Then your rate is better than what I see in the banks for TT purposes. I am not surprised though,.. usually the money-changers offer better rates than the banks, but you must be onsite with cash to exchange.

I interpreted the interview as the RM has more to drop !!!

I am really glad that I have my foreign-currencies investment income now with which I can use to pay for my overseas-related expenses, eg, my travelling abroad.

Good opinions from all. But one thing is for sure : when Fed increases interest rate, there will be less money floating around in the mkts around the world. The so-called capital flight will be funds being moved back to the US.

So : in order to keep the foreign funds in the local mkts, something must be done by the countries affected, especially the countries which are more susceptible to this outflow of funds, currently Msia and Indonesia.

Look at the patterns around us,.. globally.

I would think the US mkt reaction to the no-hike decision can be explained this way : as the odds against the hike increase as we move towards to day of decision, the mkt rose because the mkts are forward-looking towards the rate hike decision.

Then the mkt is right : no hike. As you said, the Dow spiked a little bit more.

Subsequently, after the rate hike decision uncertainty has been put aside, the MKT TURNS to the next fundamental factor, could be oil and China. Since both oil and China still do not look very promising moving forward, the mkts moved downwards.

I, on the other hand, carries the belief that the easy money that has been making us happy has done damages to us and our economies as well. When something good is always around us, we, as humans start to slacken and let down our guard. NO matter how strong our economic fundamentals are, there will be impact too.

I will give an eg of this : We all know abt Sgp. We all know abt Sgp's good fundamentals and governance. When times were good with easy money, the stockbrokers kept asking people to go on margin financing for their share purchases. Nobody asked the question of how the interest rates are decided upon.

Then recently, people started to realize that financiers peg the interest rates of the loans to the SIBOR (Sgp Interbank Rate) or the SOR (Sgp Overnight Rate). For those who have borrowed too much, they can only hope that the SIBOR and the SOR do not rise too much that it makes them unable to service their loans. If you look at the data for the SIBOR and the SOR, they have begun to rise even before the tapering started last year, and the curve has steeped upwards slightly more this yr..

Hence, what we have here is even Sgp is affected by easy money. Good findamentals or not, complacency will always set in when there is easy money around. The difference is who or which country gets hit the hardest when this easy money starts leaving.

Easy money WILL LEAVE when the Fed hikes, why ? Companies based in the US which borrowed heavily will want to repay the loans so as not to be overly burdened by higher interest servicings. Conpamies and individuals will find the USD more enticing and more worthy to carry and to invest in because a rising interest rate tends to strengthen a currency. Companies and individuals will want to invest 'back into' the USA which has a higher yield due to the higher interest rate. And more so if the interest rate is an increasing one, after the first hike, companies and people around the world will then be 100% that the Feds DARE TO increase interest rates.

I agree the Feds won't hike too much,.. and after what I heard from the press conf and what I read in the report sent to me this monirng by my RM,... I am more inclined to believe that the Feds are now more concerned about global growth than their own internal economy. There has always been sayings everywhere that the Americans care only about themselves and not the rest of the world.

That thinking and position now may change.

ON a personal side, I am glad I did not take the bait when my RM kept pestering me to take loans and take-up more shares and REITs earlier. Will my REIT counters suffer if the rate hike does take place ? YES, there will be a downward move initially, BUT : they will bounce back quickly. Most of the SG REITs' fundamentals are strong enough today with the gearing limits imposed and after what happened to many of them back in 2008/9, they have learnt how to circumvent this problem.

Our 'window of opportunity' is very short for us to buy-in more SG REITs.

Well.. just my side of the story of how this Fed rate hike thing impacts me personally.

I would leave WB out ! WB himself can move mkts with his money. We don't have enough money to move mkts, hence, we need to depend on what we interpret of the mkts, and to go only into defensive sectors.

As we speak, the Asian mkts are going green one-by-one, this is the expected reaction ! My RM just told me there is a small positive development in Chine this morning : house prices have risen in more cities in August compared to July.

Hahah,... Angie Lau of Bloomberg just SAID THAT : the Feds are also concerned about the rest of the world now and not only the United States economy, unlike last year,... when Ben Bernanke was only for the US economy when he started the tapering.

He has been wrong at times in the last 40 years, but he has been right more than wrong. And he has always bought and seldom sold,... so chances for his counters to succeed would be high if given unlimited time, and of course, he has always chosen the correct counters, which is not difficult.

However : having said the above, I am hearing rumours from some friends in the US who were rich enough to have the Lunch Talk with him that he told them that the time for him to be wrong is approaching.

I agree. The only way to win if the mkt can hop up and down within short timeframes is by buying both sides of the spot (I contemplated this strategy once in the FKLI Vroom thread).

The problem is how short do we NEED the short timeframes to be for us to win. And that translates into whether the mkt will meet that required timeframe for us to win,... Hard to play-lar,...

As we speak, another interviewee is interpreting that Ms Janet Yellen and the Feds are now more concerned about developments abroad, about emerging mkts (Msia is one of them) and about China.

So, truly,... the US is now more concerned about the world than her own survivability. Quite responsible there, I must say.

But having said the above, if Ms Yellen is going to wait for the whole world to fall in place first before she hikes,.... lol,.. the day of hiking will never come.

This post has been edited by Hansel: Sep 18 2015, 11:32 AM

Right. So,... the saying that high can go higher is applicable too. On top of the hot money, more money will be converted into the USD to capitalise on this expected strengthening of the USD. More money leaves the rest of the world, flowing into the USA.

On a personal side, I'm glad I have purchase quite some USD high yield bonds, which pay out coupons in the USD. Should have purchased more, but again, that is hindsight-lar,...

I accept this point - balancing between Investment Success and Patriotism. Not Responsibility or Irresponsibility.

I look at it this way :-

1) I measure Investment Success with returns, wherever they are generated from.

2) I measure Patriotism with my actions for the people in this country. I am an idealist.

I can't mix-up the two.

'killing short term investors with short-term volatility ?' I'm sorry but it's a zero-sum game, and everybody who plays knows that.

This post has been edited by Hansel: Sep 18 2015, 01:12 PM

Wodenus needs to open a thread about Patriotism.

Bloomberg Caroline Hyde in London has just mentioned that the US mkts are down now because of sentiments going back to China,... and safe haven instruments are gaining again.

I was of the opinion that since USA did not hike, China wouldn't need to devalue anymore, because the earlier devaluing was in reparation for a hike. And the devaluation hurt them too, not to mention,...

I am of the opinion that the Nikkei dived today because of safe haven effects of the Yen, ie people buying up more yen. I have always noticed that when Yen strengthens, the Nikkei drops, and vice-versa.

Hi MGM,.. about the chart, if you say that the level is the same between today and three years ago, then I would say that dividend has not been factored in.

For the REITs in my portfolio, I can tell for certain that the yield has been, on the average, at least 4% per year for the last THREE years, using your frame of time reference. I checked my updated spreadsheet a moment ago, the yield is at 7.98%.

My unrealized capital gain is now at 38%. Let's take a quarter of that, hence at 9.5%, since we are going to use the last three years as the time reference.

So, totalling up the above : 4% + 9.5% = 13% gain.

Had you invested SGD100K into SGREITs three years ago, then : SGD100K + 13% gain = SGD113000 sitting in Singapore now.

If you liquidate and realize your profits by selling-off everything and converting back into the RM, bringing back to Msia to invest more into the ASX, you would have : SGD113000 x 2.98 (conservative exchange rate) = MYR336740 dropping into your bank account.

You would have profited by : MYR336740 - MYR250000 = MYR86740.[SIZE=7]

I have taken very, very conservative figures in my calculation. The profit figure derived above should be higher !

The snag here is : the above calculation is based on my portfolio of REITs and some Dividend Stocks. Not across the board of REITs.

Sorry, but what other taxation and transfer fees, etc ?? That's all there is to it. I believed MGM does have 250K in ASX funds, many people do nowadays.