Due to adverse publicity over the Lehman Brothers saga, DBS stocks have fallen sharply. More than 2 billion dollars worth of value vaporized in a short week or two.
My system had told me to short DBS 3 weeks ago using CFDs. At that time, I think the price was $14 or $15 plus. However, I set my stop loss price a little low, so I was stopped out too quickly in a day or two. However, after that, it continued to free fall all the way until $10 plus yesterday. That would have been 5 times my initial investment.

Jardine C&C was another stock that appeared on my system. However, I was too busy that few days to short it, so when it fell by a few dollars, I thought it had fallen too low. My system did not give the signal to buy it back, so I could have taken that opportunity to sell it. It fell until $9 plus at a low, so again, my initial investment could have multiplied by a few times.

I was on a good trade for UOB, but I got a little nervous about seeing the numbers change rapidly, and decided to take early profits. It fell a further $2 in the next few days. But anyway, this is my first successful CFD trade.

The best CFDs to short are those that cost more than $5. They need to have market volume to move. So forget about penny stocks when you try to short them.

You are only trading with the brokerages and you do not own any physical stock. Do look out for brokerages that charge obscene amount of money. Some of the cheaper CFDs brokerages include Saxo Traders and CMC Markets.

Share This

I’ve been using the various online banking services from DBS, UOB, and Fairpriceplus, supported by OCBC. I always thought that I needed to get the PIN from the bank, so I never used Citibank’s online banking services. However, I wanted to check my account balance and so I found out that it wasn’t that hard I had imagined it to be, and I could have used it long ago. 

The PIN required for Citibank online banking is your ATM PIN. For added security, you will key in your PIN by clicking on the numbers instead of keying in from the keyboard. At the same time, your account numbers will not be seen by any hackers, because most of the numbers are covered up by asterisks ***.  

So far, UOB, Fairepriceplus and Citibank will send a second round of security number to you via SMS. This means you can check your accounts anywhere you want.  UOB is also able to separate joint account holders’ individual accounts, and yet giving access to the account for both holders. I’m not sure about other banks though. 

 Fairpriceplus is an online bank that operates mainly via the Internet. You may access the ATMs from OCBC to deposit or withdraw money, or you can just transfer money from other accounts. Because of this, it is able to give 1% interest on normal saving account. I think this is a great deal compared to what many other banks are offering. At the same time, if you are a frequent NTUC shopper, you get to earn more points when you use the credit or debit facility, as the card has 2 in 1 functions. 

 By moving everything online, we can avoid meeting the pesky bank officers who try to sell us all sorts of structured products, especially when they aren’t making the money themselves, and the products promoted are recommended not based on merit, but based on what the company has for the product of the month. 

 DBS wants to save money on SMS bills, so it has issued a token to its customers. This means you have to carry that small token with you, which is quite inconvenient. At the same time, since many of us are afraid to lose it, we will probably leave it at home, which limits the ease of portability.

One newspaper columnist had already spoken out against this a few months ago, citing it as a reason for him to close the accounts and then move on to other banks which offer more convenient services. I guess banks have to watch out for the bottom line by lowering its operating costs, but at the same time, it should ensure that customers are well served without having much inconvenience. 

Share This

My funds have risen after falling for two or three weeks.

Would China’s stock markets be able to sustain the momentum until the 2008 Olympics? The government seems to be going all out to ensure this, but overall, based on what some experts say, the Renminbi will continue to appreciate and China will remain a strong player.

Having said that, the road ahead is still bumpy.

 Best Performing
(1 month)
  
Fund Name %
Henderson Hzn China A2 USD 26.53
HGIF Chinese Eq-A SGD 25.88
DWS China Eqty Fund Cl A SGD 24.45
DWS Noor China Eq CL A USD 20.08
UOB United Greater China Fund 19.38
 
  

Source: Fundsupermart

Share This

How do you know whether you can use your SRS money to buy unit trusts? Make use of free instruments on the Internet. At fundsupermart.com, you can use the fund selector. Just select ‘SRS available’ at the ‘CPF/SRF?’ section. You will find a list of unit trusts that allow you to tap on your SRS funds. If you plan to use your CPF-OA account, you can also do the same thing. Remember that you need to have a minimum sum of $20000 from April onwards, so you may want to use part of it to invest.

Next, to find the best-performing funds, just sort out the list according to the criteria you want. You may sort according to weeks, months or years. After that, just go to your usual online trading platform to execute your trades. Make sure your account details for CPF-OA and SRS are updated at the online platform.

So far, many of the CPF-OA approved funds are not doing as well as the other funds. Hence, do make sure you make your selection carefully. If not, you may be better off putting your money in the CPF account, earning that paltry 2.5%, subject to an additional 1% interest on your first $60000 in the accounts. Only up to $20000 in your CPF-OA will receive that additional 1%. Again, with the high inflation rate, the value of your money has actually decreased. Therefore, to beat the inflation rate, your returns have to be higher.

Once you have selected the option to use your SRS or CPF-OA funds to pay for the unit trusts, you may leave it to the company to contact the agent banks (DBS, OCBC and UOB) for transactions. If your company is a CPFIS-Registered Investment Administrator (IA), then you pay less on your transactions. Remember that you have to pay additional charges on the number of transactions. Hence, you may want to consolidate your transactions to save on charges, if yours is an IA. According to Fundsupermart, it is still cheaper than if you have gone to a non-IA company.

Share This

However, if you can earn more money from unit trusts and stocks, then you should take the money out. Besides, if you are planning to buy a HDB flat, HDB will wipe out all the money in your OA. Hence, to have a buffer when you make your repayments, just in case you are in the midst of changing jobs or taking time off, you will be able to sell your investments and use that money to continue to pay for your flat. This will reduce the possibility of you forking out cash to service your loans, especially when you do not have a job. Even if you have a job, the repayments may be quite high, and when you sell your investments after making money, this sum of money can go towards refinancing your loans and you will pay less interest.

With the new ruling, quickly go and apply for a CPFIS-OA with any of the three banks in Singapore: DBS, UOB and OCBC. There is no difference. What I recommend is just to get the account from them, and then you use your own other trading accounts to make your trades.

While making your trades, take note of the percentage of sales charge. Some of my friends recommended using POEMS for unit trusts, but the lower sales charges (1.5%) only apply to certain unit trusts. The rest cost 2.5%. Fundsupermart still allows me to buy them at 2%. So, just check before making your purchases. Anyway, for those who like getting freebies, by retaining at least $10000 in your Fundsupermart account, you can get a free quarterly magazine from them.

Share This

Unfortunately, some of the stocks have low visibility and tradability as not many people know about such stocks. With low volume, it is difficult for the stock to move. In addition, there could be other market risks since the companies with penny stocks are not in the major league yet. Small changes to the price may lead to huge changes in percentage gains or losses, hence it can be very volatile.

The UOB SESDAQ monitors the movement of penny stocks. To improve your pick on stocks, find out more using chart analysis or technical analysis. The financial stability of the company, good trading volume, and strong business plans should be considered too.

Sarah Tan – SingaporeProfit.com

Share This

1. Buy gold jewellery.
Unfortunately, I don’t think I can get past the stage of wearing of gaudy yellow gold, so I doubt I will be buying any yellow gold jewellery any time soon. Perhaps I should listen to the elders and get a 4-piece gold set instead of a 4-piece diamond set (that has little resale value) when it is time for the customary marriage. You may sell the gold jewellery to goldsmith shops. My mother has done it and exchanged the gaudy ugly designs for newer and more fashionable pieces.

2. Buy gold coins
There are actually people who buy gold coins from banks. You should get them from banks and there are different countries that sell gold coins. These coins are backed up by value, so you can easily sell them back to the bank to profit. These coins are physical products, so some people keep them in safe deposit boxes or simply keep them at home if they only have a few. Yes, I am paranoid about safety. The first time I really noticed the value of gold coins was from watching a drama serial about Ah Wang.

3. Buy unit trust focusing on gold
I bought UOB United Gold and General Fund unit trust in July and I am sitting on good paper profit of 12.8%. However, it was quite volatile and I constantly wondered whether I should continue to hold on to them. I have to admit that I bought this particular unit trust based on friends’ advices, for they said they had made quite a lot of money from this particular unit trust.

4. Buy certificates of gold
Instead of having the physical product, buying certificates is easy. These are sold in mutiples of one kilobar and up to a maximum of 30 kilobars per certificate. With no expiry date, these certificates can be exchanged for physical gold or cash whenever the need arises. You can get this from the bank.

Or you could also check out another website that shares information on how to get started on gold.

Share This

*The information here is based on what the websites say as of the published date. Please check with the banks personally if you wish to apply for any of the above services. 

Sarah Tan – SingaporeProfit.com

Share This

The NZ government does not want to hurt the exporters, but with the increase in dairy prices, they are still doing well.

According to Bloomberg, the NZ finance minister has said that the NZ dollar has reached its peak and will continue to decline. This does not look very good because the high percentage in interest rates may not offset the fall in the value of the NZ dollar, when it is sold against the Singapore Dollar. Thus, you may want to reconsider buying NZ dollar now if you had not earlier done so.

Currently, the key rate for NZ dollar is 8.25%, which is at a record high. Based on this, it is a little puzzling that the interest rate at the bank is not as attractive.

Given the uncertainty of the NZ dollar, the breakeven rate is S$1.13. Currently, DBS offers it at $1.15, which is lower than it was at its peak. Hence, if the NZ dollar falls beyond that, it might be wiser to keep the fixed deposit in NZ dollars until it increases again, unless it falls beyond what you have bought the dollar at.

Share This

Let’s take a look at how income tax is calculated. For example, your chargeable income is $50000. It used to be $40000 the previous year. Tax on the first $40000 is $900. The additional $10000 is $850. Total income tax will be $1750. By earning $10000 more, you have to pay double the income tax of previous year.

If you put $10000 into the SRS, you could save $850 if your chargeable income is ($50000-$10000=$40000) or $1400 ($90000-$10000=$8000).

For those in a lower income tax group, $10000 may seem like a big sum. There is a lot we can do with $10000. To take this amount out, it can be rather tough for some of us. Besides, one of the disadvantages of SRS is we will not be able to touch the money until retirement. With a lower income, $10000 is a lot to fork out a year.

The good thing about SRS is we can use the money in SRS to invest. If you are currently buying unit trusts and stocks, the money in SRS can be used to invest. Your proceeds will go into SRS. This will certainly overcome the paltry returns on interest rates provided by SRS banks.

In my original computation of investing $11,475 a year (the maximum amount we can contribute to SRS), by investing SRS in an index fund which could give returns of 12% a year, the sum becomes a mind boggling $3.45 million. (3,445,397.77). Even if you have to pay income tax on $344000 a year (the money has to be withdrawn in 10 years), you will probably pay about $45000 in taxes and still have lots more left.

Now, what if you had just willingly paid the extra money in income tax?
Let’s assume you never had a pay rise, so you have chargeable income of $50000 every year. The additional $850, if invested in an ETF that returns 12% a year, will become $255,214.65. This means, you can potentially lose $255k if you don’t reduce your tax. And since most of us have the potential to earn more each year, there is a greater potential loss!

Gosh! I’m going to open a SRS account next week. There are three banks where we can open an SRS account with – DBS, UOB and OCBC.

Sarah Tan – SingaporeProfit.com

Share This