The flight to safety continued with gold strengthening and touched the $1300 psychological resistance zone. I started accumulating gold miners in Oct/Nov 2014 during the gold sell off then. I didn't expect that the bearish sentiment on gold to change so fast. My earlier plan was to hold the gold miners for at least 6-12 months.
From the low of 73.6 cents on 16 Dec 2014, United Gold and General fund has rallied 33.6% to 98.4 cents on 20 Jan 2015. This was the price zone I projected as my initial target price. So I decided to lock-in some profit by unloading 3/8 of my total position in United Gold and General fund. Unloading was done from 20-22 Jan for a decent profit.
I also sold half of my position in Blackrock European Eqty Income A6 SGD-H, to lock-in some profit. In the meantime, it seemed the high yield fund offered a decent yield at the current price level. I initiated a position in Fidelity Asian HY AMDIST SGD Hedged. The fund distribution rate was 6.8% based on my purchase price.
January seemed to be a good month. My unit trust portfolio value appreciated some $4400 compared to 31 Dec 2015, more than the return I got for the whole of 2014. I'll post my position by end of the month.
Friday, January 23, 2015
Tuesday, January 20, 2015
Monday, January 19, 2015
Platform Fee is Killing Me
Total platform fee I paid to FSM in 2014 was $505.51.
So I've been thinking for lower cost alternative investment such as ETF and even build my own dividend portfolio. For this purpose I've been looking at offerings from TD Ameritrade (thinkorswim) and E*TRADE.
TD Ameritrade offers a wide range of commission free ETF, however they currently do not have a local bank account to facilitate local fund transfer. They can only accept international wire transfer which will cost $25-$30 per transfer. They're willing to reimburse the cost incurred for international wire transfer up to USD 100. However as I will be doing a regular contribution instead of a lump sump transfer, this will not work for me. They said they would offer a local fund transfer facility by Q1 this year.
Total profit I made was $3207.68 or 1.47% of total capital on an average weighted basis. Without platform fees, I would make $3713.19 or 1.7% of total capital on average weighted basis.
Platform fee cut my annual return by around 0.23% or 13.61% of my 2014 profit. When market is good and I make above average profit, 0.23% cut probably is not big deal. But when return is just "so so", yes it is a big deal. And in the long run, it's a very big deal.
So I've been thinking for lower cost alternative investment such as ETF and even build my own dividend portfolio. For this purpose I've been looking at offerings from TD Ameritrade (thinkorswim) and E*TRADE.
TD Ameritrade offers a wide range of commission free ETF, however they currently do not have a local bank account to facilitate local fund transfer. They can only accept international wire transfer which will cost $25-$30 per transfer. They're willing to reimburse the cost incurred for international wire transfer up to USD 100. However as I will be doing a regular contribution instead of a lump sump transfer, this will not work for me. They said they would offer a local fund transfer facility by Q1 this year.
E*TRADE on the other hand offers local fund transfer, and offer some commission free ETF. However the more liquid ETF (such as VanGuard) are not free of commission.
Anybody has any comments or suggestions? You're more than welcome to leave your suggestions.
Thank you.
Friday, January 16, 2015
Weekly Update - 17 Jan 2015
1. Unit Trust Transactions
- 13 Jan - I bought $500 Allianz US High Yield AM Dis H2-SGD(SGD).
- 13 Jan - Switch $5506.46 worth of United SGD Fund Cl A Acc to Nikko AM Shenton ShortTerm Bond(S$) in preparation for buying opportunity that may arise.
2. Swiss National Bank Scrapped CHF/EUR
SNB surprised currency market on 14 January after deciding to scrap 3-year-old peg of 1.20 CHF per EUR. The decision swiftly sent the EUR down to 0.85 CHF (~41% drop). This sudden and surprise move caused a number of forex brokers to go into insolvency.
3. Gold Broke Out its 3 Month High to Reach USD 1,280
Gold & gold mining companies were the beneficiaries of flight to safety due to volatility in currency and equity markets. It finally broke it's 3 month high of USD 1,240 and reached a high of USD 1,280 before closing at USD 1,276.
As I mentioned in my last week update, I expected gold and gold mining companies to benefit and continue their rally due to shifting to assets perceived as safe havens.
4. FSM Event - What & Where to Invest 2015
Same old same old I guess. Nothing much to say, except that all the speakers think it's still bullish for equity markets especially Asia. Within Asia, Hong Kong and Singapore was believed to be the cheapest market at the moment.
There was one fund manager from HSBC, Elina Fung, that impressed me because of her in-depth insight in Asia smaller cap companies.
SNB surprised currency market on 14 January after deciding to scrap 3-year-old peg of 1.20 CHF per EUR. The decision swiftly sent the EUR down to 0.85 CHF (~41% drop). This sudden and surprise move caused a number of forex brokers to go into insolvency.
3. Gold Broke Out its 3 Month High to Reach USD 1,280
Gold & gold mining companies were the beneficiaries of flight to safety due to volatility in currency and equity markets. It finally broke it's 3 month high of USD 1,240 and reached a high of USD 1,280 before closing at USD 1,276.
As I mentioned in my last week update, I expected gold and gold mining companies to benefit and continue their rally due to shifting to assets perceived as safe havens.
4. FSM Event - What & Where to Invest 2015
Same old same old I guess. Nothing much to say, except that all the speakers think it's still bullish for equity markets especially Asia. Within Asia, Hong Kong and Singapore was believed to be the cheapest market at the moment.
There was one fund manager from HSBC, Elina Fung, that impressed me because of her in-depth insight in Asia smaller cap companies.
Tuesday, January 13, 2015
Rise of The Gold Mining Companies
Gold is trading near its 3 months high and even trying to take out the high on 9 Dec 2014 of USD 1,239.00. Meanwhile, the stock of gold mining companies continued with their rally in the past few days, showing some underlying strength despite the volatility seen in general stock market index.
On a 5 year basis, the spread between fund investing in gold mining companies and one of the major stock index, such as S&P 500, are at its widest range. However in the 6 months and 3 months chart, we can see the spread are narrowing. As the stock index started to turn down, the gold fund started to turn up.
United Gold and General fund in my portfolio has turned from -3.77% to +9.22% as of today. I think there will be more upside in the near term, and I'll be looking to take some profit gradually as the price rises.
5 Year
6 Months
3 Months
Sunday, January 11, 2015
Krispy Kreme vs Dunkin Donuts
My youngest daughter got a free online voucher for an original glazed doughnut from Krispy Kreme through the chat application LINE. She asked me and my wife to accompany her last Sunday. However because we're going somewhere else, we told her that we'd redeem it next week or some other days.
So she asked again this morning. But alas, the voucher unfortunately expired on 9 January 2015. Not wanting to disappoint her, both I and my wife decided to buy 2 pieces for her and the eldest sister.
While we're in the queue, I saw 1 piece of original glazed doughnut cost $2.60. My eldest daughter saw the price too and told me to buy her Dunkin Donuts instead, because it's cheaper and probably she could get 2 pieces for the same price. She would eat one today and kept another one for school recess on Monday. That way, my wife wouldn't need to prepare food for her, and she wouldn't need to spend her pocket money.
Such thought coming from a 10 year old actually surprised me. I ended up buying a piece of Krispy Kreme for my youngest daughter and half a dozen of Dunkin Donuts for $9 or $1.50 each, enough for the whole family.
As we're walking to the bus stop, I told my eldest daughter to study math well. I told her that I would teach her the power of compounding, and she might just have her first million by saving bit by bit from young and invested them wisely.
So she asked again this morning. But alas, the voucher unfortunately expired on 9 January 2015. Not wanting to disappoint her, both I and my wife decided to buy 2 pieces for her and the eldest sister.
While we're in the queue, I saw 1 piece of original glazed doughnut cost $2.60. My eldest daughter saw the price too and told me to buy her Dunkin Donuts instead, because it's cheaper and probably she could get 2 pieces for the same price. She would eat one today and kept another one for school recess on Monday. That way, my wife wouldn't need to prepare food for her, and she wouldn't need to spend her pocket money.
Such thought coming from a 10 year old actually surprised me. I ended up buying a piece of Krispy Kreme for my youngest daughter and half a dozen of Dunkin Donuts for $9 or $1.50 each, enough for the whole family.
As we're walking to the bus stop, I told my eldest daughter to study math well. I told her that I would teach her the power of compounding, and she might just have her first million by saving bit by bit from young and invested them wisely.
Friday, January 9, 2015
Weekly Update - 10 Jan 2015
1. Unit Trust Transactions
3. Spike in SIBOR
- 2 Jan - I bought $5,095.77 United SGD Fund ($5000 fresh fund, $95.77 dividend reinvested)
- 5 Jan - I bought $500 Allianz US High Yield AM Dis H2-SGD(SGD). With the monthly distribution of 6 cents and per unit cost of $9.34, the yield was at 7.7% p.a. The yield looked attractive to me.
2. Fierce Rally on Gold Mining Stocks & Funds
Over the week, there was increased volatility in risk assets. Major stock index such as DJI, S&P, STI, Hang Seng saw fierce sell off, followed by quick recovery. The volatility was triggered by further drop in oil price below psychological support of USD 50.00.
The perceived risk caused flight to safety with buying seen on assets that were considered "safe haven" such as gold, treasury bills, and USD. As a result yield on US 10 year T-bills dropped below 2%.
Fortunately for my portfolio, United Gold and General fund that invested in gold mining companies acted as a hedge. Apparently the buying in gold also spread into buying bashed down gold mining stocks. Many gold mining stocks rallied more than 5% in 1 day. Most of them were at 1 month high and some were at 3 month high. I think gold mining stocks may be bottoming and probably in initial phase of medium & longer term reversal.
3. Spike in SIBOR
As a result of USD strengthening and sell off in EUR, SGD was also impacted because it is pegged to a basket of currencies. The sell off in SGD, caused the SIBOR to spike. Those who are over leveraged due to years of low interest rate may want to be cautious. The spike may be a start of trend reversal in years to come.
Friday, January 2, 2015
Thursday, January 1, 2015
My Resolution for 2015
- Read 2 chapters of bible every day.
- Exercise 4 x 45 minutes every week.
- Reduce my weight by 5 kg, from 78.5 kg to 73.5 kg.
- Save $90K, and use the fund to grow my investment portfolio from $265K to $355K.
- Achieve 4% return on my investment on average weighted basis.
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