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

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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
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
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
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?
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.
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
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.
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
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
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
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.

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.
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
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.
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
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?
JohnL77
post Jun 21 2013, 01:45 AM

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What about the United States.
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?
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

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