Author: Dr Wealth

Tracking the Singapore Permanent Portfolio

Our favourite investment portfolio for every Singaporean is getting more attention! Business Times senior correspondent, Teh Hooi Ling, wrote about it in Sunday Times. She did a back test from 2003 with $1 million. In 2012, it grew to $2.04 million. This is an 8% average annual return. But this is not the best part. We all know that stock market gives you close to double digit returns if you hold for a long period of time. But retail investors always make investment decisions based on greed and fear whereby they buy in a bull run and sell in...

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Are you using the right tool to invest?

A few months ago, I fixed up some Ikea shelves for home. Now if you think Ikea is nothing but just cheap paper wooden furniture and groovy meatballs in gravy, think again. The real attraction, I swear, is the ability of the Swedes to put together an idiot proof instruction manual for their products so that a six year old can build his own bedroom. And when adults realize that they could actually build something bigger than themselves in as much time it takes for them to get to work on an unbroken MRT train, they get hooked so...

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Trend Following Mentor reveals the Hard Truths about Trading – Interview with Andrew Abraham of Abraham Investment Management

Andrew Abraham released his book, The Trend Following Bible, at the end of 2012 and he sent me a copy for review. You can read the book summary here. I set up the interview with him in Jan 13 where he talked about several aspects of the trend following technique. He currently trades for himself and his clients, and he also conducts courses. Here is the interview. Enjoy! How long have you been trading, Andrew? I started trading in 1994 and I probably made every mistake possible. I managed to learn from the mistakes though. Who was your mentor? I had...

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The perils of falling in love with your investment

We just shifted into our new place over the weekend, and are in the midst of unpacking. While jostling for common cupboard space in the kitchen area for our own stuff, I came across a compartment full of plastic containers. Apparently someone has gotten to it before I did. I have a vague idea that these containers have been around for years, but I have never ever seen anyone in my household use them before. Neither do I forsee anyone suddenly deciding to. Now, I have nothing against these millions of plastic containers. They could be used to collect...

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Enjoying Mid-Life Without Crisis by Eileen Tan and Ui Wei Teck

 ”Eileen and Wei Teck are experienced property investors with a wealth of knowledge to share. Most importantly, they have a positive attitude towards life and they love people. I believe their stories in this book will inspire you to achieve greater things in life!” I gave the above testimonial for my good friends’ book. I knew them through Dennis Ng’s seminars and my first impression was that they are really friendly and cheerful people. Regardless whether you are a stranger or an old friend, they can strike a conversation with you with so much sincerity. It is hard to...

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An introduction to Singapore Monetary Policy

Twice yearly, on the 2nd Friday of April and October, the Monetary Authority of Singapore (MAS) releases a concise  ‘Monetary Policy Statement’ to the public. In the two page release, the MAS announces its stance on the Singapore Dollar for the next six months and the considerations behind the decision. Unlike proclamations of growth for the economy that inevitably hogs the headlines for days on end, traders and investors tend to dismiss this announcement without much consideration. However, this little nugget of concrete information is much more important than growth figures. We examine Singapore’s Exchange Rate Policy in more...

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Buy Term and Invest the Rest?

This is a reply from Brendan, in response to my post, Is this a Good Deal? – Great Eastern Annual Cashback Endowment Plan. Brendan has gladly allow me to post it here. This will be his first guest post! (Brendan is an Investment Specialist and Financial Advisory Director at SingCapital.  He is currently teaching other financial advisers/practitioners in Module 4: Investment Planning under the CFP® program. He is also a sought-after speaker and a MoneySense representative.) Hi Alvin, Good point about the long term benefits of buying term invest the rest. Of course as you mentioned, the investor needs...

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The importance of benchmarking your investments against the Effort Free Rate

Imagine a world where there are only two investment opportunities. You are first presented with a risk free investment opportunity; your capital is guaranteed, you have absolute faith in the counter party, and there is zero risk of default. This investment promises returns of n % per annum and you are tempted to invest. The second opportunity is a little more complex and a little more risky and in your opinion, there is a slight chance that the returns may not materialize. Now being the rational and intelligent investor, would you expect a lower or higher rate of return...

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Is this a Good Deal? – Great Eastern Annual Cashback Endowment Plan

My girlfriend was approached by one of the Great Eastern (GE) agents at an MRT station. She was recommended the Annual Cashback Endowment (ACE) Plan and her initial thoughts was it sounded good as there were cash back and the investor will get more than the premiums he or she paid. She asked me if it was a worthwhile plan and I shall share with you what I explained to her in this post. Let’s assume the best case scenario which all the cashback are reinvested and allowed to compound till the end of 18 years. The returns from...

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Is this a Good Deal? – A review of Sunday Times Invest Section

A handful of investment products was mentioned in the 27 Jan 13 Sunday Times. I am referring to the article, “Grow your wealth wisely”, in the Invest Section which the reporter, Magdalen, had solicited comments from industry experts. She tried to help retail investors understand the products better, without the sugar coated sales pitch. I will go one step further to make quantitative comparisons for some of the products. OCBC Momentum This is a regular investment program, or better known as dollar cost averaging technique, whereby investors commit at least $2,000 a month to buy funds they chose. Mr...

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200000 Units, 4 Strategies, a 911 Carrera and the purpose of BigFatPurse

This is the 14th article I have written for bigfatpurse. My greatest fan (my wife. she has no choice. I force her to read all) has complained more than once that I am too long winded, provide too much details and that the stories that I use to bring out my points are not succinct enough and often leaves too much room for interpretation. She dared me to write another ‘long winded’ story. For the benefit of bigfatpurse readers and at the risk of pissing her off, I shall share not one, or two, but three vignettes that happened...

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Successful Completion of How to Invest 2013

This event was meant to be held last December but I guessed it was a holiday season so the response was not good. We postponed the event to Jan 13 and within 12 hours, 60 seats were taken up and more people wanted to come! It was a happy problem and we managed to secure a bigger venue and we opened up another 50 seats. It was taken up within hours! Thanks for those who had come and I believe you have taken away something useful. For those who did not manage to get a seat, I will be...

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A Different Kind of Fund – Interview with Aggregate Value Fund Managers

It was the last working week of the year, that few forgotten days tucked away between Christmas and the New Year. Driving that morning was a surreal experience, with the roads devoid of cars despite them running on their ridiculously priced COEs. Everything seemed to move slower, in a more relaxed manner. The surreality factor went up a notch when Alvin and myself found ourselves in an industrial building, seated across the table with Eric Kong and Wong Seak Eng, two gentlemen who founded and now run the Aggregate Value Fund. In place of the customary IWC watches and...

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The Trend Following Bible by Andrew Abraham

I have done trend following in the past but it was not successful. I believe many people had the same experience for me and are quick to denounce trend following does not work. No matter how we hold that opinion, there are enough professionals making money with trend following strategies. Andrew Abraham is one of them. In this book, he showed me the reality of trend following and I realised how wrong my expectations were. Here are the 3 things I learned from the book #1: Compounding realistic profits (not get rich with just one or two trades) Andrew...

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Does your agent have your best interest in mind?

Some years ago a friend of mine, let’s call him R, purchased a condominium unit in the east. It was a two bedroom unit located on the 9th floor, right next to the mrt station and a short commute from where he and his girlfriend would both work. He had seen a number of units in the vicinity, and was ready to commit. He made a sincere offer just slightly below the asking and kept his fingers crossed. The agent whom R was working with, happened to hold the exclusive rights for the unit and R did not have...

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