Purple cow – transform your business by being remarkable

Other than the 4Ps of Marketing, now we have another P - Purple Cow. I picked up this book last week, but stopped it halfway to read another book - talking to humans. Finished it today, which took me around 5 days. Overall, it's a very light reading. This book is about Marketing, and how do you design, create, market, or promote your product or service in a way that is so remarkable that … [Read more...]

Why the CPF is bad for you

In September last year, Deputy Prime Minister Tharman Shanmugaratnam said that "over the last 10 years, more than 80 per cent of those who invested through the scheme would have been better off leaving their money in the CPF Ordinary Account". I have written a post about it: here. The Ordinary Account provides returns of 2.5% for amounts above $20,000. 45% of investors lost money through the … [Read more...]

Book review: Talking to humans

23314559.jpg

This book is about entrepreneurship, and more especially, about what you should do before starting your business. It originated from a blog post, which received many comments and shares, and thereafter the author, Giff Constable, made it into a book. It is listed at 88 pages on Amazon. It is almost a required reading for many entrepreneurship courses in universities, and highly recommended by … [Read more...]

Book review: So good they can’t ignore you

51atI-CDVRL.jpg

I picked up this work on the 2 Jan this year and finished it yesterday, 10 Jan. On Amazon, this book is listed at 267 pages. I is the (non-affiliated) link from Amazon: here. Without further ado, let's quickly skim the main points of the book. So good they can't ignore you: why skills trump passion in the quest for work you love The author segments the book into 4 rules and allocates a … [Read more...]

Reading goal and book review

After reading this post by LP and how he set a reading goal of 1 book a week, I was inspired. I don't think I can read that much as I have work on weekdays and sometimes on weekends as well, but I have a Kindle and I will read as much as possible when I am commuting to and fro places. How do you set a goal that will keep you motivated throughout a long period of time, such as a year? I guess … [Read more...]

Introducing the Envelopes system to manage your entire financial life

mail-1707817_1920.jpg

The Envelopes system long existed (my grandmother was already using it) but it was Dave Ramsey who popularised it. It works on a very simple concept: every dollar you have must serve a purpose. Let me explain how this can help you manage your finances (without the need of a financial advisor, of course). How does the Envelope system work? Every dollar you have must have a purpose. Take your … [Read more...]

Why you should not invest in the STI

Assume there are only two stocks in the world, Stock A and Stock B from Company A and B respectively. Company A is big, owning 90% of the workd's output, while Company B owns the other 10%. If you were to invest into each company, would you: (a) buy Stock A only, (b) buy stock B only, (c) buy both stocks in the proportion of 90-10, or (d) buy both stocks in equal weightage? Different types … [Read more...]

How will this decile of low P/E stocks perform?

Many research has been done on how low P/E stocks consistently outperform the market over the long run. For instance, Roger Ibbotson, in his Decile Portfolios of the New York Stock Exchange, 1967 - 1984 Working paper, sorted all stocks according to the Price/Earnings ratios into deciles. He then tracked the returns of each decile over an 18-year period. What he found out was that the lowest … [Read more...]

The simplest (and probably most proper) way to passive investing

Forget about thinking about how best to structure your portfolio of ETFs. The truth is, buying ETFs does not mean that you are investing passively. If you have heard of the sector rotation theory, you would probably know that people are investing into sector ETFs at different times of the year. What passive investing is meant to be In the true spirit of passive investing, you should be … [Read more...]

Backtesting the value-cost averaging strategy on 10 years worth of STI data

Previously, I had written a post on what value-cost averaging is and how it can be another viable alternative to dollar-cost averaging. In this post, I want to backtest this strategy against 10 years of STI data. Value-cost averaging? In dollar-cost averaging, we invest a fixed amount of money into the stock market each period, purchasing variable units of the investment. In value-cost … [Read more...]

1 important takeaway from the Nikkei story

Nikkei-peak-1989.png

Some people make it seem as though index investing is the holy grail of investing Is index investing the easiest way to invest? Many experts, including Warren Buffett, agree. Investing into an index comprising of one's own country's equities seems like a sure bet to invest well. But what if, you have to be a Japanese and invested in the Nikkei since 30 years ago? But it could well have … [Read more...]

How I made 130% returns from this one stock

x-pattern.png

Familiar headline? The headline was made to entice people to click. For many other websites, after users click, they get sold to a product, and then part with their hard earned money. How often do we see headlines such as this? Taken from:¬†http://highvelocityprofits.com/secret-investing-strategy-can-deliver-130-returns/ After visitors get hooked, they go on to put a disclaimer … [Read more...]

Why the currency of your investments does not matter

Let's start with a simple example Say there are two ETFs which are perfectly identical in their holdings, cost, dividends, and thus returns. However, they differ only in the currency they are traded in. In this regard, would buying them give us the same return, or a different return? The short answer is that the returns will be exactly the same. Let's use a simple scenario whereby one ETF is … [Read more...]

The 1 investing rule from the Swiber saga

Swiber-default-news.png

News about Swiber appear almost everyday I did a Google search, and all these results came out. Seems like Swiber is quite a hot topic these days. So what is the hype about Swiber? In one sentence: Swiber, an O&G company, has defaulted on its bonds, which were sold to many individuals in Singapore. What can we learn from the Swiber episode? There are many news report about how … [Read more...]

Does the stock market always rise in the long run?

Gordon-equation.png

Why does the stock market always rise in the long run? To understand this, I turn to William Bernstein's book, "The Four Pillars of Investing". According to Bernstein, the Gordon equation is the irrevocable law in investing. Put simply, the total growth of a stock market is equal to the sum of the dividend yield and the dividend growth of the stock market. The stock market is made up on … [Read more...]

What is the Boglehead Singapore 3-fund portfolio

Singapore-3-fund-portfolio-components.png

The Singapore 3-fund portfolio explained The Boglehead Singapore 3-fund portfolio is an adaptation of the Boglehead 3-fund portfolio, which was suited for American investors. The Boglehead 3 fund portfolio basically uses 3 funds, in order to achieve global diversification, and thus receive the market rate of return. It was named after the main advocate of index investing and the founder of the … [Read more...]

Am I an anomaly amongst Singapore investors?

Anomaly-in-SGX-survey.png

The weirdness of the SGX survey Last month, I received an email from SGX. I was asked to participate in a survey by them, and I would win a prize if I was lucky. The survey took no more than 5 minutes, and I answered the questions as accurately as possible. Many questions were asked, and mostly geared towards asking how often I trade, and what is the reason for trading? These were also the … [Read more...]

7 tips to achieve early financial freedom

fishing-at-sunset-209112.jpg

1. Set aside an emergency fundAs its name implies, this fund will be used only for emergencies. Those events that happen out of the blue, taking you unaware. Some examples would be like getting into a car accident, or a wisdom tooth extraction.Use this emergency fund to pay for such emergencies and avoid having to take on debt or borrow from relatives and friends. If this fund runs out of money, … [Read more...]

CPFIS not "fit for purpose" – DPM Tharman

CPF Investment Scheme to be reviewed I refer to this article by the Straits Times: here. There are three main takeaways after I read the news article. Takeaway 1: Most people would do better just leaving their money in the CPF OA He noted that, over the past 10 years, more than 80 per cent of members who invested via the CPFIS would have been better off leaving their money in the Ordinary … [Read more...]

The complete guide to planning your insurance

I have spoken before about the Financial Planning Triangle. Basically, we need to have protection first before wealth accumulation. Insurance is the bedrock of the triangle, where one needs to have protection before one can try to grow his or her wealth. It might be a little scary on planning your own insurance. So, in this post, I will be showing you how you can get the calculations, so that … [Read more...]