Traded Life Insurance Policies in Singapore

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

Traded life insurances exist because the existing policy holder decides to liquidate his life or endowment policies due to financial problems or when the insured person experiences a decline in life expectancy and hope to cash in on his insurance.

career

Usually the cash value would be low if the policy holder surrender the policy to the insurer, so a better option would be to sell to another individual at a higher price as offered by the insurer. Throughout the transaction, no new policy is created and only the existing policy bought by the original policy holder is used.

An important thing to note is that if you purchased a traded life policy or traded endowment policy, you are required to pay the premiums until the policy matures or the person whose life is insured dies. Probably because of this, traded life policies didn’t really take off in Singapore due to moral issues.

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

We will like to inform that there are at present no MAS administered regulations in place to govern the sale, purchase and distribution of traded endowment policies (“TEP”) and traded life policies (“TLP”). This means that any

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

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

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

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

Personal finance

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

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

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

“Call Levels meets a very important need for investors and …

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Investing in Telco stocks to pay your phone bills

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

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

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

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

Stock investing

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

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

With the distribution of telecommunications stock income through dividends, a steady stream of income was provided to shareholders last year. Take for instance, SingTel which distributed a 10 cent and 6.8 cent dividend last year. The total dividend amount represented 16.8 cents for the 2014 year, which was the same amount distributed in 2013. …

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mm2 Asia

Local movie producer and distributor, mm2 Asia Ltd has launched the Red Carpet Club, a programme targeted exclusively at shareholders and investors of the Group.

Up to 200 movie tickets of the preview screening on 16 February 2015 to be given away to shareholders ·

The cast of the movie will be present ·

Preview screening is the first of many perks that mm2 Asia is launching as part of its mm2 Red Carpet Club for shareholders ·

To be eligible for ticket entitlement, investors will need to be listed as a shareholder of mm2 Asia with a minimum holding of 1,000 shares as at 5.00 pm on 30 January 2015 

Newly-listed local movie producer and distributor, mm2 Asia Ltd. (“mm2 Asia” and together with its subsidiaries, the “Group”), today announced an exclusive treat for its shareholders. The Group will be giving away up to 200 tickets to its shareholders for the preview screening of the highly anticipated “Ah Boys to Men 3: Frogmen” on 16 February, a movie that is co-produced by the Group.

This preview for mm2 Asia’s shareholders will be ahead of the movie’s premiere on the big screens on 19 February. Making the event even more special, mm2 Asia has invited the cast of the movie to the preview screening for shareholders.

The preview screening of “Ah Boys to Men 3: Frogmen” is one of many shareholder perks that mm2 Asia has lined up under its mm2 Red Carpet Club, a programme targeted exclusively at shareholders and investors of the Group.

Through the mm2 Red Carpet Club, the Group intends to roll out activities and/or events on an on-going basis such as invitations to movie galas and/or movie previews, and free tickets …

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k1 Ventures reward shareholders with dividends again

In my previous post, I wrote that k1 Ventures might reward shareholders with dividends due to the divestment of China Auto Grand for $32 million. True enough, in today’s announcement, the management of k1 Ventures declared tax exempt one tier interim dividend of 1.5 cents per share. The dividend will be paid to shareholders on 12 February 2015 but the counter will go ex-dividend on 29 January 2015. Even though I am not vested in this counter, I feel happy for those who had invested in this counter.

In the current financial report, k1 Ventures classified the divestment of Helm, the long haul transport leasing business, as “discontinued”. This move effectively made k1 Ventures asset-lite because the heavy burden of long term debts was removed. Currently, the Group did not have any borrowing and is focused on managing the current portfolio of assets. In a way, it is a good move that k1 Ventures is not making any new investments because this will enable them to focus and maximize value on the proceeds from any realization of assets and to return the same to shareholders.

On the balance sheet, the Group has a net current asset of $84.3 millions. The shareholders’ funds decreased from $256.5 million at 30 June 2014 to $236.5 million at 31 December 2014. The decrease was due to dividends paid to shareholders in November 2014 of $54.1 million offset by profit for the period of $34.0 million. The profit for the period was primarily attribute to a net gain of $24.1 million from the sale of the Group’s investment in China Grand Auto. The decrease in investments was mainly due to the sale of China Auto and a downward revaluation of the Group’s investment in k12, Inc. partially offset by currency movements attributable to the strengthening …

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How to avoid fatal investment mistakes

Call Levels

One of the most fatal mistakes made by investors is not setting price levels when entering and exiting an investment instrument. This approach is akin to expecting zero risk and turmoil in the market, something which I deem foolish and naive. Perhaps one of the most recent shocks in the financial system is the sudden overnight surge in the Swiss franc after the Swiss National Bank removed the cap on it’s currency appreciation against the ailing Euro in mid-Jan 2015.

So is there a way to mitigate this risk? For sure there is. Technology has changed the way we live our lives and how we invest. We can never win technology, and therefore should always strive to leverage on technology to create and manage our wealth. Local start-up Call Levels has created a mobile app that simplifies trading and investing by focusing on a single primary need – the need for investors to be alerted when their selected assets hit pre-set price levels. Call Levels is a simple mobile-based market alert application that allows users to track and set alerts for foreign currencies, stocks (to be out in 2015) and commodities of their choosing. It will also provide snapshots for quick market analysis based on the customised alerts tracked by users. The app can be downloaded for free on iOS devices from the Apple iTunes Store.

The start-up’s co-founder, Daniel Chia, who was a sovereign wealth and hedge fund portfolio manager for the past eight years, created the app after realising that the complexity of existing finance and trading apps put off users who needed them most. “It’s for part-time investors, businessmen who watch currency moves and even finance professionals themselves” says Daniel. “Call Levels keeps things simple for anyone with an interest in the markets by focusing on only …

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Investing in Dividend Stocks

When it comes to stock picking, one of the key criteria in evaluating the performance of the managers is how they deploy or handle cash flow within the business. For example, they may choose to use cash to reduce company’s debts, acquire other companies, buy-back shares or reward shareholders with dividends. Most investors, especially minority shareholders, would prefer the company to pay out dividends because it means a form of passive income for them. My favorite stock is k1 Ventures, one of the largest venture capitalists listed in SGX.

I have been tracking k1 Ventures for more than 10 years and had invested in the stock over the years. k1 Ventures is an investment holding company invested in diverse sectors such as finance, transportation, education and oil and gas. Those who are vested in this counter would know that this is an excellent stock which had paid out huge dividends over the years. Since FY05, it had consistently paid out dividends and if you had bought the share then and hold on to them till now, you would have an incredible yield of about 70%! Now, how many stocks in SGX are capable of giving this sort of dividends nowadays? Currently, I am not vested in this counter but am still tracking the company’s development for future investment opportunities.

Now, why is it important that a company has a history of dividend payouts? One thing for sure is that having dividend payouts mean that the company is willing to share the fruits of its labor with shareholders. This approach sends a strong signal to the market that the management is willing to reward investors’ faith in their company instead of keeping the money to themselves. In addition, having a track record of dividend payouts mean instilling a form of discipline …

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Stock investments: Investment Moats

Dear Gerald,

I remember seeing one of your blogs around end of December which listed your stock holding as at end 2014. I was just going through your blog again but I couldn’t find that anymore. Could you please let me know if that was deleted or it’s still there just that I missed it.

Cheers!

Cindy

I received the above email from one of my readers recently. In view of the historic highs recorded by the US stock market, I have sold off all my stocks since last year and re-position my fund to upgrade to a new and bigger house. I feel that given the current stock market climate, the risk premium is not worth my investment dollars as it is so hard to identify good companies worth investing for the long term and trading at reasonable price. However, I still believe the stock market present many opportunities to build wealth, and therefore, I take this “lull period” to polish my knowledge on how to become a better stock investor.

When I started out investing in stocks, I do not treat the stocks as if I owned the businesses. On hindsight, that was probably why I had a few hits and misses here and there. If you treat your stock investments as if you are the co-owner, chances are, you would pay more attention to the niche business model, management execution, research and development, market share, branding, competitive edge, cost effectiveness, switching costs, network effect and efficient network. This is because these are main ingredients that form the investment moats of a great company.

Investment moats are the fortress of a company that can help it to fend off competition from rivals. Companies with investment moats tend to have sustainable growth and is deemed to be able to …

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Successful entrepreneurs

In my journey as a personal finance blogger, I have the privileges to meet up with great aspiring entrepreneurs. I learned a lot from these successful entrepreneurs because they have been unselfish in sharing with me their views and their thoughts on successful entrepreneurship. In fact, yesterday, I met up with the founder of icompareloan, one of the best websites for comparing mortgage loans in Singapore. Below are some of the traits I think commonly found in great entrepreneurs.

entrepreneur

1. They note down their ideas (just like my Investment Notebook). If there is an ah-ha moment, they would quickly note it down and revisit the idea again.

2.They think through their ideas over and over again to see if they can be successful. Sometimes their ideas might have been implemented by others. But if they are able to develop a better and more cost-effective way of doing it, then they stand a higher chance of winning.

3. They do their homework and spend tonnes of effort on researching. After all, no generals would like to fight a losing battle.

4. They can sell their ideas effectively. In business, if you cannot sell, you are finished. To make money, you must know sales tactics.

5. Passionate about their ideas. Conviction and belief are key to a successful business idea. A successful entrepreneur would always speak with a belly of fire whenever they touch on their projects.

6. They have no qualms in making many revisions to their business strategies and adapting to changes if it means to making more money.

7. Great entrepreneurs are fiercely resilient and do not give up easily without a good fight. They are not affected by setbacks and would do anything to win.

8. They understand the concept of teamwork and know that not everyone can …

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SG Wealth Builder’s Journey

As we enter 2015 and bid 2014 farewell, many of us are making new year resolutions to improve on areas which we would like to improve in the coming year. SG Wealth Builder is certainly no exception.

There were several ups and downs for me last year but overall, I think 2014 had been pretty good for me. There were also some lessons learned in my life journey which I hope to pen down in this blog, so as to remind myself not to repeat the same mistake again.

Family

This year, there will be a new addition to my family! My second child is expected to arrive in late April this year. To welcome this bundle of joy, for the past few months, I had been busy making arrangements for his arrival. My wife and I initially were planning to hire a domestic helper because we fear that she may not be able to cope with my daughter and baby son.

However, after several months of discussion, we decided not to go for it because of the concern that the maid would create more headaches and issues for us to manage. We had heard and read so many horror stories of maids mishandling baby kids and children in Singapore. In view of this, we felt that it is better that we raise the two kids without the help of a maid, though we know that the going would be tough. Especially without the help of both my mom and mother-in-law.

Wealth Builder

As my job which requires me to travel frequently, I have sacrificed a lot of precious family bonding time. I missed my wife’s and daughter’s birthday celebrations due to business trips. Thankfully my wife had been pretty understanding and encouraging but we are not so sure that going forward, …

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