Jun 11 2013, 12:34 AM

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Folks,

Let's assume that you pick 60/40 at step 1. Your brokerage expense is $10 per trade and you have approximately USD $10K to invest. Furthermore, let's assume that VT is at $50 per share and BND is at $80 per share.

At 60/40, you will invest $6K at VT and $4K at BND.

For VT, you buy $6,000 / $50 = 120 shares.

For BND, you buy $4,000 / $80 = 50 shares..

Given that you trading cost is $10, you will invest the amount of at least $1K to keep your trading cost down.

Dreamer
kaiserwulf
post Jun 11 2013, 07:20 AM

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+1 rclxms.gif

If buying US ETFs from here, subject to upkeeping charges. How do you deal with it? It will eat into profits yes? unsure.gif

QUOTE(dreamer101 @ Jun 10 2013, 06:25 AM)
Folks,

In this thread, I provide the basic step to step approach on how to use US ETF to do asset Asset Allocation investing.

http://www.investopedia.com/terms/a/assetallocation.asp
The basic assumption here is the person has access to US brokerage and can any US stock including ETF.

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

The ETF to be used in this illustration are VT and BND.

If a person is convinced that they can time the market to buy and sell, this is not the approach that you want.  This thread is for people that want a simple low maintenance approach to investing.

Dreamer
*
dreamer101
post Jun 11 2013, 07:44 AM

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QUOTE(kaiserwulf @ Jun 11 2013, 07:20 AM)
+1  rclxms.gif

If buying US ETFs from here, subject to upkeeping charges. How do you deal with it? It will eat into profits yes? unsure.gif
*
kaiserwulf,

If you open an US Brokerage A/C online and buy the ETF through that A/C, what kind of maintenance charge are you referring to??

Dreamer
jutamind
post Jun 11 2013, 08:14 AM

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Dreamer,

Which online broker do you use? What's the commission rate and how to fund your trading amount?
dreamer101
post Jun 11 2013, 08:39 AM

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QUOTE(jutamind @ Jun 11 2013, 08:14 AM)
Dreamer,

Which online broker do you use? What's the commission rate and how to fund your trading amount?
*
jutamind,

https://forum.lowyat.net/topic/2027841/+2760

I use TD Ameritrade for stock trading. I am US Resident. Hence, I can invest on Vanguard directly without using ETF. You should ask people on above thread. I believe they either open the US A/C directly on line or open A/C on Etrade at Singapore.

Dreamer
creativ
post Jun 11 2013, 08:53 AM

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Dreamer,
THANK YOU for starting this thread! thumbup.gif
kaiserwulf
post Jun 11 2013, 09:41 AM

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Good post. Always buy direct to keep costs low.

Looks like being a US resident is not in my target for a long time. Btw, how do taxes affect you if you are US resident compared to a non?

QUOTE(dreamer101 @ Jun 11 2013, 08:39 AM)
jutamind,

https://forum.lowyat.net/topic/2027841/+2760

I use TD Ameritrade for stock trading.  I am US Resident.  Hence, I can invest on Vanguard directly without using ETF.  You should ask people on above thread.  I believe they either open the US A/C directly on line or open A/C on Etrade at Singapore.

Dreamer
*
dreamer101
post Jun 11 2013, 11:07 AM

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QUOTE(kaiserwulf @ Jun 11 2013, 09:41 AM)
Good post. Always buy direct to keep costs low.

Looks like being a US resident is not in my target for a long time. Btw, how do taxes affect you if you are US resident compared to a non?
*
kaiserwulf,

Check out the US stock thread on tax issue. I am not familiar with those issues. I believe as a non-US resident, you may have additional advantage of not having to pay capital gain tax for your stock gain. And, your gain is not taxable by Malaysian government too.

<<Good post. Always buy direct to keep costs low.>>

That statement is not necessary true with Vanguard ETF. Vanguard ETF is actually lower cost than Vanguard mutual fund in most cases. The only difference is I do not have to pay trading cost to buy mutual fund versus ETF.

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

Total bond market mutual fund expense ratio = 0.20%

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=3

Total International mutual expense = 0.22%

Dreamer

This post has been edited by dreamer101: Jun 11 2013, 11:14 AM
MGM
post Jun 11 2013, 01:57 PM

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QUOTE(kaiserwulf @ Jun 11 2013, 09:41 AM)
Good post. Always buy direct to keep costs low.

Looks like being a US resident is not in my target for a long time. Btw, how do taxes affect you if you are US resident compared to a non?
*
Taken from investopedia.com:

The tax implications for a foreign investor will depend on whether that person is classified as a resident alien or a non-resident alien. To be considered a non-resident alien, a person must meet several guidelines. First of all, the person cannot have had a green card at any time during the relevant tax reporting period (e.g 2005) and cannot have resided in the U.S. for more than 183 days in the past three years, including the current reporting period. However, non-U.S. citizens who hold green cards and have been in the U.S. for more than 183 days are classified as resident aliens for tax purposes and are subject to different guidelines than non-resident aliens.

If you fall under the non-resident alien category and the only business you have in the U.S. is in investments (stocks, mutual funds, commodities) within a U.S. dollar-denominated brokerage firm or other agent, you are subject to the following tax guidelines. In terms of capital gains, non-resident aliens are subject to no U.S. capital gains tax, and no money will be withheld by the brokerage firm. This does not mean, however, that you can trade tax free - you will likely need to pay capital gains tax in your country of origin. In terms of dividends, non-resident aliens face a dividend tax rate of 30% on dividends paid out by U.S. companies. However, they are excluded from this tax if the dividends are paid by foreign companies or are interest-related dividends or short-term capital gain dividends. This 30% rate can also be lower depending on the treaty between your home country and the U.S., so it is important that you contact your brokerage firm to verify the rate. If you are a resident alien and hold a green card or satisfy the resident rules (183 days), you are subject to the same tax rules as any U.S. citizen.
xuzen
post Jun 11 2013, 02:27 PM

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Annual Expense Ratio (AER) of 0.1% or 0.2% is simply WOW!

In Bolehland these type of figures are dream only.

The lowest AER one can go in Bolehland is around 1%, that is by becoming agent on your own and reinvest your commission.

Xuzen




gark
post Jun 11 2013, 02:39 PM

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For those who are interested in ETF... but worry about trading cost and 30% withholding tax ton dividends there are ways to avoid this.

Buy offshore US ETF listed in SGX and HKEX, you will not be charged the 30% withholding tax since both countries have no tax on dividends. You choices are more limited, but you can still find the most of the more popular ETF's.

Also a lot of broker have commission free trades on US ETF, this might be able to offset your witholding tax. Then sell your holdings before dividend and re-buy ex-dividend once the price is adjusted. Otherwise don't bother (like me) as most US ETF dividend is <3%.

Or you can buy Offshore Vanguard funds , as non-US resident but the minimum purchase is $10,000.

This post has been edited by gark: Jun 11 2013, 02:47 PM
gark
post Jun 11 2013, 02:40 PM

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QUOTE(xuzen @ Jun 11 2013, 02:27 PM)
Annual Expense Ratio (AER) of 0.1% or 0.2% is simply WOW!

In Bolehland these type of figures are dream only.

The lowest AER one can go in Bolehland is around 1%,  that is by becoming agent on your own and reinvest your commission.

Xuzen
*
I hold VOO, Vanguard S&P 500 ETF, and my MER is 0.05%-0.06%.... tongue.gif

This post has been edited by gark: Jun 11 2013, 02:42 PM
jutamind
post Jun 11 2013, 03:18 PM

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what's the difference between the same ETF but listed in SGX and HKEX? Arent they the same ETF but only traded in different currencies?

If we were to buy from SG/HK, what would be the cheapest to fund the trading account in SG/HK?

QUOTE(gark @ Jun 11 2013, 02:39 PM)
For those who are interested in ETF... but worry about trading cost and 30% withholding tax ton dividends there are ways to avoid this.

Buy offshore US ETF listed in SGX and HKEX, you will not be charged the 30% withholding tax since both countries have no tax on dividends. You choices are more limited, but you can still find the most of the more popular ETF's.

Also a lot of broker have commission free trades on US ETF, this might be able to offset your witholding tax. Then sell your holdings before dividend and re-buy ex-dividend once the price is adjusted. Otherwise don't bother (like me) as most US ETF dividend is <3%.

Or you can buy Offshore Vanguard funds , as non-US resident but the minimum purchase is $10,000.
*
gark
post Jun 11 2013, 03:21 PM

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QUOTE(jutamind @ Jun 11 2013, 03:18 PM)
what's the difference between the same ETF but listed in SGX and HKEX? Arent they the same ETF but only traded in different currencies?

If we were to buy from SG/HK, what would be the cheapest to fund the trading account in SG/HK?
*
All of them listed is US, HKEX or SGX is traded in USD only.

Just the company structure is different, those listed in SGX and HKEX is offshore, so they are not subject to US tax.
jutamind
post Jun 11 2013, 04:07 PM

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how do you transfer RM to SG/HK for payment of these ETFs purchase?

QUOTE(gark @ Jun 11 2013, 03:21 PM)
All of them listed is US, HKEX or SGX is traded in USD only.

Just the company structure is different, those listed in SGX and HKEX is offshore, so they are not subject to US tax.
*
gark
post Jun 11 2013, 04:33 PM

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QUOTE(jutamind @ Jun 11 2013, 04:07 PM)
how do you transfer RM to SG/HK for payment of these ETFs purchase?
*
By TT? biggrin.gif Or you can buy through MY broker, but more expensive...

This post has been edited by gark: Jun 11 2013, 04:33 PM
dreamer101
post Jun 11 2013, 09:09 PM

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MGM and Gark,

Thanks for helping out on this thread...

Dreamer
dreamer101
post Jun 11 2013, 09:22 PM

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QUOTE(dreamer101 @ Jun 11 2013, 12:34 AM)
Folks,

Let's assume that you pick 60/40 at step 1.  Your brokerage expense is $10 per trade and you have approximately  USD $10K to invest.  Furthermore, let's assume that VT is at $50 per share and BND is at $80 per share.

At 60/40, you will invest $6K at VT and $4K at BND.

For VT, you buy $6,000 / $50 = 120 shares.

For BND, you buy $4,000 / $80 = 50 shares..

Given that you trading cost is $10, you will invest the amount of at least $1K to keep your trading cost down.

Dreamer
*
Folks,

Now, we want to go into step of how to invest additional money.

A) You have additional 1K to invest.

VT had went up $100, BND had dropped to $60..

So, VT @ 120 share = 120 X $100 = $12,000

BND = 50 shares @ $60 = $3000

Total = $15K

VT = 12,000 / 15,000 = 80%
BND = 3000 / 15000 = 20%

Your goal is to keep the fixed 60/40 ratio. Since the BND is below the targeted 40% ratio, you use $1K to buy BND 1000 / 60 = 16 shares @ $60 = $960.

Dreamer

dreamer101
post Jun 11 2013, 10:54 PM

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You have additional 1K to invest.

VT had went down $25, BND had went up to $160..

So, VT @ 120 share = 120 X $25 = $3,000

BND = 50 shares @ $160 = $6000

Total = $9K

VT = 3,000 / 9,000 = 33% < 60%
BND = 6000 / 9000 = 67% > 40%

Your goal is to keep the fixed 60/40 ratio. Since the VT is below the targeted 60% ratio, you use $1K to buy VTI 1000 / 25 = 40 shares @ $25 = $1,000.

Dreamer
dreamer101
post Jun 12 2013, 07:05 AM

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You have additional 1K to invest.

VT had went down $25, BND had went down $20..

So, VT @ 120 share = 120 X $25 = $3,000

BND = 50 shares @ $20 = $1000

Total = $4K

VT = 3,000 / 4,000 = 75% > 60%
BND = 1000 / 4,000 = 25% < 40%

Your goal is to keep the fixed 60/40 ratio. Since the BND is below the targeted 40% ratio, you use $1K to buy BND 1000 / 20 = 50 shares @ $20 = $1,000.

Dreamer

This post has been edited by dreamer101: Jun 12 2013, 07:05 AM
dreamer101
post Jun 12 2013, 07:26 AM

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You have additional 1K to invest.

VT had went up $75, BND had went up to $100..

So, VT @ 120 share = 120 X $75 = $9,000

BND = 50 shares @ $100 = $5000

Total = $14K

VT = 9,000 / 14,000 = 64% > 60%
BND = 5000 / 14,000 = 36% < 40%

Your goal is to keep the fixed 60/40 ratio. Since the BND is below the targeted 40% ratio, you use $1K to buy BND 1000 / 100 = 10 shares @ $100 = $1,000.

Dreamer
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post Jun 12 2013, 08:45 AM

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QUOTE(gark @ Jun 11 2013, 03:21 PM)
All of them listed is US, HKEX or SGX is traded in USD only.

Just the company structure is different, those listed in SGX and HKEX is offshore, so they are not subject to US tax.
*
FYI, the returns of those non-US -domiciled ETF are adjusted for the dividend tax withholding.

One may want to check for the tax treaty between the domiciled country and US.
For instance, Ireland-domiciled Vanguard S&P 500 (VUSA) is subjected to 15% dividend withholding instead of the normal 30%.

Another thing to take note is the estate tax imposed by US: Stocks are treated as U.S. gross estate and there's only $60k tax exemption for non-resident alien.
dreamer101
post Jun 13 2013, 08:21 AM

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Folks,

We had gone through

1) Set an asset allocation ratio

2) How to invest extra money into that asset allocation.

Now, we are going into re-balancing. There are two common kind of rebalancing: time based and band based.

Let's start with time based. In this case, you pick a time to rebalance your portfolio to the fixed ratio. The most common time based rebalancing is annual rebalancing. You pick the same day every year to rebalance your portfolio.

For example, you are on 60/40. at November 1 every year, you will rebalance.

Let's assume that you have 200 shares of VT at $100 and 100 shares of BND @ $120.

200 X $100 = $20,000 of VT
100 X $120 = $12,000 of BND

Total = 20K + 12K = 32K

VT 20K /32 k = 62.5% > 60%
BND 12K / 32K = 37.5% < 40%

So, you need to sell 2.5% of your portfolio (32K) = $800 of VT to buy BND in order to get back 60/40 ratio.

You sell 8 shares X $100 of VT = $800 and buy 6 share x $120 of BND @720.

Dreamer


JohnL77
post Jun 13 2013, 03:17 PM

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Hi, I recently found out that some brokerages are offering commission-free ETFs. Brokerages like Charles Schwab, Fidelity and TD Ameritrade. I think Ameritrade has the best choices of ETFs so far. I am only a student and don't have enough money to invest yet, but you guys might want to check it out. And if you are satisfied with their service, please let me know. smile.gif

For anyone interested in asset allocation, I recommend William Bernstein's Four Pillars of Investing. You can get it from Amazon for $30 ($20 plus $10 for delivery. Assuming you only order 1 book). It's not as technical as his first book The Intelligent Asset Allocator which explains a lot about Modern Portfolio Theory, but Four Pillars teaches you a lot about market history and investor psychology (behavioral finance). It also explains why the finance industry sucks big time. As someone who was once an insurance agent, I can attest to that. Anyone got books to recommend for me, please let me know. smile.gif

This post has been edited by JohnL77: Jun 13 2013, 03:23 PM
dreamer101
post Jun 13 2013, 05:54 PM

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QUOTE(JohnL77 @ Jun 13 2013, 03:17 PM)
Hi, I recently found out that some brokerages are offering commission-free ETFs. Brokerages like Charles Schwab, Fidelity and TD Ameritrade. I think Ameritrade has the best choices of ETFs so far. I am only a student and don't have enough money to invest yet, but you guys might want to check it out. And if you are satisfied with their service, please let me know. smile.gif

For anyone interested in asset allocation, I recommend William Bernstein's Four Pillars of Investing. You can get it from Amazon for $30 ($20 plus $10 for delivery. Assuming you only order 1 book). It's not as technical as his first book The Intelligent Asset Allocator which explains a lot about Modern Portfolio Theory, but Four Pillars teaches you a lot about market history and investor psychology (behavioral finance). It also explains why the finance industry sucks big time. As someone who was once an insurance agent, I can attest to that. Anyone got books to recommend for me, please let me know. smile.gif
*
http://www.betterworldbooks.com/the-four-p...0071747059.aspx

JohnL77,

You can get that book used and cheaper whenever it is available on above url. Free shipping too.

Dreamer
JohnL77
post Jun 13 2013, 06:40 PM

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Haha, thanks but I already have the book. Urm... I think Amazon is still cheaper? $30 vs $35.65 new. Plus, you can reduce the shipping cost for Amazon if you buy more than one book. (They charge a fixed $4.99 per order and $4.99 for every book. So if you order multiple books, that fixed $4.99 is spread amongst your books.)

This post has been edited by JohnL77: Jun 13 2013, 06:44 PM
dreamer101
post Jun 13 2013, 09:11 PM

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QUOTE(JohnL77 @ Jun 13 2013, 06:40 PM)
Haha, thanks but I already have the book. Urm... I think Amazon is still cheaper? $30 vs $35.65 new. Plus, you can reduce the shipping cost for Amazon if you buy more than one book. (They charge a fixed $4.99 per order and $4.99 for every book. So if you order multiple books, that fixed $4.99 is spread amongst your books.)
*
JohnL77,

You do not get IT. That particular used book is not available at that web site at the moment. When it is available, you can get it less than $10 including FREE shipping worldwide.

Most used books in that web site sell for $4 with FREE shipping worldwide.

Dreamer
JohnL77
post Jun 13 2013, 10:54 PM

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Oh... okok. I see. Nice. smile.gif

This post has been edited by JohnL77: Jun 13 2013, 10:54 PM
dreamer101
post Jun 14 2013, 08:23 AM

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Folks,

The other kind of rebalancing is called band based rebalancing. The most commonly used band based rebalancing is 5/25. In this case, the first 5 refer to 5% of the portfolio. And, the 25 refer to 25% increase or decrease.

Let's take a portfolio of 100K, the targeted % for asset A , B, C are 60, 30, 10. 5% of 100K is 5K.

For Asset A, for it to trigger the 5 rule, A has either to be lowered than (60 - 5) = 55 or higher than (60 + 5 ) = 65. For A to triggered the 25% rule, A has to be lower than ( 60 * 75%) = 45K or higher than ( 60 * 125%) = 75K.

For 5% rule, 55 < A < 65. For 25% rule, 45K < A < 75K

For A, given that the 5% portfolio rule is narrower than the 25% rule, A will be kept between 55 and 65. When A is below 55, you buy A. When A is above 65, you sell A.

Dreamer
dreamer101
post Jun 14 2013, 09:15 AM

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Folks,

For asset B, the 5% rule, means that B has to between 25K and 35K. For the 25% rule, B has be between 22.5K and 37.5K. Given that 5% rule is narrower than the 25% rule, it will be trigger first. Hence, for 5/25, B is kept between 25K and 35K.

For Asset C, the 5% rule means that C has to be between 5K and 15K. The 25% rule means that C has to be between 7.5K and 12.5K. The 25% rule win.


In summary, for 5 / 25 rule and A/B/C of 60/30/10

55 < A < 65
25 < B < 35
7.5 < C < 12.5

If A, B or C cross those threshold at ANY time, they are sold or bought back to the targeted amount.

Dreamer
JohnL77
post Jun 14 2013, 01:12 PM

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Dreamer,

Nice concept. Any statistical reason why this 5/25 rule should be followed? Do you know how to value average?
dreamer101
post Jun 14 2013, 09:27 PM

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QUOTE(JohnL77 @ Jun 14 2013, 01:12 PM)
Dreamer,

Nice concept. Any statistical reason why this 5/25 rule should be followed? Do you know how to value average?
*
JohnL77,

<<Any statistical reason why this 5/25 rule should be followed?>>

This is the most common percentage and it works for most asset classes. The GOAL is to avoid trigger rebalancing too frequently but trigger enough to avoid a bubble to overload your portfolio and expose to high risk.

For example, with asset class like commodity, the band may need to be larger since they are a lot more volatile.

<<Do you know how to value average?>>

http://www.investopedia.com/terms/f/famaan...factormodel.asp

I do not understand what you are asking... But, according to FAMA French, exposure to Small Value stock asset class is useful and rewarding. So, if you are interested, you can add small value stock index as an asset class into your portfolio and follow the asset allocation model.

Dreamer
jutamind
post Jun 14 2013, 09:53 PM

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few questions:

1. can 5/25 rule be applied to unit trust funds?
2. if 5/25 rule is breached, instead of selling, can we use the rule to top up assuming that the underlying funds/ETFs are good and we have spare cash to invest?
JohnL77
post Jun 14 2013, 11:07 PM

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I'm talking about this - http://www.investopedia.com/articles/stocks/07/dcavsva.asp. William Bernstein advocates it. I want to know if anyone practices it.
dreamer101
post Jun 14 2013, 11:50 PM

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QUOTE(jutamind @ Jun 14 2013, 09:53 PM)
few questions:

1. can 5/25 rule be applied to unit trust funds?
2. if 5/25 rule is breached, instead of selling, can we use the rule to top up assuming that the underlying funds/ETFs are good and we have spare cash to invest?
*
jutamind,


1) You could but Unit Trust Fund for this strategy. But, Unit Trust is lousy investment too begin with. ETF is 0% load and less than 0.5% annual fee. Unit Trust:-( :-(. I buy Public Bank Stock because PBB make a lot of money from people buying Unit Trust.

2) Yes, you cold do that. But, it may not be practical after a while. Please note that it is good to sell. You are "Selling High" and "Buy Low" at the same time. This rule prevent you from getting caught in a bubble. It is a GOOD THING. It keep you SAFE.


QUOTE(JohnL77 @ Jun 14 2013, 11:07 PM)
I'm talking about this - http://www.investopedia.com/articles/stocks/07/dcavsva.asp. William Bernstein advocates it. I want to know if anyone practices it.
*
http://www.amazon.com/Value-Averaging-Stra...value+averaging

JohnL77,

I have this book and I read it. I consider it as too troublesome and not worth the effort.

I am not an optimizer. And, I do not need the BEST STRATEGY. My goal is to live my life and enjoy my money. It means spend JUST ENOUGH TIME on my investment.

Dreamer

This post has been edited by dreamer101: Jun 14 2013, 11:52 PM
JohnL77
post Jun 15 2013, 12:10 AM

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Oooh.. you have the book. Hmm, disappointed to hear you say that. I wanna buy the book.

Which brokerage do you use? Please, what do you think about commission-free ETFs? What's the drawback?

Buy Public Bank Stock, hehehe.. good idea. Buffett also got rich by buying an insurance company.

Please can you share your portfolio? ^.^ Interested.

Oh, and I read a lot of bad reviews about Better World Books.... Anyway, the books I want aren't any cheaper there at the moment.

This post has been edited by JohnL77: Jun 15 2013, 12:12 AM
dreamer101
post Jun 15 2013, 12:56 AM

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QUOTE(JohnL77 @ Jun 15 2013, 12:10 AM)
Oooh.. you have the book. Hmm, disappointed to hear you say that. I wanna buy the book.

Which brokerage do you use? Please, what do you think about commission-free ETFs? What's the drawback?

Buy Public Bank Stock, hehehe.. good idea. Buffett also got rich by buying an insurance company.

Please can you share your portfolio? ^.^ Interested.

Oh, and I read a lot of bad reviews about Better World Books.... Anyway, the books I want aren't any cheaper there at the moment.
*
JohnL77,

http://www.investopedia.com/articles/mutua...tfindexfund.asp

VWENX, VGSLX, VFWAX, VTSAX, DFSVX, VBTLX

Approximately 65/35 portfolio.

I buy Vanguard fund directly..

<< Oh, and I read a lot of bad reviews about Better World Books.... Anyway, the books I want aren't any cheaper there at the moment.>>

Another cheap way to buy book is to buy a Kindle from Amazon and buy Kindle e-book.

http://ebookfriendly.com/2011/12/06/buying...road-checklist/

http://www.mobileread.com/forums/showthread.php?t=161093

Dreamer

This post has been edited by dreamer101: Jun 15 2013, 12:59 AM
JohnL77
post Jun 15 2013, 01:03 AM

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"Another cheap way to buy book is to buy a Kindle from Amazon and buy Kindle e-book."

Hmm.. yes, one day. smile.gif

0.o How do you buy Vanguard fund directly? They said foreigner cannot buy their fund. Please share. >.<

*EDIT: Oh, you are a US citizen. Admiral Shares. WOW. 0.0 So you do use Ameritrade. Do you enjoy their service? What's the cost of having an account with them?

*EDIT: Age as bond allocation... you are in your mid 30s?

This post has been edited by JohnL77: Jun 15 2013, 01:46 AM
JohnL77
post Jun 15 2013, 01:31 AM

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QUOTE(MNet @ Jun 10 2013, 11:32 PM)
Take a look at the ETF/Mutual fund performance, at MY mutual fund market also can get that kind of return.

why need the hassle to invest in US mutual fund/etf?
*
You need to minus the mutual fund costs.
dreamer101
post Jun 15 2013, 02:20 AM

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QUOTE(JohnL77 @ Jun 15 2013, 01:03 AM)
"Another cheap way to buy book is to buy a Kindle from Amazon and buy Kindle e-book."

Hmm.. yes, one day. smile.gif

0.o How do you buy Vanguard fund directly? They said foreigner cannot buy their fund. Please share. >.<

*EDIT: Oh, you are a US citizen. Admiral Shares. WOW. 0.0 So you do use Ameritrade. Do you enjoy their service? What's the cost of having an account with them?

*EDIT: Age as bond allocation... you are in your mid 30s?
*
JohnL77,

<<IT: Age as bond allocation... you are in your mid 30s?>>

No. I choose not to use that rule of thumb...

<<So you do use Ameritrade. Do you enjoy their service? What's the cost of having an account with them?>>

Not quite sure. That A/C is for my play money. It is for trading some very speculative stock. It is less than 5% of my portfolio. In that A/C, I buy stock either give me 10X return or go down to zero.

Dreamer
dreamer101
post Jun 15 2013, 02:22 AM

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QUOTE(JohnL77 @ Jun 15 2013, 01:31 AM)
You need to minus the mutual fund costs.
*
JohnL77,

Actually, I should thank the person for contributing to my PBB profit...

Dreamer
JohnL77
post Jun 15 2013, 04:24 AM

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They only charge you for trading, right? Are there account maintenance fees, something like that?

So how old are you? You seem like someone who is pretty much on path to his financial goals. I bloody hell hope I can qualify for Admiral Shares by the time I'm in my mid 30s. Lol.

Hahaha, perhaps there should be a mutual fund company index fund/ETF.

What's the weightings of your portfolio? No gold/precious metals?

*I'm especially interested in your small value weighting. Since Damodaran and Fama have proven that value stocks perform better, why don't value investors have a completely value index stock portfolio? Is that a good idea?

This post has been edited by JohnL77: Jun 15 2013, 04:39 AM
dreamer101
post Jun 15 2013, 06:59 AM

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QUOTE(JohnL77 @ Jun 15 2013, 04:24 AM)
They only charge you for trading, right? Are there account maintenance fees, something like that?

So how old are you? You seem like someone who is pretty much on path to his financial goals. I bloody hell hope I can qualify for Admiral Shares by the time I'm in my mid 30s. Lol.

Hahaha, perhaps there should be a mutual fund company index fund/ETF.

What's the weightings of your portfolio? No gold/precious metals?

*I'm especially interested in your small value weighting. Since Damodaran and Fama have proven that value stocks perform better, why don't value investors have a completely value index stock portfolio? Is that a good idea?
*
JohnL77,

<<They only charge you for trading, right? Are there account maintenance fees, something like that? >>

There is minimal amount that you need to have in order to avoid account maintenance fee. I meet that. Hence, I only pay for trading.

<<Hahaha, perhaps there should be a mutual fund company index fund/ETF.>>

VT and BND are ETF of Vanguard mutual fund. So, you have that...

<<What's the weightings of your portfolio? No gold/precious metals?>>

My wife has enough gold jewelry..

<< *I'm especially interested in your small value weighting. Since Damodaran and Fama have proven that value stocks perform better, why don't value investors have a completely value index stock portfolio? Is that a good idea?>>

VWENX aka Wellington Fund stock portion is focused on Large Value Stock.

DFSVX is Small Value focused. It is only 5% of my portfolio.

<<why don't value investors have a completely value index stock portfolio? Is that a good idea?>>

Too much of a good thing is a bad thing.. I believe in BALANCE. I tilted slightly toward value.

BALANCE let you win SAFELY In the long run.

<<I bloody hell hope I can qualify for Admiral Shares by the time I'm in my mid 30s. Lol.>>

Most admiral shares' minimum is only USD $10K.... That is not a lot of money...

Dreamer



dreamer101
post Jun 15 2013, 09:18 AM

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Folks,

There is something FUNDAMENTAL and PROFOUND in asset allocation approach.

We know in investing, if you can buy low and sell high, you will make money. So, guess what we are doing so far in every step of the asset allocation process?? We are buying low and sell high.

A) We fixed the asset classes at fixed percentage.

B) When we investing with additional money, we invest on asset class that is cheaper as compare to other asset in our portfolio. If we follow the rule, we will always buy the CHEAPEST asset class at the moment in relation to our asset.

C) When we do annual rebalancing, we sell asset that exceed our allocation. That means we sell high. And, we buy asset that is lower in allocation. We sell low.

D) We do the same thing with 5/25 band rebalancing, we sell asset that is high and buy asset that is low.

Now, if you keep on sell high and buy low, you will make money most of time.

Yes, that is ONE situation that you will not make money. Aka, all THE ASSET classes went down at the same time. But, even in this case, you are limiting your damage by sell high and buy low in relative sense between your asset classes.

Dreamer


JohnL77
post Jun 15 2013, 12:36 PM

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What's the minimum amount?

No no no, I meant, a fund that owns the shares of companies that own mutual funds like Public Bank.

"My wife has enough gold jewellery"

LOL.

$10k is RM30,000. Plus, $10k only lets you participate in one fund. Are there Vanguard funds that let you diversify without a minimum $50k? Anyway, not like I can take part, only option for M'sians are ETFs, I guess.

Btw, this is a great thread. Thanks for sharing what you know about asset allocations.

This post has been edited by JohnL77: Jun 15 2013, 12:38 PM
dreamer101
post Jun 15 2013, 08:00 PM

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QUOTE(JohnL77 @ Jun 15 2013, 12:36 PM)
What's the minimum amount?

No no no, I meant, a fund that owns the shares of companies that own mutual funds like Public Bank.

"My wife has enough gold jewellery"

LOL.

$10k is RM30,000. Plus, $10k only lets you participate in one fund. Are there Vanguard funds that let you diversify without a minimum $50k? Anyway, not like I can take part, only option for M'sians are ETFs, I guess.

Btw, this is a great thread. Thanks for sharing what you know about asset allocations.
*
JohnL77,

<<What's the minimum amount?>>

Check their web site...

<< "My wife has enough gold jewellery"

LOL.>>

That is the actual statement from my wife when I was thinking of buying some gold (coin or jewellery) to hedge inflation. I am still trying to convince her to let me buy some silver coins.

<<No no no, I meant, a fund that owns the shares of companies that own mutual funds like Public Bank. >>

The largest mutual fund company is Vanguard.

https://investor.vanguard.com/about/why-invest-with-us

Your interests are the only interests we serve

<< Most investment firms are either publicly traded or privately owned. Vanguard is different: We're client-owned. Helping our investors achieve their goals is literally our sole reason for existence. With no other parties to answer to and therefore no conflicting loyalties, we make every decision—like keeping investing costs as low as possible—with only your needs in mind.>>

Vanguard is directly / mutually owned by the investors on the Vanguard fund and ETF. Vanguard is a non-profit. Hence, it has the lowest costs.

The other mutual fund companies are not good investment.

Dreamer
dreamer101
post Jun 16 2013, 10:48 AM

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Folks,

Some other points about asset allocation:

1) You should use interest income and dividend income to rebalance your portfolio.

2) You could add more asset classes if you want to. But, for most of the studies done, stock / bond ratio has the highest impact of your portfolio return.

3) Each asset class should have 5% or more of your portfolio or else it has too little impact to matter.

4) Most popular asset class addition to the portfolio are REIT since it usually does not correlate to stock or bond. The asset class that does not correlate to other asset classes in your portfolio tend to provide better diversification and return enhancement.

Dreamer
JohnL77
post Jun 16 2013, 03:15 PM

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I did contact them, they said no minimum balance is required.

"That is the actual statement from my wife when I was thinking of buying some gold (coin or jewellery) to hedge inflation. I am still trying to convince her to let me buy some silver coins."

I guess it's no laughing matter then. Lol.

What I meant was like what you said, Public Bank owns Public Mutual and if people still believe in Public Mutual then Public Bank will make more money. So there you should be an "index fund" that tracks the performance of companies that own mutual fund companies. But then again, it's silly to think that income from mutual fund companies alone will make companies like Public Bank a lot richer, right? Or is it not? Lol.

Yes, I know Vanguard is owned by the shareholders. I just read about it recently in The Four Pillars of Investing. Xuzen is hoping that mutual fund expenses in Malaysia will drop, but I think until we have an ownership structure like Vanguard, it will never happen.

But how long do you think this situation will last? Will there be a day when we don't realize that Vanguard has raised its fees because we've forgotten what they used to charge us?

So Dreamer, what do you think is the best way for Malaysians to invest in index funds/ETFs? Is it like what Gark said, open an account with a broker in Singapore because they don't charge withholding tax?

This post has been edited by JohnL77: Jun 16 2013, 03:21 PM
dreamer101
post Jun 16 2013, 08:01 PM

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QUOTE(JohnL77 @ Jun 16 2013, 03:15 PM)
I did contact them, they said no minimum balance is required.

"That is the actual statement from my wife when I was thinking of buying some gold (coin or jewellery) to hedge inflation. I am still trying to convince her to let me buy some silver coins."

I guess it's no laughing matter then. Lol.

What I meant was like what you said, Public Bank owns Public Mutual and if people still believe in Public Mutual then Public Bank will make more money. So there you should be an "index fund" that tracks the performance of companies that own mutual fund companies. But then again, it's silly to think that income from mutual fund companies alone will make companies like Public Bank a lot richer, right? Or is it not? Lol.

Yes, I know Vanguard is owned by the shareholders. I just read about it recently in The Four Pillars of Investing. Xuzen is hoping that mutual fund expenses in Malaysia will drop, but I think until we have an ownership structure like Vanguard, it will never happen.

But how long do you think this situation will last? Will there be a day when we don't realize that Vanguard has raised its fees because we've forgotten what they used to charge us?

So Dreamer, what do you think is the best way for Malaysians to invest in index funds/ETFs? Is it like what Gark said, open an account with a broker in Singapore because they don't charge withholding tax?
*
JohnL77,

<<Yes, I know Vanguard is owned by the shareholders. I just read about it recently in The Four Pillars of Investing. Xuzen is hoping that mutual fund expenses in Malaysia will drop, but I think until we have an ownership structure like Vanguard, it will never happen. >>

Why wait for that to happen when you can buy ETF directly?? Do not wait for world to change. Do what is best for you at any time.. Life is too short.

<< So Dreamer, what do you think is the best way for Malaysians to invest in index funds/ETFs? Is it like what Gark said, open an account with a broker in Singapore because they don't charge withholding tax?>>

You could do that but it is closer and more convenient to go to Singapore to check your A/C if you need to. But, I am not sure how big a deal withholding tax is. Is it only on the dividend??

You only pay tax if you make money. Sometime, a person can be "penny wise pound foolish" and do too much to avoid tax.

How much is the cost of buying fund from fund supermarket??

Dreamer

JohnL77
post Jun 16 2013, 11:26 PM

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"How much is the cost of buying fund from fund supermarket??"

I don't know man.

William Bernstein disfavors ETFs. His outlook seems to have been kinder to ETFs since he wrote The Four Pillars compared to his stance when he wrote The Intelligent Asset Allocator, but he still prefers index funds. Why?

Hey, Dreamer, what books would you recommend reading?

And how is it like living in the US? What's your job there? Dude, have you seen monolithic domes? Round houses made of Styrofoam and concrete? I've been in love with these kind of houses. Not sure if it would be wise to build one.

dreamer101
post Jun 17 2013, 12:01 AM

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QUOTE(JohnL77 @ Jun 16 2013, 11:26 PM)
"How much is the cost of buying fund from fund supermarket??"

I don't know man.

William Bernstein disfavors ETFs. His outlook seems to have been kinder to ETFs since he wrote The Four Pillars compared to his stance when he wrote The Intelligent Asset Allocator, but he still prefers index funds. Why?

Hey, Dreamer, what books would you recommend reading?

And how is it like living in the US? What's your job there? Dude, have you seen monolithic domes? Round houses made of Styrofoam and concrete? I've been in love with these kind of houses. Not sure if it would be wise to build one.
*
JohnL77,

You are not US resident and you do not have USD $200K. So, buying fund directly is not possible. Hence, ETF is the only way to go...

<< Dude, have you seen monolithic domes? Round houses made of Styrofoam and concrete? I've been in love with these kind of houses. Not sure if it would be wise to build one.>>

You are too much of a city person. There are plenty of nice and beautiful places in USA. Live in a RV and tour all the national park all the times seem nicer.

http://en.wikipedia.org/wiki/List_of_natio...e_United_States

Dreamer
JohnL77
post Jun 17 2013, 01:42 AM

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I just have this dream of having a monolithic dome in a green area surrounded by trees. Something like that. Lol. Travelling the world in an RV sounds good too. Is that what you do? Please don't tell me your wife doesn't let you do that. sad.gif

Hey, what do you think about owning real estate? Jim Altucher doesn't like the idea, and I agree with him that it can be a drag.
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post Jun 17 2013, 06:15 AM

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QUOTE(JohnL77 @ Jun 17 2013, 01:42 AM)
I just have this dream of having a monolithic dome in a green area surrounded by trees. Something like that. Lol. Travelling the world in an RV sounds good too. Is that what you do? Please don't tell me your wife doesn't let you do that. sad.gif

Hey, what do you think about owning real estate? Jim Altucher doesn't like the idea, and I agree with him that it can be a drag.
*
JohnL77,

I owned VGSLX...

<<Hey, what do you think about owning real estate? Jim Altucher doesn't like the idea, and I agree with him that it can be a drag.>>

Who the hell is Jim Altucher?? How does that RELEVANT to you??

If you KNOW how to invest on Real Estate, it will work for you. If not, do something else..

There are many people that invest on many things and became very successful. But, they are not YOU. You need to know what will work for you and pick that.

If you asked the WRONG question, you will NEVER get the RIGHT answer!!!

Dreamer





JohnL77
post Jun 17 2013, 12:38 PM

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No, I'm definitely going to own REITs as part of my investment. But taking a loan to buy a house... I have some doubts about that. Besides, you have this great idea of owning an RV. Do you live the dream? smile.gif

I'd just like to hear your opinion on owning a house.

This post has been edited by JohnL77: Jun 17 2013, 01:03 PM
dreamer101
post Jun 17 2013, 09:19 PM

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QUOTE(JohnL77 @ Jun 17 2013, 12:38 PM)
No, I'm definitely going to own REITs as part of my investment. But taking a loan to buy a house... I have some doubts about that. Besides, you have this great idea of owning an RV. Do you live the dream? smile.gif

I'd just like to hear your opinion on owning a house.
*
JohnL77,

<<I'd just like to hear your opinion on owning a house.>>

Owning a house to stay is an expense. It is not an investment. Now, as to buying rental property to earn income, I am not interested. It takes too much active involvement and I do not want that.

I believe doing rent versus buy calculation for my primary residence. If it costs less to buy, I will buy. Or else, I will rent.

Dreamer
JohnL77
post Jun 17 2013, 10:03 PM

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Looks like we pretty much agree on this. I think REITs are the best way to invest in rental property. But I don't know anything about how to pick REITs. Any book recommendations?

Yes, I just read an article on Time mentioning P/R ratio, haha.
dreamer101
post Jun 17 2013, 10:19 PM

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QUOTE(JohnL77 @ Jun 17 2013, 10:03 PM)
Looks like we pretty much agree on this. I think REITs are the best way to invest in rental property. But I don't know anything about how to pick REITs. Any book recommendations?

Yes, I just read an article on Time mentioning P/R ratio, haha.
*
JohnL77,

Don't pick... VGSLX (mutual fund) or VNQ (ETF) is the REIT index fund for all the REIT in USA.

Dreamer
dreamer101
post Jun 17 2013, 10:30 PM

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Folks,

In this approach, other than the effort to establish the A/C and transfer money, the amount of effort and intelligence required is minimal. You do not have to be SMART in order to get this to work. You just need to have a plan and stick with it.

This plan provides you with LOW COST and DIVERSIFICATION. You are investing on 4,000 to 5,000 largest companies in the world and 3,000 bonds in USA.

You just need to get started and re-calculate and invest when you have new money. You can do either

A) Annual rebalancing -> calculate every year.

B) Band based rebalancing -> calculate every week.

You can do this via Spreadsheet or pencil and paper.

Please note that any investment approach that require you to be VERY SMART probably will not work for a lot of people.

Dreamer
dreamer101
post Jun 18 2013, 05:39 AM

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Folks,

The followings are my personal story / journey of how I come about to this investment approach.

The PROBLEM with adopting this approach is you have to admit that you are not very smart in term of investing. You cannot beat the average. You might be smart in many other different area but beating the market average is not what you can do.

10+ years ago I lost half of my life savings in stock trading. I got so scared of the stock market that I convert everything into cash except one S&P 500 stock index. After the crash, this stock fund survive. But, this is a lesson that I need to learn. I could not sleep at night during the crash. I have to sell everything in order to get a good night sleep.

As a result of this lesson, I searched and studied an approach that I have confident in and I can keep going even with a bad crash. And, this the approach that I settled in. I cannot know this approach works for me until I survive the 2008/2009 crash without losing my sleep.

Dreamer
jutamind
post Jun 18 2013, 01:32 PM

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Hi Dreamer,

Do you invest in ETF using DCA/VCA or as and when you want to invest?
dreamer101
post Jun 18 2013, 08:34 PM

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QUOTE(jutamind @ Jun 18 2013, 01:32 PM)
Hi Dreamer,

Do you invest in ETF using DCA/VCA or as and when you want to invest?
*
jutamind,

I invest whenever I have extra cash. What I buy is based on which asset is below allocation. Normally, I invest on the increment of USD 1K.

Dreamer
JohnL77
post Jun 20 2013, 03:27 AM

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Hmm.. yes, but what about global property? For some reason, I feel I should diversify.

Since bond yields are so low right now, wouldn't it be better to put your money in fixed deposit for say... 1 year or half a year?

"The PROBLEM with adopting this approach is you have to admit that you are not very smart in term of investing. You cannot beat the average. You might be smart in many other different area but beating the market average is not what you can do."

LOL, the average driver thinks he's better than other drivers. If some people can't understand what that means, this thread is not for them. Let's face it, the average IQ is 100. 1 or 2 standard deviations could mean you are much smarter or much dumber, lol.

Wasn't it Socrates who said, “I know that I am intelligent, because I know that I know nothing"?

"10+ years ago I lost half of my life savings in stock trading."

Today's episode of The Apprentice Asia was about day trading. This show is a bloody joke. I lost interest since the second episode. The task was to make a viral video and even though the losing team was a bit misguided, their video was interesting. The winning team's video was as boring as white bread. The worst part was, Fernandes called the losing team's video a disaster and he repeated that statement today. I feel Fernandes is just not committed. He said the producers persuaded him many times before he relented. The show is so bloody obviously scripted.

Where are all the winners of the US and UK series? They get a high paying job for one year and then they set up their own recruitment company. Because, you know, "if you can't do it, teach."

Sigh, a relative of mine took a loan on his house to day trade and we never saw that money again. I don't think he trades much these days, but he still reads newsletters and watches videos promising, "YOU CAN MAKE IT AS A DAY TRADER!"

I know a lot of butthurt traders will come here to defend themselves, but one thing about day traders, it's very rare to see someone fully disclose their trades. How much money did they start with? What did they buy? When? And most importantly, how bloody consistent was their performance? It's one thing to say, I beat the market this month, it's another to say, I beat the market every year for at least 10 years!

Also, saying you can make money by day trading isn't very objective and clear in telling people just how many people lose money day trading. Yeah, anyone can be rich, but not everyone. People need to learn what investing really means.

My believes are pretty much the same as yours, Dreamer. I believe the best investment is yourself. Improve your skills, start a business or work on your career. Investing should be simple and not get in the way of your business/career.

If you think you are some genius who can beat the market, then do it full time and most importantly, trade other people's money, not your own.

This post has been edited by JohnL77: Jun 20 2013, 04:58 AM
dreamer101
post Jun 20 2013, 05:22 AM

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QUOTE(JohnL77 @ Jun 20 2013, 03:27 AM)
» Click to show Spoiler - click again to hide... «

*
JohnL77,

<<Hmm.. yes, but what about global property? For some reason, I feel I should diversify. >>

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

VNQI is international REIT ETF. However I am not convinced that it is good investment. REIT is not well developed all over the world. Hence, International REIT is not as diversified as you think.

<<Since bond yields are so low right now, wouldn't it be better to put your money in fixed deposit for say... 1 year or half a year? >>

You are doing market timing...

<< Also, saying you can make money by day trading isn't very objective and clear in telling people just how many people lose money day trading. Yeah, anyone can be rich, but not everyone. People need to learn what investing really means. >>

My uncles won the lottery 3 times. He can win money by gambling at Genting. But, I am not my uncle. There might be people that can make money by day trading. But, that is THEM and their ways. I know it is not for me.

Don't worry too much about what others do and do not do. Focus and execute your own plan for your life.

Know what is right for you.

Dreamer

JohnL77
post Jun 20 2013, 02:00 PM

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Sorry, I don't really understand how investing in bonds work. Especially since retail investors cannot buy bonds directly in Malaysia. (Correct me if I'm wrong)

Haha, I'm just giving a warning to those who will heed. I especially don't want any of my friends or family to gamble their savings away. It would pain me to see that. (since I've already seen it first hand)

Your uncle is one of those coin flippers that has been destined to get heads all the time, lol.

Hmm.. should I own domestic REITS?
dreamer101
post Jun 20 2013, 08:33 PM

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QUOTE(JohnL77 @ Jun 20 2013, 02:00 PM)
Sorry, I don't really understand how investing in bonds work. Especially since retail investors cannot buy bonds directly in Malaysia. (Correct me if I'm wrong)

Haha, I'm just giving a warning to those who will heed. I especially don't want any of my friends or family to gamble their savings away. It would pain me to see that. (since I've already seen it first hand)

Your uncle is one of those coin flippers that has been destined to get heads all the time, lol.

Hmm.. should I own domestic REITS?
*
JohnL77,

BND is US bond index ETF...

<<Hmm.. should I own domestic REITS?>>

I do not invest locally except for PBB. Malaysia is TOO SMALL and it is totally dependent on the government. IMHO, Malaysia's economy will crash soon and may never recover. Anyhow, I do not believe in dependent on any single country to begin with.

Dreamer
JohnL77
post Jun 21 2013, 01:45 AM

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What about the United States.
dreamer101
post Jun 21 2013, 02:08 AM

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QUOTE(JohnL77 @ Jun 21 2013, 01:45 AM)
What about the United States.
*
JohnL77,

What is the question??

A) Will USA crashes??

B) What happened if USA crashes??

I am diversifying across the world. I invest on 4500 largest companies all over the world.

Dreamer
JohnL77
post Jun 21 2013, 03:00 AM

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Yes, will the USA crash? How much of your portfolio is US stocks?
dreamer101
post Jun 21 2013, 06:42 AM

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QUOTE(JohnL77 @ Jun 21 2013, 03:00 AM)
Yes, will the USA crash? How much of your portfolio is US stocks?
*
JohnL77,

40%.

Dreamer
JohnL77
post Jun 21 2013, 02:38 PM

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Hmm.. I think it's hard to say whether Malaysia will crash. Why do you think Malaysia definitely will crash?

What about the US? Don't you think it will crash? Or is it recovering now? Is it recovering for a crash?

40% of your entire portfolio or 40% of your stock portfolio?

This post has been edited by JohnL77: Jun 21 2013, 02:42 PM
dreamer101
post Jun 21 2013, 11:07 PM

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QUOTE(JohnL77 @ Jun 21 2013, 02:38 PM)
Hmm.. I think it's hard to say whether Malaysia will crash. Why do you think Malaysia definitely will crash?

What about the US? Don't you think it will crash? Or is it recovering now? Is it recovering for a crash?

40% of your entire portfolio or 40% of your stock portfolio?
*
JohnL77,

<<Hmm.. I think it's hard to say whether Malaysia will crash.>>

It is not hard. You just need to open your eyes and see.

<<Why do you think Malaysia definitely will crash?>>

The question should be in reverse. What makes you think that Malaysia can sustain itself??

<<What about the US? Don't you think it will crash?>>

http://www.shadowstats.com/alternate_data/...ployment-charts

US had crashed. TRUE UNEMPLOYMENT is 10+%.

<<Or is it recovering now? Is it recovering for a crash?>>

It is still in a crash.

<<40% of your entire portfolio or 40% of your stock portfolio?>>

40% of my entire portfolio.

Please note that stock market is not necessary a reflection of REAL ECONOMY.

Dreamer
JohnL77
post Jun 22 2013, 03:34 AM

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40% of your portfolio means you are confident the US will recover?

I'm really on the fence on whether Malaysia will crash. But not recover? That's very pessimistic.


dreamer101
post Jun 22 2013, 03:51 AM

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QUOTE(JohnL77 @ Jun 22 2013, 03:34 AM)
40% of your portfolio means you are confident the US will recover?

I'm really on the fence on whether Malaysia will crash. But not recover? That's very pessimistic.
*
JohnL77,

<<40% of your portfolio means you are confident the US will recover? >>

1) USA is in a crash now. So, how does it feels?? 10+% unemployment and the country is still functioning..

2) You are confusing economy with stock market again. Corporate American is doing extremely well even though the economy is doing badly.

<<I'm really on the fence on whether Malaysia will crash.>>

3) What will prevent Malaysia from crashing?? Nothing..

4) BN / UMNO had won GE13. Nothing will improve over the next 5 years. It will get worse in exponential pace.

<<But not recover? That's very pessimistic.>>

Burma and Philippine were the richest countries in South East Asia during the 1960s. They NEVER recovered from their crash. It is NORMAL for the countries to NEVER recover from their crash.

Dreamer



JohnL77
post Jun 22 2013, 04:01 AM

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Hmm.. I see your point. I hate how the tone of our conversation has shifted. This always happens when the topic has to do with politics. (I don't affiliate with any party)

When you say never recover from their crash, do you mean their economy or their stock market? I'm confused.
dreamer101
post Jun 22 2013, 05:42 AM

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QUOTE(JohnL77 @ Jun 22 2013, 04:01 AM)
Hmm.. I see your point. I hate how the tone of our conversation has shifted. This always happens when the topic has to do with politics. (I don't affiliate with any party)

When you say never recover from their crash, do you mean their economy or their stock market? I'm confused.
*
JohnL77,

Their economies.

Dreamer
JohnL77
post Jun 23 2013, 01:35 AM

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I need to read more about market history. smile.gif

Thanks for having the patience to answer all my stupid questions.
xuzen
post Jun 30 2013, 07:24 PM

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Was just browsing Vanguard's website. Wow, just wow, their expense ratio is just amazing.

Their Admiral Index Fund annual expense ratio is 0.05% p.a. and their fund size is USD 170 Billion. That means that their fee is USD85Million i.e., RM255Million p.a.

Let's take a big fund from Bolehland say PSF (Public Saving Fund). Its AUM is RM1.7 Billion and with a 1.5% annual expense ratio, the annual fee is a comparatively miniscule RM 25.5 Million.

No wonder Vanguard can charge so low AER, with an AER of only 0.05% is still beat the SH*T out of our Bolehland's largest mutual fund in terms of chargeable fee.

Being big is good.

Xuzen
JohnL77
post Jul 1 2013, 12:55 AM

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It took a long time for Vanguard to get this big. If bolehland keep refusing to come up with a good index fund, the gap between M'sian investors and US investors will keep growing.
dreamer101
post Jul 1 2013, 06:21 AM

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QUOTE(JohnL77 @ Jul 1 2013, 12:55 AM)
It took a long time for Vanguard to get this big. If bolehland keep refusing to come up with a good index fund, the gap between M'sian investors and US investors will keep growing.
*
JohnL77,

There is no DIVERSIFICATION in KLSE. 50+% of KLSE is owned by GLC and GLIC. So, the government directly or indirectly owned 50+% of KLSE. Even if somebody come up a good ETF for Malaysia, I will not buy it.

There is NOTHING to prevent Malaysian investor to buy Vanguard ETF. So, why wait for Malaysia to do something when you can do it yourself.

Dreamer


dreamer101
post Jul 1 2013, 06:37 AM

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QUOTE(xuzen @ Jun 30 2013, 07:24 PM)
Was just browsing Vanguard's website. Wow, just wow, their expense ratio is just amazing.

Their Admiral Index Fund annual expense ratio is 0.05% p.a. and their fund size is USD 170 Billion. That means that their fee is USD85Million i.e., RM255Million p.a.

Let's take a big fund from Bolehland say PSF (Public Saving Fund). Its AUM is RM1.7 Billion and with a 1.5% annual expense ratio, the annual fee is a comparatively miniscule RM 25.5 Million.

No wonder Vanguard can charge so low AER, with an AER of only 0.05% is still beat the SH*T out of our Bolehland's largest mutual fund in terms of chargeable fee.

Being big is good.

Xuzen
*
xuzen,

Public Mutual is highly profitable. This is one of the reasons that I buy Public Bank stock. The only stock that I buy for Malaysia.

Dreamer
rjb123
post Feb 19 2014, 01:09 AM

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QUOTE(dreamer101 @ Jul 1 2013, 06:37 AM)
xuzen,

Public Mutual is highly profitable.  This is one of the reasons that I buy Public Bank stock.  The only stock that I buy for Malaysia.

Dreamer
*
Reviving a slightly old thread here smile.gif

I'm looking to do my monthly, regular investments via a selection of ETFs (in this case through TDAM)

Currently these are all comission/fee free so it's not an issue to add in small amounts ($200-300 worth) on a monthly basis, do these normally stay fee free for the long term? As it wouldn't be worth paying purchase charge each time if the amounts are small.
dreamer101
post Feb 19 2014, 01:21 AM

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QUOTE(rjb123 @ Feb 19 2014, 01:09 AM)
Reviving a slightly old thread here smile.gif

I'm looking to do my monthly, regular investments via a selection of ETFs (in this case through TDAM)

Currently these are all comission/fee free so it's not an issue to add in small amounts ($200-300 worth) on a monthly basis, do these normally stay fee free for the long term? As it wouldn't be worth paying purchase charge each time if the amounts are small.
*
rjb123,

All ETFs have annual maintenance fee. You pay for those fee as long as you hold the ETF. So, check their annual maintenance fee before buying certain ETF.

Dreamer
rjb123
post Feb 19 2014, 01:39 AM

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QUOTE(dreamer101 @ Feb 19 2014, 01:21 AM)
rjb123,

All ETFs have annual maintenance fee.  You pay for those fee as long as you hold the ETF.  So, check their annual maintenance fee before buying certain ETF.

Dreamer
*
I'm aware of the yearly maintenance fee, I meant the fee to purchase the ETF - currently there's quite a few Commission-free , others $9.99. The $9.99 would be too much if just topping up monthly with $100-300 each
dreamer101
post Feb 19 2014, 01:54 AM

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QUOTE(rjb123 @ Feb 19 2014, 01:39 AM)
I'm aware of the yearly maintenance fee, I meant the fee to purchase the ETF - currently there's quite a few Commission-free , others $9.99. The $9.99 would be too much if just topping up monthly with $100-300 each
*
rjb123,

Yes. $9.99 would be too much.. The commission should less than 1%. If the commission is $9.99, each purchase should be $1,000 or more..

Dreamer
rjb123
post Feb 19 2014, 02:01 AM

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QUOTE(dreamer101 @ Feb 19 2014, 01:54 AM)
rjb123,

Yes.  $9.99 would be too much.. The commission should less than 1%.  If the commission is $9.99, each purchase should be $1,000 or more..

Dreamer
*
Agreed, that's why I was asking if they're likely to remain fee-free for the long term - will have to wait and see I guess.

Topping up less frequently in larger amounts would have to be an option I guess if the purchases don't remain fee free
JohnL77
post Feb 22 2014, 05:49 PM

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QUOTE(rjb123 @ Feb 19 2014, 02:01 AM)
Agreed, that's why I was asking if they're likely to remain fee-free for the long term - will have to wait and see I guess.

Topping up less frequently in larger amounts would have to be an option I guess if the purchases don't remain fee free
*
Mind sharing how you will be investing in ETFs? Will you be transferring your funds to TDAM? Any fees charged for that? By TDAM do you mean TD Ameritrade or TD Asset Management?

This post has been edited by JohnL77: Feb 23 2014, 01:02 AM
rjb123
post Feb 22 2014, 08:24 PM

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QUOTE(JohnL77 @ Feb 22 2014, 05:49 PM)
Mind sharing how you will investing in ETFs? Will you be transferring your funds to TDAM? Any fees charged for that? By TDAM do you mean TD Ameritrade or TD Asset Management?
*
I transferred to TD Ameritrade via Maybank from a Maybank USD account.

Transfer charge is $4+$7.65 (USD) and amount that's received is $26 USD less (middle/clearing bank charges) , so a total of $35.65

Both times so far I've done a transfer the funds have arrived quickly - ie. do it in Maybank branch at 4PM, at night time when US opens the funds are in the account.

JohnL77
post Feb 23 2014, 01:00 AM

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QUOTE(rjb123 @ Feb 22 2014, 08:24 PM)
I transferred to TD Ameritrade via Maybank from a Maybank USD account.

Transfer charge is $4+$7.65 (USD) and amount that's received is $26 USD less (middle/clearing bank charges) , so a total of $35.65

Both times so far I've done a transfer the funds have arrived quickly - ie. do it in Maybank branch at 4PM, at night time when US opens the funds are in the account.
*
Wow.. that is a lot. No cheaper way to transfer?
rjb123
post Feb 23 2014, 01:13 AM

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QUOTE(JohnL77 @ Feb 23 2014, 01:00 AM)
Wow.. that is a lot. No cheaper way to transfer?
*
Apparently you can send a cheque which costs less but can take some weeks to clear.

I haven't done / not planning on doing any transfers less than $10,000 so percentage wise the fee isn't too bad
JohnL77
post Feb 23 2014, 01:19 AM

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QUOTE(rjb123 @ Feb 23 2014, 01:13 AM)
Apparently you can send a cheque which costs less but can take some weeks to clear.

I haven't done / not planning on doing any transfers less than $10,000 so percentage wise the fee isn't too bad
*
Can break it down for me, what are the fees they charge?
rjb123
post Feb 23 2014, 01:32 AM

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QUOTE(JohnL77 @ Feb 23 2014, 01:19 AM)
Can break it down for me, what are the fees they charge?
*
As far as I know, Maybank charge $4 for any FCA (Foreign currency account) transaction , the $7.65 then will be the TT charge.

Any payments in foreign currencies always need to go through a middle/clearing bank, who again impose an additional charge (in this case, $26 USD on both occasions)

Not something that can be avoided easily that I know of, if transferring from Malaysia > US


JohnL77
post Feb 23 2014, 01:37 AM

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QUOTE(rjb123 @ Feb 23 2014, 01:32 AM)
As far as I know, Maybank charge $4 for any FCA (Foreign currency account) transaction , the $7.65 then will be the TT charge.

Any payments in foreign currencies always need to go through a middle/clearing bank, who again impose an additional charge (in this case, $26 USD on both occasions)

Not something that can be avoided easily that I know of, if transferring from Malaysia > US
*
sad.gif That sucks. So, what does your portfolio look like? Mind sharing?
rjb123
post Feb 23 2014, 01:53 AM

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QUOTE(JohnL77 @ Feb 23 2014, 01:37 AM)
sad.gif That sucks. So, what does your portfolio look like? Mind sharing?
*
Not much to share so far - far from complete smile.gif A mix of US large/mid/small cap, emerging markets, Europe, Gold/REITs

This is for my retirement at 60-65 so I'm slowly building it up over the next years then contribute a set amount per month from then onwards

JohnL77
post Feb 23 2014, 02:09 AM

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QUOTE(rjb123 @ Feb 23 2014, 01:53 AM)
Not much to share so far - far from complete smile.gif A mix of US large/mid/small cap, emerging markets, Europe, Gold/REITs

This is for my retirement at 60-65 so I'm slowly building it up over the next years then contribute a set amount per month from then onwards
*
What's your weightage? That's what I'm most interested in. smile.gif

So, $10,000 every month? Wow... notworthy.gif I am talking with a sifu.

This post has been edited by JohnL77: Feb 23 2014, 02:18 AM
rjb123
post Feb 23 2014, 02:20 AM

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QUOTE(JohnL77 @ Feb 23 2014, 02:09 AM)
What's your weightage? That's what I'm most interested in.

So, $10,000 every month? Wow...  notworthy.gif I am talking with a sifu.
*
Around 30% Bonds / 70% Equity I'll give you a more detailed breakdown tomorrow of the allocation but it will likely change over the years.

I'm only transferring in batches of $10K, not investing this amount monthly! (I wish icon_idea.gif )

This post has been edited by rjb123: Feb 23 2014, 02:21 AM
JohnL77
post Feb 23 2014, 02:41 AM

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QUOTE(rjb123 @ Feb 23 2014, 02:20 AM)
Around 30% Bonds / 70% Equity I'll give you a more detailed breakdown tomorrow of the allocation but it will likely change over the years.

I'm only transferring in batches of $10K, not investing this amount monthly! (I wish  icon_idea.gif )
*
Hahaha, I see I see. That way you get to take advantage of cost averaging la. Looking forward to a more detailed breakdown.

I'm only about to begin my career, when you say the transfer fee is so high.. really depressing for me.
dreamer101
post Feb 23 2014, 07:56 AM

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QUOTE(rjb123 @ Feb 23 2014, 01:32 AM)
As far as I know, Maybank charge $4 for any FCA (Foreign currency account) transaction , the $7.65 then will be the TT charge.

Any payments in foreign currencies always need to go through a middle/clearing bank, who again impose an additional charge (in this case, $26 USD on both occasions)

Not something that can be avoided easily that I know of, if transferring from Malaysia > US
*
rjb123,

But, comparing how much you will be paying for UT in Malaysia, this is a bargain.

Dreamer
rjb123
post Feb 23 2014, 02:21 PM

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QUOTE(JohnL77 @ Feb 23 2014, 02:41 AM)
Hahaha, I see I see. That way you get to take advantage of cost averaging la. Looking forward to a more detailed breakdown.

I'm only about to begin my career, when you say the transfer fee is so high.. really depressing for me.
*
Yes, if you transfer small amounts (say $1K) the fee is a bit too much, on $10k it is reasonable.

BTW, I tried to do the initial funding from a USD account based in IOM and the payment was rejected which cost $44 - waste of money considering it didn't achieve anything.

Here's a screenshot from TDAM Portfolio planner to give an idea of where things should be once complete :

user posted image

It'll take a while to reach as I'll be buying on a monthly basis. Even if it takes a year it isn't such a huge deal as I'm planning to save this portfolio for my retirement (at least 28 years ohmy.gif ) plus TDAM isn't the only portfolio - others I've had for a while longer.

QUOTE(dreamer101 @ Feb 23 2014, 07:56 AM)
rjb123,

But, comparing how much you will be paying for UT in Malaysia, this is a bargain.

Dreamer
*
Agreed, in the long run the 0.3765% transfer charges each time are not much compared to the savings on management fees.

Actually originally I was planning to buy Europe based ETFs / Funds through TD Direct (the European part) but their charges are crazy. ETF trading charge is 28 EUR, and it actually goes up based on the value of the trade. There may be a tax advantage compared to US though , I need to research that in a bit more detail

user posted image
max_cavalera
post Feb 23 2014, 03:31 PM

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Money game for the big boys...unfortunately my capital doesnt allow me to do this... :
JohnL77
post Feb 23 2014, 05:25 PM

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QUOTE(rjb123 @ Feb 23 2014, 02:21 PM)
Yes, if you transfer small amounts (say $1K) the fee is a bit too much, on $10k it is reasonable.

BTW, I tried to do the initial funding from a USD account based in IOM and the payment was rejected which cost $44 - waste of money considering it didn't achieve anything.

Here's a screenshot from TDAM Portfolio planner to give an idea of where things should be once complete :

user posted image

It'll take a while to reach as I'll be buying on a monthly basis. Even if it takes a year it isn't such a huge deal as I'm planning to save this portfolio for my retirement (at least 28 years  ohmy.gif ) plus TDAM isn't the only portfolio - others I've had for a while longer.
Agreed, in the long run the 0.3765% transfer charges each time are not much compared to the savings on management fees.

Actually originally I was planning to buy Europe based ETFs / Funds through TD Direct (the European part) but their charges are crazy. ETF trading charge is 28 EUR, and it actually goes up based on the value of the trade. There may be a tax advantage compared to US though , I need to research that in a bit more detail

user posted image
*
Very great info, thanks for sharing.

So, almost equal weightage for Domestic and International Equity, but more emphasis on Domestic Fixed Income. Interesting, why the difference in weightage?

Do you mind me asking how old are you? What you're doing and how much you earn per year? I'd like to have an idea of when I can start investing in ETFs.
rjb123
post Feb 23 2014, 05:38 PM

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QUOTE(JohnL77 @ Feb 23 2014, 05:25 PM)
Very great info, thanks for sharing.

So, almost equal weightage for Domestic and International Equity, but more emphasis on Domestic Fixed Income. Interesting, why the difference in weightage?

Do you mind me asking how old are you? What you're doing and how much you earn per year? I'd like to have an idea of when I can start investing in ETFs.
*
Actually I'm planning on buying additional bond/fixed income denominated in EUR , not through US broker. And already hold some others through broker in Malaysia

I'm 27 - started investing in a few funds back in 2007/8 (lump sum just before the big drop due to the financial crisis rclxms.gif ) I work in sales/purchasing and just take a commission so as such my salary is unstable and fluctuates a lot ..s so its important for me to save for future/retirement

JohnL77
post Feb 23 2014, 06:26 PM

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QUOTE(rjb123 @ Feb 23 2014, 05:38 PM)
Actually I'm planning on buying additional bond/fixed income denominated in EUR , not through US broker. And already hold some others through broker in Malaysia

I'm 27 - started investing in a few funds back in 2007/8 (lump sum just before the big drop due to the financial crisis  rclxms.gif ) I work in sales/purchasing and just take a commission so as such my salary is unstable and fluctuates a lot ..s so its important for me to save for future/retirement
*
Do you live a minimalistic lifestyle? $10,000 by age 27, quite impressive.
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post Feb 24 2014, 12:06 AM

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QUOTE(JohnL77 @ Feb 23 2014, 06:26 PM)
Do you live a minimalistic lifestyle? $10,000 by age 27, quite impressive.
*
Depends what you call minimalistic ... expenses are higher than they could be but I don't buy any luxury goods, don't drive a car etc.

Anyway, going a bit off topic here
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post Feb 24 2014, 03:26 AM

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QUOTE(rjb123 @ Feb 24 2014, 12:06 AM)
Depends what you call minimalistic ... expenses are higher than they could be but I don't buy any luxury goods, don't drive a car etc.

Anyway, going a bit off topic here
*
Haha, just want to get an idea of how to save that much money.

So, no gold/precious metals? So, while you are saving up, where do you park your cash?

This post has been edited by JohnL77: Feb 24 2014, 03:28 AM
rjb123
post Feb 24 2014, 02:41 PM

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QUOTE(JohnL77 @ Feb 24 2014, 03:26 AM)
Haha, just want to get an idea of how to save that much money.

So, no gold/precious metals? So, while you are saving up, where do you park your cash?
*
Part of the "speciality" is in Gold shares

Savings .. my emergency fund is in FD smile.gif
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post Feb 24 2014, 06:17 PM

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Hi guys, great thread here. Recently i just open Plus 500 trading account. Is it trustable platform? I realise their service charge is on the high side, any other platform that i can use to buy US ETF?
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post Feb 24 2014, 06:22 PM

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QUOTE(rjb123 @ Feb 24 2014, 02:41 PM)
Part of the "speciality" is in Gold shares

Savings .. my emergency fund is in FD  smile.gif
*
Oh yeah, what does the "Specialty" represent, besides gold?

rjb, the $36.65 includes the forex spread between market rate and the bank's rate, right?
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post Feb 24 2014, 06:23 PM

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QUOTE(khchong81 @ Feb 24 2014, 06:17 PM)
Hi guys, great thread here. Recently i just open Plus 500 trading account. Is it trustable platform? I realise their service charge is on the high side, any other platform that i can use to buy US ETF?
*
rjb is using TD Ameritrade for commission free ETFs.
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post Feb 24 2014, 06:37 PM

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QUOTE(JohnL77 @ Feb 24 2014, 06:22 PM)
Oh yeah, what does the "Specialty" represent, besides gold?

rjb, the $36.65 includes the forex spread between market rate and the bank's rate, right?
*
Gold + REITs

The $36.65 is the transfer charge only, I'm holding USD in Maybank so no currency conversation is taking place.


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post Feb 24 2014, 06:38 PM

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QUOTE(khchong81 @ Feb 24 2014, 06:17 PM)
Hi guys, great thread here. Recently i just open Plus 500 trading account. Is it trustable platform? I realise their service charge is on the high side, any other platform that i can use to buy US ETF?
*
As John mentioned - I'm using TD Ameritrade which offers 500 free trades (not sure when they expire, I think 60 days from account opening) and a selection of commission free ETFs, others have a $9.99 dealing charge.
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post Feb 24 2014, 08:16 PM

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If commission and fee is your concern, you can consider IB (Interactive Brokers). They are discounted brokers and their rate is by far consider cheapest.

But their platform does not come with research perks like TDA. IB is one of the top rated broker, both service and execution wise. The only drawback is their chart. They provide screenshot of chart updated at your selected time frame instead of a live chart. You can subscribe for chart services if you need live chart, but think asset allocation method can live without live lower time frame chart.
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post Feb 24 2014, 09:55 PM

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QUOTE(rjb123 @ Feb 24 2014, 06:38 PM)
As John mentioned - I'm using TD Ameritrade which offers 500 free trades (not sure when they expire, I think 60 days from account opening) and a selection of commission free ETFs, others have a $9.99 dealing charge.
*
QUOTE(morning06 @ Feb 24 2014, 08:16 PM)
If commission and fee is your concern, you can consider IB (Interactive Brokers). They are discounted brokers and their rate is by far consider cheapest.

But their platform does not come with research perks like TDA. IB is one of the top rated broker, both service and execution wise. The only drawback is their chart. They provide screenshot of chart updated at your selected time frame instead of a live chart. You can subscribe for chart services if you need live chart, but think asset allocation method can live without live lower time frame chart.
*
I can wire the money into the account through bank in malaysia or by using credit card just like Plus 500 account?
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post Feb 24 2014, 09:57 PM

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QUOTE(khchong81 @ Feb 24 2014, 09:55 PM)
I can wire the money into the account through bank in malaysia or by using credit card just like Plus 500 account?
*
Transfer from a bank account only.


morning06
post Feb 24 2014, 10:12 PM

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So far i've only transfer once using Foreign Telegraphic Transfer (T/T) at bank counter. I think rjb123 transfer method by having maybank foreign account is faster and less hassle.

This post has been edited by morning06: Feb 24 2014, 10:13 PM
JohnL77
post Feb 24 2014, 10:27 PM

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QUOTE(rjb123 @ Feb 24 2014, 06:37 PM)
Gold + REITs

The $36.65 is the transfer charge only, I'm holding USD in Maybank so no currency conversation is taking place.
*
What REITs do you invest in? This is a point of contention for me because I'm not sure if one should invest in a global REIT or a US one or a local one.

So, do you lose money compared to the market rate when you buy USD? That means, you have to open a forex account and there would be more charges, right?
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post Feb 24 2014, 10:29 PM

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QUOTE(morning06 @ Feb 24 2014, 10:12 PM)
So far i've only transfer once using Foreign Telegraphic Transfer (T/T) at bank counter. I think rjb123 transfer method by having maybank foreign account is faster and less hassle.
*
But is T/T less expensive?
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post Feb 24 2014, 10:38 PM

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QUOTE(JohnL77 @ Feb 24 2014, 10:27 PM)
What REITs do you invest in? This is a point of contention for me because I'm not sure if one should invest in a global REIT or a US one or a local one.

So, do you lose money compared to the market rate when you buy USD? That means, you have to open a forex account and there would be more charges, right?
*
QUOTE(JohnL77 @ Feb 24 2014, 10:29 PM)
But is T/T less expensive?
*
Currently VNQ (US)

TT / Wire all the same , no difference.

I'm getting my income in USD so I don't need to do any MYR to USD conversion

There isn't any charge for having a FCA account with Maybank, just $1000 USD initial deposit , and $4 per transaction (local, more for overseas)
JohnL77
post Feb 24 2014, 11:33 PM

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QUOTE(rjb123 @ Feb 24 2014, 10:38 PM)
Currently VNQ (US)

TT / Wire all the same , no difference.

I'm getting my income in USD so I don't need to do any MYR to USD conversion

There isn't any charge for having a FCA account with Maybank, just $1000 USD initial deposit , and $4 per transaction (local, more for overseas)
*
Again, thanks for the info, very helpful. thumbup.gif

Do you mind me asking what it is you sell?

So, US REITs. Any particular reason why you don't diversify to international REITs?

Your portfolio, is it mostly made up of passive funds or Vanguard's actively managed funds (don't follow an index)?

This post has been edited by JohnL77: Feb 24 2014, 11:34 PM
rjb123
post Feb 24 2014, 11:50 PM

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QUOTE(JohnL77 @ Feb 24 2014, 11:33 PM)
Again, thanks for the info, very helpful.  thumbup.gif

Do you mind me asking what it is you sell?

So, US REITs. Any particular reason why you don't diversify to international REITs?

Your portfolio, is it mostly made up of passive funds or Vanguard's actively managed funds (don't follow an index)?
*
Anything related to phones (mostly parts, accessories)

No particular reason , will look at some EUR denominated ones , prefer to buy those in EUR

Mostly passive
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post Feb 25 2014, 12:47 AM

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QUOTE(rjb123 @ Feb 24 2014, 11:50 PM)
Anything related to phones (mostly parts, accessories)

No particular reason , will look at some EUR denominated ones , prefer to buy those in EUR

Mostly passive
*
Do you run something like an eBay store?

Did you read Vanguard's paper on their actively managed funds? 38% chance of beating the market over the course of 30 years. 38% lol.

Thanks for sharing all the info man. If I have any other questions I'll look you up on this thread. Good luck with your investing. smile.gif

This post has been edited by JohnL77: Feb 25 2014, 12:49 AM
sonicbull
post Mar 1 2014, 03:24 PM

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QUOTE(rjb123 @ Feb 24 2014, 11:50 PM)
Anything related to phones (mostly parts, accessories)

No particular reason , will look at some EUR denominated ones , prefer to buy those in EUR

Mostly passive
*
How much min money is needed to purchase vanguard etf thru AMTD?
I read in vanguard website, usd10k is the minimum?
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post Mar 1 2014, 06:50 PM

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QUOTE(sonicbull @ Mar 1 2014, 03:24 PM)
How much min money is needed to purchase vanguard etf thru AMTD?
I read in vanguard website, usd10k is the minimum?
*
Minimum purchase is 1 share / ETF, so it depends on the price.

Initial deposit with TDAM I think is $2K, not 100% sure - read that elsewhere
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post Mar 2 2014, 12:18 AM

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QUOTE(sonicbull @ Mar 1 2014, 03:24 PM)
How much min money is needed to purchase vanguard etf thru AMTD?
I read in vanguard website, usd10k is the minimum?
*
That is if you invest directly with Vanguard, kinda like unit trust. Impossible for Malaysian, only US citizen can have account with Vanguard. Only option I know of for us is ETF.
morning06
post Mar 2 2014, 02:03 AM

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QUOTE(rjb123 @ Mar 1 2014, 06:50 PM)
Minimum purchase is 1 share / ETF, so it depends on the price.

Initial deposit with TDAM I think is $2K, not 100% sure - read that elsewhere
*
Nope, Unless you're talking about margin. For cash account there is no min. And to double confirm, I have a few friends who previously transferred only USD1,000 when they started wink.gif

Quoted from TDA FAQ
QUOTE
There is no minimum to open an account; however, a $2,000 deposit is required to be considered for margin and options privileges, regardless of any promotional offer.

MNet
post Mar 2 2014, 06:34 PM

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ProShares Ultra Health Care ok?
5-Year +48.26%
http://www.bloomberg.com/quote/RXL:US
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post Mar 2 2014, 09:41 PM

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QUOTE(MNet @ Mar 2 2014, 06:34 PM)
ProShares Ultra Health Care ok?
5-Year +48.26%
http://www.bloomberg.com/quote/RXL:US
*
I'm holding sole XLV

This RXL is 200% leveraged ..
dreamer101
post Mar 3 2014, 01:39 AM

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QUOTE(MNet @ Mar 2 2014, 06:34 PM)
ProShares Ultra Health Care ok?
5-Year +48.26%
http://www.bloomberg.com/quote/RXL:US
*
MNet,

You are GAMBLING!! You have to watch your ETF closely. Is that what you want to do??

Dreamer
dreamer101
post Mar 4 2014, 09:55 PM

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http://www.capitalspectator.com/major-asse...view/#more-3303

user posted image

Folks,

In order to make money, you have to buy something at LOW PRICE and SELL it at HIGHER PRICE. Aka, BUY LOW and SELL HIGH..

At any point in time, there will be some asset class that do well and some don't. See above. If you keep a FIXED RATIO between multiple asset classes, you BUY what ever asset class that is below allocation percentage. Usually, that means you will buy asset class that is not doing well now. Aka, you BUY LOW.

Conversely, when you SELL, you SELL asset class that is more than you allocated percentage. Normally, that is the asset class that is doing well now. Aka, you SELL HIGH.

If you BUY LOW and SELL HIGH, you make money.

You are judging the LOW and HIGH by the RELATIVE PRICING between ASSET CLASSES. All you need to do that is to keep a FIXED RATIO between asset classes.

It is VERY SIMPLE. This is TOO SIMPLE. Hence, most people will not teach this to you because if you know, you DO NOT NEED them. And, they cannot make money out of you.

Dreamer
MNet
post Mar 7 2014, 10:27 PM

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which broker is come with lowest fee?
MNet
post Jun 4 2014, 10:33 PM

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QUOTE(dreamer101 @ Jun 11 2013, 12:29 AM)
<<MY mutual fund market also can get that kind of return.>>

3) Return is NOT the main goal of this approach.  The main goal is Risk Adjusted Return with minimal expense and maintenance.

Dreamer
*
If return is not the main goal.
Why not u keep ur money at saving account?
dreamer101
post Jun 4 2014, 10:41 PM

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QUOTE(MNet @ Jun 4 2014, 10:33 PM)
If return is not the main goal.
Why not u keep ur money at saving account?
*
MNet,

Read carefully:

The GOAL is Risk Adjusted Return. Not just return

<<Why not u keep ur money at saving account?>>

This is STUPID. It is like saying you have only 2 choices: Genting Casino or Saving A/C.

With my approach, I get 6% to 8% return per year over the long run with minimal work and risk. I can "sleep for 5 years" and do nothing.

Now, what do you get in return for all those ADDITIONAL risks and efforts?? Is it worth it??

Risk Adjusted Return

By investing on individual share, you take on additional risk. Are you getting a hell lot more return??

I have some "play money" to gamble on stock. They are very small amount. For those money, I will not gamble on any stock that may return 20X to 30X. Or else, it is not worthwhile to take the risk.

Dreamer
Hapeng
post Jun 10 2014, 02:17 PM

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applied for my Foreign trading acc with Hong Leong Bank.
going into Vanguard ETFs very very soon!

MNet
post Jun 10 2014, 06:41 PM

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QUOTE(Hapeng @ Jun 10 2014, 02:17 PM)
applied for my Foreign trading acc with Hong Leong Bank.
going into Vanguard ETFs very very soon!
*
What is the fee?
Hapeng
post Jun 11 2014, 06:56 AM

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QUOTE(MNet @ Jun 10 2014, 06:41 PM)
What is the fee?
*
0.35%, USD 10 min

This post has been edited by Hapeng: Jun 11 2014, 06:58 AM
kaiserwulf
post Jun 11 2014, 11:10 AM

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what's the holding fee?
Hapeng
post Jun 11 2014, 11:13 AM

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QUOTE(kaiserwulf @ Jun 11 2014, 11:10 AM)
what's the holding fee?
*
could u define holding fee?

kaiserwulf
post Jun 11 2014, 04:08 PM

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Holding fee is something the brokerage charge for using their nominee account in the US to hold your US stocks, some broker call it custody charge... my broker quote me 2 sgd per counter per month, what's urs? It may affect your real rate of return if you hold small positions over long time...
oneeleven
post Jun 18 2014, 11:32 PM

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Hi Dreamer,

Do you still hold the same Vanguards as listed last year?

With everything so high now, is it a bad time to get into more Vanguards, or what is reasonable value now?

Are Vanguard high risk mutuals like ETFs?


dreamer101
post Jun 18 2014, 11:38 PM

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QUOTE(oneeleven @ Jun 18 2014, 11:32 PM)
Hi Dreamer,

Do you still hold the same Vanguards as listed last year?

With everything so high now, is it a bad time to get into more Vanguards, or what is reasonable value now?

Are Vanguard high risk mutuals like ETFs?
*
oneeleven,

Yes..

<< With everything so high now, is it a bad time to get into more Vanguards, or what is reasonable value now?>>

I guess you DO NOT UNDERSTAND asset allocation at all. In any point of time, not all asset classes will be high at the same time. If you follow asset allocation, you will always buy LOW aka the asset class that is relatively cheap at the moment.

At this moment, bond index fund / ETF is relatively cheap. Hence, I am buying bond as per my asset allocation.

You do not need to look at the market or time the market at all with this strategy. You will always BUY LOW and SELL HIGH.

http://www.capitalspectator.com/major-asse...view/#more-3303
user posted image


It is VERY SIMPLE but HARD.

It is a VERY SIMPLE and EFFECTIVE strategy. You just need to follow your asset allocation ratio.

It is HARD because it requires DISCIPLINE to follow the rule: buy LOW and sell HIGH.

Dreamer

This post has been edited by dreamer101: Jun 18 2014, 11:44 PM
wodenus
post Jun 18 2014, 11:47 PM

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QUOTE(kaiserwulf @ Jun 11 2014, 04:08 PM)
Holding fee is something the brokerage charge for using their nominee account in the US to hold your US stocks, some broker call it custody charge... my broker quote me 2 sgd per counter per month, what's urs? It may affect your real rate of return if you hold small positions over long time...
*
AFAIK local accounts have no holding fees.. just like local mutual funds have no platform fees smile.gif

oneeleven
post Jun 19 2014, 12:09 AM

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TQ Dreamer, I was not paying attention. So if I were to want to get into a Vanguard programme, I should set up asset allocation charting and study for some time before even buying the first set?
dreamer101
post Jun 19 2014, 01:00 AM

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QUOTE(oneeleven @ Jun 19 2014, 12:09 AM)
TQ Dreamer, I was not paying attention. So if I were to want to get into a Vanguard programme, I should set up asset allocation charting and study  for some time before even buying the first set?
*
oneeleven,

You should START by reading this thread from beginning to end.

<< I should set up asset allocation charting and study for some time before even buying the first set?>>

You are not even close to what asset allocation mean to begin with.

Dreamer
kaiserwulf
post Jun 19 2014, 07:00 AM

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QUOTE(wodenus @ Jun 18 2014, 11:47 PM)
AFAIK local accounts have no holding fees.. just like local mutual funds have no platform fees smile.gif
*
Ofc... So how do I get a local holding account?

I smell a high horse so kindly guide me. I work n stay in msia.
Hapeng
post Jun 19 2014, 08:52 AM

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QUOTE(kaiserwulf @ Jun 19 2014, 07:00 AM)
Ofc... So how do I get a local holding account?

I smell a high horse so kindly guide me. I work n stay in msia.
*
there are none with HLe broking. held in Hong Leong's foreign account.
kaiserwulf
post Jun 19 2014, 01:24 PM

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QUOTE(Hapeng @ Jun 19 2014, 08:52 AM)
there are none with HLe broking. held in Hong Leong's foreign account.
*
Ic... and HL let you use the foreign account for free every month?

Thanks.
Hapeng
post Jun 19 2014, 01:50 PM

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QUOTE(kaiserwulf @ Jun 19 2014, 01:24 PM)
Ic... and HL let you use the foreign account for free every month?

Thanks.
*
yup, just very low interest for monies parked there.
The foreign broker also charges a transaction fee, but thats all. no holding fee
zstormhere
post Jun 19 2014, 03:54 PM

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what is vanguard?
j.passing.by
post Jun 19 2014, 06:55 PM

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QUOTE(zstormhere @ Jun 19 2014, 03:54 PM)
what is vanguard?
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http://lmgtfy.com/?q=vanguard

oneeleven
post Jun 19 2014, 09:04 PM

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QUOTE(dreamer101 @ Jun 19 2014, 01:00 AM)
oneeleven,

You should START by reading this thread from beginning to end.

<< I should set up asset allocation charting and study  for some time before even buying the first set?>>

You are not even close to what asset allocation mean to begin with.

Dreamer
*
Hey, I did, and am trying to understand. Some of us have no financial training. You have been patiently answering all kinds of questions from others and I appreciate that. Just that I have already have access to Vanguard and am wondering what is the next step. Is there more than just taking their shop-front advice?


dreamer101
post Jun 19 2014, 09:09 PM

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QUOTE(oneeleven @ Jun 19 2014, 09:04 PM)
Hey, I did, and am trying to understand. Some of us have no financial training. You have been patiently answering all kinds of questions from others and I appreciate that. Just that I have already have access to Vanguard and am wondering what is the next step. Is there more than just taking their shop-front advice?
*
oneeleven,

http://www.bogleheads.org/wiki/Category:Asset_allocation

The next step is to pick asset allocation that make sense for you. Above URL has a lot more materials.

Dreamer
oneeleven
post Jun 19 2014, 09:14 PM

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QUOTE(dreamer101 @ Jun 19 2014, 09:09 PM)
oneeleven,

http://www.bogleheads.org/wiki/Category:Asset_allocation

The next step is to pick asset allocation that make sense for you.  Above URL has a lot more materials.

Dreamer
*
Ah, lots of homework. The "Lazy Portfolios" looks like my speed. Thanks for the leads, really!
dreamer101
post Jun 19 2014, 09:44 PM

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QUOTE(oneeleven @ Jun 19 2014, 09:14 PM)
Ah, lots of homework. The "Lazy Portfolios" looks like my speed. Thanks for the leads, really!
*
Go with 60/40 to start.

Dreamer


dreamer101
post Jun 19 2014, 11:13 PM

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Folks,

The easiest way to start is

60% VT and 40% BND

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

Then, you can tune and adjust your ratio or add VNQ as you know more.

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

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rjb123
post Jun 20 2014, 03:02 AM

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My portfolio using US ETFs is still in progress, doing OK so far.

Should reach my target allocation in the next few months smile.gif

Although added a few other sectors ... Russia/Thailand/Vietnam to diversify a bit smile.gif
dreamer101
post Jun 20 2014, 08:16 AM

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QUOTE(rjb123 @ Jun 20 2014, 03:02 AM)
My portfolio using US ETFs is still in progress, doing OK so far.

Should reach my target allocation in the next few months smile.gif

Although added a few other sectors ... Russia/Thailand/Vietnam to diversify a bit smile.gif
*
rjb123,

If you won't mind, could you please let us know your stock versus bond ratio and how you arrive at the number?? Or, how you decide to allocate X% to each ETF??

Thanks.

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zstormhere
post Jun 20 2014, 10:24 AM

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is there any basic training for stock allocation topic which is organized at kl?
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post Jun 20 2014, 02:24 PM

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QUOTE(dreamer101 @ Jun 20 2014, 08:16 AM)
rjb123,

If you won't mind, could you please let us know your stock versus bond ratio and how you arrive at the number??  Or, how you decide to allocate X% to each ETF??

Thanks.

Dreamer
*
Currently I'm targetting 30%/70% Bond vs. Stock ratio , will be heavier towards bonds as I get older. I'm treating this as my retirement pot , so planning to be topping up monthly without withdrawing anything (ie. close to 30 years - I'm currently 27) so I don't see a problem being a little heavier on stocks for now.

I'm still in fairly early stages as reluctant to put too much cash in at once - according to my monthly contribution plan I'm sitting on 10 years worth of contributions whistling.gif

Edit : Although for the long term I'm not sure doing this through the US is the best choice due to the Withholding tax on dividends - Luxembourg would be an alternative but the broker there has far higher transaction charges

This post has been edited by rjb123: Jun 20 2014, 02:31 PM
zstormhere
post Jun 20 2014, 03:22 PM

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dreamer101, r u cfa certified professional?
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QUOTE(zstormhere @ Jun 20 2014, 03:22 PM)
dreamer101, r u cfa certified professional?
*
he is a network engineer
dreamer101
post Jun 20 2014, 07:32 PM

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QUOTE(zstormhere @ Jun 20 2014, 03:22 PM)
dreamer101, r u cfa certified professional?
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zstormhere,

No. Why do you ask??

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wodenus
post Jun 23 2014, 09:55 PM

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Comparison of VOO (Vanguard S&P 500 ETF), VT (Vanguard Total World Stock ETF) and KUTNETF (Kenanga Growth Fund) :

Attached Image

Also, IINM, VOO's price per share is now $180.44 (about Rm580 per share.) Board lot is 100 shares, so to buy into VOO now you will need $18,044 (Rm58,093).

VT's price per share is now $62.73 (about Rm201.96). So to buy into VT now, you need at least $6,273 (Rm20,196).

The question is now whether you can afford to lose Rm58K, or Rm20K if Vanguard implodes. This is very unlikely, but then no one would have guessed Lehman Bros. would file either.

Also, if you want to DCA/VCA this, you will have to put in 58K, or 20K each time.

Please correct me if I am wrong.

Also, now that we have Aberdeen's Islamic World Fund, we have a way of mitigating single-country risk.. so I'm not sure what advantage VT would have over them in Malaysia.


This post has been edited by wodenus: Jun 23 2014, 10:06 PM
dreamer101
post Jun 23 2014, 10:28 PM

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QUOTE(wodenus @ Jun 23 2014, 09:55 PM)
» Click to show Spoiler - click again to hide... «


Please correct me if I am wrong.

» Click to show Spoiler - click again to hide... «

*
wodenus,

You are WRONG!!!

1) There is no lot size with US ETF. You can buy as little as one share. So, the minimum for VOO is USD $180.44 and VT is USD $62.73..

2) You either trade for free or pay USD $10 per trade. Normally recommended to buy around USD $1,000 per trade.

3) No sales charges of 5% to 7% like Malaysia UT..

4) Annual maintenance fee of less than 1% for both ETF..

<< This is very unlikely, but then no one would have guessed Lehman Bros. would file either.>>

5) This is a STUPID statement. VT invest on all 4,000 largest public listed companies in the WHOLE WORLD. If VT crash, the WHOLE WORLD is going to hell.

<<Aberdeen's Islamic World Fund>>

6) Why would somebody want to pay more to get less??

A) 5% to 7% upfront sales charge versus USD $10 per trade

B) 1% to 3% annual maintenance fee versus less than 1%

C) 4,000 largest public listed companies around the world versus how many in that UT??

Dreamer

This post has been edited by dreamer101: Jun 23 2014, 10:30 PM
wodenus
post Jun 23 2014, 10:33 PM

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QUOTE(dreamer101 @ Jun 23 2014, 10:28 PM)
wodenus,

You are WRONG!!!

1) There is no lot size with US ETF.  You can buy as little as one share.  So, the minimum for VOO is USD $180.44 and VT is USD $62.73..

2) You either trade for free or pay USD $10 per trade.  Normally recommended to buy around USD $1,000 per trade.

3) No sales charges of 5% to 7% like Malaysia UT..

4) Annual fee of less than 1% for both ETF..

<< This is very unlikely, but then no one  would have guessed Lehman Bros. would file either.>>

5) This is a STUPID statement.  VT invest on all 4,000 largest public listed companies in the WHOLE WORLD.  If VT crash, the WHOLE WORLD is going to hell.

<<Aberdeen's Islamic World Fund>>

6) Why would somebody want to pay more to get less??

    A) 5% to 7% upfront sales charge versus USD $10 per trade

    B) 1% to 3% annual maintenance fee versus less than 1%

    C) 4,000 largest public listed companies around the world versus how many in that UT??

Dreamer
*
Thank you so much smile.gif actually sales charge is around 0-2% here now, things have changed, but yea I can see how that might actually be a good idea smile.gif

But wait..

Attached Image

A) 2% sales charge. Lowest minimum brokerage here is $30 per trade. Would be interesting to find a low-cost US broker in this country smile.gif

B) If their expenses are so much lower, why aren't they doing any better?

C) This presumably is from their marketing material, unless you have the full list of their 4000 holdings, so nothing said about that.


This post has been edited by wodenus: Jun 23 2014, 10:55 PM
rjb123
post Jun 23 2014, 10:57 PM

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In regards to trading fees etc. US ETFs are far superior than equivalent products in Malaysia.

The only downside it seems are the tax on dividends - although I understand half of the 30% withheld you can claim back at the end of the tax year?

Wodenus , regarding your point "A) 2% sales charge. Lowest minimum brokerage here is $30 per trade. Would be interesting to find a low-cost US broker in this country"

Nothing is stopping you from opening an account with a US broker, they don't have to be based in Malaysia ...

I don't really understand this question - how do you define "better"?

B) If their expenses are so much lower, why aren't they doing any better?



This post has been edited by rjb123: Jun 23 2014, 10:59 PM
dreamer101
post Jun 23 2014, 11:42 PM

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QUOTE(wodenus @ Jun 23 2014, 10:33 PM)
» Click to show Spoiler - click again to hide... «

C) This presumably is from their marketing material, unless you have the full list of their 4000 holdings, so nothing said about that.
*
wodenus,

https://personal.vanguard.com/us/FundsAllHo...&sortOrder=desc

The full 6,227 holding.

Vanguard ETF and mutual report their FULL HOLDING every quarter. It was on the URL that I posted.

Dreamer

This post has been edited by dreamer101: Jun 23 2014, 11:43 PM
X.E.D
post Jun 23 2014, 11:43 PM

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QUOTE(rjb123 @ Jun 23 2014, 10:57 PM)
The only downside it seems are the tax on dividends - although I understand half of the 30% withheld you can claim back at the end of the tax year?

*
Don't think we have a tax treaty with the US so the 30% is a fixed number.
However I think it only applies to US company-issued dividends. So not all that painful either if you opt out of dividend ETFs too.

It's small fry in light of the 0% long term capital gains tax (most US peeps who have $ to invest get knocked with 15% if it's not in a 401(k) ) and low management fees.

I'm looking seriously at wiring a bit of money into Schwab and the withholding tax is prolly my last concern (other than picking between Schwab's own ETFs or ponying $9/trade for Vanguard stuff)
wodenus
post Jun 23 2014, 11:48 PM

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QUOTE
Nothing is stopping you from opening an account with a US broker, they don't have to be based in Malaysia ...


Fair enough, can you suggest a good low-cost US broker that will allow a Malaysian resident to open an account? Schwab wants Rm30K initial funding.

QUOTE
I don't really understand this question - how do you define "better"?


Given VT's low management fees, you'd expect them to have much better performance than AWF.. but as the chart (above) shows, performance is about the same. What does the low management fees translate to, in terms of unitholder benefits?

This post has been edited by wodenus: Jun 23 2014, 11:52 PM
dreamer101
post Jun 23 2014, 11:54 PM

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QUOTE(wodenus @ Jun 23 2014, 11:48 PM)
» Click to show Spoiler - click again to hide... «
performance than AWF.. but as the chart (above) shows, performance is about the same.
*
wodenus,

If the chart is the same, that means Vanguard win.

A) AWF's chart is based on amount invested less the front load (sales charge). That means AWF's performance is 1% to 2% lower than the chart shown.

B) AWF do not invest on 6,227 companies across the whole world. It is more risky.

C) VT is a passive index fund. No active management risk.

Why pay more to get less??

Dreamer
rjb123
post Jun 23 2014, 11:54 PM

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QUOTE(X.E.D @ Jun 23 2014, 11:43 PM)
Don't think we have a tax treaty with the US so the 30% is a fixed number.
However I think it only applies to US company-issued dividends. So not all that painful either if you opt out of dividend ETFs too.

It's small fry in light of the 0% long term capital gains tax (most US peeps who have $ to invest get knocked with 15% if it's not in a 401(k) ) and low management fees.

I'm looking seriously at wiring a bit of money into Schwab and the withholding tax is prolly my last concern (other than picking between Schwab's own ETFs or ponying $9/trade for Vanguard stuff)
*
Hmm I see, I was under the impression we can get the 15% back from what I read - need to double check.


QUOTE(wodenus @ Jun 23 2014, 11:48 PM)
Fair enough, can you suggest a good low-cost US broker that will allow a Malaysian resident to open an account?
Given VT's low management fees, you'd expect them to have much better performance than AWF.. but as the chart (above) shows, performance is about the same. What does the low management fees translate to, in terms of unitholder benefits?
*
Benefits to unit holder - less annual fees?

They can have less fees, as much larger in terms of total assets
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post Jun 23 2014, 11:59 PM

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QUOTE(rjb123 @ Jun 23 2014, 11:54 PM)
» Click to show Spoiler - click again to hide... «


They can have less fees, as much larger in terms of total assets
*
rjb123,

By the way,

1) Vanguard is the world largest mutual fund company.

2) Vanguard is owned by the mutual fund holder. Aka, it is a not for profit company. It operates the mutual fund at cost. See below URL for more details.

https://investor.vanguard.com/what-we-offer/why-vanguard

Dreamer
wodenus
post Jun 24 2014, 12:03 AM

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QUOTE(dreamer101 @ Jun 23 2014, 11:54 PM)
A) AWF's chart is based on amount invested less the front load (sales charge).  That means AWF's performance  is 1% to 2% lower than the chart shown.


Attached Image

This is a straightforward growth chart.. I got it off Bloomberg. Both have pretty much the same growth, as you can see. Given that VT's expenses are much lower, why is the performance comparable? why isn't VT's climb much steeper than AWFs? if the fees are so much lower, all other things being equal the VT chart should have a steeper gradient.. but it doesn't.

So where does the money go?



This post has been edited by wodenus: Jun 24 2014, 12:11 AM
X.E.D
post Jun 24 2014, 12:04 AM

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QUOTE(wodenus @ Jun 23 2014, 11:48 PM)
Fair enough, can you suggest a good low-cost US broker that will allow a Malaysian resident to open an account? Schwab wants Rm30K initial funding.

*
30k is on the low side man. ETrade wants 75k ringgit. laugh.gif
Actually it's only a $500USD minimum to open there. But trades aren't cheap at $10 a notch.

QUOTE(rjb123 @ Jun 23 2014, 11:54 PM)
Hmm I see, I was under the impression we can get the 15% back from what I read - need to double check.
*
I believe that happens to your active income taxation if you declare yourself either a US resident or a low-bracket income-earner ("Green Card Hax") but dividends going under passive/FDAP income, don't seem to trigger any mention of exemption.

This post has been edited by X.E.D: Jun 24 2014, 12:07 AM
wodenus
post Jun 24 2014, 12:06 AM

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QUOTE(rjb123 @ Jun 23 2014, 11:54 PM)
Hmm I see, I was under the impression we can get the 15% back from what I read - need to double check.
Benefits to unit holder - less annual fees?

They can have less fees, as much larger in terms of total assets
*
Basically, what you are saying is this, one fund manager charges $250.. but you get 5% growth after expenses. The other fund manager charges $3, but you get 5% growth after expenses. What exactly is the difference to you what they charge?
wodenus
post Jun 24 2014, 12:09 AM

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QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
30k is on the low side man. ETrade wants 75k ringgit.  laugh.gif


Exactly my point, it makes sense if you are in the US. But unless someone can recommend a reputable low-cost US broker that doesn't demand a ridiculous amount of money just to open an account, we're stuck with a $30 minimum brokerage smile.gif

QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
I believe that happens to your active income taxation if you declare yourself either a US resident or a low-bracket income-earner ("Green Card Hax") but dividends going under passive/FDAP income, don't seem to trigger any mention of exemption.


Then you would just be lying to the government? tongue.gif

This post has been edited by wodenus: Jun 24 2014, 12:13 AM
rjb123
post Jun 24 2014, 12:12 AM

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QUOTE(wodenus @ Jun 24 2014, 12:09 AM)
Exactly my point, it makes sense if you are in the US. But unless someone can recommend a reputable low-cost US broker that doesn't demand a ridiculous amount of money just to open an account, we're stuck with a $30 minimujm brokerage smile.gif
Then you would just be lying to the government? tongue.gif
*
Depends what you call a ridiculous amount of money - less than $10K isn't really worth it after paying bank charges

Currently 30% max withholding, apparently at the end of the year you can file a 1040NR form to get half of that 30% back.

wodenus
post Jun 24 2014, 12:13 AM

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QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
Actually it's only a $500USD minimum to open there. But trades aren't cheap at $10 a notch.


How reputable is Etrade?

wodenus
post Jun 24 2014, 12:15 AM

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QUOTE(rjb123 @ Jun 24 2014, 12:12 AM)
Depends what you call a ridiculous amount of money - less than $10K isn't really worth it after paying bank charges

Currently 30% max withholding, apparently at the end of the year you can file a 1040NR form to get half of that 30% back.
*
Fantastic.. so if I do DCA/VCA I have to put in $10K a shot.. otherwise it'd not be worth it? and on top of that I have to file a form to get 15% taxed from the dividend, otherwise it's 30%?
X.E.D
post Jun 24 2014, 12:16 AM

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QUOTE(wodenus @ Jun 24 2014, 12:09 AM)
Exactly my point, it makes sense if you are in the US. But unless someone can recommend a reputable low-cost US broker that doesn't demand a ridiculous amount of money just to open an account, we're stuck with a $30 minimujm brokerage smile.gif
Then you would just be lying to the government? tongue.gif
*
I wouldn't say 30k's a lot of money- it is Ringgit after all :V
Okay lah, say 1-2 years savings for average joe. If you can't leverage the economies of scale yet, put it in a local UT then... the management fee rape isn't too obvious in a short timescale, but the front load is.

For me I see the case there tho. Putting in six digits in a three/four fund allocation, set it and forget it, and enjoy no front load + minimal management costs.

Oh and you can only declare residency if you fulfill certain eccentric conditions. Certainly not lying. And doesn't help the 30% dividend case here. Most countries with US tax treaties are ones that tax their citizens worse- hence the gov stepping in to prevent dual taxation.
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post Jun 24 2014, 12:22 AM

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QUOTE(wodenus @ Jun 24 2014, 12:15 AM)
Fantastic.. so if I do DCA/VCA I have to put in $10K a shot.. otherwise it'd not be worth it? and on top of that I have to file a form to get 15% taxed from the dividend, otherwise it's 30%?
*
Just because you transfer in $10k doesn't mean you have to invest it all in one go. Can have a higher balance and just top up every month (whatever your schedule)
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post Jun 24 2014, 12:22 AM

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QUOTE(X.E.D @ Jun 24 2014, 12:16 AM)
» Click to show Spoiler - click again to hide... «

*
X.E.D,

https://personal.vanguard.com/us/funds/snap...ntExt=INT#tab=0

VT annual expense is 0.18%.

Dreamer



wodenus
post Jun 24 2014, 12:23 AM

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QUOTE(X.E.D @ Jun 24 2014, 12:16 AM)
I wouldn't say 30k's a lot of money- it is Ringgit after all :V
Okay lah, say 1-2 years savings for average joe. If you can't leverage the economies of scale yet, put it in a local UT then... the management fee rape isn't too obvious in a short timescale, but the front load is.


Ha if I had a few million ringgit lying around, I'd buy property.. smile.gif

QUOTE
For me I see the case there tho. Putting in six digits in a three/four fund allocation, set it and forget it, and enjoy no front load + minimal management costs.


Maybe in the US now that the property market there is pretty much dead. But here.. high-end property is dead cheap smile.gif

QUOTE
Oh and you can only declare residency if you fulfill certain eccentric conditions. Certainly not lying. And doesn't help the 30% dividend case here. Most countries with US tax treaties are ones that tax their citizens worse- hence the gov stepping in to prevent dual taxation.


Now I'm curious, what if you had money in a brokerage account, that you used to buy into a mutual fund, but then the brokerage goes under, what happens to the amount in the brokerage account, and the amount in the fund?


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post Jun 24 2014, 12:23 AM

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QUOTE(wodenus @ Jun 24 2014, 12:15 AM)
Fantastic.. so if I do DCA/VCA I have to put in $10K a shot.. otherwise it'd not be worth it? and on top of that I have to file a form to get 15% taxed from the dividend, otherwise it's 30%?
*
Just because you transfer in $10k doesn't mean you have to invest it all in one go. Can have a higher balance and just top up every month (whatever your schedule)
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post Jun 24 2014, 12:24 AM

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QUOTE(wodenus @ Jun 24 2014, 12:15 AM)
Fantastic.. so if I do DCA/VCA I have to put in $10K a shot.. otherwise it'd not be worth it? and on top of that I have to file a form to get 15% taxed from the dividend, otherwise it's 30%?
*
Just because you transfer in $10k doesn't mean you have to invest it all in one go. Can have a higher balance and just top up every month (whatever your schedule)
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post Jun 24 2014, 12:24 AM

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QUOTE(dreamer101 @ Jun 24 2014, 12:22 AM)
So it is, but it does not seem to translate to noticeably better returns.
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post Jun 24 2014, 12:31 AM

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QUOTE(wodenus @ Jun 24 2014, 12:23 AM)

Now I'm curious, what if you had money in a brokerage account, that you used to buy into a mutual fund, but then the brokerage goes under, what happens to the amount in the brokerage account, and the amount in the fund?
*
The excess funds parked in the brokerage are in my case insured by FDIC (www.fdic.gov)

The fund is just held in that brokerage, if it was to go under and taken over by a new brokerage it'd get moved to there I imagine. Only if every company that fund holds was to go bankrupt your money would be gone !
wodenus
post Jun 24 2014, 12:35 AM

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QUOTE(rjb123 @ Jun 24 2014, 12:31 AM)
The excess funds parked in the brokerage are in my case insured by FDIC (www.fdic.gov)


Sure in your case it is. But if you are not a citizen, all your funds are gone right?

QUOTE(rjb123 @ Jun 24 2014, 12:31 AM)
The fund is just held in that brokerage, if it was to go under and taken over by a new brokerage it'd get moved to there I imagine. Only if every company that fund holds was to go bankrupt your money would be gone !


Any idea what happened in Lehman Bros. case? especially to their foreign accounts?


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post Jun 24 2014, 12:47 AM

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QUOTE(wodenus @ Jun 24 2014, 12:35 AM)
Sure in your case it is. But if you are not a citizen, all your funds are gone right?
» Click to show Spoiler - click again to hide... «

*
wodenus,

The money is held in TRUST independent of whether the person is a citizen or not.

It is THE SAME as your stock is held in CDS A/C in Malaysia. Your broker do not own those stock in your CDS A/C. You do.

Whatever your question is. It applies THE SAME in Malaysia. The ONLY DIFFERENCE is USA has the larger scale and better transparency.

Dreamer
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QUOTE(wodenus @ Jun 24 2014, 12:23 AM)
Ha if I had a few million ringgit lying around, I'd buy property..  smile.gif
Maybe in the US now that the property market there is pretty much dead. But here.. high-end property is dead cheap smile.gif
*
Yet for people in between who prefer liquidity and ease of mind, ETFs are pretty much right sized.
I can't just snap my fingers and sell off a bungalow in KL to pay for tuition at Haas, for example.

(Also, the US is doing pretty good in urban properties. SFBay, Seattle etc... crazy rents these days!)

Brokerages have SIPC + internal insurance coverage. Not as much of a wild west as you think.


QUOTE(dreamer101 @ Jun 24 2014, 12:22 AM)
That's pretty good for a world index (something that Schwab doesn't have) but Schwab has <.1% ERs on the majority of its domestic offerings. Just small cap intls going slightly higher.

I guess I don't like how Vanguard doesn't have a physical presence; if things go wrong and unchecked it's not exactly easy to rectify stuff.
rjb123
post Jun 24 2014, 12:49 AM

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Already answered by Dreamer , and I'm not a US citizen - don't know what gave you that impression.

Lehman case I don't know much about, but not very relevant to this discussion

This post has been edited by rjb123: Jun 24 2014, 12:50 AM
dreamer101
post Jun 24 2014, 12:50 AM

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QUOTE(rjb123 @ Jun 24 2014, 12:31 AM)
The excess funds parked in the brokerage are in my case insured by FDIC (www.fdic.gov)

The fund is just held in that brokerage, if it was to go under and taken over by a new brokerage it'd get moved to there I imagine. Only if every company that fund holds was to go bankrupt your money would be gone !
*
rjb123,

http://www.sipc.org/

SECURITIES INVESTOR PROTECTION CORPORATION

Brokerage A/C is protected by SIPC.

Bank A/C is protected by FDIC.

Dreamer
rjb123
post Jun 24 2014, 12:52 AM

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QUOTE(dreamer101 @ Jun 24 2014, 12:50 AM)
rjb123,

http://www.sipc.org/

SECURITIES INVESTOR PROTECTION CORPORATION

Brokerage A/C is protected by SIPC.

Bank A/C is protected by FDIC.

Dreamer
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FYI, from my TDAM account (the cash balance)

QUOTE
FDIC INSURED DEPOSIT ACCOUNT IDA10 NOT COVERED BY SIPC


dreamer101
post Jun 24 2014, 12:53 AM

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QUOTE(X.E.D @ Jun 24 2014, 12:47 AM)
» Click to show Spoiler - click again to hide... «

That's pretty good for a world index (something that Schwab doesn't have) but Schwab has <.1% ERs on the majority of its domestic offerings. Just small cap intls going slightly higher.

I guess I don't like how Vanguard doesn't have a physical presence; if things go wrong and unchecked it's not exactly easy to rectify stuff.
*
X.E.D,

VT is an ETF. You can buy and sell it just like stock. As long as your Schwab is a stock brokerage A/C, you can buy it.

Dreamer

This post has been edited by dreamer101: Jun 24 2014, 12:54 AM
dreamer101
post Jun 24 2014, 12:58 AM

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QUOTE(rjb123 @ Jun 24 2014, 12:52 AM)
FYI, from my TDAM account (the cash balance)
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rjb123,

By the way, TD own a bank too. It is called the TD Bank. So, in your case, your spare money is rolled into a bank A/C. Hence, it is protected by FDIC. In some other case, the money is held right in the brokerage A/C. Hence, it is protected by SIPC.

In any case, it is protected by FDIC or SIPC. One way or another.

Dreamer
rjb123
post Jun 24 2014, 01:16 AM

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QUOTE(dreamer101 @ Jun 24 2014, 12:58 AM)
rjb123,

By the way, TD own a bank too. It is called the TD Bank.  So, in your case, your spare money is rolled into a bank A/C.  Hence, it is protected by FDIC.  In some other case, the money is held right in the brokerage A/C.  Hence, it is protected by SIPC.

In any case, it is protected by FDIC or SIPC.  One way or another.

Dreamer
*
I'm aware of the bank - if I remember correctly they give you 2 choices of parking your cash , either FDIC or SIPC. Doesn't really make a difference to me as I'm not planning on having anywhere near the limit in cash parked there anyway.

Most important thing is, there's protection in the unlikely event of them going under.
dreamer101
post Jun 24 2014, 01:59 AM

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QUOTE(rjb123 @ Jun 24 2014, 01:16 AM)
I'm aware of the bank - if I remember correctly they give you 2 choices of parking your cash ,  either FDIC or SIPC. Doesn't really make a difference to me as I'm not planning on having anywhere near the limit in cash parked there anyway.

Most important thing is, there's protection in the unlikely event of them going under.
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rjb123,

I have a TDAM A/C too. It is for my play money..

Dreamer
rjb123
post Jun 24 2014, 02:09 AM

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QUOTE(dreamer101 @ Jun 24 2014, 01:59 AM)
rjb123,

I have a TDAM A/C too.  It is for my play money..

Dreamer
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Who do you prefer as a main broker?

I opened an account with IB as well, but really prefer the TDAM interface
dreamer101
post Jun 24 2014, 04:02 AM

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QUOTE(rjb123 @ Jun 24 2014, 02:09 AM)
Who do you prefer as a main broker?

I opened an account with IB as well, but really prefer the TDAM interface
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rjb123,

I do so little trade that I use TDAM.

Dreamer
apathen
post Jun 24 2014, 05:42 AM

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QUOTE(rjb123 @ Jun 24 2014, 12:12 AM)
Depends what you call a ridiculous amount of money - less than $10K isn't really worth it after paying bank charges

Currently 30% max withholding, apparently at the end of the year you can file a 1040NR form to get half of that 30% back.
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May I ask did you ever successfully get your withholding tax back? It's not by filling w-8ben form? Tq
wodenus
post Jun 24 2014, 11:21 AM

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QUOTE(dreamer101 @ Jun 24 2014, 12:47 AM)
wodenus,

The money is held in TRUST independent of whether the person is a citizen or not.

It is THE SAME as your stock is held in CDS A/C in Malaysia.  Your broker do not