Financial Freedom SG

I was considering if it is was worth getting the book “Security Analysis” from Amazon. Its listed price is much cheaper than if you get it from a Singapore local bookstore, even after postage.

With the increase of the Singapore dollar versus the US dollar, the prices of books should have come down. But it didn’t. When the Singapore dollar weakened against the US dollar the bookstores took the opportunity to increase prices, but with the reverse, it didn’t happen. So the online bookstores are looking to be a better bet to get a good deal.

Being a cheapskate, I googled for ways to ship via Amazon to Singapore and found this website, Parka Blogs which provides good information on buying stuff from US. I had done it before and didn’t like the Singpost because of rather poor service from them. So looking for alternative ways to get it, even if it is direct from Amazon.

I have bought stuff from US before, books, dvds and even a digital camera. Think the world is becoming ever more interconnected as more people explore direct shopping and shipping the item straight to their homes.

Source:

1. Parka Blogs- Guide to Buying and Shipping From Amazon To Singapore.

Was reading Google Reader, where I subscribe to blogs, online newspapers and company websites, via RSS and saw a few good articles and websites to share with you.

1. The first one is a regularly updated site on Singapore’s highest dividend stocks: InvestMoat’s Dividend Screener
2. The second is a remarkable letter from Warren Buffett who writes a refreshing candid and honest article to Uncle Sam, the USA government, for its handling of the recent financial meltdown. Its at the New York Times site and it  is really worth reading: Pretty Good for Government Work
3. Motley Fool has some of the most remarkable investment articles and this is one of them: One Indicator for Market Crushing Returns
4. Fellow blogger MusicWhiz’s blog is one I have also bookmarked on Google Reader and it is always interesting to read what he has to say about Value Investing. His articles are always illuminating, detailed and well argued. Read what he has to say about: Can One Expand Their Circle of Competence?
5. Last but not least, another mother lode of financial information is Seeking Alpha and this article is lengthy but there are lucid arguments both for and against the use of valuation metrics: The Case for the Individual Investors   

I read this article by Bad Money Advice’s Frank Curmudgeon about “The Truth About Mortgages” and I agree with what he says about stretching your housing loan to the maximum.

Whether you live in United States or here in tiny Singapore, the conclusion is the same.

If you borrow it at 2.6% for the HDB home loan here in Singapore or 2.48% after taxes in Frank Curmudgeon’s case, it will be possible to get a return higher than that low base rate. Just last year, my dividend returns on just the shares and ETFs were 2.2%. That’s not counting the returns for unit trust nor the returns from last year. If I had panicked and took out all my investment at the start of 2009 and ploughed it all back to my housing payment, I would be much worse off today.

And the fact of the matter is that there are investors out there who’s return are even better than mine. A fellow investment blogger, Musicwhiz, has dividends returns north of 3% and a very solid portfolio.

The question is then, are you prepared to change your mindset and weigh the pros and cons of paying off a housing loan later rather than earlier?

If you need further persuasion, an earlier article of mine, “Early House Repayment or Invest the Sum” will give you more food for thought. And if you have gotten this far in this article, you should go and do the sums for yourself to decide what your own position is.

Sometimes, investing needs you to do a fair bit of calculations and “what if ” scenarios to decide what is the best option for yourself. Paraphrasing what Gandalf said in Lord of the Rings, “All you have to decide is what to do with the money that is earned by you”

Using the data provided from Financial Times, which you can download the pdf document, you can see that quite a few financial markets are near the 18-20 mark.

These includes Singapore, US S&P 500, China, Hong Kong, South Korea amongst others.

While some argue that P/E on its own is not meaningful, it provides a useful guide to which financial markets are undervalued compared to their counterparts elsewhere.

So where are the countries with undervalued markets?

Pakistan, Romania, Bulgaria and Venezuela are all below the 10 mark. Russia looks a good place to put some money, along with Brazil with their markets hovering around the 13 figure. A good place to consider will be the BRIC ETFs which invests in Brazil, Russia, India and China.

How the world market will do this year, no one can tell you for sure, so the best we can do as investors is to look for some bargains when they become available.

So are they expensive right now? Not yet, but those that are in their 30s and above looks overvalued right now.

I shall end here with a link to an interesting article in Business Week that talks about “Wall Street Hubris Soars as Crisis Goes to Waste by William Cohan”

If you look at the table above, it shows a continued steady increase in the value of the stock market over 130 years. At the same time, it shows that the past 10 years has been the second worst decade for stocks. The worst being the aftermath of the Great Depression years.

But maybe we are speaking ahead of ourselves as there are still a few more market days before the end of 2009.

The table is reproduced from an article in the Motley Fool, A Terrible Decade for Stocks- and Reason for Optimism. I have articles from there sent to my email and I read them if they sound interesting to get ideas and to increase my knowledge of financial and investment matters.

So is one past indicator, with a positive return after a negative, a sign that after the second worst decade, an immediate rebound is on the cards?

The article in Motley Fool seems to think that it is a given that it will and compares different time points and even a different index, pulling the Dow Jones Industrial Index to the picture too.

I think that it is not that certain and it will depend very much on how the governments of United States and the developed economies in Europe and Japan find ways to resuscitate their economies.

The economy that was the most affected by the Great Depression of the 1930s, Germany, had unemployment rate above 10% and voted in the Nazis. In this time of troubles, the terrorists, the extremists will have no difficulty getting converts or hearing from the masses, some of whom may be swayed by their accusations and ‘solutions’.

I am still invested in the markets and looking to make more investments where the opportunity presents itself. Currently reading two books by Peter Lynch and a book about the Google. Sometimes, I tend to want to start on too many different things and end up doing nothing much. Think it is called ‘paralysis by analysis’. 

Have a good Christmas and Boxing Day and an enjoyable end to what has been an eventful year of 2009.

A round up of good articles around the internet on investing.

1. Top Mutual Funds: Luck or Skills? New Study Questions ‘Active’ Managers, looks at how the professors of finance are stuck in a quandary. They can’t be sure whether top performing funds are either just plain old lucky or is there some little morsel of skill involved.

2. Questions for a Financial Planner gives you a list of questions and checklist to ask your financial planner to see whether you are comfortable working with him or her.

3. ETF Deathwatch, December 2009: 128 Funds and Counting shows that quite a few ETFs in USA aren’t really doing that well, generating just $100,000 in average daily value.

4. Book Review: How to Smell a Rat by Ken Fisher is probably essential reading for turbulent and dangerous time like this. Remember Bernie Madoff. Enough said.

5. How Do the Best Performing Stocks of the Decade Compare to Predictions in 2000? This is something that will put a smile or grimace on your face depending on your affiliation to Fortune magazine.

This table on the left is what is shown in the article and a damning indictment of the predictive capability of the magazine’s financial writers.

Notice number 11 on the list? Guess the author who made the predictions needs to get a copy of Ken Fisher’s “How to Smell a Rat”.

Another interesting article is written by a local Singaporean blogger La Papillion on “The Blind Men and the Elephant”. It talks about his investment ethos and how he moved from hearsay to technical analysis to fundamental to a mixture of both.

It is certainly indicative of the journeys of many people who want to learn about investment and who will try different ways to do better in this art and science.

Have a good investment week!

If you go to the Wolfram Alpha site, you can compare two or more stocks side by side and see how they measure up against one another.

Sadly, the site does not support Singapore stocks at the moment, even Straits Times Index, STI index etc did not return any results. So hopefully, the people there are indexing and processing information from Singapore soon.

The example for stock comparison in their site is quite an apt example. It looks at the IT behemoths- Microsoft, Apple and Google.  A screenshot of what you will see is on the second image below here:

This allows you to look at the stats and graphs for the stocks that you want to compare. It presents it succinct and rather sparse way which cuts away other information. So it may only be useful in a very superficial first look at a company you may be interested to monitor and use this tool as the scalpel to cut away those that don’t measure up.

When you look at the three titans fighting it out in cyberspace, you see that they are all holding out and the battle is nicely poised for the next phase- whatever it may be.

I managed to get 30 years worth of data from the site and it generated this simple chart to show the rise and fall of the S&P500 for the past 30 years in a nifty.

Do check out the site, especially if you look at overseas stocks in the USA or buy into major indices as part of your investment portfolio.

Source: www.wolframalpha.com

These are articles that I found useful and interesting to read the past week:

1. This article from Steadfast Finances talks about how Some Tech Bubble Stocks Finally Breaking Even after a 10 Year Wait. Inside it are charts of companies such as JDS Uniphase, Amazon, IBM, Cisco and Apple. Steadfast Finances is one of the blogs that I read using RSS feeds from Google Reader.

2. SGX Yield Stocks is a blog that I stumbled upon today from a blogger’s blogroll. The blog posts articles from securities firms research articles like this one talking about M1 from CIMB. It keeps a list of stocks that the blogger monitors. So if you do have one of those stocks, it can be part of your reading materials too.

3. The Digerati Life is another blogger whose posts I read. Her guest blogger posts about Leveraged ETF Investing: More Risk With More Rewards. It is a pretty succinct  summation of how one can use leverage with ETFs to make a bit of money. Even though it is not for me :) Think I’d pass.

4. Bad Money Advice is one blog that I make a point of checking out his ALL of his post. They are illuminating and points out fallacies about investments and financial advice that are being dispensed. This article, Conventional Wisdom: The Emergency Fund list out the types of advice regarding the subject of the ‘'3 months expenses as emergency fund’ as being lacking as it may not be for all people. I am guilty of such advice too. So reading his blog makes me honest.

5. As a counterweight to all these heavy financial type articles, I read the blog English Muse on Google Reader too and the photos and pictures here will very often take your breath away or make your day :) Take a look here at Beauty, Illustrated to see what I mean,

Recently, I found an article that is very similar to one of those that I posted earlier and whose author did not attribute it back to me in any way.

If you use other people’s articles blatantly the least you can do is to attribute it back. So I am not likely to post any of that blogger’s articles here as his blog articles could be taken verbatim from another person’s hard work.

I read this article in Washington Post about how “Many Small Investors Have Sat Out Rally” and found it sad that so many of these investors got burnt and will probably swear off investing again only to come back to it when the market is near the highest point.

Another article from the Wall Street Journal, “Surprise! That 401 (k) Account is Looking Good” is perhaps the antithesis or solution to the first article, whichever you prefer.

The key lesson is that it is hard, almost impossible to know where the market is going in the next minute, at the end of the market day or even at the end of the week.

The only thing you have to do is to put as much time as possible in the market and keep investing in small baby steps. This will help you build your investment from almost negligible to something substantial.

If you had been listening to the naysayers of market doom and meltdown, so far it hasn’t happened yet. Will it happen? Who’s to know? And will you know who knows?

I remember reading that when the market is bad, it is bad for retirees and those about to retire, however it is very good for people who has just entered the job market and looking to buy their investments.

The article in WSJ reinforces this point. Those who are younger and did not have as much in the market fared relatively well compared with those in the higher age ranges.

Another key point that was reinforced in the WSJ article is that dollar averaging is a disciplined way to invest, especially in a bear market where people fear to tread. If you stopped investing in September 2007 after putting $10,000 in a fund, you would have lost 10.6% at the end of September 2009. However, if you have purchased an additional $200 each month, you will be down only 6% at the end of September 2009.

The United States leading economic indicators are up again today. It could be the signal to buy more, but i would rather buy bits and pieces regularly and get pieces of good companies at good valuations.

What would you do?

“How I Timed the Market” by Tim Hanson writing for Motley Fool is an example of the type of articles you can read at Motley Fool by subscribing to their email services. I have a summary of different articles it sent to my email which I make it a point to read every morning.

The writers there give you the low down about companies they look at and provide insights into the investment mindset. At times, the articles there may give you clues to which are the companies worth looking further into and what are some clown companies you would do well to avoid. They focus very much on US stocks with limited foreign stock coverage.

Best of all, its free. Unless you subscribe to their paid newsletter.

In the article which I read by Tim Hanson, the writer talks about selling right near at the bottom of the market in February 2009, while buying into the dip in July 2008 just before the whole financial market crashed through the months of August and September. He also talks about being unable to buy into the market because his excess funds for investment were all used up from August 2008 through 2009.

I experienced some of the self doubts and questions in the depths of the market too, wondering if I should sell off and cut my losses. In the end, I decided not to and in fact bought some more in March, April and May of 2009.

Not that I am a better investor. Far from it. I just happened to be reading good articles in the months of maximum pessimism in dreary March 2009 and I remember posting this blog article “Fear in the Market- Time to Wake up Greed” on 22 of March 2009 while reflecting about the different articles I have read.

To be honest, I was thinking quite a bit about paper losses in the shares portfolio of up to almost 60%. At the same time, my significant other was made redundant from her job as her company closed down operations in Singapore. So it was a bit of a trying time.

The things that sustained me was knowing that market dips are opportunities for young (relatively, anyway) investors to buy and accumulate shares in good companies; shares goes both up and down; I have a relatively long time before retirement; P/E ratios and market valuations were dirt cheap at the time; I still have a job and our living costs were manageable.

I didn’t even contemplate stopping the dollar averaging investment plans as again, it was the best time to buy more units of the funds.

At the end, it all comes down to what is the amount of time and preparation you are willing to take on to learn, relearn and refine what you have learnt about investment. It really is a never ending learning about investment.

Currently reading “Fooled by Randomness” by Nassim Nicholas Taleb- A better and less dry book than the Millionaire Next Door so far.

So what are your reading preferences?

Saw this link to a free e-books about investing from one of the blog’s I read regularly, Get Rich Slowly. It is a link to a pdf version of an e-book to be published soon but which the author has kindly made available for free. You can get it from his website Investing Made Simple.

I read about 10 pages and found it well written and it could just start you on the road towards investing. It will be taken down on the 1st of October so if you like some valuable that is free, please go and download it and read it at your leisure on your iPhone or smart phone while going to home or going to work.

Another blogger, Frank Curmudgeon of Bad Money Advice, who’s blog I read regularly on Google Reader talks about 5 lessons of the Great Recession We Probably Won’t Learn.

If you don’t know what is a RSS aggregator, setting up a google account and reading blogs and other news article on Google Reader will slowly wean you off the one sided news that you get in Singapore from the sole newspaper company.

You can get great news from Guardian, Telegraph from UK, Wall Street journal, BBC news etc. From all these news, I get to scan the titles of the articles written and click on those that I’m interested to read further.

Lots of free stuff to get you started on your road to Financial Freedom :)

Two weeks back, when the market was busy with lots of orders, it became hard to login or get orders executed.

If you are a trader of stocks and shares, it can be frustrating to see your orders not being done when you submit an order to buy at the prevailing selling price. Thus it can be important to have at least another brokerage account in case there are problems with the normal online brokerage that you use.

Here is a list of brokerages that you can go to open an online stock trading account to buy/sell shares in Singapore or other other countries (it'd depend on which company you sign on with)

1. DMG Online
2. UOB Kay Hian
3. KE Live (Kim Eng Securities)
4. Lim & Tan
5. iOCBC Securities
6. POEMS (Phillip Securities)
7. E-Trade
8. AMFraser (Fraser Securities)
9. CIMB Invest (CIMB-GK)

Read some interesting articles from Financial Times:

I saw this article on Get Rich Slowly, which is a superb site, where the author JD published a reader's comments (more like article)- "A Lifetime of Doing the Right Thing"

This is a work in progress ... Please email me to suggest on what you think should be in this list too.






A. Economics / Economic Trends/ Financial News

1. The Economist

2. Bloomberg

3. Business Week

4. Fortune

5. Forbes

6. Wall Street Journal

7. BBC World Service Business

8. Industry Week

9. Yahoo Finance Singapore

10. The Market Oracle


B. Investment Website

1. Seeking Alpha

2. Investment U

3. Value Investing News

4. E-Trade

5. Charles Schwab

6. MorningStar

7. Phillip Securities POEMS Trading

8. CIMBInvest (Goh Direct)

9. Vanguard

10. Ticker Sense


C. Finance/Investment Blogs

1. Get Rich Slowly

2. Stock Investing- Retire Rich Slowly

3. Blogging Stocks

4. Fire Finance

5. fivecentsnickel

6. My Money Blog

7. Blogging Away Debt

8. One Frugal Girl

9. The Digerati Life

10. All Financial Matters


D. How to Save Money/ Avoid Being Cheated

1. List of Confidence Tricks

2. How to Save Money

3. Go To the Library!

4. Money Saving Supermarket Tips

5. How to Save Money Running a Start Up

6. How to get a Pay Raise

7. Prevent your kids getting e-conned

8. How Criminals Try to Rob You- A Video

9. How to Know Instantly You're Being Conned

10. Best Ways to Spend Your Money


E. Regulatory Bodies
1. Federal Reserve Bank

2. Central Bank- China (People's Bank of China)

3. Central Bank- Japan (Bank of Japan)

4. Central Bank- Germany (Deutsche Bundesbank)

5. European Central Bank

6. World Bank

7. Monetary Authority Singapore (MAS)

8. SGX