I have been retrenched ...

In the recent months, there have been more news about corporate laying off staffs due to the worsening of the global economy. Most of us won't feel it unless it happens to you or someone you know. Few weeks ago, I received a phone call from 2 ex-colleagues, and both of them had been retrenched as the unit closed it's Singapore operation. However, they should be able to tide over this difficult period as they have been prudent and without major debts, apart from daily family expenses.(which the payout should be able to last for sometime). Nevertheless, I feel for them as few years back, I was layoff due to organisation restructuring.  In the new year, there will be more job lost coming as Singapore has many MNCs, and once the revenue target is not met, the axe will come. Not a good way to start the new year, but this is fact of life.

In this post, I would like to penned down few thoughts to prepare us for the coming New Year 2017, which will be filled with lots of uncertainties.

Savings and Investment

Basic principle of savings still apply, one should always save a percentage of your salary, in preparation for raining days. And one day, the rain will come, it is always good to be prepared. Once you have a reasonable amount of savings, one should look at how to grow the money. There are reasonable number of blogs out there on investment, which I shan't discuss here.

Debts

Economic cycle is getting shorter, and since the GFC, many organisations have been looking at ways to improve their operating margins, and laying off staffs is always the first tool to use. It is a fact of life now, nothing is constant, thus we need to prepare ourselves. It will be a stressful situation where he/she is jobless, and still servicing huge amount of debts. These debts come in the form of housing and car loans, which is the major debt for most of us.

Health

When one is still healthy and employed, and if you are the breadwinner, you should have enough insurance coverage. This is to ensure that if your health takes a turn during your jobless period, at least, you have some coverage to tide over.

Networking

Networking during your career is important, and is like point 1 above, you build trusts, and this is like savings account, it builds up over time. When I lost my job, I was lucky to know few close folks whom I have known for many years, and manage to get 2 jobs offer within 3 months period. I am really thankful for those friends whom have lend me a hand, and also lady luck, who has been very kind to me all these years. Last week I have to tap into this saving account and referred one of my friend to another who has a position open in his company. Hope this turns out well.

It is not all that gloomy if you are prepared, let's have a enjoyable 2017!!!

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We have forgotten - Asian Financial Crisis

I guess most of us only remembered the last Great Financial Crisis, starting with the housing toxic securities which the bubble finally burst in 2008/2009. How many of us still remembered the Asian Financial Crisis and how it started. This site here has documented the entire timeline and events if you are interested. Why am I writing this out of the blue.

In the past weeks, after Trump won the US Presidential Election, the USD has strengthened and the regional currencies weakened. Some Asean countries' currencies (Malaysia, Philippines) have dropped in a terrifying speed. Looking back, in 1997, as we all know by now, the AFC was started from Thailand due to the crashed in it's currency by as much as 20%, and situation were further aggravated by the huge infrastructure spending. 

Last week, we witnessed the Malaysian Ringgit devalued about 33% from a norm range of RM3.3 against the USD, and Philippines Peso devalued about 14% from a norm range of PHP43.6 against the USD. Similarly to 1997, these 2 countries were also spending lots of money on their infrastructure. 

Historical events can be an important learning lessons for all of us(that's if you learned something from it), however it does not mean that the same event will happen again(hopefully). But if it does, we should be more prepared this time to capitalise on it. In a lighter note, it's time for more shopping in our neighbourhood country☺.

What did we learnt from the last Fed Interest rate increase

On 16 Dec last year, Fed raised the interest rate, and lately, many of the financial news are also talking and speculating about when the next increase will be. Let's look at what happened to some of the counters when the interest rate was increase last year, hopefully, this can help us to navigate for the next one.

The first column is the counter price after the announcement of the hike, and the next column is the lowest point of the counter price the few months after. Despite what many analysts have said about banks are the ones to benefit from the rates increase, they have also corrected, just like the other counters.
How will the next one be different from this ... I wonder.

My first online shopping experience

Well, actually it's not really my first time buying stuff from the internet. Its just that the last time I bought stuff from a online merchant was more than 5 years ago. Recently, during the black friday and cyber monday, I bought some stuff from Amazon, and here are my thoughts after buying them.
Currency
With the USD getting stronger, it is no longer that appealing to buy stuff from the US. It only makes sense economically if  you get more than 50% savings. On the item which I had purchased, I managed to get 70% of savings off from the same item here. Recently, I saw the same brand having some 20% promotion locally, and if I were to buy here, the savings from my online purchase reduced to 45%. However, this is before shipping.

Shipping
I used a local shipping provider, and because I was their new customer, they gave me a $15 off from my total shipping costs. With the shipping cost included, now my savings from my online purchase reduced to 30%.

Timing
At the time of writing, it's been 8 days and I have not received my "goods". This is because I used the free shipping option from Amazon, and it takes about 5 to 6 days to transport to the local provider's US address. It takes another 5 to 6 days for the local provider to transport my stuff into Singapore.

Banking Charges
I also just realised that I have been slapping with some banking charges known as dynamic currency conversion fee. At first I didnt know what is this, then I realised it was the conversion from USD to SGD which Amazon has offered me.

Conclusion
Now that I learned (the hard way) of all the charges involved, the item must have a substantial savings before I will shop online again. It also has to be stuff that I dont need urgently and can wait for at least 2 weeks shipping time as I only use the free shipping option.

Will AC effect result in a market correction?

Since last year, the Chinese stock market has been rising and this uptrend was also followed by Hang Seng Index in the recent months. Just few days ago, TVB decided to telecast an old film starting next Monday. For those of us who are old enough, you will remember this film 《大時代》, it's about the stock trading and speculation.

The focus here is on the actor, Adam Cheng. After this show was first telecast in 1992, it followed with a major correction on the Hong Kong stock market. This happens subsequently for the next 32 times whenever his show was telecast, is this a coincident or what. And thus this was known as the “丁蟹效应”

The chart below shows the correction that happened.

http://blogs.wsj.com/

Do you think 'Adam Cheng effect' will happen next week?

A conversation with an Intern

Recently, my company engaged a few interns from a local poly. I had a chance to talk to one of them over lunch and kopi session. Let's call him J. At the initial conversation, J is like other boys of his age, easy going and jovial. After a few conversation, as you get to know him more, he is more mature than most of the boys of his age.

J comes from a low income family, his parent makes only enough to provide the basic food and necessities. Since he started his poly education, he has been working whenever he can during the weekend or after school to supplement his education. Due to his family situation, he has gotten some education grant, however, that is only enough to pay 2 terms of his fees. I then asked him how about the remaining 2 terms and also his expense. He told me he will work whenever he can over weekends, and that has been enough to cover his fees for the remaining 2 terms and also his expense. At his point, I guess most of us have been very fortunate, not having to worry about our course fees back then. Most of my classmates, including myself, do not have to work during school terms to help supplement our course fees.

J shared with me he has started his investing into stocks as he realised that with proper use of this tool, it might be a chance for him to have a better financial situation in the future. He has attended some of those free courses, and is trying to find a method that suits him. At his age, most of his peers will be thinking of what movies to catch, which latest phone or gadget to buy, and here is a young men who has started his investment journey.

Given his resilient character and matured thinking, I believe this young men will do well. I wish him all the best for his journey after graduation.

Time to buy car ... HUAT AH??

A friend of mine booked his car before Chinese New Year as they gave him a high trade-in value for his current 8 years old car. 2 days after he booked his car, another agent from another car model which he did not purchase from, send him a text on a one day promo of 15% discount off the model he was looking at. For first time, for that particular model, after discount, it will be below $100K. He thought I would be interested and thus forwarded the text to me. Frankly, it prompt me to look, and being Singaporeans, we all love discount. 

COE closed lower for the first time from the last bidding exercise, as shown in the table and chart below. I didnt know there is such a nice chart, do you guys see what I am seeing ...... Ha.... yes, looks like chart of moving average. And for those who knows TA, what does the look of the chart tells you.

Source: http://www.straitstimes.com/sites/straitstimes.com/files/coelargechart0805.html

GONG XI FA CAI, to those who will be shopping for car soon...

Learn how a janitor amassed $8m fortune

This is a real life story of how an ordinary folk is able to amassed huge fortune in his entire life. To reach our financial goals, most of us live frugally, try and invest wisely while some people surrounding us are enjoying high life with luxury items. At times, it makes you wonder if it is all worth it. It's story like this that affirms one's belief.

Ronad Read is one of the many example out there, and a common traits among them is:

It is that simple isnt it.

Here is the link for more of his story.

What happened to inflation

Just not too long ago, many economists were worried about inflation due to many countries printing money and starting the similar QE programs. A few months ago, oil crashed, and this changed the whole equation. Now, the same economists are talking about a possible deflation in most countries. Lately, we have seen countries launching their own programs whether through interest rates or currency to prevent their economy from falling into deflation.

Yesterday, Monetary Authority of Singapore (MAS) said it will let our Sing dollar to appreciate at slower pace, news from channelnewsasia. The core inflation is also down from the earlier forecast of 2 to 3 percent. For the longest time, we have always been told that one need to own assets like property, commodities or gold to protect oneself from inflation. With the latest action from MAS, what do we need to do and now with a possibly sign of deflation, what do we do?

Cash/USD

Remember cash is 'king', no matter which situation you are in. It's without doubt that USD is still a global recognised and traded currency, one which investors like to have in times of uncertainty. I mean USD has performed strongly against major currency and looking at all the positives signs on the US economy, what is preventing the USD from moving up some more.

Buy High Good Dividend Stocks

Whether is it inflation or deflation, we still need to buy things that we need to us daily, these will be good sector to look at. It will be even better if one is able to find valued high dividend paying stock. Just not too long ago, Asia superman, Mr. Li Ka Shing ramped up his huge purchased of assets in the UK, especially the Utilities asset. Is he preparing for deflation too?

Let's see how this will turn out and I guess no point trying to predict, we will know in time to come.

2015 - Top 10 Predictions

Post Merry Christmas greetings and happy new year in couple of days, this is probably my last post for 2014 and it will be a short one. I was browsing on lazy weekend and came across this article by 'Dr. Richard Coghlan', which he mentioned his Top 10 predictions for 2015. Here is the link to the article, 'http://www.chinatimes.com/realtimenews/20141105003652-260410'.

Below is the highlight of his predictions:

From the chart, what would be your strategy for 2015?

I bought stocks during last week's big selloff

For those who had read the CNBC news, this was the statement made by Warren Buffet last week. He did not reveal which were the companies that he had added holdings to. As per his statement below in CNBC, in his usual style, he never like to time the market and he would buy more when the stock price becomes cheaper.

Source: CNBC

In this part of Asia, we had our own problem too, just last week, huge number of protester started the 'occupy central' campaign in Hong Kong due to a reason that we are know and I shall not repeat here.

Source: CNN

Let' look at how the 2 markets, Hang Seng and STI, reacted to the events above. 

Source: Yahoo.com

 

In the month of Sept, Hang Seng has corrected of about 9%, while the STI has a minor correction of about 3.5%. Based on any of the valuation indicators, these 2 countries are consider cheap as per the report by The Telegraph. In this report, it has an interested graph which shows where the countries stand. If you have been buying STI ETF as part of your permanent portfolio, does this present an opportunity?

Telegraph

Do you have the courage to be like Warren Buffet and buy into Hang Seng and STI?

Property prices will keep going up?

This is my first post about property, but it is not really about property as I am using this in relation to stocks. I am sure many of us heard about this statement many times, either from eager property sales person or in the showroom that you have visited. Many times, we were told that cant go wrong buying property in Singapore, it will keep going up in long term. Yes, the catch is in long term. Being someone who likes to play with data, I search the HDB portal for past resale transactions and guess what I found.

What can you learn from free invest workshop

A friend of mine spoke to me about a course that he had previously attended and was checking if the few of us are interested to attend a free workshop. He attended the course a couple of years ago when he just started his investment journey and this has helped him to set his foundation. I thought why not, on one hand, I can catch up with my friends and on the other, maybe can learn something from the workshop. In the end, I've gotten free dinner and beer too. :)

A gem in Asia ??

The past few weeks have been pretty exciting, not from the stock market but from the world cup matches, especially the humiliating loss of the Brazilian team. A team that had been well respected to the extend feared by many teams, was defeated by such a huge score. This also send us a timely reminder that anything can happen, including a correction in the current market. Bearing all these uncertainty still, where else can still give us an attractive proposition?

You can save $400,000 before 40

Whenever I ask around, how much do you need to be able to be able to slow down in work pace and that you can choose how to live your life and not rushing to work everyday, the answer is always $1 million. I dont know why but it seems that $1 million is the magic number. I mean how many of us, the working class can accumulate $1 million through savings. 

Can money buy happiness?

I believed many of us have heard this before, no matter how much money you have, it can't buy you happiness. There was an article from Stanford which discussed about this topic and a book was also published on the study. In the article, it also mentioned about Warren Buffet feeling awesome after he has decided to pledge most of his wealth to charity.

I had the similar feeling last week. 

A pleasant surprise last week when Noble Group started a run, and a strong one. As I had bought this counter with no idea about it's FA, I decided to take profit and thus it came to me as a pleasant surprise with this extra income. I had not expected the counter to gain 15% within a couple of months. This is definitely one of my good win for this year.

With the extra cash, I decided to buy my family a good seafood dinner over the last weekend and everyone was asking if I had strike TOTO. Everyone was happy and I was happy too. With the remaining cash, I was subtly happy that I can use it to pay for a small portion of the Tissot watch which I have been eyeing for a few months now. My friends have stopped asking when I am buying it .....haha...... alright, I will pay for supper the next time we meet :)

I guess money can buy happiness after all and it all depends on how it was being spend on.

Focus on risk, not profit

STI has been trending up for the past few weeks, and reading from some of the stock forums, I know many people have gone into the market with the hope of making a quick profit, as they can't resist that other people are making money. Before all of us(including me) get carried away, I thought I just share my 2 cents on risk and reward. Many of us when we invest, we always look at the rewards or profit first, how much we are going to make from this counter, share price is going up or in local term 'cheonging', how much higher can it go. We have forgotten one very important thing which most people neglect, it is the risk.

Some of these risks that we want to be aware of are :

1. Are you having your portfolio skewed towards certain sector - Remember a time when Reits were very popular, if one is not careful, you might end up with more than half if not all of your portfolio with Reits counters. They should be some form of diversification in the portfolio as not all sectors go up and down together in the same cycle.
2. What is the downside at your entry price - when you decided to buy the equity, are you buying at the 52 wks high. If you are, don't you think that your risk is higher as compared to one who bought at its low and once the sector turns around, it can be very rewarding.
3. At the macro level, where is the standing of the major indexes now? At this level now, would there be higher risk or reward if one chose to invest now?
4. What price should you cut loss if you were wrong - Once you bought the equity, you should also know at what price you need to cut loss, should your decision to buy is a wrong one. No one knows how the market will turn out next week, next month or next year. If market tells us that we are wrong,we should not go against it. Importantly we must preserve our capital.
5. One of the difficult decision is when to sell one's equity, I am still learning on this one. Many a times, when the counter goes in the right direction of your purchase, when would be the right time to take profit. Most of us would said hang on and wait for a while, it should go even higher, sounds familiar :) One has to ask what is the risk if you do not take profit now, and has it already met your original target profit.

There had not been huge swing in the market after the last speech by Federal Reserve Chair Janet Yellen, but that does not mean it will not in the coming months. Let's hope the party still continue but do watch the downside risks.

NOT to do before 35 years old

Following my previous posts of 35 and broke, I thought I will share what are the NOT to do things financially before 35. These are some of things which some of the people around me had committed, and spend years making it right again. By staying away from these, one should be fine at 35 and after.

So what are the things we should avoid?

Big Items - One's graduation is a joyous occasion, when one enters the workforce and the ability to make money and finally not dependent on allowance from parents. Some chose to celebrate this occasion with expensive Europe or Japan tour. Some of my classmates did that when we graduated, the idea being that it will be difficult to take 1 month of leave next time when one started working. I mean as long as the cost of the tour does not get you into too much of debt, why not, after all, one had studied all his life and it's not too reasonable to want to take a break. However, by not having a budget and discipline, one will find that he/she will get into huge debt even before he/she starts work. What if you cant find a job after the trip.

Small Items - Yes, everything adds up end of the day. If you stand in the middle of the Raffles place, do you noticed that every other people holds a cup of expensive coffee as they walk to their office.  By not having that $3 cup of coffee every morning, one would save about $60 a month and $720 a year. Another one  would be taking taxi going to work or home, especially after a tiring day. Most of us think that it's ok, it's just 4 or 5 taxi trips a week, does not matter much. Again, the  cost from the 4 or 5 taxi trips add up to quite an amount end of the day. If your objectives is too save very hard for the first 10 years of your working life, this is something that you can cut back on. 

Getting married - Most Singaporeans will get a house before they get married, and with 2 big items, most of our savings will be depleted badly. For the first time in your life, you never feel so empty before, I mean your bank account. Do you really need that expensive condominium or can you start with a simple HDB and then upgrade later when you build up your finances again. Most of my friends did just that and most are doing well financially. Do you really need that lavish wedding dinner or we can have a simple and yet presentable one. By making the right choice based on one's financial status, your financial standing should still be in Green even after getting married and your home.

Investments - Do not make stupid mistakes by getting into unregulated investments schemes which promises returns of 20% or even 30%, remember the gold scam, etc. Come on, even Warren Buffet's return is not that fantastic, and being an educated person, we should be able to question how this is achievable.

Related posts : Broke at 35 years old

Broke at 35 years old

My friend sent me this article from asiaone, 35 and flat broke, and we had this conversation over lunch today. He was shocked that couple earning $17,000 a month, can be highly in debt and eventually broke. Someone once said, it is not how much you make that matters, it is how much more you can save that is important. As we are going to have a new batch of graduates joining the workforce in a few months time, I thought I will share my 2 cents on this. One's financial journey starts the moment you join the workforce and if you don't make silly financial mistake along the way, you will be much better off than those characters mentioned in the article.

With the social media and internet, there are too many temptations trying to make you spent your dollar. Whenever there is an urge to buy something, have a cooling period, delay the purchase for 2 weeks and you might realized that you don't really need it after all.

Credit card is another culprit, as most of them who is in debt actually lose control over the use of credit card. It is the convenience and without realizing it, the limit has been blown. One of my colleague only has 1 credit card, and that is probably a good way to curb the urge of over spending.

If you are really in debt, you have to recognize that you have this problem and try and get back your financial to a healthy state again. Unfortunately, there is no easy way to this, and importantly to live below your means. Go read 'the millionaire next door', and you will know what I mean.

Singapore 50 - Still land of opportunities ...

Singapore has started preparation and getting ideas from it's people for its 50th year independence celebration in 2015. 50 years is deemed long by some people, but comparing with other developed nation, we are still a young one. In the recent years, there were many issues raised such as high hdb price, runaway condo price, high car price, food prices have also increased, everything has gone up except for salary which has not kept in pace. The young (aged 20 to 25) started asking about their future and if there is still opportunities in the land where they were born. More than 1000 students attended the Ministerial forum 2014 with PM Lee recently to understand his thoughts on these.

As I gathered with a couple of friends during our usual CNY gathering, I looked at them and they are pretty successful in their own ways. Though not very rich, all of us have a roof over our head, all drive car because of needs, kids in neighborhood school and all doing well in their career. We are the Generation X and our 2 generations before us had contributed to growth of Singapore and now in my generation we are still contributing.

Every generation had its challenge, the earlier generation had theirs. In our generation, We witnessed the fast transformation of this country, from a ticketed non-aircon bus to now using card. There is now also more competition in school and in jobs, given our open economy. In job, we had to compete with the FT, some got displaced of their job. I was fortunate to have my previous 3 very professional FT hiring manager. We also experienced firsthand dot com crisis, 911, SARS and Lehmen collapse. These had taught us to understand that if one is able to use the cycle to your advantage, the rewards will follow. This is not the first time COE is so high, it had happened before. And if it's high, then don't buy now cause knowing that it will normalized some time in future again, though no one knows when. Same goes to property price as well, it reached all time high before it crashed during the Asian Financial crisis.

To the young, importantly, spend less than what you are earning and don't make common sense financial mistake because just one mistake it can set you back many years. If you abide by these rules, you should be comfortable as these were the rules that my friends and I followed as well. With the amass cash, your opportunity will come in the next cycle.