How to be a successful investor

Last year, during a meet up with the man behind BeMoneySavvyToday.com, Brendan Yong shared with me his insights on how to succeed in investing. Brendan works in the financial industry for 11 years and is a veteran when it comes to insurance matters.

First and foremost, most Singaporeans tend to rely on tips from friends and investment bloggers on when is the best time to invest and which are the best stocks to invest in. Most of them either are not financially savvy or have no time to do research. But to succeed in investing, there is no shortcut and you need to put in a lot of hard work.

Secondly, you must understand your character and priorities. Your personality and behavior determine the outcome of your investment decision, not the market. Over time, you would realize that your greatest enemy is yourself because managing your emotions is key to winning the investment game. On priorities, many of us have family commitments or hectic careers, so not many people can have the luxury of time to do stock research. For this group of people, choosing a reliable financial planner would make sense.

A third point he made was that to be successful, you must experience at least one cycle of market boom and market crash. Such experience would enable an investor to validate his investment thesis. Otherwise, no amount of reading can level up your investment competency.

When touched on the topic that there was an initiative by MAS to promote online direct purchase for insurance products, Brendan commented “Of course I knew as I work in the industry and as a matter of fact, MAS had a round of consultation on the proposed move”. However, Brendan dismissed that such a move reflected that consumers are ready to purchase insurance products directly from the insurers. He shared that financial planners and insurance agents still has a role in helping consumers make the most informed choice when it comes to buying the most suitable insurance products.

BeMoneySavvyToday

Brendan Yong

Brendan went on to share that his concern was Singapore consumers making the wrong decisions when it comes to purchasing insurance policies. He revealed that many Singaporeans were led into buying investment-linked insurance policies that were not meant for protecting the financial welfare of the policy holders and he even described these products as “time-bombs”. In addition, he also added that Mr Tan Kin Lian, ex-CEO of NTUC Income admitting “ALL ILPs are bad”. Sound sobering but just how bad are investment-linked insurance policies? Personally for me, I had been approached by many insurance agents to buy ILPs before but I had never buy one because I don’t really understand the mechanics of such product. Brendan patiently explained to me how ILPs work.

Traditional life policies pool premiums from policy holders and injected the fund to a fund manager who will than invest in a portfolio of stocks and bonds. Expenses and claims are then deducted before the profits are distributed to holders in the form of declared bonuses. Typical, the credit rating for the industry is $1 per $1000 sum insured, plus 1% per year. Once declared, the bonuses cannot be reversed and hence over time, the cash value will gradually build up.

Investment-linked insurance policies work differently as the premiums are used to purchase unit trusts instead. In the first few years, not all the premiums are channeled to buy unit trusts but instead used to cover distribution costs. The remaining fund is then used to buy unit trusts, less sales charges typically 5%. The most important thing to note is that insurance charges are deducted, along with policy fees, by selling units, on a monthly or yearly basis. The most outrageous thing is that the insurance charges do not increase linearly over the years, but exponentially. What this means is that the policy holder may face the situation of having to top up his policy to pay his insurance coverage because the units in his policy might have all been deducted to zero.
Magically yours,
SG Wealth Builder

Why developer defects is the worst nightmare of off-plan property buyers

By Property Soul

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Residents of Trivelis, an 888-unit Design, Build and Sell Scheme (DBSS) project in Clementi, are disappointed about the quality of their new flats.

What happened to Trivelis after TOP?

Owners who collected keys to their new units since January complained about defective stove knobs, rusty dish racks, stain-prone kitchen countertops, poor quality laminate flooring, shattered shower glass panels, wardrobe without shelves, rusty lift doors and flooding corridors.

Ironically, ‘delivery of high-quality products’ is both the vision and the mission of the developer EL Development, though the long list of developer defects in Trivelis has proved otherwise. The end products are also a big contrast to ‘choice fittings’ and ‘quality floor finishes’ as stated in the project’s sales brochure.

This was not an individual case of one owner suing the developer for discrepancies of the actual unit from the sales brochure, but feedback of 300 emails from the residents.

EL Development finally agreed on May 14 that, besides arranging repairs and replacing defective items, it would look into giving residents a goodwill package (Straits Times, May 15, 2015, “DBSS flat owners at Trivelis may get goodwill package following slew of complaints”)

Background of the developer

EL Development is not new in the local property scene. The 9-year-old developer is behind a few small residential projects in the prime districts, including Stevens Suites, Parc Centennial, Rhapsody on Mount Elizabeth and Illuminaire on Devonshire. For mass market condominiums, there are Trivelis, Rosewood Suites, La Fiesta and SkySuites 17. Projects of industrial development include Nordix, Eldix and Jurong Food Hub.

With their higher price tags, flats built under the DBSS scheme are supposed to be better quality compared with Built-to Order or normal HDB flats. For Trivelis, the most expensive unit costs a hefty $800,000 which is comparable to buying a unit in a mass market condominium in the private market.

And it remains a mystery how the developer managed to pass the inspections and checks of Housing Development Board to obtain the TOP (Temporary Occupation Permit).

The bargaining power of off-plan property buyers

If a buyer purchases a second hand property, to the seller, the buyer is the only purchase party. In this case, the bargaining power of the buyer is high.

If the buyer finds any defect during flat viewing, he/she can specify in the offer to purchase to instruct the seller to rectify the problem before handover. If the seller fails to do so, the buyer has the right to seek compensation.

On the other hand, if a buyer purchases off-plan from a project under construction, to the developer, the buyer is only one of the few hundred purchase parties.

In this case, the bargaining power of the buyer is low. If the buyer finds any defect after collecting the key, he/she can report to the developer and it is at the discretion of the latter how it wants to rectify the problem.

Although there is a one-year liability period after project TOP for developers to fix all the defects, in the past there are cases that the developer put the blame on the contractors and conveniently pass the responsibility to the latter.

When developer defects become yours

For off-plan property buyers, they can only pray that there is no major developer defect when the developer hands over the new flats to them.

If unfortunately, they turn out to be developer defect victims like the Trivelis residents, they can only cross their fingers that the developer will take care of all the rectifying work so that they don’t have to dig into their own pocket.

For units bought for investment, owners may choose to fix the defects themselves rather than waiting for the developer to take actions. Time is money – the sooner they fix the problems, the sooner they can rent out their unit.

If the problem is minor, they may prefer not to talk to the media for fear of affecting the value of their property. Who will want to rent or buy a second-hand unit from a project like Trivelis?

Even if the owners decide to join together to sue the developer, at most the court will order the developer to fix the defects after they win the case. There won’t be any other form of compensation for the owners. It is also likely to end up to be a long battle that wastes time and money.

Protection for buyers of uncompleted projects

One reason why many first-time buyers like to purchase off-plan properties is the flexibility of the payment scheme. After putting down a deposit at the sales gallery, buyers only need to pay the downpayment to exercise the option in 8 weeks’ time. After that, they can follow a payment plan according to the building progress of the project.

Without the pressure to fork out a big lump sum upfront, off-plan properties sounds more flexible and affordable to home buyers.

However, the biggest problem of buying off-plan properties is ‘what you see is not what you get’. Misunderstandings and misinterpretations often arise from pictures for artists’ impressions only and from the unnoticeable fine prints.

Except the 12-month defect liability period, there is no law protecting the rights of home buyers when they find sub-standard fittings, funishings, fixtures and building materials in their new homes. There is also no fine imposed on developers, builders and contractors when they have unsafe structure or fixture in the project that may cause harm or accident to residents in the development.

In that sense, the terms of buying resale units are much more favorable compared with buying off-plan properties.

Read more here:: Why developer defects is the worst nightmare of off-plan property buyers

BullionStar: How to buy authentic gold without being cheated in Singapore

Below is a piece of editorial from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation.

We often get questions on the authenticity of different products.

How can I know it’s really gold?

How can I test?

Is there a certificate of authenticity included?

Let’s address the last question first. Most bullion bars and bullion coins don’t come with any certificate of authenticity. The refinery’s stamp on the coin or bar is the refinery’s guarantee of the authenticity.

It’s after all much easier to fake a piece of paper certificate than it is to fake the metal. As a matter of fact, a metal can’t be faked, it can only be imitated in regards to some characteristics but never all.

One of the most important characteristics for gold is its high density. The density for gold is 19.3 g/cm3 which is almost the highest density of all elements on earth. This means that if you use another metal, let’s say e.g. copper which has a density of 8.96 g/cm3, to try to replicate the visuals of a gold bar, the bar will become much larger assuming the same weight.

The only metal close to gold in density is Tungsten. Tungsten has a density of 19.6 g/cm3. This means that a tungsten bar is very close in volume to a gold bar which is what you might have seen on Youtube.

Fortunately though, it’s easy to differentiate Tungsten from Gold.

The speed of sound when traveling in gold is 3240 m/s whereas it’s 5200 m/s for tungsten. The sound speed can easily be measured with an ultrasonic gauger.

When you buy metal from BullionStar, we guarantee the authenticity. We test our metals thoroughly and most all products sold by us come directly from the refinery/mint.

Mad Money Tips

By Team Wall Street Survivor

Depending upon your personal constitution, at some time or another you have probably been inclined to throw a little mad money in the direction of some of the more volatile – and potentially lucrative – stocks.

They can indeed be enticing if for no other reason than the ability to invest paltry sums with potentially stratospheric returns. So, what about the viability of penny stocks and over the counter securities? Is there anything wrong with having a little mad money stash just to have fun with? Not necessarily.

In fact, if handled correctly it might actually be possible to have a little fun and maybe make money along the way.

1. Volume Matters

Nothing is worse than buying a stock that you can’t sell.

Take a look at the daily (or in some instances – weekly) volume to make sure there is someone on the other end of the transaction. Novice investors are often surprised how limited volume can be and are taken aback when their sell order isn’t immediately executed.

2. Sales and Earnings.

Yes, it sounds old fashioned especially in light of the pop culture investing mentality but fundamentals still hold true.

3. Percentages Mislead.

Especially when dealing with micro or penny stock. It just makes sense. If a stock is trading at a $1 and doubles to $2 then the percentage alone skews the total picture. Remember the Law of Diminishing Returns.

4. Use Caution.

Setting aside a little mad money for those fun investment crushes is a great idea – just don’t go overboard. Depending upon the total size of your portfolio there isn’t anything
wrong with using 2% to 10% of your investment dollars to roll the dice and try out your luck.

For more information, head over to Wall Street Survivor.

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Throwback Thursday: The 4 Most Common Investing Myths People Fall For

By Team Wall Street Survivor

Courses marketplace

Warren Buffett often tells people not to focus on day-to-day movements of the stock market; he prefers to take the long view.

That’s good advice; getting caught up in the daily movements of the stock market is enough to drive anyone crazy. There’s a lot of investing tips floating around out there, but for every good piece of advice there are two or three stinkers.

Have you ever heard someone say “investing in the market is gambling”? You hear this being thrown around when people are trying to dissuade others from getting involved in the market, but it’s just untrue. Gambling is when the money from the losers is used to pay the winners, a zero-sum game. In the world of investing, wealth is being created. You buy stock in a company which then goes on to produce goods that add value to the world – that’s wealth creation, not gambling.

Here are some of the most common myths of the market:

1. Set it and Forget it Investing

Target date funds, also known in the investing business as life cycle funds, are designed to be convenient. Invest your money in a fund, leave it in there for years while others take care of the asset allocation and diversification part, and then profit once you are ready to retire. Easy game, right?

The simplicity of this investing solution is tempting and target date funds are very popular in the U.S. In theory these funds mimic behaviour that you as an investor should be following anyway: invest in equities when young while becoming more conservative as retirement draws nearer.

The Reality

You are still at the mercy of the market and when you choose to retire can have a big impact on your returns. For example, all 264 target-date funds sold by 39 mutual funds performed poorly after 2008. Even the most conservative – designed to weather any storm – fell on average 17% in 2008.

Additionally, it is unwise to think your portfolio is complete with a simple set-it and forget-it approach. There are other asset classes beyond equities, bonds and cash and being exposed to real estate and commodities are all part of an all-round investing strategy.

2. What Goes Up Must Come Down

Mean reversal, or the school of thought that says prices and valuations in the market tend to fluctuate, is an idea that has been around for a long time.

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The graph above shows U.S. and European corporate profits for the last 35 years and we can see them clearly oscillating around a long term level.

Next, let’s take a look at the Dow Jones.

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We see that in general stocks tend to march upward over time, but to be specific the stock market consists of a series of upward AND downward moves that result in a net increase over time.

The Reality

While there is some truth to the concept of mean reversion for parts of the market, (earnings etc.) we aren’t so much concerned with IF mean reversion will happen but WHEN it will happen – and therein lies the problem. Knowing how to time the market is no simple task and requires meticulous analysis.

3. Invest With Me, I Can Pick the Winners

Every fund manager out there is asking for your business, banking on their reputation and ability to turn your endowment into a hefty sum. There are plenty of names out there. Peter Lynch was one of the more well-known stock pickers and he did very well for himself.

If only you could get the secret to Warren Buffet’s approach and you’d be a mega-millionaire right?

The Reality

No one has ever been shown to be a consistently good stock picker. Yup, not even Warren Buffet. According to Seeking Alpha, Buffet does very well compared to almost every fund manager out there but falls short when compared to a popular market index, the S&P Midcap 400.

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That’s right. If you invested in the S&P Midcap 400, you would have outperformed Warren Buffet. In fact, depending on what time period you use, the S&P 500 will generally be ranked halfway amongst all the actively managed funds. That means the S&P 500 outperforms at least HALF of all actively managed funds out there!

You’re better off putting your money in a low-cost index fund that tracks the overall market.

4. Gold is a Good Hedge

Gold bugs will not hesitate to tell you where to put your money. When inflation gets out of hand you’ll thank the savvy investor who told you hold onto your stocks of gold. Unlike currency, gold holds its value. A brick of gold today will preserve its worth from one generation to the next.

It is widely believed that gold is just a good hedge. People often buy gold on anticipation of market and currency drops as gold is expected to rise when the dollar or the stock market falls.

Gold is also known as the crisis commodity, because people tend to buy up the precious metal when geopolitical tensions rise. When threat of coups rise and confidence in governments is low, gold tends to do well.

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The Reality

It was observed that gold fell nearly 1/6th of the time when stocks fell – hardly making it a good hedge. Additionally it was found that changes in gold prices are independent of currency changes – again making it a bad form of protection against another asset class.

The bottom line: gold is not a reliable hedge during periods of stock market turbulence.

What is true is that gold has been a good hedge of inflation over the very long run (100 years+) but not so much in the medium to near-term investing horizon.

In the right allocations gold can be a useful component of any portfolio, but gold does not provide the amazing protection that many people claim it does. Many portfolio constructionists recommend holding less than 3% of your assets in precious metals such as gold and silver.

Those are just a few of the myths in the investing world but there are plenty more out there.

Have you heard of any stock market urban legends? If so, share them in the comments below and we’ll debunk them in part 2!

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What is a Mutual Fund?

By Team Wall Street Survivor

A Mutual Fund is basically a pool of funds collected from many investors that is used to invest in securities like stocks and bonds. A Money Manager actively makes investments for the whole fund while leveraging the large pool of money they have to work with. Each shareholder in the Mutual Fund benefits or suffers in proportion to how much they have invested in the fund and can be bought and sold like regular stocks.

Mutual Fund Blues

Unfortunately, most mutual funds fail to outperform the market in any significant way. Because the Money Manager doesn’t work for free, his pay is taken out of the profits and the mutual fund owners get less.

In theory, Mutual Funds are a great investment. But in reality, you’re better off investing in ETF’s or other investments where the return is better.

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Why Index Funds are the Best

By Team Wall Street Survivor

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Everyone says you should be investing in Index Funds. Apparently they’re all the rage but how does one get involved in index funds. To answer that let’s start with the basics.

What is an Index Fund?

To understand what an index fund is we have to know what a stock market index is. You already know what a stock market index is; two of the most popular stock market indices are the S&P 500 and the Dow Jones Industrial Average. Each index is made up of an amalgamation of stocks and the value of this group of stocks is reflected by a number. For example, the S&P 500 is a basket of 500 stocks that is considered to approximate the overall U.S. market. The value of the S&P 500 reached record highs recently and stands at $2129.20 at the time of writing.

An index fund is a specific type of mutual fund (where money is pooled by investors) that is constructed to match the performance of a specific market index. For example the Vanguard 500 Index Fund (VFINX) approximates the make-up of the S&P 500. Index funds can also be constructed to track particular sectors like consumer staples or utilities.

Index funds are different from traditional mutual funds in that they are not actively managed. There’s no fund manager calling the shots behind the scenes. There’s no one selecting stocks or changing the makeup of the portfolio. What you buy is what you get. Instead of a fund manager you get a computer that tracks the market and rebalances the fund as needed so that it matches the market index it is following as closely as possible.

So by investing in an index fund you live and die by the market index you track.

Is that good? Don’t I want to beat the market? Why should I invest in an index fund?

Benefits of Index Funds

Outperformance

Investors will generally be able to beat actively managed funds in the long run by investing in index funds.

Warren Buffet himself requested that this estate be put into index funds.

Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.” – WB

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Studies have shown that the majority of actively managed mutual funds fail to beat the overall market in the long run. In the short run some may do better than others, but time does not paint a good picture. One study followed the performance of 2,076 actively managed mutual funds from 1976 to 2006. After fees, they found that 75% of the funds failed to generate a return greater than the overall market.

By investing in an index fund you’re already doing better than 75% of the mutual funds out there.

Low Fees & Passive Investment

Index funds don’t require much management as they are passive investments. Just set it and forget it. These types of investments also allow investors to invest in a large segment of the market – easily diversifying one’s portfolio.

Additionally index funds don’t have a lot of costs associated with them like mutual funds. There are no sales commissions and because they are run by computers the operating costs are way lower!

Ok, so I get why index fund investing is such a good idea but what index fund do I put my money in?

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There are no set rules to index fund investing but here are a few things to consider.

Diversify your investment

Yes, it is true that an index fund is already a diversified investment. You could invest all your money in the Vanguard 500 and be done with it, but why put all your eggs in one diversified basket?

Most financial experts will tell you to have some sort of allocation between stocks and bonds. They’re not wrong.

One strategy is to go with the two-fund portfolio. Two Vanguard funds that fit the above profile would be the Total Bond Market index fund, which holds U.S. Treasuries, home mortgage securities and high quality corporate bonds, as well as the Total World Stock index fund, which gives you access to stocks from around the globe. Both funds comprise of thousands of securities – meaning you’re safely diversified.

Another strategy is to have international and domestic exposure in the same portfolio, as well as equity and bond exposure. This allows you to mitigate swings in the stock market. Split your portfolio equally between the Vanguard 500, which mimics the S&P 500, the Vanguard Total International Stock Index Fund, which gives you exposure to both developed and emerging international economies, and the Vanguard Total Bond Market Index fund. This way you’ve got a bit of everything. Once a year, rebalance your portfolios so that there are equal amounts in each of the three index funds you’re good to go.

Plan for the Future

If you are incredibly lazy you could even invest in a lifecycle index fund. Most finance experts recommend an allocation between stocks and bonds, an allocation that should shift more towards bonds as time goes on and retirement draws closer.

Rebalancing between equity and bonds like that can be time-consuming, unless you own a lifecycle fund. Also known as target-date funds, these investments rebalance themselves over time – shifting to more conservative assets as you age. By the time you are ready to retire your portfolio will have gone from 90% stocks, 10% bonds to 90% bonds and 10% stocks.

There you have it. The simple guide to index fund investing. There are many slight variations to the strategies outlined above but the principles are always the same. You can’t go wrong with simple portfolio choices!

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Singapore is among top 40 countries with reported official gold holdings

In the latest gold demand trends reported by World Gold Council, it was stated that Singapore central bank amassed more than 120 tonnes of gold as reserves. The amount constitutes only 2% of our reserves and the report also ranked Singapore as number 27. The top country with the most gold holding is USA, with more than 8100 tonnes of gold, followed by Germany with 3400 tonnes. Not surprisingly, North America and Europe dominated the list.

Determining the official gold holdings and demand trends are challenging, given the lack of transparency and sheer complexity of the gold market. The report by World Gold Council is based on a complex methodology of data collected from domestic sources and international trade.

The important thing that can be gleaned from the report is that there was a 17th consecutive net purchase by various governments, reflecting a sign that central banks continue to rely on gold as a form of hedge against volatile currency movements.

Given that Singapore is neither a country known for gold consumption nor a gold exporter, our strong gold holding reflects the government’s belief in the precious metal’s status as a form of holding value. This is probably because the value of Sing dollar is pegged against a basket of currencies of our major trading partners and competitors. What this means is that any swing in this basket of currencies would affect our economy growth. Thus, the gold holding would provide a form of hedge protection against currency uncertainties.

In Singapore, you can buy gold and silver bullion online from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). You can choose to self collect your bullion at BullionStar’s store, or opt for home delivery. Alternatively, you can choose to store your bullion at BullionStar’s vault storage.

There are 4 easy steps to buy your precious metals through BullionStar as described below. A more detailed step by step guide is available here.

Step 1: Place the desired products in your shopping cart. There is no minimum or maximum amount when purchasing from BullionStar.

Step 2: Click “Checkout” in the Shopping Cart to go to the checkout. Select delivery and payment method in the checkout.

Step 3: Confirm and pay for your order.

Step 4: Depending on the delivery method you have chosen, your products will be:

– Available for pick-up at 45 New Bridge Road, Singapore 059398. No appointment for pick-up is necessary.

– Shipped to your delivery address; or

– Stored for you in My Vault Storage® in our vault at 45 New Bridge Road for you to inspect, sell or physically withdraw anytime.

You can follow the order process from purchase to delivery. We will update you by sending e-mail order status updates. You will receive e-mails for order confirmation; payment confirmation; and confirmation of delivery, availability for pickup, or storage

Magically yours,

SG Wealth Builder

Greece is BANKRUPT

By Team Wall Street Survivor

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Greece is in the midst of economic catastrophe, with both political and economic repercussions on the horizon.

The Greek debt crisis is many years in the making. In 2009 the budget deficit hit 12% of GDP and all the big rating agencies such as Fitch, Moody’s and S&P, downgraded Greek debt to junk status, so named for the higher risk of the borrower, i.e. the Greek government, being unable to repay their creditors.

This only stoked fears that Greece would not be able to pay back debt and investors started to get nervous. The Greek GDP had stalled and debt levels were at crazy highs. Debt was 127% of total Greek Gross National Product in 2009!

As bond investors became nervous, yields on Greek government bonds rose sharply. That means that bonds currently being sold in the market were essentially losing value.

For example, say the Greek government issued a bond. You buy this bond for 100 Euros and the government promises to pay you 110 Euros one year from today. All of a sudden people became panicky and bond yields soar. Now that bond you paid 100 Euros for is selling for just 60 Euros on the market.

So Why Are Greek Bonds Losing Value?

Everyone is starting to believe that there is a good chance Greece is bankrupt. So whoever bought your bond would have no confidence that they would get the money promised to them. That’s why they are asking for such a steep discount to take on the risk.

Once panic sets in, it can be hard to bring the markets back. Once bond yields reach record highs no one wants to risk any money. The economic system stalls and that’s never a good thing. In Greece high bond yields essentially shut down sources of private lending. Economies depend on investment to keep growing and the tap was now closed.

Desperate Times Call for Desperate Measures

With no source of income other than taxation, Greece would find it increasingly difficult to finance their public spending. They would soon go bankrupt.

In May of 2010, the IMF along with the European Central Bank and other Eurozone countries approved a €110 billion bailout so that Greece would not default on its sovereign debt.

The condition: Greece had to impose strict austerity measures, and severely slash their spending.

When a country is already in trouble, austerity seems like the common sense solution, but in economies it can have a restrictive effect at first. Economies in this situation tend to contract first, shedding its inefficiencies and experiencing pain along the way, before finding room to grow again.

greece is bankrupt

Greece was plunged back into recession and now needed a second bailout worth €130 billion. Investors holding Greek bonds would have to accept extended maturities (instead of getting paid in 2020 they would get paid in 2030) and a 50% face value loss. This second bailout was approved in February 2012.

The Calm Before the Storm

It looked like everything was back on track. The economic outlook was promising, and Greece experienced three straight quarters of growth in 2014. Greece’s private lending market restarted; but then recession hit again in the last quarter of 2014. This happened just after a parliamentary election that resulted in the Syriza (Coalition of the Radical Left) party gaining control of the government. The Syriza would go on to refuse the terms of the bailout.

Because of all the political uncertainty – all aid was suspended until Greece either accepted the conditions once more or until a compromise could be reached.

That’s where we are now.

Greece is living pay check to pay check. No one is quite sure how much money they have left but the troubled economy had to dip into an emergency reserve account in order to make a 750 million euro payment to the IMF. Apparently 650 million euros were drained from the reserve account and supplemented with 100 million euro from the country’s cash reserves.

What is striking is that the emergency reserve account is actually funded by the IMF.

Every IMF member is allocated a portion of the IMF’s currency, known as Special Drawing Rights (SDRs). Generally countries use SDRs to bolster their currency. In nations where the currency is vulnerable to large swings and capital flight, SDRs act as a sort of buttress but it is extremely unusual for SDRs to be used to make payments.

Essentially Greece paid the IMF with the IMF’s money. Money the IMF had given Greece to use only as a last resort.

It’s a pretty desperate move.

Greece and the Eurozone are dancing dangerously around each other. Greece has been accepting bailout money since 2010 and using it to pay its bills, both at home and abroad.

Responsibility and Recession

The Eurozone is willing to lend money to Greece but only in exchange for severe austerity measures. The Greeks want the money but are unwilling to implement the changes. A proposed change to Greek pensions has been a particularly sore point of discussions.

Neither party wants a Greek default. The Euro area is already balanced precipitously economically speaking, and a Greek default could send the entire region into recession. The Greeks themselves don’t want further hardship after a nearly 6 year long recession but both parties are reluctant to be the first one to blink in this economic game of chicken.

car crash

Bond yields are rising again, and the stock market is hurting. Talks of Greece exiting the Eurozone are intensifying. It may just be rhetoric but at the same time Greece is running out of money to pay wages to government workers, keep pensions going and finance public spending.

Greek Finance Minister Yanis Varoufakis is on record saying that the liquidity situation in the country was dire and that Greece could run out of money in two weeks.

The clock is ticking.

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How to Invest in Gold

By Team Wall Street Survivor

Investing in gold can be viewed as exciting, scary, confusing, intimidating, or safe, depending on your outlook and experience. As always, knowledge is power. Here are some popular options to invest in gold successfully.

Wondering how to invest in gold?

There are many options:

• Gold coins • Gold bars • Gold certificates • Gold funds
• Gold-backed securities • Gold futures • Gold accounts

As you can imagine, the large menu of choices can be confusing to the new gold investor. Do your homework and learn about two subjects.

  1. The recent trends in gold prices.
  2. How the different gold options (coins, bars, certificates, securities, accounts and funds) are responding to recent trends.

The price of gold fluctuates.

The real time stock market prices of the various gold-related investment vehicles will also move in conjunction with or seemingly independent of the stated price of gold. As you learn the details of the choices noted above, you will also get a “feel” for the differences, beyond the obvious physical ones, that will help you successfully invest in gold.

To learn more, head over to Wall Street Survivor.

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Throwback Thursday: What is Crowdfunding?

By Team Wall Street Survivor

Courses marketplace

Have you ever had a brilliant idea that could help a lot of people? Maybe you should try raising money through the crowd, not the cloud, the crowd.

When was the last time you cleaned your ears?

For most of us, ear care is an afterthought. But for hundreds of millions of poor people living in rural India, hearing loss or impairment runs rampant. One company is on a mission to tackle this problem. The solution: the Oto-Tip by Clear Ear. The 2 month long crowdfunding campaign had a target of $30,000 but more than doubled it this summer by raising $78,000. They are on pace to start saving the world’s ears in 2015.

Here’s how it works

Not Just Ear Care

Crowdfunding has hit its stride raising $5.1 billion dollars for non-profits last year. But where does all the money come from?

The answer is quite simple really, EVERYONE!

Crowdfunding is an internet phenomenon where money for a project is raised through a large amount of people who make pledges. This way, ideas can get off the ground by raising money before the project is completed, everything from fan requested movies to giant 6-legged robots. You can help people pay their medical bills or support new medical technology.

It’s a Game Changer

Blockbuster movies spend millions on special effects, actors and marketing to get a cut of the $10 we pay at the theatre. But imagine if the movie was crowdfunded and moviegoers donated $10 to see that the movie gets made in the first place.

And that’s why crowdfunding is so powerful. Ideas get funded based on merit, instead of their profit potential.

Crowdfunding sites like kickstarter and indiegogo, are helping brilliant ideas become reality by fostering a place to raise money and awareness from strangers.

But It’s Not All Charity

Crowdfunders might get free admission to the movie’s advanced screening. Other options exist depending on the size of the donation. While most donations are for less than 100$, large pledges could be met with a special thank you in the credits or signed memorabilia.

The crowd works because of a few human desires. One of them is that people like feeling at least partly responsible for the success of others. Which is why pro sports teams are so popular. But humans also strive to be a part of a bigger picture. An example of this is the modern green movement toward sustainability.

Aside from just raising money, crowdfunding a project can have lots of other benefits as well. The massive amount of people who are investing will probably also buy the product and talk about it with their friends. Inevitably their ideas spread to social media and in rare cases go viral. When investors see that a project has garnered a lot of attention – and money, it gains legitimacy.

The Ultimate Test

With the advent of crowdfunding comes a new source of capital. Big time investors sink large sums of money in new companies but prefer established projects. With crowdfunding, riskier ventures are able to get off the ground. Projects don’t always reach their fundraising target, and sometimes they can be significantly over or under. This can be seen as a litmus test for success or failure, because when people believe in your idea, they vote with their wallets. Effective crowdfunding campaigns don’t just raise money, they get people talking, and this exposure helps launch their startup even higher. After all, you can trust the wisdom of the crowd.

Did you pledge money to any startups? Let us know in the comments. If you haven’t, what are you waiting for. It has never been easier to change the world.

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What is Short Selling?

By Team Wall Street Survivor

Have you ever heard someone use the term Short Selling, or simply Shorting and wondered what they were talking about?

Look no further, shorting is actually quite basic and fundamental to investing.

We all know that if we think that a stock, say APPL, is going to go up we can buy some APPL stocks and be proud of our investing decision.

But what if we thought the price was going to go down? We would do the opposite of buying APPL, we would sell it.

But what is short selling?

Seems simple enough, but how does selling APPL make any sense? If we don’t own APPL how do we sell it, and even if we did, how does selling it help other than to mitigate the losses we would have suffered?

Enter Short Selling

Shorting a stock means that you borrow the stock, sell it today, and then have to buy it back later to cover your position.

Therefore if you sold it at today’s price, and you believe the price will go down, you can buy it back later for less.

This is a very basic example but its that simple!

To learn more head over to Wall Street Survivor.

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3 Ridiculous Cases of Herd Behaviour

By Team Wall Street Survivor

herd behaviour

Herd behaviour is the tendency for individuals to mimic the actions of a larger group. Individuals in the group make decisions that they normally would not have otherwise.

In the world of investing this herd behaviour can lead to prices of certain assets being driven up to ridiculous proportions. Unfortunately this often leads to a big crash soon after.

The Dutch Tulip Mania

One of the most famous and earliest financial bubbles was the Dutch Tulip Mania of the 1600′s. Back then the Netherlands were already quite fond of tulips and collecting things in general.

Tulips proved to be a fantastic gentlemanly pursuit for Dutch men. There were many varieties to be examined, and by the 1630′s many tulip brokerages started to pop up around the country.

At first trade was limited, but as professional growers entered the market the prices rose higher and higher. That’s when the speculators came out.

Things got out of hand quickly. A popular bulb went from 125 florins a pound on New Year’s Eve 1636 to 1500 florins by Feb 3, 1637! That’s 10 times the annual salary of a skilled craftsman.

Here are 3 other collecting fads that got way out of hand:

Beanie Babies

In the late 1990′s, Beanie Babies became huge – people were buying and selling rare Beanie Babies for as much as $5000 and expecting their collector’s item to keep on rising in value. Gullible children and irresponsible adults alike were taken in. Collectors would keep each toy’s price tag attached so as not to destroy the value of the Beanie Baby – said to fall by 50% once the tag was removed.

Ty Warner, the creator of the toys did a brilliant job of manipulating supply and demand. He only sold small batches of each new Beanie Baby, refusing to deliver large quantities to bigger distributors. He would also “retire” each Beanie Baby after a short time – creating a weird sort of obsession not unlike the hysteria that comes with the launch of a new Apple product.

herd behaviour

There is a video called “How to Spot Counterfeit Beanie Babies”, the title of which speaks volumes. It’s also incredible that people thought Beanie Babies would be worth thousands of dollars in the future. The 1998 edition of the “Scholastic Beanie Baby Handbook” listed the 1998 prices of various Beanie Babies, when they were first released, as well as their estimated price in 2008.

Strikes the Dark Tiger was estimated to reach $1000 in value by 2008. If you held on to Teddy the violet bear until 2008 then you could expect to grab a cool $4000-$5000.

These days you can grab a Beanie Baby for $10 on eBay.

Baseball Cards

OK so there are definitely a few baseball cards that could change your life.

The most valuable baseball card of all time is the Honus Wagner T206. When it first came out in 1933 the card was listed for a price of $50, making it the most expensive baseball card in the world at the time. There were only 40 cards ever distributed and the Wagner T206 would go on to rise sharply in value over the years. The card exchanged hands numerous times, on each occasion taking pause to skyrocket in value. In 2000, the card was sold for $1.27 million, then again for $2.35 million before being sold again to the owner of the Arizona Diamondbacks for a cool $2.8 million!

herd behaviour

From the 1950’s to the 70’s the baseball card market was pretty quiet. A few collectors traded between each other but vintage baseball cards exploded in the 80’s and into the early 90’s. There were a few reasons.

  • The media latched onto baseball cards and hyped them up as collector’s items.
  • Price guides appeared, like Beckett Baseball Card Monthly, providing sources of market valuation for these cards.
  • Wall Street started to talk about baseball cards as legitimate investment alternatives to stocks.

At its height the number of dealers reached 10,000 with industry sales topping $1.5 billion in 1992. Today, there are 200 dealers of baseball cards and industry sales are a paltry, by comparison, $200 million.

The bubble would burst in spectacular fashion by 1993. Competing baseball card manufacturers who flooded the market and print runs of cards that numbered in the millions turned once valuable cards into worthless pieces of cardboard. Baseball cards had become such an expensive hobby that kids had moved onto to more practical pursuits. Making way for video games and pogs, and leaving the world of baseball card trading to middle-aged men who disguised their hobby under the thin veneer of investment.

Comic Books

Best… Fad… Ever…

At one time comic books were all over the place and worth about a dime per issue. By the mid 1980’s there were numerous specialty shops that only sold comic books and a sizeable collector’s market had formed.

From 1985 to 1993, comic book speculation reached its highest levels.

A copy of Action Comics #1 – marking the first appearance of Superman – cost $5000 in 1984.

Detective Comics #27 – the first appearance of Batman – sold for $55,000 in December 1991. That same year, Action Comics #1 fetched an eye-watering sum of $82,500.

Once again the media had been involved – profiling the earning potential of comic books and getting more and more eyeballs onto the scene. Mainstream comic book publishers started to pander to the collector’s market, releasing issues with special covers and gimmicks that they knew enthusiasts would go nuts for.

fad4

Source: www.newsivity.com

The comic book bubble collapsed between 1993 and 1997, a time period in which two-thirds of all comic book specialty stores would shut down.

Retailers ignored the fact that while certain issues sold well, many of the comic books they ordered sat collecting dust on the shelves. The market had become oversaturated over time and eventually went bust. The comic book giant Marvel, the company responsible for the Avengers movie you likely saw this month, was even forced to declare bankruptcy in 1997.

How Speculative Bubbles Work

Each one of the fads described above is an example of a bubble and every bubble has four basic phases:

  1. A grand new development that excites the markets
  2. Intense euphoria over the development
  3. A boom in sales and speculation
  4. Panic, as the boom turns to bust

Often the people who make money in mania markets are speculators who sell to other speculators. They are the lucky ones who get to exit the market while others are left holding the ball.

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BullionStar launches new silver products and bullion competition

Below is a newsletter from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation.

Nadir Silver Bar Promotion 

Nadir Silver Bars are produced by the LBMA certified Nadir Refinery. The Nadir Silver Bars known for their attractive price premium offering investors more silver for their money.

Nadir is one of very few LBMA certified companies to produce 250 gram and 500 gram silver bars. As the price per gram for these bars is lower than for coins, they may serve as a good alternative to silver coins.

We currently run an exceptional time-limited offer for these silver bars reducing the price premium as much as 40 % compared to the normal price! The offer is valid until 24 May or while stocks last.


Nadir Silver Bar 250 gram

Current time-limited price: Spot price of silver + 9.9 % regardless of quantity bought!

Nadir Refinery Silver Bar – 500 gram

Current time-limited price: Spot price of silver + 8.4 % regardless of quantity bought!

Nadir Refinery Silver Bar – 1 kg 

Current time-limited price: Spot price of silver + 7.9 % regardless of quantity bought!

 

Video Competition 

Let your creativity loose and shoot a video of your bullion bought from BullionStar to Win Big!

Record a video with bullion bought from BullionStar. We’ll leave the ideas up to you. Perhaps you want to shoot your bullion together with Singaporean landmarks or talk about how you stack bullion from BullionStar.

The length of your video must be between 15 seconds and 3 minutes. E-mail your video or a link to your video to support@bullionstar.com no later than 21 June to stand a chance to win the below prizes at our 3 year anniversary in the beginning of July.

1st prize: 30 oz silver bars from Heraeus
2nd prize: 10 oz silver bar from Heraeus
3rd prize: 5 oz silver bar from Heraeus

The jury consists of the BullionStar staff members. BullionStar reserves the right to the usage of the videos sent in. BullionStar reserves the right to issue more than three prizes in case there are more than three suitable videos or less than three prizes in case there’s not enough suitable videos sent in. The jury’s decision is final.

Kind Regards
BullionStar

Never read the news like the bible

By Property Soul

Did you notice that when you flipped the newspapers in 2012 and 2013, all the articles on properties were about ‘the next hotspot, ‘property boom continues’, ‘robust sales in projects’ and ‘achieved record high’?

Did you notice that fast forward to 2014 an 2015, the same media published articles consistently on ‘lower transaction volumes’, ‘drop in property prices continues’, ‘rental market continues to soften’, ‘more bank sales” and “lowest in six years’?

Have you asked the question why there were few articles in 2012 and 2013 warning buyers to be conscious about the overheated market?

Have you asked the question why there was almost an absence of articles in 2014 and 2015 mentioning the pockets of opportunities in this bleak property market?

Have you ever wondered why the media can flip-flop on their opinion and outlook of the market within such a short time?

Have you ever wondered why a project or a district that used to be the media’s favorite can become a snub overnight?

A review of newspaper headlines on property over the past three years can give you a better idea on what is happening.

Iskandar properties: Once a cult, now a doubt

1. Headlines with positive outlook

  • Iskandar condos now investors’ darling (The Straits Times, Jun 15, 2013)
  • Singaporeans snap up Danga Bay units (TODAY, Aug 19, 2013)
  • Most foreign buyers of UEM’s Iskandar homes are S’poreans (The Straits Times, Sep 22, 2013)
  • Iskandar property is hot commodity for investors: Poll (The Straits Times, Oct 07, 2013)
  • 2. Headlines with pessimistic view

  • Don’t rush to buy into ‘hot spots’ (The Straits Times, Mar 18, 2014)
  • Iskandar: Too many homes, too soon? (The Straits Times, Jul 11, 2014)
  • Is Malaysia’s Iskandar losing its shine as a property hot spot? (The Business Times, Jun 26, 2014)
  • Oversupply by China developers sparks uncertainty over Iskandar’s rental yield (TODAY, September 30, 2014)
  • Iskandar ‘housing glut’ may hit rents (The Business Times, Oct 01, 2014)
  • Iskandar needs economic activity for housing market to take off (TODAY, Oct 4, 2014)
  • Home prices in Johor slide in second quarter (The Straits Times, Nov 4, 2014)
  • Housing glut worries over Johor’s mega projects (The Straits Times, Feb 23, 2015)
  • Executive Condominium: Good buy or good-bye?

    1. Headlines with positive outlook

  • Tampines EC ‘presidential suite’ to be priced at $2.05m (The Straits Times, Dec 27, 2012)
  • Eyeing an EC? ‘Golden period’ to buy is here (My Paper, Aug 18, 2014) (My Paper Advance seminar on Aug 17 what to consider when buying an EC)
  • Jurong EC draws record number of applications (The Straits Times, Oct 12, 2014)
  • 2. Headlines with pessimistic view

  • EC upgraders may take big loan hit (My Paper, Dec 11, 2013)
  • One in eight EC units left vacant in Q2 (The Straits Times, Aug 18, 2014)
  • No one home as executive condominiums wait for occupants (The Straits Times, Nov 17, 2014)
  • Choices aplenty for EC buyers this year (The Straits Times, Apr 18, 2015)
  • Commercial Property: Is it hot or not?

    1. Headlines with positive outlook

  • Investors look into commercial property (The Straits Times, Dec 25, 2011)
  • More switching to commercial property: banks (The Business Times, Dec 14, 2011)
  • Strata commercial properties see record sales (The Business Times, Jul 19, 2012)
  • 2. Headlines with pessimistic view

  • Global economic uncertainty casts pall on industrial property (The Business Times, Oct 10, 2013)
  • Occupancy rate of industrial properties falls to lowest level since 2007 (The Straits Times, Jul 24, 2014)
  • Prices, rentals of Singapore industrial space continue to moderate in Q3 (The Straits Times, Oct 23, 2014)
  • Shophouse deals continue to languish (The Business Times, 14 Apr 2014)
  • Strata industrial units looking to fill the void (The Straits Times, 9 May 2015)
  • Shoebox units: When the hype fades

    1. Headlines with positive outlook

  • The rise and rise of shoebox units (The Straits Times, Sep 12, 2012)
  • Buyers with HDB addresses drive demand for shoebox units: DTZ (The Business Times, 25 May 2012)
  • For many, the shoebox fits (TODAY, May 17, 2013)
  • Shoebox units lift resale home prices (The Straits Times, Aug 31, 2013)
  • 8,700 shoebox units for resale from now to 2017 (The Business Times, Oct 23, 2013)
  • 2. Headlines with pessimistic view

  • Private home resale prices drop 0.4% in Feb, dragged down by ‘shoebox’ units (The Straits Times, Mar 28, 2014)
  • Suburban shoebox units: Bottom falling out of sector? Experts say flood of new homes next year likely to put pressure on rentals (The Straits Times, Sep 2, 2014)
  • Shoebox units ‘hit by weak leasing market’ (The Straits Times, Dec 1, 2014)
  • Rentals of shoebox units may fall 5%-10%: Analysts (Channelnewsasia, Dec 27, 2014)
  • Gloomy outlook for shoebox units as their numbers rise (The Straits Times, January 29, 2015)
  • Measures to curb excessive shoebox units yield mixed impact: study (Business Times, February 2, 2015)
  • Lessons learned

    1. Read with a pinch of salt

    When developers are launching new projects, they have to buy advertising time and space from the media to get the desired publicity and attention. Wide media coverage is the result of their efforts in advertising, public relations and editorial contribution.

    Nonetheless, the media have no loyalty to anything or anyone they have reported previously. When the tide reverses, or when something gets out of favor, they can immediately shift gear to cover the story in a completely different angle.

    2. Get first-hand information

    The press is only capable of reporting what has happened or what is happening. But they are poor in predictions and are not in a position to tell what is going to happen next.

    As property buyers and investors, it is important to step into the market to have a feel of what is happening. It helps tremendously if you are an active agent, buyer, seller, landlord or tenant in the marketplace.

    Take the hints from your observations: Are foreign investors losing interest of your market? Do you see transaction volumes increasing or decreasing at a slower pace? Are owners taking longer or shorter to rent and sell their properties in the market?

    3. Form your own judgment

    The job of the journalists is to look for news or stories and report them. It is not their obligation to do a serious research, followed by an in-depth analysis and a detailed report on any subject.

    Like what Jim Rogers said in A Gift To My Children: “The media often propagates conventional wisdom. Judge the content of stories in the media and turn their inaccuracies to your advantage.”

    Savvy investors all have individual thinking. They know how to digest the news slowly and in moderation. They understand that there is no need to be too excited when the media say something is hot. Similarly, it is not necessary to be too pessimistic when the media say the worse has yet to come.

    Individual judgment is about the wisdom of not believing everything you hear. Like what they say: If you are serious, you lose.

    Read more here:: Never read the news like the bible

    Why Mutual Funds Are a Bad Investment

    By Team Wall Street Survivor

    mutual funds

    Mutual funds experienced a surge in popularity from the 80’s and 90’s. In 2013, nearly half of all U.S. households owned mutual funds. It’s easy to see why mutual funds are so attractive: they’re easy to buy, they’re easy to sell and they offer instant diversification.

    What are Mutual Funds?

    A mutual fund is a professionally managed investment vehicle. A mutual fund pools money from investors and has a fund manager calling the shots behind the scenes. This makes a mutual fund an ‘actively-managed’ investment. Instead of managing your investment yourself, you hand over that responsibility to someone who is a professional with a proven track record of making money in the market.

    While it is tempting to think that a mutual fund is a hedge fund – that would be incorrect! Mutual funds are not hedge funds, because mutual funds can be sold to the general public, unlike hedge funds.

    The benefits of owning a mutual fund are two-fold. Investing in a fund managed by an investment professional saves you time, time that could be used to do the things you love. There’s often a peace of mind that comes with knowing your investments are in the hands of someone who knows what they are doing. Another benefit to investing in a mutual fund is that as a small investor, one can get access to professionally managed portfolios, through the fund manager, that you might not be able to have access to otherwise.

    Here’s how it works. You pick a fund you like and buy shares of said fund, then sit back and let the money manager pick the stocks he thinks will yield the best return. It’s almost always made up of a collection of stocks – instant diversification. If one stock goes bust, it shouldn’t affect the fund too greatly.

    The Reality

    On the face of it, mutual funds are an easy way to gain exposure, i.e. risk money in the markets, as well as being a way to diversify an already existing portfolio but here’s the dirty secret of mutual funds: most of them fail to beat the market.

    One 2010 study followed the performance of 2,076 actively managed mutual funds between 1976 and 2006. After accounting for fees, they found that 75% of them returned zero “alpha”, or return in excess of some benchmark, usually something that mimics the overall market such as the S&P 500. That does not mean the money managers didn’t make money for their investors, just that they could not beat the benchmark they were being measured against.

    Only 0.6%, showed any consistent returns in excess of the benchmark index. 0.6%, which is ‘”statistically indistinguishable from zero”, in the words of the researchers who conducted the study.

    So you’re unlikely to pick a mutual fund that will outperform the market, and the annual fees can really take a bite out of your return. The expense ratio fee, between 0.5 and 1.5%, is the fee the fund manager takes home. If you’re invested in a smallish mutual fund ($500 million) then the fund manager is taking home anywhere from $2.5 to $7.5 million!

    mutual funds

    Take note: the average size of a U.S. mutual fund is 1.58 billion.

    Then there are administrative costs, and something called the 12B-1 fee, which uses the money accrued to pay off brokerage commissions as well as promoting the fund. You are essentially paying the fund to advertise itself so it can get more customers!

    Then there are loads…

    Loads are fees a fund uses to pay sales people or other intermediaries for selling you the fund. So say you bought a mutual fund with a 5% front-end load through your bank, Washington Mutual. You invest $1000, of which $50 goes to the bank and the rest is invested in the mutual fund. It’s called a front-end load because it happens before the money is ever invested.

    Back-end loads are more complicated. You may end up paying a back-end load fee if you sell the fund within a specified time frame, sometimes up to 7 years.

    mutual funds

    Source: www.grinningplanet.com

    If you must buy a mutual fund, stick to a no-load fund. The lack of fees means more of your money is at work – an ideal scenario. Stick to discount online brokers and stay from fees!

    What’s a guy to do?

    Luckily, there are other options.

    You could invest in a very specific type of mutual fund: the index fund. Instead of being actively managed by an investment professional, index funds are a constructed to track some market index, for example: the Dow Jones.

    Index funds are a form of passive investment and the advantages are simple. You don’t have to worry about picking a money manager who will eventually lose you money. Just track the market and watch your money grow.

    You also get to save greatly on fees. Index funds are passively managed, so there are no “star” managers taking a cut of your hard-earned dollars. The fees on index funds are generally lower than 0.2%. The Vanguard 500 Index Fund (VFINX), which closely follows the S&P 500, has an expense ratio of just 0.17%.

    Buying a mutual fund is a sucker’s bet. “The fund industry costs investors billions in lost returns every year – while coining money for itself, its employees and its distributors.

    Warren Buffett himself suggested that the common investor is better off invested in index funds.

    If you were to rank the top equity mutual funds in 2009 and look at the top 25% , as the research team at Standard & Poor’s did, and look at how that composition changed over time you would be very disappointed.

    Only 2 out of 2,862 funds managed to consistently outperform their peers over a 5 year period.

    What’s the chance the fund you picked was one of those two?

    mutual funds

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    Are There Safe Stocks to Buy?

    By Team Wall Street Survivor

    “Are there any safe stocks?” This is a popular question, particularly from new investors. Cruel reality answers, “No.” By definition, if there ever was such an entity, it is now extinct.

    However, some stocks are certainly safer than others. All stock market investing basics will advise you that equity investments (common and preferred stocks) offer no guarantees of anything. Even dividend stock investing data sources will advise that the past history of dividends paid to shareholders offers no assurances that dividends will be paid in the future.

    A stock trading course might note that there are perceived “safe stocks,” so named because they have long histories of continued growth, profits, and dividend payments. Throughout the twentieth century, stocks like IBM, CocaCola, Procter & Gamble, and Microsoft, to name a few, have consistently grown in value, enjoyed two-for one (or more) “splits,” and have earned the term safe stocks.

    Use this rule of thumb when looking for safe stocks. Examine those stocks with a consistent history of growth and profits, paying closest attention to their return on equity (ROE), to find the safe stocks, be they large or small cap. Analyze how they are reacting to current
    economic conditions to become comfortable that they should continue their performance.

    To find out more, head over to Wall Street Survivor.

    The post Are There Safe Stocks to Buy? appeared first on Wall Street Survivor Blog.

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    Alibaba’s IPOpen Sesame: Throwback Thursday

    By Brandy Adler

    US and china working together illustration design over white

    Alibaba’s IPO: Everything You Need to Know

    Hearing a lot about Alibaba in the news recently? Not sure who they are, what they do, or why Wall Street is making such a fuss about a company you’ve never heard of until now? Not to worry, Wall Street Survivor is here to help.

    What is Alibaba?

    Simply put, Alibaba is an e-commerce company based out of China. It was founded in 1999 by Jack Ma, and now includes several online vehicles.

    • Alibaba.com: the first Alibaba site, which serves primarily as a business-to-business marketplace and has customers globally (yes, even companies in the United States).
    • TMall.com: an online retailer with dedicated shops from brands all over the world…basically an enormous Amazon. The upside for the retailers? Access to the Chinese market. The upside for Alibaba? They take 5 percent of all sales.
    • Taobao: another e-commerce destination, but this time for consumer-to-consumer sales…basically an enormous eBay.
    • Alipay: an Alibaba owned payment platform for transactions done online.

    So, imagine a company that offers the services of Amazon, EBay, and Paypal combined. It’s BIG.

    It’s so big, in fact, that according to Forbes, itaccounted for 80% of China’s estimated $300 billion in online shopping last year.” Or, as explained by BusinessWeek, “A better measure of Alibaba’s power is the volume of merchandise sold through its various properties: $248 billion in 2013. Amazon did about half that; EBay, a third.”

    What is an IPO?

    IPO stands for “Initial Public Offering” and takes place the first time that a private company issues stock to the public. A company may choose to go public as either a method of raising capital, a way to return value to shareholders, or both.

    Typically, an Investment Bank works with a company before listing to determine three key values: the company’s total worth, the percentage of the company’s total worth that will be made public, and the dollar value per share at which the stock will be sold. (These values are still being determined for Alibaba.)

    But don’t take my word for it; let this helpful Wall Street Survivor video explain!

    Why is this IPO a big deal?

    Alibaba has plans to go public on the New York Stock Exchange after Labor Day, and Wall Street is primarily abuzz about it because of its size. This IPO is BIG. It has been valued at anywhere between $130 and $275 Billion and is rumored to raise more than $20 Billion in its initial offering.

    To put that in perspective, Facebook made waves last year when they raised $16 billion. You did the math right; Alibaba is projected to raise 25% more. Indeed, $20 billion would make Alibaba the largest IPO ever… ousting current title-holder Visa which raised $17.9 billion in 2008.

    Why do I keep hearing Yahoo’s name in Alibaba news?

    Yahoo owns roughly 23% of Alibaba. As announced during their latest earnings release, they will sell 140 million shares when Alibaba goes public, which, depending on just how highly BABA is valued, should be a serious boost to Yahoo’s financials.

    While considering that, according to the New York Times, Yahoo’s ownership of Alibaba contributes to more than half of Yahoo’s current market cap, you can see why YHOO stock owners are especially interested in the BABA IPO.

    Before news of Alibaba going public was announced, many US investors had used YHOO shares as a way to invest in Alibaba . Good news for Alibaba meant good news for Yahoo. Of course, once the big day approaches, and investors can freely buy BABA shares outright, YHOO owners will have to start evaluating the success of Yahoo a bit differently. That’s why you are seeing headlines like “Marissa Mayer’s Post Alibaba Reckoning.”

    How can you buy Alibaba shares?

    Unfortunately only Institutional investors will have access to Alibaba’s shares before the IPO. However, once BABA officially hits the market, you will be free to buy shares via the NYSE on your online brokerage account.

    Does it matter that the company is based in China?

    Yes and no.

    Yes, despite its origins in China, you will be able to buy and sell its shares as you do any other listing on the NYSE. However, Alibaba did have to go through some regulatory hurdles to secure that listing. For example, it had to incorporate in the Cayman Islands and utilize a “V.I.E.” or variable interest entity structure. This is why if you choose to buy BABA stock, your shares will read “Alibaba Group Holding Limited” and not “Alibaba China.”

    But no, you will not be able to include BABA on purchases of several indices or mutual funds. Their Cayman Islands address will necessitate that Alibaba be excluded from the S&P 500, for example, which requires that its companies be held in the United States. Exclusion from the indices will also lead to exclusion from certain mutual funds; as the Wall Street Journal notes, “if a stock isn’t in a certain index, some funds can’t buy it.”

    There are other factors making fund managers wary of BABA as well. The V.I.E. structure is considered risky by many, because Chinese courts have invalidated V.I.E. structures in the past. There is also a question of asset value, as a number of Alibaba’s assets will remain in China and not be owned by the “Alibaba Group Holding Limited” in the Cayman Islands.

    Finally, there is Alibaba’s unusual structure for board appointments. In fact, it is partly this structure that led to Alibaba choosing to list in the United States at all. Per BusinessWeek:

    “A unique stock structure, which gives the founders enhanced rights on board appointments, made it impossible for Alibaba to list on Hong Kong’s stock exchange, whose bylaws forbid such arrangements.”

    What does this IPO mean for Chinese companies?

    Although we won’t see for sure until BABA officially goes public, some analysts believe that Alibaba’s entrance into the market will hurt other Chinese companies. Because many portfolios allocate a fixed percentage for foreign companies; buying Alibaba would mean selling other Chinese stocks. Per Henry Guo of ABR,

    “Funds tend to limit their exposure to individual countries, and they may have to sell some companies to make room for Alibaba.”

    Of course, if Alibaba’s IPO is successful, it may lead to investors paying increased attention to the Chinese market as a whole. A rising BABA stock price could raise all other Chinese stocks like “a rising tide raises all boats.” It will be interesting to see how the sector reacts to this new behemoth in the market.

    What is the outlook for Alibaba now and in a year?

    Short term, Alibaba has begun looking westward, not only for their IPO but also for new customers. For instance, they have been investing in western, and specifically American, tech companies. Names from the likes of Lyft, Fanatics, and Tango have all benefitted from Alibaba support, presumably as the Chinese giant attempts to begin targeting the American consumer.

    Long term, analysts foresee Alibaba continuing to expand its footprint on the ever-growing e-commerce space. According to Money Morning Executive Editor Bill Patalon,

    “By 2020, China’s e-commerce market will be worth more than the United States, the United Kingdom, Japan, Germany, and France combined”

    Sheesh, that’s some aggressive growth. And consider that this estimate only includes the company’s growth in China…imagine the numbers Alibaba will be putting up if it’s successful in its western expansion.

    This is the bull case, of course. Some others worry that the regulatory concerns coupled with the current grand expectations will lead to a letdown once Alibaba hits the market.

    Now it’s your turn, are you planning to get in on the Alibaba IPO? Have e-commerce titans like Amazon and EBay finally met their match? Let us know in the comments below.

    The post Alibaba’s IPOpen Sesame: Throwback Thursday appeared first on Wall Street Survivor Blog.

    Read more here:: Alibaba’s IPOpen Sesame: Throwback Thursday

    What is a Dividend?

    By Team Wall Street Survivor

    Have you ever heard someone justify an action because it will “pay dividends”? What they really mean is that their action will cause good results for them in the future. In the financial world, dividends are a bit different.

    So What is a Dividend, Exactly?

    A dividend is when a company distributes a small portion of their earnings to shareholders. Dividends are usually cash payments and happen a few times a year to reward people who buy their stock and increase the stock’s value and attractiveness in the marketplace.

    Not all companies issue dividends. In fact, its typically older companies that have matured that give out regular dividends. Newer companies usually choose to retain their earnings and focus on growth rather than pay out dividends to shareholders. To learn more about dividends, head over to Wall Street Survivor.

    The post What is a Dividend? appeared first on Wall Street Survivor Blog.

    Read more here:: What is a Dividend?

    Frightening Truth about Investment-Linked Insurance Policies

    Last month, the Monetary Authority of Singapore (MAS) launched compareFIRST with Consumers Association of Singapore, Life Insurance Association of Singapore and MoneySENSE. compareFIRST is a portal that contains information on life insurance products offered by all the life insurers in Singapore. However, way before the website was launched, last year, SG Wealth Builder had an opportunity to meet up with Brendan Yong, of BeMoneySavvyToday.com.

    Unlike me, Brendan works in the financial industry for 11 years and is a veteran when it comes to insurance matters. Nevertheless, both of us shared the same belief that insurance is a form of protection, and never meant for investment purposes. In that meeting, he revealed a frightening industry secret on investment-linked insurance policies.

    When touched on the topic that there was an initiative by MAS to promote online direct purchase for insurance products, Brendan gave out hearty laugh and commented “Of course I knew as I work in the industry and as a matter of fact, MAS had a round of consultation on the proposed move”. However, Brendan dismissed that such a move reflected that consumers are ready to purchase insurance products directly from the insurers. He shared that financial planners and insurance agents still has a role in helping consumers make the most informed choice when it comes to buying the most suitable insurance products.

    BeMoneySavvyToday

    Brendan Yong

    “Look Gerald, basically you still need insurance agents and financial planners to advise you on how the insurance product works and whether they are suitable for you or not. There is no way to know all the nuances and details from the website without someone explaining in details what does each feature entails. Furthermore, the way an applicant declares his health status is also important and can affect his insurance application or even coverage. So moving forward, insurance agents and financial planners would still have a role in aiding consumers and technology can never replace this human touch.” Deep in my heart, I agreed with him on this point wholeheartedly because more than 10 years ago, when I applied for private shield plan for my late father, it was rejected on the premise that he had declared that he got high blood pressure, hence, he was deemed too high risk to be covered by the insurer.

    Brendan went on to share that his concern was not competition from direct purchase, but rather Singapore consumers making the wrong decisions when it comes to purchasing insurance policies. He revealed that many Singaporeans were led into buying investment-linked insurance policies that were not meant for protecting the financial welfare of the policy holders and he even described these products as “time-bombs”. In addition, he also added that Mr Tan Kin Lian, ex-CEO of NTUC Income admitting “ALL ILPs are bad”. Sound sobering but just how bad are investment-linked insurance policies? Personally for me, I had been approached by many insurance agents to buy ILPs before but I had never buy one because I don’t really understand the mechanics of such product. Brendan patiently explained to me how ILPs work.

    Traditional life policies pool premiums from policy holders and injected the fund to a fund manager who will than invest in a portfolio of stocks and bonds. Expenses and claims are then deducted before the profits are distributed to holders in the form of declared bonuses. Typical, the credit rating for the industry is $1 per $1000 sum insured, plus 1% per year. Once declared, the bonuses cannot be reversed and hence over time, the cash value will gradually build up.

    Investment-linked insurance policies work differently as the premiums are used to purchase unit trusts instead. In the first few years, not all the premiums are channeled to buy unit trusts but instead used to cover distribution costs. The remaining fund is then used to buy unit trusts, less sales charges typically 5%. The most important thing to note is that insurance charges are deducted, along with policy fees, by selling units, on a monthly or yearly basis. The most outrageous thing is that the insurance charges do not increase linearly over the years, but exponentially. What this means is that the policy holder may face the situation of having to top up his policy to pay his insurance coverage because the units in his policy might have all been deducted to zero.
    After listening to what he told me, I was felt sicked in the stomach. How can people conjure such a way to make money? Brendan shrugged off and reiterated that there would always be black sheep every industry and investors must always stay vigilant, otherwise, they might lose ten of thousand dollars. The worst thing, he emphasized, is discovering the painful mistake when crisis happens or during the twilight years when you need the fund for retirement.
    Magically yours,
    SG Wealth Builder

    Buying My First Private Property 1-Day Workshop

    In today’s article, SG Wealth Builder is pleased to catch up with Property Soul on her upcoming property workshop. Property Soul is one of the most well known property bloggers in Singapore  and is the author of the best selling book “No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets to Building Wealth Through Properties”.

    Can you share with the readers what are the key takeaways they can expect from your upcoming Buying My First Private Property 1-Day Workshop?

    They will learn how to save faster to buy their first property, and what is the highest property price that they can afford. They will know where the hidden traps are, and what properties to buy or avoid for first time buyers. They will also pick up tips on negotiation skills, housing loans and dealing with lawyers and property agents.

    This workshop is basically designed for first time private property buyers to help them avoid all the costly mistakes that would have cost them thousands times more than the small fee of the workshop.

    What are the general profile of those who attended your seminars and workshops? Property investors, upgraders or first time property buyers?

    It depends on the topic of the talk or workshop. For Buying My First Private Property 1-Day Workshop, the participants are mostly first-time buyers, HDB upgraders or aspiring investors. For talks like “Everything You Want to Know About Property Auctions and Mortgagee Sales” and “Buy, Fix and Profit from Old Houses/Apartments”, there are more savvy investors or investors who own multiple properties.

    20150321_094140s 20150321_094150_s

    You have built your wealth through properties at a time when Singapore has not implemented the cooling measures. Against the current backdrop, would you agree that the bar has been raised for property investors? Do you think that the measures could have been more targeted?

    No matter what time you buy, there are opportunities and risks. Yes, I bought during the time when there were no cooling measures. The government even rolled out different measures to stimulate the market. But there were few takers. Why? Because buyers at that time had to deal with bad economy and high unemployment. Prices would continue to drop lower and no one would know when the property slump would end.

    The root problem is not about the cooling measures. Investors should ask themselves the fundamental questions: Why they cannot get the financing they need? Is it because they are already over-leveraged? Is the property value above their affordability? Are private properties overpriced these days?

    The cooling measures are implemented to ensure the sustainability of the property market. Let’s face it: If you can’t borrow for it, you actually can’t afford it. So don’t blame the restrictions in financing any more. The outcomes of these cooling measures are definitely much better than widespread mortgage defaults or massive negative equities when the market changes direction next time.

    In terms of liquidity and capital needed, real estate fares the worst among equities, bonds and bullion. Why are you still an advocate of property investment?

    I agree that property is a capital-intensive and illiquid asset. Nonetheless, it never fails to give me the thrill of finding that good deal. And because of the magic of financing, a 20 percent deposit means a multiplication of five times your initial investment when the value of your property doubles. This is in addition to the positive rental return you pocket every month. This is difficult to achieve in other types of investment, even if you manage to find a very good stock or bond.

    Of course, whether your property investment can make a handsome profit, or can ever make a profit depend on when and what price you buy. Only developers, property agents or mortgage brokers will tell you that any time is a good time to buy : )

    Some developers have complained that the slew of cooling measures implemented by the government has driven local investors to a corner and led to a wave of overseas property investments instead. What are the dangers that local investors should look out for in overseas property investments?

    All types of property investments, whether local or overseas, are business ventures that the investors have to calculate return on investment and hidden risks. There is nothing like settling for less to get a cheaper alternative. If you buy the wrong thing, you still have to face the music one day.

    Buyers of overseas properties must beware of the political, economic and legal risks, as well as the challenges in remote management of an overseas property. Do note that whatever you buy outside of Singapore, you are on your own and no longer protected by the Singapore laws. (Read my blog post “Three biggest risks buying overseas properties” which is an abstract in my book No B.S. Guide to Property Investment.)

    Three advices I would like to share with buyers looking outside Singapore:
    1. You know best the market you live in. Only invest in what you are familiar with. Avoid buying in markets that you know very little about.
    2. Only invest in an overseas market if the return proves to be much better than what you can get at home; otherwise it doesn’t worth your time and effort.
    3. Instead of just looking at what you are offered, fly to the country to find out what are available and get first-hand information about the real picture of the property market there.

    You have set up Property Club Singapore, written a book and is also conducting seminars and workshops. How do you juggle your time between your work, family and your passion?

    I don’t ‘juggle’. I just avoid the ‘hustle’ by doing what I enjoy doing and outsource the rest : )
    I also realize that I can optimize my levels of energy and productivity by living a healthy lifestyle and keeping myself in good mood. To me, the latter can be easily done with some ‘me time’.

    Of course like most people, I do have my bad days, like knowing that my young kids fall sick or having to deal with a difficult situation at work. If I have to take on a challenging project or an undesirable task, I try to focus on the enjoyable aspect of it, no matter how trivial it is.

    Vina Ip (a.k.a. Property Soul) is a property enthusiast. She bought her first condominium unit for rent in
    2002. In the next 4½ years, she built up a portfolio of five private properties. In 2010 and 2011, she
    sold four of the properties, realizing a net profit of 80 to 120 percent.

    In August 2010, she set up a personal blog PropertySoul.com (http://propertysoul.com) to share her
    experiences as a property investor and to exchange ideas with fellow investors on accumulating wealth
    through properties.

    She has written over 200 articles and attracted a regular group of followers. Her posts are frequently
    quoted or reposted at YahooNews, TheFinance.sg, Singapore Investment Bloggers, PropertyGuru.com,
    Propwise.sg, Singapore Business Review, Singapore Daily, Temasek Review and other wealth blogs.
    In April 2014, Vina published her first book No B.S. Guide to Property Investment – Dirty Truths and
    Profitable Secrets to Building Wealth Through Properties. The book is now on its third print and
    is a bestseller at Kinokuniya and Times Bookstore.

    In 2014, Vina founded Property Club Singapore (http://propertyclubsg.com) to provide a neutral
    platform for the learning and networking of like-minded private property buyers, investors and owners.
    Seminars, talks, workshops and networking sessions are organized regularly for club members.

    3 Stock Market Myths

    By Team Wall Street Survivor

    Wall Street Survivor Courses

    Everyone has their favorite stock market myths but here are a few you might like to add to the collection:

    Fallen Angels Rise

    The devil is in the details. The rationale behind this myth is that buying at a 52 week low leaves nowhere to go but up. Buying on price alone is a recipe for disaster. Companies can – and will again – be delisted. It is possible for a stock to decline even further. Buy value not vapor.

    What Goes Up Must Come Down

    Really? Was Berkshire Hathaway expensive at $6,000 per share? What about at $10,000 per share? Who could have imagined $70,000 per share? That is just the point; the force of gravity doesn’t apply to finance. Inflationary pressures alone dictate a continued upward momentum for the entire market so it is at least theoretically possible for any given stock to
    continuously increase. Notice – we didn’t say “probable” just “possible”.

    Stock Market Investing is the Same as Gambling

    This really depends on how you go about it. If you follow the masses then
    chances are you will obtain the same returns…dismal. On the other hand,
    vast fortunes have been made by more than chance alone.

    To find out more, head over to Wall Street Survivor.

    The post 3 Stock Market Myths appeared first on Wall Street Survivor Blog.

    Read more here:: 3 Stock Market Myths

    Why people often end up buying the wrong thing?

    By Property Soul

    wardrobe

    Wardrobe spring cleaning

    I spent my Labor Day holiday doing the long overdue task of spring cleaning my wardrobe.

    How hard can it be? Well, any lady will tell you that this is a labor-intensive plus physically and mentally-draining chore, with lots of surprises and heartbreaks along the way.

    It took me almost two days to complete the job, after endless rounds of repeating three tasks:

    1. Keep pieces that are still in favor.

    To maximize the chances of wearing the good ones, mix and match different pieces to try various combinations and create new outfits. Then take photos to keep a journal of the new looks.

    2. Put aside pieces that need some work.

    Many pieces need maintenance before they can be back in service, like cleaning or ironing, sewing missing buttons, fixing damages, tailoring to make them fit, etc.

    3. Throw away pieces that will never wear again.

    They are pieces that haven’t been worn for the past two years. Some are old clothes that have seen better days and are now ready for retirement. Others are simply not in the trend now.

    For new clothes that are used just once or even brand new, the strong feelings of guilt and regret come every time I decide to dispose them.

    There are three common reasons why I end up buying the wrong thing:

    1. Buying on a whim

    It looks nice in the catalog and fashion magazine. Or I can imagine myself looking fabulous in it the same way it is displaying in the boutique. It is the fashion trend now and I just don’t want to be lagged behind.

    2. Buying under pressure

    There is peer pressure when a shopping companion tells me that it looks nice on me. A few times I fall into the trap of a flattery salesman who is full of praise when I step out of the fitting room.

    3. Buying for the future

    It is tempting to buy now and save it for a future occasion. And I am not the only lady who tries to buy clothes one size smaller, thinking that one day I can fit in. But somehow that day never comes.

    Who are the third parties reaping the benefits from my silly mistakes? They are my domestic helper and my elder girl who turns ten next month. They are excited by this treasure hunt game to find gems from the pile of my discarded clothes. With the ‘new’ clothes in their arms, they smile triumphantly and ask “any more mom (ma’am)?”.

    Property spring cleaning

    During the past property doldrums, many investors had to deal with the long overdue task of spring cleaning their property portfolio.

    How painful is the process? Well, any owner selling at a loss can tell you that this is a time-consuming and heart-wrenching chore, with lots of headaches and disappointments along the way.

    It can take months or even a year to decide what to do, though it won’t go beyond three steps:

    1. Keep the properties that still have holding power.

    They are the good quality properties that still have positive cashflow during bad times. Measures are taken to minimize costs and maximize returns, such as refinancing for lower interest rate, renting rooms rather than the whole unit, etc.

    2. Fix the properties that need some work.

    In a soft rental market, no one will take up a place that needs repair. To secure good tenants in a competitive market, it’s time to touch-up old apartments and renovate rundown houses.

    3. Dump the properties that are underperformed.

    Properties that have negative rental return make little business sense for owners to subsidize tenants to stay there. Similarly, properties that are bought wrongly have to cut loss in time before their values drop further.

    There are three common reasons why investors end up buying the wrong thing:

    1. Buying on a whim

    The project looks nice in the advertisement and the showflat. It is a Singapore dream come true to imagine yourself owning the property the same way the celebrity enjoying his lifestyle in the TV ad. Everyone is buying now and you can’t afford to lose out in the property game.

    2. Buying under pressure

    All your friends, colleagues and relatives stay in a condo. It is such an embarrassment telling people that you are putting up in an HDB flat. Noises from every direction tell you to go for it. And you find it very difficult to say ‘no’ to that persuasive property agent.

    3. Buying for the future

    It is tempting to buy now and pay later. Buying a project still under construction means that you only have to pay years from now. By then you will have enough savings and a higher salary to support that pricey property. But somehow the down cycle comes earlier than what you can imagine and everything just go out of control.

    Who are the third parties reaping the benefits from your silly mistakes? They are the bargain hunters or value investors who have been waiting for this day to come. They are excited by you cutting loss and are busy finding gems among the bulk of fire sales. With the ‘new’ properties in their arms, they smile triumphantly and hope there are more to come.

    Lessons learned

    1. The most terrible feeling is the realization that you have spent a lot of money buying the wrong thing.

    2. Good taste and good insight often have nothing to do with money. Having money and knowing how to pick the good stuff are two different things.

    3. Resist the temptation to buy the thing on the day you first see it. Put it on hold for a few days. You can minimize the chance of regretting it later.

    4. Buy only what fits you (or your budget) now, not what is going to fit you in the future.

    5. Being picky doesn’t pay. Buy only what is good enough for you, and the fewer, the better.

    6. You can’t make choices based on what everyone say is good. Don’t imitate others. Don’t follow the trend. Find your own style.

    Read more here:: Why people often end up buying the wrong thing?

    How to buy gold and silver bullion online in Singapore

    One of the best things about e-commerce is that it allows retail investors to make orders online and have the purchases deliver to home, thus saving a lot of hassle for investors. In Singapore, you can buy gold and silver bullion online from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). You can choose to self collect your bullion at BullionStar’s store, or opt for home delivery. Alternatively, you can choose to store your bullion at BullionStar’s vault storage.

    There are 4 easy steps to buy your precious metals through BullionStar as described below. A more detailed step by step guide is available here.

    Step 1: Place the desired products in your shopping cart. There is no minimum or maximum amount when purchasing from BullionStar.

    Step 2: Click “Checkout” in the Shopping Cart to go to the checkout. Select delivery and payment method in the checkout.

    Step 3: Confirm and pay for your order.

    Step 4: Depending on the delivery method you have chosen, your products will be:

    – Available for pick-up at 45 New Bridge Road, Singapore 059398. No appointment for pick-up is necessary.

    – Shipped to your delivery address; or

    – Stored for you in My Vault Storage® in our vault at 45 New Bridge Road for you to inspect, sell or physically withdraw anytime.

    You can follow the order process from purchase to delivery. We will update you by sending e-mail order status updates. You will receive e-mails for order confirmation; payment confirmation; and confirmation of delivery, availability for pickup, or storage.

    5 Ways to Ask For a Raise: Throwback Thursday

    By Brandy Adler

    Courses marketplace

    Wouldn’t it be nice if we could all determine our own salary? I’d probably choose to pay myself about this much… and I’m guessing so would you. Unfortunately, making more money usually means asking your manager for a salary boost. That conversation can be uncomfortable and intimidating, which is why only 56% of Americans have reportedly asked for a raise.

    You know how Wayne Gretzky missed “100% of the shots he didn’t take?” Well employees miss out on 100% of the raises they don’t ask for … here’s how to do the asking:

    STEP 1: Make sure you deserve the raise

    Okay folks, here’s the hardest part about asking for a raise: being honest with yourself. As much as we would all like more money, you’re not likely to actually get more money unless you truly deserve more pay for your work. After all, Kevin Durant didn’t ask for a max contract and THEN start scoring 30 points a game, he spent a few seasons scoring 30 points a game and then his max contract was justified.

    So ask yourself, “Do I deserve this raise?” If the answer is “YES OBVIOUSLY,” then proceed to step 2. If the answer is “Ummmm….” then consider making some preliminary moves before straight up asking for the big bucks.

    For instance, instead of sitting down with your manager to say, “I want more money” make a point to tell them “I want more responsibility.” Ask your boss if there are larger or more high profile projects you could start working on, or proactively lend a helping hand to another group that’s understaffed.

    Timing is important here –after the “I’m ready for more responsibilities” conversation, consider giving yourself 3-6 months to ramp up your job performance. During that few months, set goals for yourself with clearly measurable results, so that by the time you sit down to ask for your own version of a max contract you’ve got a solid stat sheet to back up your request.

    STEP 2: Schedule a Meeting

    Take a moment to remember that unlike you, your salary and its appropriateness level isn’t constantly on your manager’s radar. Everyone has their own projects, deadlines, and fires to put out, so bursting into their office unannounced to ask for more money won’t win you any points. Do yourself a favor and schedule a meeting.

    Finding a dedicated time for the salary discussion is a signal to your manager that your request deserves their respect and attention. It also gives you the benefit of knowing exactly when the conversation will take place; that way you can approach the meeting thoughtfully and come prepared.

    Of course, everyone’s relationship with their manager is different. If the formality of scheduling a meeting feels a bit uncomfortable, try to bring up the subject during a goal review or annual evaluation. The key is to try to find a time when your manager will be least distracted and therefore (hopefully) most receptive. Overall, think of it as an opportunity to present yourself as professionally as possible.

    step brothers interview

    Remember to dress to impress!

    STEP 3: Demonstrate your value

    First of all, make sure you do this before you walk into the meeting. Confidence is key.

    Now, I’m sure your boss wants to give you a raise. But unfortunately, it usually isn’t as simple as snapping their fingers. In most cases, unless you report to the owner, getting your raise approved will require your manager to do some salesmanship up the food chain convincing his boss that you deserve more money. Your job as the raise-seeker is to make this process as easy as possible for your manager.

    Never assume that your manager knows how wonderful you are, so have proof points of your success at the ready. Here’s how to ensure that you have some ammunition when someone asks you “What would you say you do here?”

    • Make a note to yourself when you receive praise or kudos from other employees
    • Keep a folder in your Outlook/Email dedicated to “Thank You” emails for a job well done
    • Regularly reference a copy of your original job description, and periodically make updates with your new responsibilities as an easy way to track your progress as an employee
    • Print out work you are particularly proud of and bundle it together; keep it all easily accessible as a makeshift “portfolio” of your best accomplishments

    Most importantly, actually bring these things with you to the salary meeting! Don’t just tell your manager that you deserve a raise, show him. And make sure that he has the materials to show others as well.

    STEP 4: Know your worth in the market

    Knowing how much money to demand when you ask for a raise is certainly one of the more difficult parts of the conversation. Luckily there are many resources at your disposal.

    In researching, your first stop should be your company’s internal compensation policies. Often there are published pay ranges for different job grades/employee levels. If you fall below the middle of your range, you should be prepared to make an argument as to why your work merits a salary higher on the spectrum. If you are already in the higher range of your job grade, start thinking about whether your responsibilities might merit a promotion to a higher title.

    Of course, it will also be helpful for you to know what your skills are worth at other workplaces. Externally, sites like Glassdoor.com or Salary.com do their best to publish salaries for a variety of companies and positions. Networking with your peers across your industry, though, will probably give you a more accurate view of what a fair salary is for your skillset. Lastly, don’t neglect those recruiters that pester your LinkedIn profile! Even if you aren’t looking for a new job, they might be able to give you some good insight into what your resume is worth on the open market.

    As with most things in life, knowledge is power. Make sure you know what you’re worth so that when your manager asks you what specifically you’re looking for, you have a well-researched answer.

    STEP 5: Celebrate!

    It’s important to remember that these things take time, and even if something doesn’t happen right away that doesn’t mean the salary-increase wheels aren’t in motion behind the scenes. Have patience and keep working hard. Even if a raise doesn’t come your way in the immediate future, you have successfully demonstrated your worth to your manager with poise and professionalism. That can never hurt. And if a raise does come through thanks to this hard work? High five. Drinks on you.

    Sounds so simple, right? Of course, this is all much easier said than done. Try not to get overwhelmed, and remember that getting your salary increased really comes down to demonstrating why you are worth more to your company. Now go out there, and give it a shot. Get that raise!

    The post 5 Ways to Ask For a Raise: Throwback Thursday appeared first on Wall Street Survivor Blog.

    Read more here:: 5 Ways to Ask For a Raise: Throwback Thursday

    Capital Match on making money from Peer-to-Peer (P2P) Lending

    In this article, SG Wealth Builder is pleased to catch up with Pawel Kuznicki, co-founder of Capital Match, a homegrown Singapore-based peer-to-peer (P2P) lending platform that helps Singapore SMEs obtain loans financed by individual investors.

    1) Peer-to-Peer lending is something new in Singapore. In your opinion, what are the potential pitfalls that investors should look out for when choosing the right platform to invest?

    The key risk of this type of investment is a default risk of the borrowers. The investors should carefully assess if the information provided to them about the potential borrower is sufficient to make an informed decision on the risk involved and if the proposed interest rate is sufficient to compensate for the risk.

    2) How does Capital Match deal with default loans and what mitigating measures can investors expect from Capital Match?

    If the default were to happen, we would employ a debt collection agency to attempt to collect the debt from the borrower. The directors of the borrower have to provide personal guarantees so the debt can be collected both from the company and its directors. If the debt collection is unsuccessful, we would then advise lenders if they should start the legal action against the borrower. The cost of debt collection is on us, the cost of subsequent (if any) legal action has to be borne by lenders. In the future we will also introduce secured loans to provide better security to lenders?

    3) How does Capital Match differentiates itself from other P2P lending platforms and how much market share do you foresee Capital Match will gain in the next five years?

    There are currently only two peer-to-peer lending platforms in Singapore. We believe our key competitive advantage is a credit risk capability allowing more borrowers to get approved (despite potentially unfavourable credit rating etc.) and giving more assurance to investors of the quality of the companies introduced to the platform. The market potential is huge and we do not think there will be much competition initially between P2P lending platforms in Singapore – rather each can grow organically for a few years without much friction.

    4) Given the impending regulatory changes proposed by Monetary Authority of Singapore, how do you think it will impact Capital Match?

    Impending MAS regulations for crowdfunding do not impact peer-to-peer lending. MAS intends to only regulate crowdfunding that involves exchange or offer of securities – we deal in loan agreements that do not constitute securities.

    5) Do you view banks as your direct competitors for SME funding and given that banks are typical slow to adapt to new disruptions, do you foresee that big players of P2P lending (e.g. The Lending Club) will replace the role of banks?

    In the segment we operate, banks are not our direct competitors. Most of our customers have difficulties getting bank loans and thus they are looking for alternative source of funding. I believe there will be space for both banks and P2P lending companies – P2P lending emerged because bank have not served a large segment of customers. I believe that consumer and SME/commercial lending will be to a large extent advanced by P2P lending platforms, whereas medium-to-large companies and MNCs will be served by banks.

    Explaining How Much to Tip People

    By Team Wall Street Survivor

    t1

    The practice of tipping extra for service is socially accepted in North America, while notably absent in many parts of Europe. Every year Americans fork over about $40 billion in tips to nearly 3 million servers across the country’s restaurants.

    Tipping can come with a lot of anxieties.

    How much do I tip?

    Am I going to look cheap if I only tip 10%?

    Do I tip on the pre- or post-tax total?

    What is a Tip?

    It’s often understood as some sort of optional or voluntary kindness on the part of the diner. Except in America, when you don’t tip you’re actually taking money out of someone’s monthly pay check.

    Say what?

    Federal law in the U.S., as it stands, allows an employer to pay a server substantially less than the minimum wage.

    The reasoning: the difference will be made up in tips.

    The minimum wage in the U.S. is $7.25 an hour, but U.S. law allows tips to be used to make up the difference between a server’s salary and minimum wage. This means that in reality people are being paid $2-3 per hour with tips expected to make up the difference. In fact, in some states employers are legally only required to pay tipped labor a minimum of $2.13 per hour.

    So when you stiff a waiter, you are actually docking their wages.

    The Expert’s Guide to Tipping

    t4

    At this point tipping is a part of life so you might as well know where, when and how much to tip. These are low to average amounts someone should tip in different situations. Stay in this range and you are fine and forgotten. Go above this and you will be remembered, and it’s always good to be remembered and noticed by service workers. Go below this and you’ll be remembered too – for a different reason.

    • At restaurants a good rule of thumb is to always tip 15% even if the service sucks. After all, the appropriate tip on a restaurant bill does not depend on whether the service was good, or if you will even ever visit that establishment again. (Pro tip: when you get the bill, slide that decimal over one, that’s 10%; divide that number by half and add it to the 10% to bring you up to 15).
    • Tip your bartender/barista; $1 a beer, and $1 a cocktail at minimum and 15% if you have a larger bill. Additionally, the longer they take making your drink, the more you should give.
    • Tip your cab driver, especially if you get off somewhere where it would be hard for them to find another customer, like if you’re being driven to a graveyard at 4 AM.
    • There’s no need to tip on restaurant takeout, but do tip valets at least $1.
    • Do you live in an apartment with a doorman? No need to tip, except at Christmas; $50 will go a long way here.

    A Brief History of Tipping

    The practice of paying someone extra as an expression of goodwill likely dates back to the first use of physical money – whether or not it was called a tip is a different question. By the 16th century, guests at English mansions were expected to leave a “vail”, the equivalent of a modern-day tip.

    Before the Civil War, Americans did not tip. It was only after the War that tipping spread – when rich Americans returning from overseas travels brought the practice home with them. Tipping quickly became the norm, and a way to show one’s comfort with and knowledge of high society

    Who Wins When it Comes to Tipping?

    The same people who always win: business owners.

    Tipping certainly doesn’t help servers and bartenders.

    Tipping does not act as an incentive for better service. It actually degrades teamwork in a restaurant setting because now the servers are out for themselves. It’s all about how much money they can make. Why would you help a waiter who is having trouble on a big table when it means you don’t get to share in the tip? Tipping also shifts the burden of paying workers from the business owner to the customer. Also, the rest of the kitchen staff doesn’t always get tips (cooks, busboys, etc.) which divides the restaurant.

    t3

    NYC’s Sushi Yasuda eliminated the tipping system in their business, instead opting for a gratuity added on to every bill. This is the easiest way to move away from a tipping service model. Server’s wages become more consistent and teamwork should rise as a result as restaurant staff become more focused on the health of the establishment itself and not just their own tables.

    How to Game the System

    Michael Lynn, a professor of consumer behaviour and marketing at Cornell, is an expert on tipping science. His research shows that the amount people tip has almost no bearing on the quality of service they received. Instead the amount someone tipped often came down to social cues.

    Here are some proven ways servers can increase their tips:

    1. Introduce yourself
    2. Touch the customer, just not in a creepy way, a touch on the shoulder will generally yield you a bigger tip. This is usually more effective with younger patrons.
    3. Be the opposite gender of your customer.
    4. Smile! Smiling people are perceived as more attractive, sincere and sociable than unsmiling people.
    5. Sit at the table or squat next to it when taking the order.
    6. Give customers candy: people feel obligated to reciprocate when they receive gifts from others.
    7. Upsell: industry speak for selling more stuff, whether it be another bottle of expensive wine or an extra desert, 15% of a bigger bill means a bigger tip at the end of the night.

    There you have it, everything you need to know about tipping.

    Remember, it isn’t about how generous of a person you are. It isn’t even about gratitude for good service. It’s about doing what you’re supposed to do.

    The post Explaining How Much to Tip People appeared first on Wall Street Survivor Blog.

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    What Are Stocks?

    By Team Wall Street Survivor

    Stocks are pieces of ownership of a company. Stocks, also called Shares, represent a claim on the company’s earnings and assets. Which technically means you have a claim to a small fraction of every thing the company owns.

    Profits are paid out to shareholders in the form of dividends. If the company goes bankrupt, your claim on assets kicks into action as all the things the company owns are sold off. The portion you get is whats left over after all creditors are paid.

    Owning shares makes you a shareholder and gives you a small say, based on how much many shares you own, on who runs the company. While owning stocks does carry some risk, the potential for profit attracts lots of trading.

    To watch more videos head over to the videos page.

    The post What Are Stocks? appeared first on Wall Street Survivor Blog.

    Read more here:: What Are Stocks?

    BullionStar offers Gold Buffalos for only spot price of gold +3.99%!

    Below is a newsletter from BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation. 

    We are currently offering 1 oz Gold Buffalos (2013, 2014 and various years) for only the spot price of gold + 3.99 %. The offer is valid until 4 May or as long as stocks last.

    The Gold Buffalo was first minted in 2006 and is the only 1 oz .9999 gold coin produced by the United States Mint. Encapsulating a monumental time in history, this beautiful coin is a modern rendition of the James Earle Fraser’s 1913 Buffalo Nickel, produced in pure .9999 fine Gold.

    New Sales and Operations Manager

    We would like to introduce our new Sales and Operations Manager, Mr. Luke Chua.

    Luke brings with him the skills and experience required to propel us forward in the areas of customer experience, operational efficiency and effectiveness.

    If you have any development ideas or would like to give us any feedback, please feel free to contact Luke.

    Luke is a precious metals enthusiast who has decided to make his passion his work!

     

    Why Singapore investors always lose money in shares

    For the past few years, there has been a proliferation of young investment bloggers in Singapore. While I am not sure if this is a good phenomenon, it certainly reflects a growing interest in the stock market among young Singaporeans.

    Many years ago, a veteran in the stock market told me that when taxi-drivers, housewives and students start to dabble in shares, it’s a warning sign that the market has peaked. In fact, for the past few years, the stock market in U.S. has rallied and surged to multiple highs. Entering the market during this boom period can be dangerous because many stocks have risen beyond their fair values. In such case, the return of your money is far more critical than the return on your money.

    You must have heard of Warren Buffett’s famous quote “be fearful when others are greedy, and greedy when others are fearful”. In reality, telling this to someone who try to find value stocks in the current market is akin to telling a horny male to remain celibate, and thus, I often find this quote unhelpful. For me, it is almost impossible to tame greed and overcome fear if we lack of self awareness. Most people fail to realize that their greatest enemy is not Mr Market, but actually themselves. Your emotions, behavior and decision-making determine the outcome of your investments.

    How often were you tempted to buy a stock when a friend boosted that he made a killing from it? When was the last time you bought a stock at the top and ended up incurring huge paper losses? Indeed, most of us are controlled by our emotion brain when it comes to investing. Not knowing how to manage our emotions can be financially fatal and I have seen far too many intelligent people making stupid investment decisions.

    To nurture our emotion brain and make it an asset, we need to understand and train our thought processes. After reading Wai-Yee Chen’s NeuroInvesting, I am even more convinced that our money personalities drive our investment philosophy and principles. Henceforth, I encourage readers to read her book and find out how to become a better investor.

    As an investment advisor to high net worth individuals, Wai-Yee Chen has spent years watching her clients make investment decisions—some good decisions and some not-so-good decisions. Though confronted by the same market variables, those clients often make very different choices with very different results. Here, Chen argues that it’s usually not the data that affects investor decision-making as much as the way investors themselves think. In NeuroInvesting, Chen argues that investors can change the way they think in order to change the way they invest. She presents four elements that affect investor decision-making and reveals how investors can rewire their brains to make better investing decisions for better returns.

    • Uses neuroscience to explain how successful investors think different
    • Written by an experienced investment advisor who works at one of Australia’s premier retail brokers
    • Explains investing using real-world stories about investors from an advisor’s perspective

    When it comes to investing, how you think has a huge impact on how you make investing decisions. Based on the real science of how people think, NeuroInvesting offers every investor a chance to change the way they invest by changing the way they think.

    Wai-Yee Chen, CPA, MAppFin, is an investment adviser and professional portfolio manager who specializes in the use of options in growing, protecting, and income-enhancing investment portfolios of her high-net-worth clients.
    Wai-Yee’s more than seventeen years’ experience in trading and advising clients in mostly equities and derivatives gives her a unique perspective into how investors’ own personality, psychology, and behavioral traits affect their investing style and returns. Her market insights and investment ideas are regularly sought after by investment magazines, journals, and TV channels CNBC and Sky Business, and she is a coach to fellow advisers and investors.
    Wai-Yee’s skillfulness in drawing on the sensitivities of neuroscience, psychology, and philosophy of investing, combined with her knowledge of the fast and dynamic worlds of derivatives and stocks, makes her both a swift and considered investor/adviser.

    Magically yours,

    SG Wealth Builder