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New Course: Investing Teacher!

By Team Wall Street Survivor

it graph

Hey Wall Street Survivors!

We are excited to announce the brand new Investing Teacher course pack!

Want to learn how to read stock charts and advanced techniques for trading?

Check out this fully interactive course now and take advantage of our special launch offer.

About Investing Teacher

Investing Teacher isn’t like other WSS courses. This time, quizzes are integrated directly into the course so you don’t have to wait ’til the end of a chapter to test yourself.

Stock charts are visual representations of data over time – so what better way to teach how to read stock charts than having you draw directly on them?

Investing Teacher is so jam-packed with content that we had to split it into two different courses. Start with the basics and move your way up to becoming expert in stock charts.

it part2 curriculum

So what are you waiting for? Get started with Investing Teacher and learn how investors see the stock market.

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How to Budget: The 50/30/20 Rule

By Team Wall Street Survivor

Wall Street Survivor Courses

Ever wonder where all your money goes? It can be easy to spend a few dollars here and there on non-essential goods, but over time these costs can add up. That’s why its important to identify your spending hot spots so you can reclaim your cash. The theory is that identifying those areas of financial vulnerability — the products and services upon which you have demonstrated a proclivity for spending the most money — is the first step to addressing them.

For more help on this topic, check out the Building Money Saving Habits course.

Keep Track

It’s critical to review your credit card statements and receipts to track where your money went. Once you gather several months’ worth of data, its time to start sniffing out patterns. Eventually, you’ll be able to isolate the categories where you spend the most. Some unavoidable costs just have to be absorbed but you may find yourself saying “I spend that much on coffee(or something else)!?!?”

Now you’ll not only be able to identify your spending hot spots, but to rank them too. This will help you focus your cost-cutting efforts by tackling the biggest problem first.

The 50/30/20 rule

Before tackling your specifics, look to implement the 50/30/20 method. This rule takes some of the hard-core challenges out of the ugly task of finding out how to budget by providing a compassionate set of guidelines to go by.

Here, your needs are allotted 50 percent of your after-tax expenditures. These are essentials, like your rent, utility bills, food, medications, minimum credit card payments and transportation costs.

Cap your wants, meanwhile, at 30 percent. Discretionary spending encompasses those small pleasures that enhance your life, such as movies, concerts, cable and nights out at the pub. Obviously a person’s wants list could trail on endlessly (who doesn’t want a month in Tahiti?); but if you want to save for the possibility, you must hold the ceiling at 30 percent.

The 20 percent in this directive is to devote at least 20 percent of your after-tax income to your financial goals. Here, you pay down (more than the minimum requirement of) your debt, bulk up your savings, add to your retirement stash, launch an emergency account or start saving for a down payment on a house.

If it helps, set up three accounts according to the 50/30/20 algorithm and stick to it!

The Standard Categories

Conventionally, the biggest spending classifications are as follows: home and living; food; entertainment, celebrations and vacations; and body and personal care. Yours might differ, however, and you need to be honest with yourself about what your biggest weaknesses are. If you’re a particularly avid collector of electronic gadgets, for example, or are such a fan of your pooch you can’t help but lavish her with expensive accoutrements, take note.

Home and Living

This is likely the spending category with the biggest appetite of all. Here, your budget groans with expenses like your rent and mortgage, utilities, home furnishings, home maintenance, banking fees and transportation costs.

If you spend more than 35 percent of your net income on your accommodation and costs associated with maintaining it, you’re spending too much. Consider cutting here by refinancing your mortgage or moving to cheaper digs. If none of these is an option, you’ll have to slash elsewhere.

Food

This is likely your single biggest variable expense. Take care to include not just groceries in this bucket, but all the money you spend eating and drinking outside of the home. That means coffees, snacks, gum runs and every last of your restaurant meals.

There’s a fair bit of room for movement in this arena, though the sting of associated deprivation can be rough. Cutting down on just two store-bought coffees a week, for example, could score you more than $400 a year in savings. Bringing your lunch one more day than you typically do, or suggesting potlucks with friends in lieu of pricey trips out can also add up to some serious sums.

Entertainment, Celebrations and Vacations

This feel-good spending classification can get unwieldy very quickly. The catchall for good times, this is where you’ll find everything from nights out with your peeps to spring-break jaunts to sunnier climes. Gifts clock in here, too.

Explore house swaps for vacations, or downgrade your accommodation needs by a star. And start focusing your gift-giving efforts on thoughtfulness instead of costliness.

Body and Personal Care

This category includes every single thing you spend money on to enhance your appearance. That means gym memberships, personal care products, haircuts, clothing and so on.

groomed

There’s a fair bit of elasticity in this spending category, too, so long as, again, you’re willing to forego a bit of the pleasure it delivers. In some cases, your choices here a just a case of bait and switch. Drugstore shaving and skin-care products are way cheaper than their brand-name counterparts, you might run outside or exercise at home instead of signing on for the gym, and there’s a huge swath of choice in where you go to buy your haberdashery.

Emotional Shopping

Often, your emotions are the biggest enemy to your ability to stick to a budget. That’s why identifying the emotional triggers for your spending impulses is paramount to staying on target. Are you spending in an effort to relieve tension, maybe? Boredom? To reward yourself for enduring some ordeal? Or are you making a link between your worth as a person and those material things you’re able to amass?

If your inner plumbing efforts reveal your self-esteem to be tied up with your spending on the latest toy or fashion, tuck that knowledge away for regular reference. And if you think you might have a shopping addiction, check out 4Therapy.com’s compulsive shopping quiz to confirm the diagnosis.

impulse

One way to cut down on emotional spending is to avoid making impulse buys. The next time you’re considering a purchase, whether it be in the flesh or on line, give yourself 24 hours to mull it over. You’ll often forget about the object of your affection as soon as you leave the store or flip to another web page. If it helps, keep a wish list of the items you’ve resisted buying so that you can return to them when you come into some cash or ask for them on your birthday.

You might also limit your exposure to what’s out there vying for your money on the premise that the less you’re aware of what’s available to buy, the less likely you’ll be to develop a sudden need for it. So unsubscribe to the rivers of advertising that stream into your inbox every day or download a program that prevents ads from appearing on your screen.

Remind Yourself

Scribble yourself a note to keep your reasons for introducing financial responsibility to your life front and center. Write, I’m getting serious with my money because and then fill in the balance with something meaningful to you, like “I want to visit New Zealand” or “I need to finally kill that student loan.”

The best budgets are flexible, personal and always subject to adjustment. Having identified the what and where of your personal expenditures, you can start to unravel the why.

The post How to Budget: The 50/30/20 Rule appeared first on Wall Street Survivor Blog.

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Isolating Your Spending Hot Spots

By Team Wall Street Survivor

Wall Street Survivor Courses

The chilly scene currently frosting up your window notwithstanding, now is always a good time to take stock of your “spending hot spots.” The theory is that identifying those areas of financial vulnerability — the products and services upon which you have demonstrated a proclivity for spending the most money — is the first step to addressing them.

Here’s some help.

Initial research

The critical launch point requires you to review your bankand credit card statements and receipts to track where your money went. Gather several months’ worth of the things, and use different colored highlighters to suss out patterns. Eventually, you’ll be able to isolate the categories that characterize your spending.

Ideally, you’ll not only be able to identify your groupings, but to rank them, too, from biggest culprit on down. This will help you focus your cost-cutting efforts.

The 50/30/20 rule

Before tackling your specifics, look to implement the 50/30/20 method. This rule takes some of the hard-core challenges out of the ugly task of budgeting by providing a compassionate set of guidelines to it.

Here, your needs are allotted 50 percent of your after-tax expenditures. These are essentials, like your rent, utility bills, food, medications, minimum credit card payments and transportation costs.

Cap your wants, meanwhile, at 30 percent. This venture into more discretionary spending encompasses those small pleasures that enhance your life, such as movies, concerts, cable and nights out at the pub. Obviously a person’s “wants” list could trail on endlessly (who doesn’t want a month in Tahiti?); inside this guideline, you must hold its ceiling at 30 percent.

The 20 percent in this directive requires individuals to devote at least 20 percent of their after-tax income to their financial goals. Here, you pay down (more than the minimum requirement of) your debt, bulk up your savings, add to your retirement stash, finally launch an emergency account or maybe start a house fund.

If it helps, set up three accounts (or label three mason jars) according to the 50/30/20 algorithm.

The Standard Categories

Conventionally, the biggest spending classifications are as follows: home and living; food; entertainment, celebrations and vacations; and beauty and style. Yours might differ, however, and you need to be honest with yourself about what your biggest weaknesses are. If you’re a particularly avid collector of electronic gadgets, for example, or are such a fan of your pooch you can’t help but lavish her with expensive accouterments, take note.

Home and Living

This is likely the spending category with the biggest appetite of all. Here, your budget groans with expenses like rent and mortgage, utilities, home furnishings, home maintenance, banking fees and transportation costs.

If you spend more than 35 percent of your net income on your accommodation and costs associated with maintaining it, you’re spending too much. Consider cutting here by taking on a boarder, refinancing your mortgage or moving to cheaper digs. If none of these is an option, you’ll have to slash elsewhere.

Food

This is likely your single biggestvariable expense. Take care to include not just groceries in this bucket, but all the money you spend eating and drinking outside of the home. That means coffees, snacks, gum runs and every last of your restaurant meals.

There’s a fair bit of room for movement in this arena, though the sting of associated deprivation can be rough. Cutting down on just two store-bought coffees a week, for example, could score you more than $400 a year in savings. Bringing your lunch one more day than you typically do, or suggesting potlucks with friends in lieu of pricey trips out can also add up to some serious sums.

Entertainment, celebrations and vacations

This feel-good spending classification can get unwieldy very quickly. The catchall for good times, this is where you’ll find everything from nights out with your peeps to spring-break jaunts to sunnier climes. Gifts clock in here, too.

Explore house swaps for vacations, or downgrade your accommodation needs by a star. And start focusing your gift-giving efforts on thoughtfulness instead of costliness.

Body and personal care

This category includes every single thing you spend money on to enhance your appearance. That means gym memberships, personal care products, haircuts, clothing and so on.

groomed

There’s a fair bit of elasticity in this spending category, too, so long as, again, you’re willing to forego a bit of the pleasure it delivers. In some cases, your choices here a just a case of bait and switch. Drugstore shaving and skin-care products are way cheaper than their brand-name counterparts, you might run outside or exercise at home instead of signing on for the gym, and there’s a huge swath of choice in where you go to buy your haberdashery. And so on.

Emotional shopping

Often, your emotions are the biggest enemy to your ability to stick to a budget. That’s why identifying the emotional triggers for your spending impulses is so important to this hotspot-finding mission. Are you spending in an effort to relieve tension, maybe? Boredom? To reward yourself for enduring some ordeal? Or are you making a link between your worth as a person and those material things you’re able to amass?

If your inner plumbing efforts reveal your self-esteem to be tied up with your spending on the latest toy or fashion, tuck that knowledge away for regular reference. And if you thinkyou might have a shopping addiction, check out 4Therapy.com’s compulsive shopping quizto confirm the diagnosis.

impulse

One way to cut down on emotional spending is to avoid making impulse buys. The next time you’re considering a purchase, whether it be in the flesh or on line, give yourself 24 hours to mull it over. You’ll often forget about the object of your affection as soon as you leave the store or flip to another web page. If it helps, keep a wish list of the items you’ve resisted buying so that you can return to them when you come into some cash or ask for them on your birthday.

You might also limit your exposure to what’s out there vying for your money on the premise that the less you’re aware of what’s available to buy, the less likely you’ll be to develop a sudden “need” for it. So unsubscribe to the rivers of advertising that stream into your inbox every day or download a program that prevents ads from appearing on your screen.

Remind yourself

Scribble yourself a note to keep your reasons for introducing financial responsibility to your life front and center. Write, I’m getting serious with my money because and then fill in the balance with something meaningful to you, like “I want to visit New Zealand” or “I need to finally kill that student loan.”

The best budgets are flexible, personal and always subject to adjustment. Having identified the what and where of your personal expenditures, you can start to unravel the why.

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How SpaceX Plans to Colonize Mars

By Team Wall Street Survivor

Courses marketplace

Space Exploration Technologies, better known as SpaceX, just raised one billion dollars through Google and Fidelity. The pair now own around 10% of the space transport services company with Google hoping the collaboration leads to a global internet.

The company is known for its outrageous mission statements. It was founded in 2002 by billionaire entrepreneur Elon Musk with the goal of making space transport cheap enough to allow humans to colonize Mars.

For those unfamiliar with Musk – he is the South African born, Canadian-American billionaire behind companies such as Paypal, SolarCity and Tesla Motors and has been described as a mix of Steve Jobs, J.D. Rockefeller and Howard Hughes. The entrepreneur knows how to think big and SpaceX is arguably his most ambitious project to date.

SpaceX developed the Falcon 1 and Falcon 9 rockets and the Dragon spacecraft. The Falcon 1 was the first privately-developed liquid-fueled rocket to successfully reach orbit. The launch on September 28, 2008 came after six years of hard work and three failed launches going back to 2006.

In 2012, they followed up that achievement by becoming the first private company to send a spacecraft to the International Space Station. The Dragon launched on May 25, 2012, bringing a load of cargo to the astronauts on the ISS. As of January 2015, SpaceX has flown five missions to the ISS and launched 13 Falcon 9 rockets with many more launches planned for the future.

Source: SpaceX.com

Elon Musk has bigger dreams than delivering cargo to the ISS or lining up commercial launches. He wants to get humanity to Mars. In 2011, Musk boasted that he would put a man on Mars by 2021.

To do so, SpaceX will have to use reusable rockets. A basic, traditional rocket might consist of a rocket core, payload, and boosters where much of the apparatus is thrown away each time.

spacex rocket

Currently there is no launch system that allows reuse – at least in a manner similar to the simple reusability of an aircraft. A few are under development, including SpaceX’s reusable rocket launching system – planned for use on the Falcon 9 and upcoming Falcon Heavy rockets.

SpaceX has accomplished a lot in its short history. What really distinguishes the company is that they have succeeded in making the field of space travel more competitive. SpaceX’s low launch prices – especially for sending communication satellites into orbit – have placed a lot of pressure on their competitors. As of September 2014, French aerospace company Arianespace claimed 60% of the global satellite launch market. By November 2014, SpaceX was already taking market share from them.

Competition in the arena of space launches can only be a good thing. Arianespace has been around since 1980 and before that space travel was the domain of nationally funded government organizations. SpaceX has come in as a disrupter; their Falcon 9 rocket being the cheapest in the industry. By late 2013 the published price of a launch to low Earth orbit stood at $57 million.

falcon 9 rocket

Source: SpaceX.com

The Falcon 9 can bring one pound of material in low Earth orbit for about $2100. The Falcon Heavy rocket is even cheaper, able to send one pound of material to space for around $730. Elon Musk insists that this is just the beginning, saying in testimony to the U.S. senate that he believes” $500 per pound or less is very achievable”.

The journey has not been easy. When Musk went out to buy the first rockets, suppliers strong-armed him with exorbitant prices. The experience prompted him to build the rockets he needed himself. During this time, rocket development and other costs kept climbing and it wasn’t clear that SpaceX would survive. By March 2006 Musk had invested $100 million of his own fortune into the company but three consecutive failed launches of the Falcon 1 rocket between 2006 and 2008 meant that prospective clients were reluctant to sign contracts. The global economic collapse made things even more complicated.

It was in 2008 that Musk decided to open SpaceX up to investors, selling a small piece of the company to Founders Fund – a private equity group. Musk was quoted as saying “it was never my intention to take outside investments but I simply didn’t have the money to put in.”

The latest round of funding from Google and Fidelity coincides with news that NASA has awarded Boeing and SpaceX lucrative contracts to develop and operate “space taxis” capable of ferrying astronauts to the International Space Station. It seems that with nearly 50 launches booked through 2017 – a mix of commercial satellite launches and NASA missions, – SpaceX is sitting pretty, expecting to bring in roughly $5 billion over the next few years.

Spacex chart

Source: Wall Street Journal

The company is red-hot and Google is interested. The Wall Street Journal reports that Google put up the majority of the $1 billion investment, valuing the company at $12 billion. That places it ahead of companies such as Dropbox, Snapchat and Airbnb. According to multiple reports the search giant could soon make another investment into SpaceX, with the goal of supporting the creation of a satellite-based Internet system that could bring internet access to the whole world.

If SpaceX looks to be an all-conquering force it is down to the relentless efforts and sheer strength of will of its founder Elon Musk. A recent study found that it cost SpaceX $440 million to go from drawing board to first Falcon 9 launch. The study goes on to say that is NASA tried to do the same thing it would have cost three times as much. When Musk asked his propulsion chief Tom Mueller how much he thought SpaceX could discount the cost of a rocket engine, Mueller estimated that they could bring it down by a factor of three. Musk said they would do it for a tenth of the cost.

In the end Musk was closer.

SpaceX is pushing the limits of technology and benefits from having a simple plan. They have one vision, three vehicles and an incredibly talented and dedicated workforce.

We might just put a man on Mars yet.

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5 Ways the Psychology of Investing Tricks You

By Team Wall Street Survivor

myopic

It’s comforting to imagine that investors are highly logical creatures whose money-centric decisions are made with an abundance of rational consideration alone. But the truth is, a great deal of emotion is in play when we contemplate where to invest our bucks.

According to BMO Financial Group’s most recent Psychology of Investing Report, only one in three investors relies completely on research, and just 28 percent report being in control of their emotions at all times. For those who do allow emotion to figurAdd Mediae into their investment decision-making, optimism, anticipation and confidence are the feelings that most commonly come up.

Broadly speaking, a variety of identified dysfunctional psychological influences regularly encourage investor behavior to leave logic in its dust. From individual personality traits to fatigue to the impact of the weather, emotions simply have a lot of sway for investors when it comes to decisions around their money.

Here are five emotional heavyweights that might threaten to knock your logic off track — and some advice on how to keep them in check.

1. Recent-events Preoccupation

The power of recency is a biggie when it comes to those external influences that have dominion over our choices. Whatever just captured our attention, after all, naturally races to top of mind. More than that, if something happened once, we convince ourselves, it’ll likely happen twice. Find the adherents to this philosophy at the casino, stalking the slot machines that just delivered payouts with the conviction that they’re bound to do so again.

This approach to investing, where it’s also known as “chasing returns,” is best countered by a long view that considers not just top performers from the last four weeks, but from the last four years.

2. Myopic Loss Aversion

Long recognized by psychologists exploring behavior motivation, this phenomenon refers to the short-sighted view to which anxious individuals with money in play are prone to falling prey. Here, investors become consumed with the coming minutes and hours, and put themselves at risk of making potentially foolish kneejerk decisions rather than waiting things out. These are the folks who sell stocks in a panic or linger too long on the outside of a poised-for-turnaround market slump.

For individuals prone to such thinking, it’s prudent to remember this: a return to the mean is inevitable. Patience is a virtue, after all. So sit tight, and lift your gaze.

3. Overconfidence

As much as your mom might have had you believe otherwise, you’re probably not nearly the hotshot investor you imagine yourself to be. Reckless money-shifting conducted under the influence of such unwarranted cockiness — men, research shows, are more susceptible to these overblown self-valuations than women — can deliver big losses.

A realistic assessment of one’s knowledge and abilities is essential in investing. That translates into steady, thoughtful investment decisions that are based on truth rather than fiction. And if you’re still struggling to rein in your sky-high confidence, force a worst-case mental scenario on your situation. If you lose it all, ask yourself, how will you survive?

4. The Herd Mentality

sheep

It takes a lot of personal resolve to move in the opposite direction of the crowd. But sometimes you should. Celebrated investor John Templeton understood this maxim implicitly, and so removed himself from the reach of the prevailing winds by moving to the Bahamas during his management tenure of the Templeton Group.

In order to similarly avoid such all-consuming weather patterns, you need to focus your sights. Do your research, consider the uniqueness of your distinctive investment situation, and remain flexible to new sources of information, no matter how singular you may be in adopting them.

5. Sunk-cost Fallacy

There’s something primitive in the self-protective impulses that kick in when you’ve made a decision that’s tanking. Rather than cut bait, investors who are given to this psychological malfeasance keep right on fishing, imagining the lake will suddenly fill with cod.

But as hard as it is to accept that you made a bad decision, if your investment is or sinking, you must abandon it.

The thinking behind the sunk-cost cognitive bias is that people are trying to avoid the losses because it simply hurts too much to acknowledge them. But sustaining emotional commitment to bad investments is never smart.

Instead, consider that the money you’re sinking into the losing venture could be doing good work in a more lucrative opportunity. Plus, you can use capital losses to offset capital gains, and so cut your tax bill.

Human psychology is a complicated beast, and investors are just as likely to fall victim to its inherent weaknesses as the next guy — but it stands to cost them more. An awareness of these tendencies, however, is the first step in sidestepping them.

Have you made any of these errors while investing? Share your stories in the comments below

.

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5 Ways Knowing How to Bargain Can Save You Money

By Team Wall Street Survivor

Courses marketplace

Everyone knows that they should bargain when buying a car, but the idea of haggling for some of life’s lesser charges is not so widespread. Who knew, for example, that you could talk down your dry cleaning bill or beat down the price of your mattress?

You should have, and now you do.

Here’s how to handle 5 situations where knowing how to bargain can save cash.

Cellphone Bills

You’re most likely going to score a win near the end of your contract, because your provider is scared of losing your business. That’s because it’s harder for them to score a new customer, than to retain the one that they already have. Use this to your advantage.

Go into battle well armed,and do some research on your options. Check out Billshrink and Lowermybills to get a sense of what plans are out there, then compare them with what they’re proposing to you.

If the first rep you speak with says they can’t help, ask to speak with someone in customer retention. That’ll shake them up.

People often sign on with a cellphone company on the strength of a promotion. Then, when the promotional period ends, they find themselves subject to a price hike. Your best bet on this front is to make a note of when your graces end, and to place a call just prior to that with a threat to cancel. More than likely they’ll have another promotional rate on the table in response to your I’ll-take-my-business-elsewhere noises.

Don’t get emotional. Be brief and to the point.

Take notes during your conversations. Make sure to get the names and employee numbers of everybody with whom you speak.

Most of all… Mean it when you say you’re ready to cancel.

Gym Memberships

Timing is really important forthis one, and you’re in luck! That’s because Gyms are generally hungry for members at thestart of the year, and are willing to negotiate with folks they know are only there to make good on New Year’s resolutions. Slow seasons like the dead of summer are also ripe for wrangling. These are the times when gyms’ promotions are at their sweetest, too.

As always, do some homework on your options before going in. Check out the best offers at competing gyms, and ask your friends what they’re paying. This way, you can lay down hard numbers as evidence and insist that they’re matched.

Hold your tongue before accepting a counteroffer. If you pause for a bit, the guy at the other end of the phone may well sweeten the deal in a hasty bid to stave off rejection.

If you can’t get much budge on the membership fee, ask for another perk, like free personal training sessions or towel service. The worst they can say is no!

Credit Card Debtcreditcarddebt

Credit card debt is a biggy when it comes to the value of the time you invest in negotiating with creditors. After all, with a big balance comes loads of interest, and serious bucks are at stake.

Credit card interest rates may not seem negotiable, but you can get certain fees waived, especially if you have a flawless payment history. If you have a good track record with your credit company, they’ll feel more inclined to forgive a late fee.

All creditors want is to collect their money from you and to get you to keep spending more, so suggest cutting a one-time payment, or work out a payment plan on a lower amount.

If you can’t talk down the principal, work on negotiating the payment terms to a place that is more manageable for you.

If you’ve fallen behind on your bills by more than 90 days, you could end up dealing with a collections company. Here, it’s useful to remember that this third party is interested only in making a profit on your debt, and it doesn’t require payment on the entire balance to achieve that.

Utility Bills

Write yourself a script before calling the customer service arm of your public utility provider. If you know what you want to say ahead of time, and have notes to keep you on track, you’ll increase your chances of getting what you want.

Be polite. You won’t win points and you’ll draw out the drama if you lose your cool.

At the very least, suggest you negotiate a payment plan that fits your budget.

Furniture and Mattresses

mattresses-main_full

Before you shirk at the audacity of making a claim on a furniture store, bear in mind that furniture and mattresses are sold at as much as a 200 percent markup.

Asking for a price reduction on your purchase is only one gambit in this arena. Also think free box springs, complimentary shipping and upgrades to higher-quality products.

Offer to pay in cash and skip the tax.

If you’re not getting any joy from the salesperson, ask to speak to the manager. If it’s a small, family-run operation, you’re probably already dealing with the owner.

Everything but everything can be had for a price, and the fact is that almost any bill is negotiable. In any case, it never hurts to ask; the worst thing that can happen is you don’t get a deal.

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Alibaba Stock Price Falls After Counterfeit Goods Scandal

By Team Wall Street Survivor

ali1 (1)

Alibaba’s IPO was met with great enthusiasm last year as it broke the record for the largest US-listed initial public offering. Last September the company raised a total of $25 billion, overtaking the $22 billion IPO of the Agricultural Bank of China – listed in Hong Kong. Fortunes have soured slightly as the Alibaba stock price tumbled 20% over the last two weeks, falling from $104 to $86 a share in response to criticism by the Chinese State Administration and news of disappointing revenues.

What is Alibaba?

Alibaba is a Chinese e-commerce company that dominates the Chinese market. It’s like Amazon, PayPal and eBay of China all-in-one package. In 2012 the Chinese giant had $170 billion in sales, which is more than eBay and Amazon combined! Founded and led by a former English teacher named Jack Ma, Alibaba has since become a $200 billion company. It was all going so well. But then, on January 28th, China’s State Administration for Industry and Commerce (SAIC) released a white paper bashing the e-commerce giant over the ubiquity of fake goods on its online retail platforms. The report stated that “Alibaba Group hasn’t been paying enough attention to the mismanagement of the Alibaba Internet transaction platforms for a long time, and hasn’t implemented effective controls to solve the problems”. ali2 The white paper went on to highlight that Alibaba failed to properly regulate what merchants were allowed to sell, that their product information was often inadequate, and that their system for ranking sellers was flawed. Alibaba has been trying to fight the cloud of counterfeit goods for a while now. In December, Alibaba Group announced that it had been successful in taking down more than 90 million fake signings. That’s like the entire population of Vietnam! Then news of disappointing earnings came. The company reported profits of $2.1 billion between October and December 2014, a 25% increase from year-ago levels. The problem was that a very specific metric (GAAP Net Income as seen in chart below) was nearly 30% less than year-ago levels. Total quarterly revenue, at $4.2 billion, also came slightly under Wall Street estimates of $4.45 billion. The lower than expected earnings combined with anxiety regarding the State Administration’s concerns was enough to send the share price back to September 2014 levels even though profits had nearly doubled from Q3 to Q4 2014. ali4Source: alibabagroup.com It would seem that fears are overblown. Many analysts see the stock price falling to $75 on fears of rising margins. Others believe that the SAIC’s white paper has highlighted risks investors were unaware of – which is now priced into the stock.

Alibaba will be just fine.

It appears that the company is in prime position to surf the wave of beneficial macroeconomic trends. Online retail sales are about 10% of total retail in China, of which Alibaba represents 80%. The share of online retail sales in overall Chinese retail sales is expected to exceed 15% by 2017 so as more and more Chinese move online. Alibaba stands to profit massively so long as they consolidate their position. Internet penetration in developed countries is around 77%. Even though China has about 632 million internet users, internet penetration in the country is only around 47%. That represents a lot of growth opportunity and as the online landscape in China diversifies that only gives Alibaba more opportunity. Its investments in Lyft, a ride-sharing app, and Tango, a messaging app, indicates their intent to aggressively expand their online empire. The company is also targeting international expansion. They hope to partner with e-commerce players in India and are also targeting countries in Europe, South America and the Middle East. Right now more than 80% of Alibaba’s revenue comes from Chinese retailing but there has been incredible growth in other, smaller areas of the business. The international retail segment of the business has grown revenues by 110% over the last year and cloud computing and internet infrastructure has seen growth of 85% in revenues over the same period. ali5Source: alibabagroup.com So it seems that this price wobble is just a temporary setback. Wall Street appears to agree; “[o]f the 42 analysts covering the stock, 34 rate it a Buy while only three advocate a Sell.” The consensus price estimate is above $110 and the price dip is generally seen as a good chance to pick up Alibaba at discount.

Here’s why you should NOT buy Alibaba.

The company that is listed on the New York Stock Exchange as BABA does not really represent the actual company. The Chinese government forbids foreigners from investing directly in Internet services in China so Alibaba had to get around this by creating a Variable Interest Entity (VIE) which has contractual rights to the profits of the e-commerce firm. Foreign investors can invest in the VIE, but should you? Unlike a normal investment, investing in the security offered on the NYSE means you are investing in a contract, not the actual company. Alibaba set up a VIE and an offshore holding company, Alibaba Group Holding Ltd, registered in the Cayman Islands. The Chinese VIE pays fees and royalties to the offshore holding company according to a contract between the two. It’s all a bit shady isn’t it? ali6 Furthermore, VIEs are somewhat illegal in China. VIEs are designed to circumvent Chinese law and Chinese courts have previously ruled against foreigners’ claims on Chinese companies via VIEs. The Chinese government has purposely kept their stance vague so as to be flexible enough to backtrack when the concept does not work in the country’s favour. Basically when it comes down to it, your investment has no legal protection in Chinese courts. Generally as a shareholder you are part-owner of a company. As a shareholder of the stock BABA you are part-owner of a contract. Most of the actual assets of the company are still owned by Chairman Jack Ma and another founder, Simon Xie. It’s enough to make you think twice. Or maybe you can just take billionaire entrepreneur Mark Cuban’s view. “They shouldn’t be allowed based on what I know today, but if they’re in, it’s just one more stock to trade or invest in depending on your perspective,”

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Apple Car: Investing in the Future of the Automotive Industry

By Team Wall Street Survivor

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Move over Tesla, Apple Inc. is exploring the development of a car – well at least the inside of one. The Wall Street Journal reports that the company has a team of hundreds working on the design of a battery powered minivan-like vehicle, code-named Titan.

The news has got people spreading rumours like a teenage girl.

Tim Cook, CEO of Apple, appointed Steve Zadesky, a former Ford engineer, to lead the project, giving him permission to create a 1000-person team. According to the WSJ, the team is researching metals and materials consistent with automobile manufacturing – lending credibility to the idea that Apple is building a car of its own.

Apple also hired Johann Jungwirth, former head of R&D at Mercedes-Benz, last September. Before Johann defected he was VP of Connected Car, User Interaction & Telematics at Mercedes.

It’s hard to say what’s going on with any certainty, but Jungwirth’s former title seems to hint at the bigger picture. It’s really hard to make a car, as Elon Musk and Tesla have found out. Apple also only has a team of hundreds…where Tesla employs 10,000 people. It’s clear that Apple has only just started in the auto industry.

Consider this: Apple has a market cap of $750 billion; Tesla has a market cap of $25 billion. Even if Apple were to build a Tesla-sized competitor that would only add 3% to their valuation; and who knows how many decades that would take? General Motors, which employs over 200,000 people and has a market cap of $60 billion, is worth less than 10% of Apple Inc.

Is Apple Making a Car?

So is Apple really betting on an Apple Car to create explosive start-up like growth in their massive company?

I think we’re missing what’s happening right now for seductive visions of what might happen.

It’s far more likely that Apple is creating an R&D division aimed at dominating the in-vehicle user experience. Our cars are on the cusp of enlisting in the global army of interconnected devices; it is the last “untapped frontier when it comes to mobility and connectivity”.

Last year, Apple introduced its Carplay system – allowing integration of Apple software into automobile dashboards. Siri is in your cars, you guys!

Source: CNBC.com

This is truly where Apple is able to compete, not in building an electric car. Although they certainly have the resources to build one if they so desired.

Mark Boyadis, an analyst at IHS Automotive, puts it well when he says “They want your eyes, your purchase intent and so many other things in the hour or two you are driving”.

About 600,000 vehicles were equipped with some form of ‘phone projection’ system (AKA a Carplay type of system) in 2014. That’s nothing when you consider that 88 million vehicles were sold in 2014. Boyadis estimates that by 2017, 40 million vehicles will come equipped with such systems, ballooning to 250 million by 2020. Apple will want to be in the majority of those 250 million cars.

What’s more likely? Is Apple building an electric car or is the hiring of the former VP of Connected Car at Mercedes Benz a signal of things to come?

We can’t really say for sure, but the furore and wild speculation occurring in the public sphere is reflective of a larger sentiment. Electric cars are on people’s minds.

Actually, there are three futuristic trends that are in play right now.

How far away are Driverless cars?

Driverless cars, electric cars and smartphone hailing; imagine all three converging into a crazy-wonderful future where all cars are eco-friendly, autonomous, and available at the push of a button.

a3

We’re further along than you think. On February 18th, The Telegraph published a video showing how a driverless car beat a race-car driver on the track at Thunderhill Raceway Park in California.

Fully autonomous cars available to the public are still many years away. Economic and political reasons abound. For instance, the sensors used to convert a regular vehicle to a driverless vehicle cost about $75,000. You’re probably not going to disrupt an industry with those kinds of numbers. A professor specializing in the field, Prof. Rajkumar, stated his belief that Google would be able to bring those costs down to about $10-15,000 per vehicle in 3 years. In the mean time we may have to make do with incremental advancements in driver-assisted technology, such as camera feeds or self-parking features.

Taking the Tesla Challenge

On the electric car front Toyota recently announced their first hydrogen fuel cell car, an obvious competitor to the Tesla Model S. This shows that big car companies are taking the Tesla challenge seriously. Both cars are priced similarly but the Toyota is estimated to have a cruising range of 465 miles to Tesla’s 265 and a refuelling time of just three minutes compared to one hour for a Tesla vehicle at one of their supercharger stations.

Widespread use of electric cars is also far away. Remember how 88 million vehicles were sold globally in 2014? Well, the total number of all the electric cars ever sold is less than 1 million. One reason we don’t use electric cars more ubiquitously is that they are expensive. They also don’t work the way we’re used to our cars working. The Tesla Model S costs about $100,000 and takes an hour to recharge (if you use a supercharger station). If you don’t use a supercharger station it can take up to 9 hours on a regular wall socket!

tesla222

The price of electric cars is going to go down. Tesla has plans to bring a $35,000 vehicle to market by 2017. Bringing down costs while also making sure the driving experience remains fairly unchanged (i.e. not having to wait 3-4 hours to recharge your electric car vs. filling up at the gas station in a few minutes) is what will bring about the electric car revolution. Competition from the giants (Volkswagen, Toyota, and GM) will help as well but without the perfect union of all those elements the electric car will remain a niche market.

We live in exciting times, and it may be that the expert’s predictions are extremely generous but it seems that market forces have put us on an unstoppable collision course with autonomous, electric vehicles. I can’t wait!

Want to learn more about trading stocks and personal finance? Check out the Courses Marketplace.

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Martin Zweig – New Stock Investment Legend on meetinvest.com

By meetinvest
meetinvest

Martin Zweig — Investing with Data Studies This week we’re launching the investment strategy of the American investment legend Martin Zweig (1942-2013). Zweig began his career in the 1970s as an investment newsletter writer and contributed numerous articles to Barron’s Magazine. He went on to become a successful and influential investment adviser on Wall Street, […]

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Check Out Our New Performance Analysis Tool on meetinvest.com

By meetinvest
meetinvest

Lots of users have asked us an important question recently: “How do I see the outperformance developments over time, if it’s increasing or shrinking?” To answer this question, we have now programmed a new statistical analysis graph – the so-called “historical monthly relative performance”. Currently on meetinvest, you may only look at the hypothetical back-tested […]

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The Silver Bull Market: Four Investment Factors to Consider Before Buying Silver or Gold

In Shayne McQuire’s The Silver Bull Market, he highlighted four important factors to consider before buying silver or gold:

1) Investment safety refers to your capital protection from the financial market risks. Most people always lament that owning silver or gold bullion does not provide dividend incomes. However, they don’t realize that precious metals allows you to remove wealth from the financial system. This is because gold and silver have historically been used as store of wealth and gold in particular, is seen as an effective tool to beat inflation. Take the current Euro crisis as an example. Greece is facing possible exit from the Euro because of its massive national debts. The country had been previously bailed out with a $275 billion international loan and is now asking for fresh fund of $10 billion euros in short term financing. Clearly, the country’s plight shows that the Europe economies are not doing well and holding on to the Euro currency might be risky as it could face possible devaluation if the crisis spreads across Europe.

Silver Bull Market2) Investment potential refers to the ability for the price of silver or gold to rise over the long term. It is interesting to note that while Warren Buffett disdains gold for its lack of utility, he views silver differently and even purchased 130 million ounces (at low price of $6) in the late 1990s, one fifth of the global production at the time. He would have made a lot of money in the period of 2008, the year of the worst global financial crisis in recent memory. This was because silver performed extremely well against other investments.

3) Liquidity risk refers to the ease of buying and selling silver or gold. This can be an important consideration as who would want to buy something that cannot be sold? On this note, rare silver or gold coins tend to fare poorly as compared to mainstream coins. Jewellery is easier to sell but the margin would be lower due to the premiums for the workmanship. In Singapore, liquidity is not an issue because investors can sell their silver or gold bullion to dealers like BullionStar.

4) Government risks refers to rule changes regarding gold and silver investments. In Singapore, the government exempted precious metals in 2012 with the objective of making Singapore a trading, transit and storage hub of precious metals. Since then, many dealers, wealth management banks and vault operators had set up infrastructure services in Singapore, hoping to catch a slide of the action. Metalor had also set up a gold refinery and bullion product manufacturing plant in Singapore in 2013. However, it should be noted that the investment environment is not so conducive in every country. For example, in 1933, due to a wave of bank failures, the United States government was forced to confiscate gold from the individuals and companies.

The Silver Bull Market is now available nationwide at all major bookshops and popular online e-book retailers. For a list of retailers that are available in your location, visit: www.wiley.com/buy/9781118383698.

Phil Town – New Stock Investment Legend on meetinvest.com

By meetinvest
meetinvest

Phil Town — A Rafter Turned Investor. This week we’re introducing American investor Philip Bradley Town on meetinvest. After serving in the US Army Green Beret, Phil Town became a rafter leading expeditions down the Colorado River. After an incident that nearly ended in catastrophe, Town took on the words of a fellow rafter who […]

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How to estimate fair value of a stock

Many finance bloggers like to quote Warren Buffett’s saying “price is what you pay; value is what you get”. However, knowing this is one thing, practicing it is another matter altogether which requires some level of deep analysis. The fact is that you can’t determine the intrinsic value of a company just by staring at the figures stated in the quarterly or annual financial statements. According to MorningStar’s “Why Moats Matter”, there are generally two approaches when it comes to valuation concepts.

How do investors identify great companies? One of the simple tools to value company is through using earnings yield, or more commonly known in the investment community as Price/Earning (P/E) ratio. This simple method requires only current share price divided by the last 12 month’s earning. Companies with high P/E ratio are considered growth stocks.

There are pros and cons in using P/E ratio to measure the value of a company. Whilst this metric is relatively easy to calculate, this approach might not be appropriate for companies whose profits swing significantly from year to year. This is especially for for high growth stocks and cyclical companies like the airlines and IT companies.

Another approach of measuring the intrinsic value of a company is to determine the discounted cash-flow, or DCF. To do that, we need to establish that the Return on Invested Capital (ROIC) exceeds the Weighted Average Cost of Capital (WACC). This is because the fundamental aim of investing is to generate returns that exceed the cost of capital required. To derive ROIC, we need to divide Earning before Interest (EBI) by Invested Capital (IC): EBI/IC.

Next, we need to determine the WACC. From investopedia, the formula for calculating WACC is as follows:

Weighted Average Cost Of Capital (WACC)

  • Re = cost of equity
  • Rd = cost of debt
  • E = market value of the firm’s equity
  • D = market value of the firm’s debt
  • V = E + D
  • E/V = percentage of financing that is equity
  • D/V = percentage of financing that is debt
  • Tc = corporate tax rate

Magically yours,

SG Wealth Builder

Singtel reports robust Q3 earnings growth

Singapore Telecommunications Limited reported group earnings results for the third quarter and nine months ended December 31, 2014. For the quarter, the company reported group revenue of SGD 4,427 million compared to SGD 4,263 million a year ago.

EBITDA was SGD 1,229 million compared to SGD 1,264 million a year ago. Underlying net profit was SGD 970 million compared to SGD 910 million a year ago. Net profit was SGD 970 million compared to SGD 872 million a year ago.

Free cash flow was SGD 669 million compared to SGD 569 million a year ago. Profit before EI and tax was SGD 1,285 million compared to SGD 1,236 million a year ago. Net profit rose 11.2% boosted by higher mobile data revenue and bigger contributions from its mobile partners in Australia and elsewhere.

SingTelThe company delivered a solid third-quarter performance and successfully increased mobile data revenues with better networks, technology, content and service. Post-tax profit of its associates rose 29% to SGD 458 million, led by Telkomsel in Indonesia and Bharti Airtel.

For the nine months period, the company reported group revenue of SGD 12,884 million compared to SGD 12,720 million a year ago. EBITDA was SGD 3,817 million compared to SGD 3,858 million a year ago. Underlying net profit was SGD 2,830 million compared to SGD 2,690 million a year ago. Net profit was SGD 2,843 million compared to SGD 2,754 million a year ago. Free cash flow was SGD 2,585 million compared to SGD 2,381 million a year ago.

Profit before EI and tax was SGD 3,966 million compared to SGD 3,756 million a year ago. Net debt as at December 31, 2014 was SGD 7.9 billion. The company provided consolidated earnings guidance for the year ending Match 31, 2015. Revenue from Core Business (comprises Group Consumer and Group Enterprise) to be stable and EBITDA to increase by low single digit level. Mobile Communications revenue from Singapore to increase by mid single digit level. Mobile service revenue from Australia to increase by low single digit level. Group ICT revenue (comprises Managed Services and Business Solutions) to increase by low single digit level. Revenue from Group Digital Life to exceed SGD 300 million and negative EBITDA to increase to approximately SGD 200 million to SGD 250 million. Consolidated revenue and EBITDA of the group, excluding acquisitions, to be stable.

Capital expenditure for the group is expected to approximate SGD 2.3 billion, comprising approximately SGD 900 million for Singapore and the balance for Australia.

Singapore private property prices decline for the first time since 2008

According to data released by URA on 23 January 2015 for 4th Quarter 2014, the prices of private properties declined by 4% for the year of 2014 as a whole, compared to an increase of 1.1% in 2013. The report also highlighted that there were price decrease across all segments of the private residential property market, including the central region, which seen drop of 0.9%.

Source: URA

The current market trend is in line with what most analysts predicted last year and the market mood is expected to continue to be sour moving forward. With the slew of cooling measures firmly in place, many property investors are still adopting a wait-and-see approach. Because of this, for the whole of last year, developers sold 7,316 units, a figure much lower than the 14,948 units sold in 2013.

Source: URA

To make matter worse, if we include the 14,220 Executive Condominium (EC) units in the pipeline, there would be a total of 83,180 units in the pipeline. Also, based on the completion dates reported by developers, about 24,796 units (including ECs) will be completed this year and another 25,717 units (including ECs) are expected to be completed in 2016. Clearly, the data indicated that the supply is outstripping the market demand since 2010 as reflected below.

Source: URA

My view is that prices would still continue to decline gradually by 5-7% until end of this year. Even so, this does not mean that this is a buyer’s market because most developers did not slash prices and the additional stamp duty, coupled with the Total Debt Servicing Ratio (TDSR) Framework, continue to put off investors. So it is a stalemate for both investors and developers. Unless developers “price to sell” their projects, they may face difficulties in attracting serious buyers or investors to the market.

Magically yours,

SG Wealth Builder

Joel Greenblatt – New Stock Investment Guru on meetinvest.com

By meetinvest
meetinvest

This week, we launch the strategy of 1957 born American guru investor Joel Greenblatt. He is the founder, managing principal and Co-Chief Investment Officer of Gotham Asset Management, the successor to Gotham Capital, a New York City based investment firm he founded in 1985. Greenblatt likes stocks that are “cheap and good”. He likes stocks […]

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Investment Opportunities in Europe and Indonesia – Check This Out

By meetinvest
meetinvest

We’ve found two very interesting market opportunities with a high probability of larger price moves, and you have the chance to participate: European Stocks Stock market legend W.D. Gann taught us that a market would often break through on the fourth attempt. That’s exactly what European Stocks have done this week. It seems that most […]

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Peter Lynch – New Stock Investment Legend on meetinvest.com

By meetinvest
meetinvest

This week we’re highlighting the investment strategy of the legendary American investor Peter Lynch. Born in 1944, he is perhaps the greatest mutual fund manager of all time with his fund being among the highest-ranked stock funds from its inception in 1977 to his retirement in 1990. The fund returned +29.2% p.a. almost doubling the […]

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James O’Shaughnessy – New Strategy on meetinvest.com

By meetinvest
meetinvest

Meet O’Shaugnessy’s Tiny Titans This week we’re not launching a new investment strategy from a new legendary investor, but rather a unique small/micro-cap strategy called “tiny titans,” which was developed and introduced by James O’Shaugnessy in his 2006 book, “Predicting the Markets of Tomorrow“. O’Shaugnessy is already present on meetinvest with a value and a […]

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John Neff – New Stock Investment Legend on meetinvest.com

By meetinvest
meetinvest

This week we’re introducing the investment strategy of the legendary American investor John Neff. After joining the Wellington Management Co. in 1964, he became the portfolio manager of the Windsor, Gemini and Qualified Dividend funds. He retired in 1995 after 31 years (1964-1995) of market-beating investment results while the Vanguard Windsor Fund during his tenure […]

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Why Singaporeans always lose money in gold investments

Ignorance is one of the main reasons why investors consistently lose monies when it comes to investing because the biggest risk comes from not knowing what you are doing. The second factor is greed, which causes investors to lose sight of the risks involved in alternative or exotic investments. In the pursuit for higher returns for their monies, those who are greedy overlook or underestimate the risks involved. Thirdly, arrogance is the ultimate downfall for those who don’t respect the market. Always remember the golden rule that you can never win the market consistently, so avoid leveraging your investments if you don’t have the holding power. Yes, leveraging can increase the profit margins, but it can also backfire and widen your losses when the market turn against you.

In early February 2015, news broke out that more than 250 Singaporeans lost an estimated $35 million in yet another flopped gold buy-back scheme operated by Suisse International. Unhappy investors gathered outside the police headquarter trying to lodge police reports to the Commercial Affairs Department (CAD). It was amazing that after so many widely reported cases of gold buy-back scams, Singaporeans still fell prey to such schemes. There were a few who even claimed to borrow a few hundred thousands from the banks to invest. Some even encouraged their friends to invest in the programme.

In my view, it is unlikely that the investors would get back their hard-earned monies. Losing money from scams or flopped investment schemes is a painful feeling but investors who learn from this experience would come to understand how to invest in gold in the right way. The reason why Singaporeans consistently lost money in gold investments is because of the above factors – ignorance, greed and arrogance. Most investors do not know much about gold-back schemes and how the companies generate returns. There is no pricing transparency because the companies would supposedly sell you the physical gold bars and coins at a “discount of 1.5 or 2 percent” and buy back at higher price when in fact you are paying a premium of 20 to 30 percent to the market price. In a scheme whereby the actual bullion is held by the companies, then there is greater liquidity risk in which the companies would not or unable to deliver the gold to the investors.

Driven by greed, the second mistake is that most gold buy-back victims would borrow money and pump all their money into the schemes, in the hope of making even more money. They don’t realize that they might lose their entire fortunes or even become bankrupt in the event that the company folds. This is especially if the company “recycled” the gold with multiple customers. The worst thing is when investors induced their friends and relatives to participate in such a scheme. They must be feeling very bad and guilty for causing their loved ones to lose so much monies.

The best way to own gold is to buy gold bullion from reputable or trustworthy dealers. Indeed, owning bullion is expensive because of storage and transportation costs. In addition, bullion does not give you dividends or expected return. However, owning bullion can give you a peace of mind knowing that your money is real and is in your own good hands. You don’t have to worry about the daily prices of gold and should try to hold it for the long term. This is because owning bullion is about diversifying your assets and protecting your purchasing power for the long run.

So join me in my wealth building journey and learn more about the right way to invest in gold!

Magically yours,

SG Wealth Builder

M5: Minutes Away From Everything

SG Wealth Builder is pleased to form a partnership to syndicate articles from iCompareLoan Mortgage Consultants, a research focused independent mortgage broker based in Singapore. I share the same passion with Paul Ho, the editor of iCompareloan. He is passionate about helping people enhance their wealth through financial literacy and in making money work harder for them. We must understand that property can be your key to financial success – but only if you play the game right. To this end, mastery of knowledge is important in building the foundation. So join me in the Property Investment Series and start your wealth building journey as early as possible.

As far as residential properties go, luxurious boutique condominiums are all the rage these days. Everyone wants a piece of the lifestyle that comes with a posh, hotel-like home, especially one in an upmarket part of town. And it isn’t just because of the prestige attached to the address; anyone knows that a winning location presents possibilities and perks that you can’t just come across elsewhere.

One such address is the new M5 at No.5 Jalan Mutiara, the freehold development by Amara Holdings Limited. Situated in the vicinity of Orchard and River Valley District 9, the location alone preps you for privilege:

– It’s a mere 10 minutes from the CBD.
– It’s just 10 minutes away from the famed Orchard Shopping Belt, the home of premier malls like Wisma Atria, ION Orchard, Wheelock Place, and Forum.
– It’s 15 minutes from Marina Bay and the Southern Waterfront.
– It’s within walking distance from Great World City, which offers a host of shopping, dining, and entertainment options.
– For even more options, it’s quite easy to get to the nearby Valley Point Shopping Centre, Dempsey Hill, IKEA Alexandra, VivoCityClarke Quay, and Boat Quay.
– Being so close to the Orchard Station (North-South Line), commuting will be stress-free. From there, you can get to the Dhoby Ghaut interchange, just 2 stops away.
– It’s well-connected major roads such as Tanglin Road, Alexandra Road and River Valley Road, as well as the CTE, AYE and ECP. Getting anywhere on the island is a cinch!
– It’s just a short drive to the exciting offerings of Sentosa Island.
– Within a 2km raduis are top schools like River Valley Primary, Crescent Girls School, ISS, and Gan Eng Seng Primary and Secondary Schools. Also nearby are Zhangde Primary, Henderson Secondary, Outram Secondary, Queenstown Secondary, Finnish Supplementary School, Norwegian Supplementary School, and Raffles’ Girls School.
– It’s less than 10 minutes from the Singapore Botanic Garden, which contains a world of natural wonders.- Nearby are several other parks including the Alexandra Canal Linear Park, Tiong Bahru Park, IstanaPark, Henderson Park, and the historic Fort Canning Park.

In a nutshell, the opportunities presented by M5 are limitless. How’s that for an address? But if all of the above aren’t yet enough to grab your interest, wait until you read what’s up next:

M5 is an exclusive, low-density condominium. Only 33 units will be housed in a single 12-storey building, so you can rest assured of more privacy, security, and freedom to live your life. Each home will be decked out in all the best materials, giving it an interior atmosphere of modern elegance. Think of built-in wardrobes and cabinets,huge windows, balconies, air-conditioned rooms, designer fittings by Grohe, and kitchen appliances by Miele.

Of the 33 units, 22 of them are one-bedroom flats, with a floor area between 441 and 532 square feet. These are just right for single adults, especially for those who work in the CBD and the surrounding areas. A one-bedroom unit is affordably priced between S$800k and 1M.

Meanwhile, 11 of the units are two-bedroom apartments, with a size from 775 to 764 square feet. A two-bedroom unit at M5 will surely make a great home for a couple or a young family, and sells for only around S$1.5M.

Once you’ve moved to M5, you can make use of it communal facilities. Kick back with friends and family by the barbecue pit; soak away your stress at the spa tub, or work up a good sweat at the fitness corner.

This privileged lifestyle is delivered to you packaged in an eye-catching architectural masterpiece by ip:li architects. The bold, geometric form emerges authoritatively over the Jalan Mutiara street scape, sure to elicit the curiosity and awe of passersby because of its extraordinary shape.

By the end of September of 2017, you can enjoy the way of life that M5 affords. But you don’t have to wait until then to claim that life as your own – you can begin to do that as early as this year. It has to do with making the right financial decisions as soon as now, and that starts with a choice to compare Singapore housing loans in the best way possible. Yo can’t go wrong with iCompareLoan mortgage broker.

For advice on a new home loan.

For refinancing advice.

SGX organises inaugural investment carnival, launches mobile app

Below article is adapted from SGX website and permission was sought to publish it.

Singapore Exchange (SGX) will hold its first-ever SGX My First Stock Carnival, as part of a campaign to educate new investors and encourage them to start investing.  The campaign comprises a fun-filled carnival this weekend (6 to 8 February), digital initiatives including an interactive online tool, the launch of SGX Mobile App as well as a weekly radio programme.

Recent retail investment trends have shown that almost one-third of new retail CDP account holders are under the age of 25. Targeted at NIBIs (Not Invested But Interested) aged 18 – 30 years old, the SGX My First Stock Carnival takes a hands-on, user-friendly approach to educate investors on how to get started on investing. A Resource Centre will be set up at the carnival to provide information and tools for investing, and SGX staff will show participants how to select their first investment. Participants will be given a My First Stock Guidebook to help them learn about investing.  Six brokers will also be on hand to help investors open accounts and activate their first transaction, and share about their fee promotions to support smaller board lots.

One of the new SGX tools being launched is the SGX Investor Roadmap, an easy-to-use, interactive online tool designed to help new investors get started on their investment journey.

To give investors market information on the go, SGX will be launching its mobile app at the carnival. The app is available on both Google Android and Apple iOS platforms.

From March 3, SGX will provide content for a weekly live radio programme on MediaCorp’s 938LIVE called Dollars and Sense.  SGX and other investment experts will discuss various aspects of investing and listeners can call in with their questions. Dollars and Sense will be broadcast every Tuesday from 12.30-1pm and be repeated on Saturday evenings from 8.30-9pm. Currently, SGX provides daily market updates on 938LIVE at 6.50am, 11.20am and 6.20pm.

Lynn Gaspar, Head of Retail Investors at SGX, said, “SGX My First Stock Carnival is an excellent opportunity for us to reach out to new investors and help them embark on their investment journey. The Investor Roadmap, guidebook and mobile app are useful tools for investors to select the most appropriate stocks for their investment objectives. Together with the recent reduction of board lot size, our existing company screener and information portal SGX StockFacts, and retail education efforts through over 300 seminars and courses run by SGX Academy each year, SGX continues to educate, engage and enable retail investors, and help them be financially confident.”

The minimum lot size in the securities market was reduced from 1,000 to 100 from 19 January 2015. With smaller board lots, higher-priced stocks have become more affordable to investors. Reduced board lots enable investors with less investment funds to build a diversified portfolio more effectively, giving them more flexibility to manage their exposure to different sectors.

Compared with the last quarter (October-December 2014), the number of daily retail participants in the first two weeks since the introduction of smaller board lots has risen 29%. Although the median trade value has fallen 61%, this was more than offset by an 82% increase in the number of daily retail transactions. Daily retail transactions in STI stocks increased at an even faster rate and more than doubled over the previous quarter.

Stock Investments in Singapore’s Telecom Services

Nowadays, I am extremely fed up with M1 network services. No matter where I go, the 3G network coverage is terribly poor for my mobile phone. As a result, sometimes I could not receive messages from my loved ones and friends. I suspect the drop in the network quality may be because I cancelled M1 4G subscription recently – previously it was offered to me free-of-charge when I renewed my subscription plan but M1 stated that it would charge me $10 extra from January 2015 onward. If not for the fact that I have to pay hefty penalty for cancelling my subscription plan contract, I would have terminated my line long ago.

From the consumer’s point of view, if I am not satisfied with a company’s services or products, I would not invest in their shares. For a knowledge-driven economy, internet data access is critical in Singapore and if M1 is unable to provide reasonable network service level, it don’t deserve any investment merits. Notwithstanding the dividend track records, if M1 is unable to retain customers, its economic moat will only erode over the long run.

SingTelThe saturated Singapore market and the fierce competition among the three telecommunication companies (SingTel, M1 and Starhub) reinforce the importance of economic moats in this sector. In terms of scale and market share, SingTel is considered the leader because it used to be a wholly government-owned carrier before it became a listed company. Having the scale, in terms of subscribers and network infrastructure, allows SingTel to lower its overhead costs per customer. For example, the more the subscribers on its network, the lower the marketing costs and interconnection fees.

Of interest to note is that the government restricts the number of players in the telecom services to three, and thus this allows the three telecommunication companies to enjoy efficient scale and earn good returns. This makes perfect sense as Singapore’s market is so small and as this industry requires huge capital requirements, having too many players would only reduce sustainable cost advantages for the players. As a result, the three telecom service providers enjoy substantial government’s backing. Singapore’s sovereign wealth fund, Temasek Holdings is the largest shareholder of SingTel, with shares of 51%. Temasek Holdings also has significant deemed interest (indirect shareholdings) in M1 and Starhub.

From an investor’s standpoint, I prefer SingTel because it has major regional presence in India’s Airtel and Australia’s Optus. Its Q2 financial report stated that the group’s share of pre-tax earnings from the regional mobile associates grew 26% to $629 million. The free cash flow generated for the half year is $1.9 billion, riding on stronger operating cash flows from Singapore and Australia, as well as dividends from its associates.

I am also intrigued by SingTel’s aggressive foray into the digital marketing business. The Digital Life segment of SingTel is acquiring online businesses such as Amobee, Adconian and Kontera to add scale and capabilities. Amobee has won several top advertising industry awards and Dash, SingTel’s mobile money service has won the Gold Award in the Best Consumer Product Category at the 2014 Singapore infocomm Technology Federation Awards. For sure, I believe investments in the digital arena will definitely reap huge rewards and create new revenue streams for SingTel moving forward.

Not vested in this counter but definitely tracking this stock for future investments.

Magically yours,

SG Wealth Builder

Gold Bars traded without spread in Singapore – A world’s first!

Below is a press release from BullionStar Pte Ltd, a Singapore registered bullion dealer offering GST exempted precious metals for savings and investment. The Singaporean government exempted precious metals in 2012 with the objective of making Singapore a trading, transit and storage hub of precious metals.

Gold Bars with No Spread!

Today, BullionStar launches a unique new opportunity to buy and sell physical 100 gram gold bars without any spread between the buy and sell price! The BullionStar 100 gram gold bar is the world’s first physical 100 gram gold bar to be traded with no spread.

The gold bars are minted by the Swiss LBMA accredited refinery Argor-Heraeus for BullionStar with the text “Money since 4000 B.C.” on reverse indicating that gold has been money for some 6000 years.

When you buy 10 or more of these gold bars there’s no spread between the buy and sell price whatsoever. For purchases of less than 10 bars, there’s a small spread of 0.6 % which is still significantly less than normal for 100 gram bars.

BullionStar Mint – Gold Bars with No Spread – 100 gram
    
The gold bars are minted by the renowned Swiss refinery Argor-Heraeus and comes sealed in a tamper-proof Certicard blister package.

The gold bars have an appealing design following the belief that gold is money indicated by the text “Gold since 4000 B.C.” on the reverse.

Sale with Reduced Prices on the following 2014 items:

Australian Gold Lunar Series 2014 – Year of the Horse – 1 kg – Reduced to only spot + 3.89 % – 1 coin left only
Australian Silver Lunar Series 2014 – Year of the Horse – 10 kg – Your chance to own a massive 10 kg silver coin – 4 coins left only
Australian Silver Lunar Series 2014 – Year of the Horse – 5 oz – Reduced to only spot + 22 % which is below the premium we bought them in for!

25 New Types of Silver Coins

Be sure to check out the around 25 new different types of silver coins from Royal Canadian Mint, Royal Mint, Perth Mint and Golden State Mint that we have added in stock during the last month! Whether you are looking for Lunar New Year gifts or collectible items, you will be able to find something that suits you!

Kind Regards
BullionStar

Singapore investors set to lose $70 million

According to today’s Property Guru’s news article, 400 Singapore investors are suing Ecohouse for investment losses of up to $70 million. Apparently, the company had an office in Suntec Tower and managed to attract many first time retail investors hoping to make money from overseas property investments. Investors were sold investment schemes that promised to deliver “20% in 12-months on its S$46,000 social housing property investments”.

To put things into perspective, many of these Singapore investors are not your typical mom-and-pop types of investors who are uneducated and ignorant. Most of the victims are middle-class people with high incomes seeking to enhance their wealth through schemes that promise high returns within a short time frame. Usually the scheme involves pooling of investors funds and the money is typically managed solely by the operator. The first principle that investors should always bear in mind is that if something is too good to be true, it is! Retail investors should first of all check whether these schemes are regulated, instead of just focusing on the rate of returns.

Ecohouse managed to sell more than 1000 of their investment schemes in Singapore and other South East Asian countries in 2012 and 2013. That was the period when the property market was in blistering red hot form in Singapore and also coincided with the slew of cooling measures implemented by the government. Due to the unfavorable investment climate for real estates, Singapore investors hoping to make money from overseas real estate investments were lured by schemes that promised 15 -25% returns within a year. In fact, last year one of my friends had an interest in investing in Japan property market but I warned him that his lack of knowledge in the Japan market and the language barrier would pose a huge risk. I am not sure if he was fully convinced by my pointers but his interest indicated many first time property investors are vulnerable to the pitfalls of overseas property investments.

Many investors interested in overseas property investments don’t care how the returns are generated and whether the schemes are regulated. Just like my friend, they don’t bother to look before they leap. When I queried the investment merits of investing in Japanese properties, my friend highlighted that Japanese are known for their integrity and honesty, so how can the investments go sour?  I almost fell off the chair when I saw his text message. The number one danger in investing is not knowing what you don’t know. And the lesson can be really painful if you lose huge sum of money from failed investments. Some people, after losing their entire fortunes, could not take the blow and subsequently lost their mind. Some even commit suicide.

Always bear in mind to take care of the downside risks and the upside risks would take care of itself. In Singapore, securities and collective investment schemes are regulated. The regulatory regime safeguards the interests of retail investors and the regulations require accurate disclosure and risks of these products. Also, according to Moneysense, “financial institutions are expected to have a process to review and resolve complaints. In instances where the matter cannot be resolved, retail consumers may approach the Financial Industry Dispute Resolution Centre for mediation and adjudication. These safeguards do not apply to consumers that invest in unregulated investment products or schemes”.

So it is true that all overseas property investments are doomed to fail? To be fair, this is not true. Based on a few successful stories shared by my colleagues, they made money from overseas property investments after living in the foreign countries for a few years. Some of them had kids studying there and so they accompanied them to live there for a few years. Some of them were posted by their companies to work there for a number of years. Their stays there allowed them to be familiar with the local regulatory regimes and the market dynamics – location (near good school), living density and management.

There are many free online literature out there on how to invest in overseas properties. Just do your homework before you jump in with your hard-earned money. There are no free lunch in this world!

Magically yours,

SG Wealth Builder

Hillion Residences

SG Wealth Builder is pleased to form a partnership to syndicate articles from iCompareLoan Mortgage Consultants, a research focused independent mortgage broker based in Singapore. I share the same passion with Paul Ho, the editor of iCompareloan. He is passionate about helping people enhance their wealth through financial literacy and in making money work harder for them. We must understand that property can be your key to financial success – but only if you play the game right. To this end, mastery of knowledge is important in building the foundation. So join me in the Property Investment Series and start your wealth building journey as early as possible.

Sim Lian Group Limited brings forth an exciting mixed-use development to watch out for in the suburbs of District 23. Hillion Residences now rises at the corner of Jelebu and Petir Roads in Bukit Panjang. It’s a masterpiece of cosmopolitan convenience melded with countryside calm: a 23-storey residential condominium atop a 3-level shopping podium with an integrated transport interchange. The target completion date for this 99-year leasehold is within the year 2016.

Life Above It All

Hillion Residences will have three 23-storey residential blocks, with a total of 546 units. It intends to offer the following constellations of living spaces:

– 1-Bedroom pad (463 – 549 sq ft)
– 1-Bedroom / Home office unit (463 – 474 sq ft)
– 2-Bedroom unit (710 – 872 sq ft)
– 2-Bedroom / Home office unit (710 sq ft)
– 3-Bedroom apartment(1,163 sq ft)
– 4-Bedroom apartment (1,356 – 1,410 sq ft)
– Penthouse (2,616 – 3,208 sq ft)

Living isn’t just about a place to lay your head; it’s also about having spaces for leisure and recreation. Hillion Residences hopes to make life your life more indulgent gratifying by providing full condominium facilites:

– An array of swimming pools, including a lap pool, a wading pool, a cascading pool, a spa pool, and a lounge pool, complete with sun deck
– Fitness facilities, such as a gymnasium, exercise stations, an aqua gym, a jogging track
– Play areas, like a playground for children, a tennis court for adults, and the lawn for just about anyone
– Spaces for resting and relaxing, like the Garden Lounge, the Pergola, and the Reading Room
– Places for getting together or holding your events, such as the function room, the pavilion, the gourmet dining room, or the barbecue area
– A two-level basement parking area, located on levels 3 and 4.

And of course, let’s not forget the shopping mall just below the residential blocks. All you have to do is head downstairs and you’ll find yourself in the midst of boutiques, retail stores, salons, restaurants, restaurants, and a host of other establishments for hours of leisure and entertainment. It also has a department store and a supermarket, so you don’t need to go far for your daily household needs.

Location and Connectivity

The site is comprised of three lots – #8, 10 and 12 Jelebu Road – now combined into a 1.8 ha (approximately 204,000 sq ft) parcel in Bukit Panjang Central. It’s a highly accessible location, ideal for residences as well as businesses, perfect for both commuters and private vehicle owners .It’s currently occupied by the Bukit Panjang LRT Station, which will also be integrated into the new development. Once completed, the building will also have an integrated bus interchange, plus a direct link to the Bukit Panjang MRT Station (Downtown Line) which will begin operating sometime this year.

With all these brilliant conveniences and connections built into the development, you’ll have an breezy time traveling to and fro. The stations are just downstairs from your condominium, and it will only take you a few minutes’ walk. It will be very easy for you to get to the CBD or Marina Bay. And oh – have we mentioned that the transport hub is air-conditioned? There’s no need to fear hot, humid days.

However, you’ll probably want to drive your car from time to time. Here’s some great news for you: the site is seamlessly connected to main routes including Upper Bukit Timah Road, (which leads directly to the Pan-Island Expressway), Bukit Batok Road, Bukit-Timah Expressway, and Kranji Expressway.

Surrounded By Nature

One of the best things about the location is its proximity to greenery and woodlands. Within minutes, you can embrace the tranquility and the freshness at Dairy Farm Nature Park or Bukit Batok Nature Park. Also nearby are Bukit Timah Hill, Bukit Panjang Park, Bukit Timah Nature Reserve and the Upper Peirce Reservoir. Not too far away are Bukit Batok Hillside Park, Upper Seletar Reservoir, and the Kranji Reservoir.

Other Nearby Amenities

Besides the mall integrated into Hillion Residences, there are other places to shop at too, like Bukit Panjang Plaza, Junction 10, Lot One, The Rail Mall, Beauty World Plaza, West Mall, Fajar Shopping Centre, and Greenridge Shopping Centre. and There’s also the nearby Giant Hypermart.

When you feel like looking for other fun things to do, you can check out Senja Cashew Community Club, Btukit Timah Panjang Community Club, Warren Golf and Country Club, Zhenghua Community Club, Choa Kang Stadium and Sports Hall or the Singapore Island Country Club. You might also want to take your family to Singapore Zoo or Night Safari.

Schools

You don’t have to travel across the island every day just to ensure your kids get a good education. There are a lot of schools near Hillion Residences.

Primary: CHIJ- Our Lady of Queen of Peace, Bukit Panjang PS, Greenridge PS, West View PS, Beacon PS, Zhenghua PS, South View PS, and Teck Whye PS.

Secondary: Assumption English School, Nanyang Girls’ School, Chestnut Drive Secondary, Fajar Secondary, Methodist Girls’ Secondary, West Spring Secondary, Zenghua Secondary, Regent Secondary.

Junior College: Pioneer JC, National JC

Colleges: Singapore Institute of Management, Ngee Ann Polytechnic, Singapore Polytechnic, Republic Polytechnic.

A Brilliant Investment

Hillion Residences is a dream come true, especially for people who would love to live next to nature without giving up the conveniences of the city. It’s lovely address to move to, and a worthwhile property to invest in. With the continuous improvements going on in the region, things can only get better.

See yourself there yet? Contact a specialist at iCompareLoan mortgage broker. With his expert insight, you can compare home loan Singapore in the most efficient way available, so you can make better, quicker decisions.

For advice on a new home loan.

For refinancing advice.

Traded Life Insurance Policies in Singapore

Singaporeans love to buy and sell properties and cars, and the secondary markets have been vibrant for these two big ticket items. To source for the best deals, Singaporeans can conveniently log on to online websites like iProperty and SG Car Mart. But how about insurance policies? In US and UK, the secondary markets for traded life and endowment insurances are pretty robust. However, in Singapore, the market for traded life and endowment policies is still pretty nascent.

Traded life insurances exist because the existing policy holder decides to liquidate his life or endowment policies due to financial problems or when the insured person experiences a decline in life expectancy and hope to cash in on his insurance. Usually the cash value would be low if the policy holder surrender the policy to the insurer, so a better option would be to sell to another individual at a higher price as offered by the insurer. Throughout the transaction, no new policy is created and only the existing policy bought by the original policy holder is used. An important thing to note is that if you purchased a traded life policy or traded endowment policy, you are required to pay the premiums until the policy matures or the person whose life is insured dies. Probably because of this, traded life policies didn’t really take off in Singapore due to moral issues.

On whether the service providers of resale endowment policies need to be regulated by Monetary Authority of Singapore (MAS), I wrote to them a few months ago and this is what they replied:

We will like to inform that there are at present no MAS administered regulations in place to govern the sale, purchase and distribution of traded endowment policies (“TEP”) and traded life policies (“TLP”). This means that any individual or company involved in buying or distributing these policies is not regulated or licensed by MAS. The only exception to this is if a Collective Investment Scheme (“CIS”), a fund or a corporate entity is already regulated under the Securities and Futures Act (“SFA”), and TLPs and TEPs form the underlying assets of the CIS, fund or corporate entity. In such cases, the CIS, the fund or the corporate entity would be regulated by MAS under the SFA.

The implication of the above statements is that the investors cannot rely on laws administered by MAS to take actions against the intermediary or person who sold them the insurance policies if there is any problem during the process. In this regard, MAS strongly encourages investors who purchase investment products to deal only with entities that are regulated by MAS. However, investors can seek recourse under the Consumer Protection (Fair Trading) Act (“CPFTA”).

In conclusion, before you purchase a traded life or endowment policies, read through the fine print carefully and understand how these products work. Don’t just focus on the returns from the policies, instead ask yourself whether the risks involve justified your capital layout.

Magically yours,

SG Wealth Builder

New asset classes added to stock market ‘s alarm clock, Call Levels

Local start-up Call Levels has created a mobile app that simplifies trading and investing by focusing on a single primary need – the need for investors to be alerted when their selected assets hit pre-set price levels.

The start-up’s co-founder, Daniel Chia, who was a sovereign wealth and hedge fund portfolio manager for the past eight years, created the app after realising that the complexity of existing finance and trading apps put off users who needed them most.

“It’s for part-time investors, businessmen who watch currency moves and even finance professionals themselves” says Daniel. “Call Levels keeps things simple for anyone with an interest in the markets by focusing on only doing one thing well – free, reliable, real-time price alerts.”

The app allows users to select their assets to track, set price levels with a responsive slider, and then receive push notifications when the asset prices hit the desired levels. Users can also notify friends, brokers and bankers when the Call Levels hit by adding their contact details to the app.

Call Level app users will get the most updated information reliably across multiple trading markets and stocks, with a system algorithm that scans the market every minute. Leveraging on Agile development methodology, Call Levels team and 2359 Media built the app within two months, with a system that notifies users within seconds, ensuring critical information reaches users in a timely manner.

The simplicity which Call Levels offers has received warm reception in an industry where complexity is the norm, raising USD$100,000 in funding within a month of its inception. One of the company’s angel investors, former GIC Director of Foreign Exchange, Commodities and Short Term Rates, Timothy Teo, feels the app may fundamentally change the way people trade.

“Call Levels meets a very important need for investors and traders to be informed about price levels whether for entry or exit,” says Mr Teo. “It will level the playing field for smaller players, who can now easily access customised news, views and relevant research whenever they set a price alert.”

Call Levels currently offers users real-time alerts for 930 currency pairs, gold, silver and other metals, with equities and indices to be introduced soon. There are plans to deliver market news to users over the app, customised to what assets they are tracking and where their alert levels are.

“Investors have become more self-directed, more informed and more tech-savvy these days,” says Daniel. “Even late adopters are now using technology on mobile to help them make investment decisions, but we have to make it as accessible as possible. This app helps to put critical information in everyone’s hands in real time so they can make informed decisions quickly.”

The free-to-download Call Levels app is available for Apple iOS devices on the iTunes Store. For more information, you can visit their website at http://www.call-levels.com.

Their latest iOS version is under review by Apple and should take no more than a few days to be approved. The new version will include new asset classes (More commodities such as WTI, Brent and index futures such as DJIA, S&P etc. all from CME) and new social sharing features (Whatsapp and Twitter). In addition, Call-Levels is also pleased to announce that their Android version is available on Google Play Store today!

Investing in Telco stocks to pay your phone bills

Below article is adapted from SGX website and permission was sought to publish it.

According to a year-end BCG report, there are currently almost 7 billion mobile phone subscriptions globally, or one for every person on Earth.

Last year, listed mobile phone providers – Singtel, Starhub and M1 averaged a 10.1% total return and have generated a 1.7% return in the year thus far.

These stocks all distributed dividends last year, which might have helped offset mobile phone subscription plans. For instance, an investment of S$7,320 in Singtel shares last year would have generated enough dividend income to pay the minimum annual fee of Singtel’s Combo 1 plan.

According to Boston Consulting Group (BCG), there are currently almost 7 billion mobile phone subscriptions globally, or one for every person on Earth. The recent report BCG noted several factors are fuelling subscription growth, including greater access, increasingly sophisticated mobile-device functionality, fast-rising device sales, an ever-increasing range of devices and device types, and sharply falling prices. Another factor that was noted included more reliable data connections that enable increasingly data-intensive activities – moreover approximately 60% of the world’s population is covered by 3G connectivity.

Singapore’s three listed mobile providers are Singtel, Starhub and M1. All three stocks paid dividends in 2014, which means that if you had a mobile subscription plan with one of the three companies and owned shares in the company, some of your subscription expenses could have been returned to you in the form of dividends.

With the distribution of telecommunications stock income through dividends, a steady stream of income was provided to shareholders last year. Take for instance, SingTel which distributed a 10 cent and 6.8 cent dividend last year. The total dividend amount represented 16.8 cents for the 2014 year, which was the same amount distributed in 2013. The Singtel Combo 1 mobile subscription plan cost a minimum of $27.90 a month, not including tax and other service charges. Based on this current information, the plan would have cost S$334.80 for the past 12 months.

Given each Singtel share paid 16.8 cents for the 2014 year, a total of 1993 Singtel shares would have been needed to generate S$334.80 in dividends last year. Given the minimum board lot size was 1000 shares last year, 2000 shares would have been required. Singtel shares began 2014 at a trading price of S$3.66 and ended 2014 at a trading price of S$3.90. Hence, an investment of S$7,320 in Singtel shares last year would have generated enough dividend income to pay for the minimum fee of Singtel’s the Combo 1 plan.

The purpose of this example is to provide a simple educative example how dividends can be applied by investors. All investors maintain their own unique set circumstances and objectives when it comes to investing hence using dividends to offset expenses may not be a relevant activity.

Singapore Telecommunications
Singapore Telecommunications provides multimedia and infocomm technology (ICT) solutions in Singapore and Australia. It offers facilities management, consultancy, information technology, Internet access, and pay television services; technical, business, and management consultancy services; and distributes telecommunications and data communication products. Singapore Telecommunications has the highest market capitalization of S$62,817.7 million and the stock generated 2014 total return of 11.3%. On 13 November 2014, the company reported that their revenue for the half year ended 30 September increased by 0.01% to S$8,457.0 million

Starhub
StarHub provides a range of information, communications, and entertainment services for consumer and corporate markets in Singapore. The company’s personal solutions comprise mobile services, wireless broadband services, and IDD services. Starhub has a market capitalization of S$7,156.5 million and the stock generated a 2014 total return of 1.5%. On 5 November 2014, the company reported that their revenue for the third quarter period ended 30 September increased by 2.3% to S$592.0 million.

M1
M1 provides mobile and fixed communications services in Singapore. It offers a range of voice, data, and value-added services on 4G, 3G/high speed packet access, and 2G networks; and wireless broadband services. M1 has a market capitalization of S$3,455.2 million and the stock generated a 2014 total return of 17.4%. On 16 October 2014, the company reported that their revenue for the third quarter period ended 30 September increased by 3.5% to S$250.2 million (Click here to view). The stock went ex-dividend on 6 August 2014, distributing S$0.07 per share in dividends. A S$0.119 dividend was declared on Monday, which will go ex-dividend on 17 April.

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