Thursday 1 August 2013

Art of the Trade



 This is a reprint of "Dancing with Lions" where the author was using an anonymous identity then in 1999. Basically, this book is more on the storytelling rather than teaching you how to trade. I believe the author is coming out of his anonymous identity because he is currently giving seminars to teach people how to trade :).

This is an interesting read if you do not have much expectation as it depicts the life of a commodity broker which is something out of the movie "Boiler Room". It reminds me of the days of the "White House" in Tanjong Pager where all the bucket shops are located.  They will entice people to go for their career talks which promised high hourly pay. Their main motive was of course to persuade you to invest so that they can churn you till you are totally depleted. I have been through the career talk but have never invest as how much can a student looking for a holiday job have?

The book does touched on the emotional side of trading as in how to handle losses and the common risk management concept. Overall, it is not spectacular but could be a book you could bring to a holiday trip. You could finish the book in one to two seating.

Lee


PRIMARY ONE REGISTRATION (UPDATE)

This is an update of the primary one registration status which I have written earlier here. We are so glad that we have managed to get in through Phase 2B without any ballot.

Based on historical records, this was a "given" situation especially if you are staying within 1 km. However, this year the competition is intense and we almost have to go into ballot till someone finally withdraw at the last minute. Thou even if there is a ballot, the probability would be really high but we could end up being the few unlucky ones and we have totally no backup plans. Going into Phase 2C would be really competitive, we are looking at a 2 for 1 situation.

The wait for the result was quite nerve whacking as some of my grassroots friends can't even sleep or even have to take fever medicine during the course of the process. Therefore, we can empathise with those currently waiting for the results for phase 2C and we wish you could be as fortunate as us not to go through  the ballot process. Even if there is a ballot, we wish you lots of luck.

We are just thankful that our efforts have been rewarded.

Lee

Saturday 20 July 2013

Lords Of Finance




I picked up this book from a bookstore in mid valley, Kuala Lumpur during one of our short getaways. Being an avid follower of financial history, I hope this book will be give me a better understanding of the causes for the Great Depression. The Lords that the book are referring to are mainly the central bankers of that era and they are Montagu Norman (U.K.), Benjamin Strong ( U.S.), Hjalmar Schacht (Germany) and Emile Moreau (France).

During those days, they are still on a gold standard and so it restrict the flexibility they will have in implementing policies during extreme scenarios. Moreover, all the european major economies were in debt to the US due to the war expenses. Some countries did break away from the gold standard and they fare better than those who stick on to it.

There are also quantitative easing of their kind during those turbulent period which I guess Bernanke might have learn a trick or two from his predecessors. The book also touched on famous personalities such as Winston Churchill, Maynard Keynes and Andrew Mellon.

Towards the end, the book touched on the eventual formulation of the Bretton Woods Treaty which is a modified and more flexible gold standard which lasted from the 1940s to early 1970s.

For financial history fans, this is a book that will be good for your collection.

Lee

Wednesday 17 July 2013

My Take on Buy Term Insurance and Invest the Rest

The "Buy Term and Invest the Rest" concept has been around for many years and it is not something new. The main model behind this concept is to split the protection/insurance needs from your investment for retirement goals needs.

Insurance companies have try to bundle these two needs into investment linked plans whereby you will get protection and at the same time you are invested in unit trusts based on your risk profile. However, the charges such as sales charges and administrative fees could be quite huge relatively to if you do it on your own (Buying term insurance and investing in unit trust on your own). Therefore, it is not surprising that some insurance agents were pushing aggressively for Investment Linked Plans (ILP) to their less savvy clients as commissions are the greatest.

Insurance companies also offered other savings plans such as Endowment and Whole Life Plans whereby the insurance company will be in charge of investing the funds and generating decent returns for the policy holders. Majority of the funds will be usually invested in long term bonds. We will like to look at the track record and payout history of the separate insurance companies to have a gauge which company plans to choose (Thou historical record is not illustrative of future payout but at least it provide some sort of comparison and guidance).

Personally, we do not believe in an extreme buy term and invest the rest concept as we feel endowment and whole life plans adds a good dimension to your overall financial plans. It is a good way to force yourself to save and there is no temptation to dip into your investments for lifestyle needs.

For my own investment and protection needs, this is what we have planned. For protection needs, we have brought the SAF Aviva Group Insurance for both Death and Critical Illness as their premiums are really competitive. Also, we took up some SAF NTUC Group Insurance Plans. We have also taken up a mortgage declining insurance for our home loan with the bank. Not forgetting the usual health care insurance which we used our Medisave to pay for and using cash to pay for the excess waiver.These are basically term insurance.

For my kid's education needs, we have brought endowment plans that are due when they are about to go for their university education. So far Tokio Marine(Previously Asia Life) seems to have the best track record based on our comparison. However, we did diversify our plans and so we are holding policies with Tokio Marine, Manulife and NTUC Income for their education needs.

For my retirement funds goals, I am trying to segregate them into 3 sections.

1) My SRS is used mainly to build up a unit trust portfolio with some SGX listed Exchange Traded Funds as we are not able to invest in US based Exchange Traded Funds using SRS.

2) For my cash holdings, I am using it to build a portfolio of stocks. Also, if an opportunity presents itself, I will use it to pay for another property's down payment.

3) As for my CPF, I am using it mainly to pay off my mortgage and if there are excess, I will do some investments either through unit trust or exchange traded funds.

So hope my plans will work out fine and I will have a great retirement(Still a Long Way) with no worries about my finances.

Lee

Saturday 13 July 2013

PRIMARY ONE REGISTRATION

It is the time of the year again whereby parents start worrying about getting into the preferred primary schools of their choice for their kids. This is  a particular stressful phase especially if they are trying to get their kids into a popular school.

Initially, I am of the view that a decent primary school will be good enough for my kids. However after considering our overall position, we feel that we can afford to give my daughter a good start to her educational journey. With that in mind, we decided to switch on our kiasu mentality and push forward our plan to get her into a relatively popular primary school.

In strategizing our game plan, we decided to explore the avenues and shortlisting the primary school of our choice. There are mainly 4 avenues available to us:

1) Using Clan association
2) Grassroots Leader Route
3) Staying Within 1km of the School
4) Parent Volunteer Route

We initially wanted to go through the clan association  through Phase 2B but the competition is very stiff and there is no "Sure Eat Scenario". Later we decided to zero in onto a popular primary school whereby if we are staying with 1km and is an active grassroots leader, the odds are 100 percent based on historical results for admission based on Phase 2B.This primary school don't really take in parent volunteers. Being an aspiring trader and loving high probability situations, the latter seems to be a no brainer
.
Next up will be the implementation stage. We sold our house and move to within 1km of our preferred school. Also, I started my grassroots work which I find it pretty meaningful and am able to make friends from outside your normal social circle.

So everything is set and we are waiting for July 22nd to register our daughter for the admission into the primary school of our choice. Wish us Luck.

Lee