TheFinance.sg » Adrian Khiat

3 minutes investment update – 07/2010

Adrian Khiat — Mon, 19 Jul 2010 05:57:37 +0000

First Minute – Lets appreciates the indices
1.       The market recovered quite well for the emerging and Asia economies after the steep drop in May. Most indices are overall still in the red for the whole of 2010.
2.       Japan is one of the worst performer in 2010 with the political uncertainties lingering. US did quite badly and yield -8.5% in 2010 as well.
3.       Emerging Markets, Hong Kong and Russia indices lost more than 6% in 2010 as well.
4.       Gold and oil prices rose slightly. Gold price is near to all time high and Oil price is 13% below end April price.
5.       Vix Index rose 7.7% in June which reflect the continual uncertainties
6.       Baltic Dry Index dropped very significantly to 2406. It is something worth monitoring as it may reflects the demand of shipping raw material across the globe.

Second Minute – Double Dip Reccession? Read more…

3 minutes investment updates – 06/2010

Adrian Khiat — Sat, 12 Jun 2010 04:00:03 +0000

The month of May reminds me of the Thai Protest in March when Blood was spilled on the government gates because it was all red. All the indices I’m monitoring are in negative territory in 2010 after a bloody month in May. I had added 3 new indices namely Korea Kopsi, Russia TRS as well as the US Consumer’s Sentiment index.

1st Minute – Let us go through the indices

a) It was all red for the month of May with the Emerging Markets dropping as much as 12-14% and developed markets by 9-11%.

b) Generally, if you started investing in global or asia equities from October last year, you are most likely losing money today.

c) Blend Crude prices shoot down 15% to $73.1/barrel. The lowest point was on 25th May at $63.18/Barrel. It shows how oil prices are determined by sentiments and not so much by supply and demand.
Read more…

The Non Disclosure Problem (1)

Adrian Khiat — Mon, 31 May 2010 10:00:55 +0000

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I met 3 clients with non disclosure cases recently. They have certain medical conditions but choose not to disclose during the application of a life or medical insurance. Let me share what happened for the 3 of them.

1) Mr Yeo previously suffered spinal disorder during his National Service about 5 years ago and had a day surgery to correct the spine. He was subsequently downgraded to Pes C9L9 after medical review with the specialist. He did not visit the specialist after National Service and do not have any medical report with him. The insurance agent from “P”, while signing up for his ILP and medical Plan, told him that it is not necessary to disclose it since he is not seeking treatment now. All his policies went through without a glitch.

2) Mdm Ong went for medical checkup specially for woman in 2006. The specialist found that she has fibroids at her womb. She signed up a Life policy with ”A” in 2007 and chose to answer “No” in her proposal form when asked if she has cyst, fibroids, growth, etc. Her reason was that her doctor told her that Fibroid is very common, normally non cancerous and no action is required for her case. Her policy also went through without a glitch.

3) Ms Mary had cysts and growth that was non cancerous but had distorted her Fallopian Tube. The doctor advised her to remove the left Fallopian tube. She took up an ILP from ”H” and did not declare this condition. She had informed her adviser about it but the advisers told her that it is not necessary to inform the insurer because the operation was done in Philippines and it is not causing an issue for her. Her ILP of course went through without a glitch again. Read more…

The Non Disclosure Problem (1)

Adrian Khiat — Fri, 21 May 2010 10:00:04 +0000

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3 minutes investment updates – 05/2010

Adrian Khiat — Mon, 10 May 2010 01:00:38 +0000

Though the info below might be a bit outdated due to the last 3 few day of hysterical market drop which wipe off 2010 gains in all markets, I will still like to share my views for the month of April and do take 3 minutes of your time to read through.

1st Minute – Let us go through the indices

a) April is the month where indices continue their gain following the trend in March with exception in Hong Kong which follows the China Market which also took a dip due to the monetary tightening in the country. Both Hong Kong and China are among the worst performing countries in 2010.

b) Gold price surged 6.0% probably due to the expection of crisis coming up.

c) Vix index rose 25.4% in April in expectation of volatility ahead in Europe that that time

d) Baltic Index remains bouyant and up nearly 12% in April. Trade seemingly looks ok and going well.

2nd Minute – Let us look at the Greek Crisis for this month
Read more…

Commonly Forgotten Tax Reliefs

Adrian Khiat — Sat, 17 Apr 2010 10:00:23 +0000

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This post comes a bit late as most of you probably would have filed your income tax. From what I noticed of people filing taxes, 3 areas are commonly forgotten by taxpayers. I can share my observations:

1) Rental Expenses
Rent received from the letting of property in Singapore is subject to income tax, while your property is subject to property tax. Your rental income includes rent of the premises, maintenance, furniture and fittings.

Some people are not aware that there are allowable expenses that can be deducted from the Gross Rent to save tax. Some deductible expenses include:
a) Interest paid on the loan or mortgage taken to purchase the property which is rented out.
b) Property tax
c) Fire insurance
d) Repairs done to restore the property to its original state
e) Cost of maintaining the property (e.g. painting, pest control, monthly maintenance charges to management corporations)
f) Agent’s commission, advertising, legal expenses for getting subsequent tenants\
Read more…

3 minutes investment updates – 04/2010

Adrian Khiat — Mon, 12 Apr 2010 11:10:15 +0000

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There was quite a number of positive news for the month of March. The indices which took a dip in January and February, finally took a turn in March to get back into positive territories for 2010.

Let us take a look at the March and Year to date performances of selected indices.

The 1st Minute – Let us appreciates the Indices for the month of March

a) March was a very good month for most indices regardless of developed or developing economies. Nikkei index surprising posted a near 10% gain for the month and Emerging Market lagged slightly behind at 9.4%.

b) Singapore and Hong Kong year to date performance is lacklustre at 0.3% and -1.2% respectively so far. It is probably due to their strong performances at end 2009.

c) Oil and Gold prices continue to creep upwards in March but at a relatively controlled pace. This could be due to the stability of the US currency and the gradual growth of the global economies thus far.

d) The Vix index dipped nearly 10% in March. This may signal lesser fear and more assurances among investors that the economy is well on the mend.

e) Baltic index is still hovering around 3,000 and had held around this figure for many months. There do not seems to be any surging shipping demand yet. Read more…

System and Discipline

Adrian Khiat — Fri, 18 Dec 2009 01:00:47 +0000

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My non-investment clients or friends always pop 2 questions for me “Should I buy or sell now? or “What to buy and sell now?”

They always expect that I have inside information and able to give them “Tips” on making quick money. When they realise that I don’t have any inside information to fulfil their expectation, they will go back into the stock market and look for their quick money investments.

Clients often have an unrealistic expectation of advisers and advisers who are able to make them believe that they are able to fulfil their expectation will make a sales. However, are advisers who are not able to create such impression deems as incompetent?

Some advisers who focus on returns can invoke greed of the client. Some adviser who warns on the volatility of the market will invoke fear of the client. The fear factor is frequently stronger than the greed factor and many will choose not to invest. As more people around them makes money, the greed factor will over the fear and start chasing the hot trend. Read more…

Starting an Investment Plan(3)

Adrian Khiat — Tue, 01 Dec 2009 01:00:01 +0000

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Step 5: Funds Selection
As Financial Advisers, one of the thing we can do is to help select funds for our clients. There are hundreds of mutual funds in Singapore and it is a challenge to find reliable fund managers to be included in our portfolio. Other than the recommended funds from our i-fast and Navigators platform, I try to find out more about other funds as well if they deserve recommendations.

I will first get to http://www.fundsupermart.com/ website to download all the funds info by asset classes and geographical allocations. The usual ones I download are Equities: Global, Asia Ex-Japan, BRIC/Emerging Markets, China, Latin America, Bonds: Global, Asia, High Yields.

I’ll transfer the funds information to my excel spreadsheet and use a colour coding system for 4 criteria namely 1,3,5 years returns, Sharpe Ratio, Expenses Ratio and Fund Size to select up to 4-5 funds. For those without long term track record, I’ll check out its mother fund in http://www.trustnetoffshore.com/ for guidance.

With the 4-5 funds available, I’ll check out the Lipper Website http://www.lipperleaders.com/ to check out their Returns Consistency and Preservation Score. I’ll then check out the Morningstar website http://sg.morningstar.com/ to check out the Alpha, Beta, style box, PE and PB ratio.

On completion, 2 or 3 funds will remain in my respective portfolio and the same process of review will be conducted 6 months later. Read more…

Starting an Investment Plan? (2)

Adrian Khiat — Fri, 27 Nov 2009 01:00:30 +0000

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Step 3: Agreeing on the Asset Allocation

Determining on the asset allocation is the foundation of my client’s investment plan. The 3 asset classes are Equities, Fixed Income and Money Market.

Equities are more risky but offers potential to get higher returns while Bonds are able to get reasonable returns with lower risk and money market are shorter duration bonds of as short as 1 year which are even more stable than normal bonds.

We’ll agree on the percentage band of equities in the portfolio depending on the client’s risk profile.

For example, Growth Portfolio (60% to 80% equities),

Aggressive (70% to 90% equities), etc.

I adopted some suggestions from Larry Swedroe’s book “What Wall Street Doesn’t Want You to Know” as a guide on the maximum equities allocation to be recommended on top of what my company suggested.

a) Investment Horizon ==> Maximum Equity Position

<3 yrs =”=”"> 0% Equity

4-6 yrs ==> 30% Equity

7-10 yrs ==> 70% Equity

11-20 yrs ==> 90% Equity

>20 yrs ==> 100% Equity