A little slice of pie on planning for Financial Freedom

I received a few private messages on how to plan for Financial Freedom.

I would like to share a slice of pie with my humble opinion here.

1. Think Big. Start Small.

a) Invest Gradually within your means.

b) Accept Delay Gratification.

c) Focus on multiple portfolio that can be realized in time range of 10 years, 20 years, 30 years to your projected life span.

d) Realised Portfolio should be planned in a way to cover later date investment expenses if you have retired without employment income.

f) Unrealised Portfolio should be able to generate income for your living expenses when you retired.

g) Last but not least, Cash is King.

Even the Greatest Investor Have more Money in the Bank then in any Investment. Do you know why?

Tricky part can be define as the part that is tough or critical to achieve for the goal to materialize.

1. Money in the Bank can be categories into Short, Mid, and Long Term Deposit and should be easily attained for any purposes.

2. Always invest within your means so no investment have to be cash out in poor market condition other then sour investment.

3. All investment Sold will become Money for the next investment or expenses plan like retirement.

4. To achieve more Money in the bank, one will require Consistent Incoming Cash Flow.

5. Passive Income in investment ONLY comes from funds that are locked in.

So the Greatest Investors knows how to make sure his money in the bank is more then his investment because that is the Best way to have more Quality Investment when the Opportunity knocks.

How is Valuetronic performing after the blog post on Wednesday, 24 September 2014

This blog is a follow up on the blog post dated  24 September 2014. You can refer to the link below.

http://kenjifundmanagement.blogspot.sg/2014/09/do-you-see-value-in-valuetronic.html

http://research.maybank-ib.com/pdf/document/Valuetronics_IC_131014a_6716.pdf

The above report send the price action of Valuetronic to Gap Down and dropped 12% in a day. You can refer to the chart below dated 14 October 2014.

DBS Vickers and Lim & Tan Securities came to the rescue dated 15 Oct 2014. The red shade and the red arrow in the below chart.

http://www.nextinsight.net/index.php/story-archive-mainmenu-60/924-2014/9141-valuetronics-overly-pessismistic-call-by-maybank-concerns-overblown



After looking at all the report, we should look at the present chart and Valuetronic Half Yearly Result from the link below.

http://infopub.sgx.com/FileOpen/VHL-Q2FY2015%20Media%20Release.ashx?App=Announcement&FileID=321941

Which Analyst did you think given a better analyse of Valuetronic?

At the current price of 0.345, Valuetronic price action is near to  NAV of 0.325 and the Dividend Yield, if all remain equal, is value at 7.4%.

IS this the right time of entry?

We have to take note that Valuetronic is indeed facing competition in the market and the Profit have came down.

Will Valuetronic be able to increase their revenue in the future and pay consistent dividend?

Your Guess is as Good as My Guess but it will be good to look for any high volume break out from 0.375 for a Good Reversal.

If there isn't any reversal, we might just see a possible Eillot Wave C to be formed at 0.265.

Invest Safely Everyone. Always do your own Due Diligent!

Is Dollar Averaging the Magic Pill and Does it suits Everyone? Part Three of Three!

Part 3. 

Is Dollar Averaging the Magic Pill and Does it suits Everyone?

For starters, the Idea of Dollar Averaging are suitable for people who are not interested in the price of the units, until the day they wanted to sell the accumulated units (partial or not) for profit.

(hopefully not sell in losses due to cash constraint).

1. It is a good portfolio for retirement when the tide is in your favor but we must not depend just on this portfolio for retirement just in case the market is very very dim.

2. It is good for people who want to start small and wants a decent ROI.

3. It is good for people who don't have the time to look at the market.

4. It is good for people who are savvy or not savvy in investment plus time is on their side.
(The main thing you need to know is the expenses you are incurring.)

Let's look at the STI Chart,

All the Blue Shade are the Start of a New Year.

All the Red Share are the No NO Zone to sell your Dollar Averaging Units.

As you can see from the chart, the person who are not afraid of the sell down and believe that the market will moving towards their advantage in the future will be the Winner.

If the Chart does not give you an idea, you can download the excel sheet (from the blog) and pluck in the figures to confirm your own understanding.

http://singaporeanstocksinvestor.blogspot.sg/2013/08/tea-with-matthew-seah-dollar-cost.html

-------------------------------------------------------------------------------------------------------------------------

In a nutshell, Dollar Averaging is suitable for everyone but it is not a magic pill because when you use it in a wrong counter that can go bust, it is Game Over and that is why STI ETF is recommended because it will never go bust.

-------------------------------------------------------------------------------------------------------------------------

@Ambrosini Maximiliano asked: Kenji can share some advantage/disadvantage comparing these bcip/saver plans against higher dividend lower volatility counters, for example reits

Assuming a Monthly Purchase,

Reits:

Upside:

1. When you use Dollar Averaging (DA) to buy Reits, you get to choose the price you want to buy in since it will be done through your own brokerage.

2. You get to set your own rules (hopefully you follow them), and get to buy cheaper.

3. Lower expenses (if the DA saving plans charges increase)

4. The Dividend is Higher.

5. You can use the Dividend to do Compounding Anytime.

Downside:

1. The Reits you pick fall faster then it picks up especially when it under perform all other Reits

2. You need to have the cash since you are buying by lots now (1000units).

3. The Reits might be in very bad shape and your average units price are above the market price.

----------------------------------------------------------------------------------------------------------------------

Dollar Averaging Saving Plans with STI ETF:

Upside:

1. The Dollar Averaging Saving Plans is Automated as long as your account have the money to purchase.

2. You get to start with a small amount and increase gradually (if you want).

3. Lower expenses (if the bank never increase their charges)

4. You still get a Dividend better then Bank Interest Rate.

5. You have a choice to study (or not) the market.

6. STI ETF will not go bust and recovery is gradually.

Downside:

1. Your Expenses are Controlled by the Bank Charges

2. The Bank have the Rights to amend the Rules which sometime can create some inconvenience.

3. You don't get to compound the dividend if the bank does not provide flexibility in changing the amount to purchase at ease.

4. You don't get to choose the price to buy in since the date will do the job.

5. When your entry price starts from high, you will need a considerable time to accumulate your units price to low.

I hope these 3 parts on Dollar Averaging will benefit Everyone who understand what are their objectives.

Invest Safely Everyone!

Another Good Deed Done!

Is Dollar Averaging the Magic Pill and Does it suits Everyone? Part Two of Three!

Part 2. POSB Invest Saver vs OCBC BCIP (Both work with Dollar Averaging)

Dollar Averaging in a nutshell,

1. When price action is lower, your $100 investment can buy more units.

.2. When price action is higher, your $100 investment buy less units.

On total average when low is more then high, your units' price is in average (possible) low.

-----------------------------------------------------------------------------------------------------------------------

There are a few shared post below to read up on Both Dollar Averaging Plan so I will go straight to the main points to compare.

1. POSB Invest Saver

(i) Pay a low sales charge of 1% (charged on each monthly transaction) from as low as S$1 based on the minimum investment of S$100 a month. There are no other administration or platform charges involved.

(ii) No exit or redemption charges. However, please note that this may be "subject to change." ("clause" is important for any documents)

(iii) On Purchase, as only round figures can be issued for the POSB Invest-Saver, the cost and sales charge of the residual units of 0.82 units will be refunded back to you.

(iv) Only purchase Nikko AM Singapore STI ETF

For more info:

http://www.posb.com.sg/personal/investments/invest-saver/faq-important-notice/default.page

http://singaporeanstocksinvestor.blogspot.sg/2013/07/tea-with-matthew-seah-posb-invest-saver.html

------------------------------------------------------------------------------------------------------------------------



2. OCBC BCIP

(i) For Fees Rate and Promotion refer to the link below

http://www.ocbc.com.sg/personal-banking/Investments/bluechip.html#fees

(ii) Exit or Transfer Charges. Refer to the same link

http://www.ocbc.com.sg/personal-banking/Investments/bluechip.html#fees

(iii) On Purchase, the quantity will be rounded to the nearest whole number. If rounded up, there will be no additional charges. "If rounded down, we will not credit any residual monies to you." (This is very important)

(iv) Can Purchase into either 18 share counters and one Exchange Traded Fund (ETF).

For more info:

http://www.ocbc.com.sg/personal-banking/Investments/bcip-faqs.pdf

http://singaporeanstocksinvestor.blogspot.sg/2013/07/tea-with-matthew-seah-ocbc-blue-chip.html

-------------------------------------------------------------------------------------------------------------------------

What we should take note in this article is,

POSB point 1 (iii)
OCBC point 2 (iii)

The objective of this Dollar Averaging Saving Plan is to make value out of money, but by incurring expenses that are not necessary just defeated the purposes.

Which plan would you recommend after reading this post?

Don't Buy into anything yet. Read Part 3.

In Part 3, I will explain, is Dollar Averaging the Magic Pill and whether it suits everyone.

Another Good Deed Done!

Is Dollar Averaging the Magic Pill and Does it suits Everyone? Part One of Three!

There will be 3 part to this post because I need to drive the whole day.

So let us start with Part 1.

What sparked this Post is an Enquiry on OCBC Blue Chip Investment Plan (BCIP).

Below is his reply when I ask what he knows about BCIP before I Forensic Analysis for him.

"oh right... so basically its just a saving plan that provides a higher % interest? can i put it in this way?"

From his answer, I know his main objective is to have a capital protected saving plan that give good return of interest rate.

In this case, this product might not be suitable for him because

1. it is an investment plan that is not capital protected but it does comes with a better dividend returns compare to INTEREST RATE from bank.

2. There is expenses incurred for every transaction that normal saving deposit does not incurred. (unless you over shot the 300pcs a day from counter deposit)

3. There is a risk that on the day you need to Sell the Shares you might be at a losing end.

-------------------------------------------------------------------------------------------------------------------------

This product is suitable for people who

1. Know ALL the expenses for buying and selling shares and are willing to accept the expenses

2. wants to Diversify thier extra funds like SRS or Spare Cash for a better ROI

3. Have Limited Capital but wants to start young and accumulate his position with $100 or more monthly and at the same time get better ROI.

4. Believe that the Dollar Averaging is moving towards their advantage in the future.

5. Knows the downside of this investment and knows when not to sell their shares when the market is dim.

In Part 2, I will talk about POSB Invest Saver vs OCBC BCIP and which one is recommended for his New Objective.

Driving off now!

Another Good Deed Done!

Being a Woman is Not Easy

It's been a while since I posted. Just my personal opinion for this post.

It is really not easy to be a woman.

They must look either pretty, kind or filial or all to get a possible good husband or family.

Especially for those who need to make up so as to look presentable for work. 

Is Tough Job to make up and remove make up everyday.

Guys...being nice is not enough, must be able to give security. Yes. Money or Asset is even better.

I won't go into the figure for women or guys in this post.

I won't go into when one party decides to be unfaithful.

In most case studies, girl will accept guy older then them.

It will be great if they are around the same age, this mean they can grow old together.

The big problem comes when a girl choose a guy 15 years older then her.

In the beginning, it will seems ok but when they become elderly, that is where the problem surface.

If the guy is 70 years old, the girl is only 55 years old.

I know an auntie who have this problem, the husband got stroke and she can only play game everyday.

Yes. She told me she play mobile game everyday. To relieve her stress apparently.

Her maid will and is the only one who can take care of her husband.

My point being is she have to either take care of her husband for the rest of her life, if they can't afford a maid or she would be alone after her husband left her early.

She might have to live alone for the next 15 years if 70 is the normal number for one to go heaven.

She might not meet a good elderly company due to family or society belief.

I am not saying when the age gap is huge 2 person cannot be together, at least plan something good for your partner long before hand.

My point is being a woman is really not easy, that's all.