Buy T-Bill when Inflation is 6%?

 

There has been much talk about T-Bills for the past few months, as High Inflation & Interest rates surge globally. Singapore being a small global city is also not spared with the large winds of financial change. Headline news of High Inflation continue to bombard Singaporeans in everyday lives. But with inflation hitting 6%, is it worth investing in T-bills of around 4%?

https://www.straitstimes.com/business/singapore-core-inflation-holds-firm-at-55-in-february#:~:text=The%20official%20projections%20for%20the,per%20cent%20from%20Jan%201.

To try to answer this financial question, I guess it depends on what u are comparing it against and the timeframe. There is hardly anything that is absolute and everything is relative to something. In science, distance measurements are relative to origins and even time is relative to your frame fo reference, accordingly to Einstein's theory of relativity.

Math will tell u that 4% - 6% is equal to negative 2%, which mathematically means it's not worth it to invest as u would be losing 2% of your money value in a year.

However many things in life are not a simple straight line. Because it depends on what u would have done seperately with your money if it is not invested in T-bill. Would u spend it instead on a luxury bag for example? Hence getting a negative 6% return 😂

Or would u do nothing and left the excess cash in the bank earning 0.1% interest? Or put it into HSBC savings 5.35% or RHB Fixed Deposit 3.9% promotion!?

HSBC 5.35% Savings Account Promotion

RHB 3.9% Fixed Deposit Promotion

Or is it just a Bond Ladder placeholder to capitalise on better % Investment Opportunities?

S&P500 ETF

Is Wilmar at 3.94 a Good BUY?

Everybody's financial situation is unique and different, and there are many priorities that demand our everyday attention. Some find joy in shopping, like my wife and daughter, while I find joy in making them happy 😍  May we all choose to spend our time and monies wisely!

UNEVENTFUL Apr $8,437 *yawn*

 

In medical terms "uneventful" can mean a slight positive event. For example, the surgery  operation was uneventful. Which literally means nothing much extraordinary/unexpected happened throughout the surgery. 

The markets in April, were mostly sideways with low volume, plus my family was also down with Covid of mild symptoms (thank God!) So apart from collecting dividends from DBS, ESR reit and Bonds, there were really not much interesting activities (*YAWN*). Still that's kind of the beauty of a semi-passive income, where invested money works on its own to provide returns, while u are busy with other aspects of life and family.

7-Figures Singapore Portfolio

6-Figures Income

With a long weekend ahead and few days left in April, I easily tabulated my $8,437 gains (gave thanks) and look forward to a hopefully more profitable month of May ahead 😎 Though the saying goes to "sell in May and go away", this effect has been slowly waning as more trades can be done online even while away for summer holidays.

Personally, I think the USA markets seem to be slowly turning positive, with the S&P500 Moving Averages MA50 currently sloping upwards. Hopefully some good corporate earnings will act as a catalyst to start the ball rolling, as Interest Rates seem to have peaked. With positive USA markets, Singapore should follow slowly after. The Singapore market is usually the boring kiasu type 😂

Still if u have any interesting large/mid cap stock that u are looking at, pls feel free to comment below. Thanks  😊

FoxNews $787M Disinformation!

The USA court trial of Fox News vs Dominion ended with a settlement of $787M to Dominion Voting Systems. With this settlement, it spares Fox News the embarassing witness of its famous executives and news achors from standing in court to explain their intentions and actions taken. It is easy to lie in public (citing freedom of speech), but much more difficult & expensive to lie in court. Responsibility does need to go hand-in-hand with Freedom/Power. Remember this famous Spiderman quote "with great Power comes great Responsibility"?!

Misinformation vs Disinformation

Misinformation is false/inaccurate information. Disinformation is false information which is deliberately intended to mislead. The spread of misinformation/disinformation has affected public health (think Covid vaccinations) and  even how countries are run (election results/politics). It's scary to think moving forward, that half-truths are going to shape how many people think/react. Information War is becoming very real indeed!

As Investors, how we read the headline Financial news becomes very Important, as what we Think translates to what we Do. Modern day news tends to scream for our Attention, with big Bold words and Exclamation marks! Sieving through the rumours from the real stuff becomes a challenge, where some mistakes will be made, some learnt through painful experiences, and ultimately continuing bravely forward. Sticking on to our personal financial plans & convictions in certain Stock purchases, or reversing course and cutting loss, happens all in our Minds.

Personal Psychology plays a big part in investing. Containing Fear vs Greed are two keys emotions that need to be kept in good Control. Only by better understanding oneself, can we be better investors and as individuals 😊

Will Kepcorp at $6.2 go HIGHER?

 

Keppel Corporation is a government linked company with strong capabilities in energy & environment, urban development and connectivity. Many Singaporeans will be much familiar with this grandfather stock

Kepcorp has a market capitalisation of $11B with a 52wk price range of $4.57 to $7.72 (current price at $6.21) which is -20% from 52w high and +36% from 52w low

Throughout the many years, Kepcorp has rewarded shareholders with relatively good dividend (2-6%), even during Covid year of 2020

In the short term, psychological $7 and $7.50 resistance levels will be the prices to watch. Also not forgetting $7.35 which was the price that Temasek initially offered to buy Keppel private, before calling it off. So lots of resistance bands ahead.

Looking at the long term chart, it's probably hard to recall before 2014, that Keppel used to be a $10+ stock. Those are probably the good old days where shipbuilding was lucrative and profitable before the Chinese shipyards competition kicked-in

With the sale of its Oil&Gas segment to Sembcorp Marine, the problematic & cyclical profit sector seems to be unhinged from the future dreams of Kepcorp. It is now ready to embark on a more asset light management moving forward. With gahment ambitions on-the-tow, will it be able to make further inroads into neighbouring Asia and Asean countries? I certainly hope so, as I am currently vested  😂

Ukraine War & $$$ Impact

 

The Ukraine war has been heartbreaking to watch. War has always been cruel with the great loss of lives and precious resources. More so in this modern era of social media, phones/cameras and drones etc. Numerous videos with different perspectives are widely available online. One of these great minds I follow is Prof Alex Stubb, former Prime Minister and Finance Minister of Finland.

https://www.youtube.com/watch?v=OhwfC_Vh4DI&list=PL9zL6xEwtVujfHHif6MyfIFxP_G44sfAG

One of the most obvious financial impact of Ukraine war would be the price of oil, where we can see from below the price of WTI oil spiking from $94 (Feb 2022) and even up to $130 (Mar 2022)! In the following months of 2022, the price of oil remained high above $100, until it became obvious that instead of a lightning fast victory expected from Russia, the war is grinding on beyond one year. The current price of WTI is settling around $80, even below the invasion of Ukraine, as worries of global recession arise.

The second most obvious impact would be the strength of USD following the war, as global risks and uncertainties arise, people tend to flee towards strength, which would be the USD. The Dollar Index climbed from $96 (pre-War) up to $113, until settling down to the current $101. Similarly for USD/SGD $1.34 up to $1.43, before settling down to $1.33 now

Other $ impact would include global supply chain constraints in Wheat, Fertilizers and Agricultural products, all helping to push Inflation numbers higher, with Risk and Logistics Costs all baked into the final Prices of many everyday items

To those who are following the Ukraine War, we are currently in Day 419. While personally hoping for a solid Ukraine spring counterattack for this cruel war to end soon, it does not seem too likely, with Russia too pooling in more resources and mobilization, in view that this is an Existential Threat. Dictators cannot lose, as it would mean their personal Death or permanent Jail & historical Disgrace. Remember too that Russia has the largest arsenal of Nuclear Weapons and might be forced to use somehow through Intention or a fat-finger Mistake. Hence the "better" option would be for this war to grind on for years to come, until someone is assasinated or passes away. It's kind of a scary thought, but remember the also long Afganistan war?!

For Investors like us, it's another major hoop to navigate through in this global sea of Risks. The Market is not immune to negative news, and usually climbs through walls of Worries. Historically and Amazingly, mankind prevails somehow, through the Grace & Mercies of God. With an eye to Challenges, let's continue to press Up and On!  😎

RHB Fixed Deposit 3.9% vs 12mths T-Bill 3.7%

 

RHB bank is running a new Fixed Deposits promotion of up to 4.1% though realistically while comparing with the upcoming 12 months T-bill, it should be 3.9%

I had in Jan and Feb 2023, benefited from their 5.5% savings deposits promotion, and am considering putting in some monies, to lock-in a higher interest rate before rates start coming down. Fixed Deposit (FD) Minimum placement is $20,000

https://rhbgroup.com.sg/rhb/personal/fixed-deposit-campaign

Comparing against the upcoming 12 months T-bills, with historical prices hovering at around 3.7%, the RHB FD rate of 3.9% is a just a tad higher.

For those who are unaware, the 12 months T-bill is only available every quarter, and closing this week, 19 April

Most of my funds are currently in HSBC deposits, which are already earning 5.55% high interest rate. Logically it does not make sense as High Liquidity (savings deposits) should yield Low Interests. Instead due to promotional rates, High Liquidity is earing High Interests. Well I guess, we are indeed living in strange/uncertain times. These "illogical" interest rates should only be temporal, as banks adjust to the big fluctuations of interest rates, and fight for fresh funds. As the old saying goes, "Money FLOWS where it is treated BEST!"

HSBC 5.55% Savings Account

T-Bills are definately safe as backed by Singapore AAA Gahment  😆

MAS T-Bills

RHB is the 4th largest bank in Malaysia by Assets Size, founded in 1994 with roots all the way back to 1913. There's also $75K individual bank deposits that is fully backed by SDIC

Will bank interest rates continue to climb higher or would it stagnate and even reverse gear soon? Nobody has a 100% accurate crystal ball, and your guess is as best as mine. In financial investments, it's all about managing Risks vs Rewards. Unique individuals need to manage our circumstances differently. It pays to "not put all eggs in one basket", yet not to over-diversify that will consume too much energy. It's all about personal BALANCE!

Compare S&P500 BlackRock ETF IVV vs CSPX

 

Both IVV and CSPX are passive S&P500 ETFs from BlackRock that seeks to track the performance of an index of 500 large cap USA companies. IVV is listed in the NYSE (USA), while CSPX is listed in LSE (UK). Both are in USD and have shown similarities in terms of portfolio performance and pricing.

Only slight differences are seen in terms of Net Assets, Dividends and Expense Ratio. 

IVV is more established (since 2000) with $308B net assets, quarterly distribution of dividends and a lower expense ratio of 0.03%

CSPX however is smaller, accumulating dividends and a slightly higher expense ratio of 0.07%

Personal Preferance: As a re-foray into USA markets after many years, I guess it pays to be more cautious. Would choose IVV instead, as it is more established/liquidity, pays quarterly dividend and offers a lower expense ratio (personally dislike paying fund managers 😂). The slight drawback would be in the USA domicile, which would require 30% tax vs 15% tax for Ireland. Guess my intial positions would be small, so there should not be much differences in dividend payouts.

S&P500 ETF - Onward to USA Market!

Waiting for a good opportuntiy to enter into USA markets. Hopefully it would be profitable in the long run, as Singapore markets is small and kind of directionless.

As always, would welcome any comments or suggestions  😎

S&P500 ETF - Onward to USA Market!

 

The legendary investor Warren Buffet has long recommended that the average person buy a low cost S&P500 index fund, as it will be difficult to beat the market in long run. Being an average Joe in the market and having more time currently to learn, I decided to take a closer look at the S&P500 passive ETFs. 

USA remains the largest economy in the world, and the Top500 companies make up the S&P500 index. I have travelled many times to different parts of USA and have always loved this country, which is full of natural resources, freedom & innovation. Though in recent years, challenges (eg. dysfunctional politics and gun violence) have arised, I still believe that USA will be the market leader for many more years to come.

Naturally while looking at the S&P500 ETF, one will first see the oldest (since 1993) and most liquid SPY. 

The slight con of SPY is its relatively higher Expense Ratio at 0.09% as compared to 0.03% in BlackRock IVV, Vanguard VOO and also State Street's cousin SPLG

Since I am thinking of using my current Standard Chartered trading platform, I am considering IVV which is priced around $414. I also like this price as it's almost 10 times less than the current 4140 S&P500 index. Easy to calculate mah ... 😂

As I am new to investing in S&P500 index, please let me know if u have any better passive Index Funds suggestions. Thanks :)

Thank you CW8888!

 

Thank you CW8888 for your selfless sharing and deepest condolences to your family. I have learnt much over these years from you and your lifestyle. Though we have not met face-to-face, your wisdom has been an inspiration to me.

https://createwealth8888.blogspot.com/2023/04/in-loving-memory.html

Through your selfless sharing, I have also been encouraged to show my income & portfolio, while hesitant over my personal privacy. Privacy is kind of a "sacred" thing,  which once lost is difficult to ever recover back.

https://thesingaporemarket.blogspot.com/2023/03/on-target-for-6-figures-2023-semi.html

The investing community in Singapore is small relative to other global markets. Yet it has its unique financial instruments like CPF, T-Bills, Equities etc that are only applicable to investors in Singapore. Many of us spend much of our adult life working, but yet with poor financial habits & lifestyle, we would never be able to achieve financial independence and retire comfortably for ourselves and our families. 

Thank you once again CW8888 for being one of the bright spots in the Singapore blogger community. Indeed I am sure that many will agree that we have been blessed by your kind and thoughtful words of wisdom over these past 18 years. You will surely be sorely missed  :(

SLOW Living

 

For the past few months, I have chosen a different type of lifestyle. Some may call it "Slow Living". Wikipedia describes Slow Living as a Lifestyle which encourages a slower approach to aspects of Everyday Life. Others simply mean making more time for self-care or appreciating little joys of life.

Probably because of a combination of life experiences, work and hope for doing something different in future, I have opted for this new lifestyle. I have been blessed by the acceptance of my family and finances. Apart from having less money 😂, I have found this new lifestyle to be quite satisfying. 

CPF website has a nice article and image on this

https://www.cpf.gov.sg/member/infohub/educational-resources/how-slow-living-can-shape-our-finances

It is great to spend more time with family, exercising and also learning how to invest better. Time seems to fly past so fast each day. I picked up some cooking, blogging again and am learning how to make youtube videos 😁. 

Would also hope to do some volunteer work, when time allows?! There is just so much stuff to do everyday. Time is such a precious resource, which when lost, cannot be recovered. I guess there's only so much money which we really NEED. The rest is probably WANTS, which we are using time to exchange for. 

Is Slow Living also what you currently desire? 😎

HSBC 5.55% Savings vs 3.85% T-Bills

As revealed in my 7-Figures Portfolio, Bonds form the biggest chunk at 19%, of which most of it includes 6 months T-bills, with which I have created a 6 months Bond Ladder to ensure funds liquidity to capitalise on probable investment opportunities.

7-Figures Portfolio

 

However with the availability of HSBC 5.55% high Savings account, this resolves the liquidity issue of excess cash vs Bonds (T-bills, SSB, Fixed Deposits etc)

HSBC 5.55% EGA Savings Account

Bank Savings acconts should be relatively safe, with guarantees of at least $75K by SDIC. Plus HSBC is also one of the 7 Singapore banks classified as Domestic Systematic Important Bank (D-SIB).

https://www.mas.gov.sg/news/media-releases/2015/mas-publishes-framework-for-domestic-systemically-important-banks-in-singapore

The last bank run in Singapore happened in 1974, almost 49 years ago, survived and subsequently was acquired by present day UOB bank

https://remembersingapore.org/2014/04/22/a-bank-run-in-singapore/

Even in USA, when the relatively small Silicon Valley Bank run happened, USA government quickly stepped in for a full guarantee of ALL bank deposits.

Comparatively, T-Bills are fully backed by the Singapore Government, AAA credit rating. Plus Singapore has $0 net external debt. Yes, $0! external debt (woohoo, well done Singapore!). Technically, u can't default/bankrupt with ZERO debt.  😅

https://www.mof.gov.sg/docs/default-source/resource/gst/pdf/10-is-the-singapore-government-heavily-in-debt.pdf

So it does seem that T-Bills are still relatively SAFER than HSBC savings, but it's kind of negligible. So for the time being, more of my cash is in HSBC rather than in 6m T-Bills (which also are 2 weeks apart). T-Bills yields are also slightly lower at around $3.85% vs HSBC 5.55%

Still in our current highly volatile world, u can never say NEVER! Let me know your thoughts of 3.85% T-Bills vs 5.55% HSBC Savings?

3 Simple Steps to Save on Income Tax

There's a common phrase saying that only 2 things are certain in life - Death and Taxes. It is finally the month of April, and it is Income Tax Time. While nobody really loves to pay taxes 😆, it is a good reminder that it is always more blessed to be able to give back. Being able to pay income tax, basically means at least we have some income. Though almost everyone wishes to have more income, at least it's better than nothing 😁

After dutifully completing our tax reliefs, it is finally time to pay our Income Tax *LOL* 

Tax Avoidance vs Tax Evasion
There are 3 further simple steps to at least help to alleviate the "pain" of taxes.

Step 1: Apply for the HSBC EGA account to enjoy the 5.35% highest savings rate

Highest 5.35% Savings Account

Step 2: Download the IRAS Master Giro Form from website

https://www.iras.gov.sg/quick-links/forms/other-taxes-and-services/giro-application-forms

Step 3: Complete the Giro form and snail mail it back to IRAS, to enjoy 1% cashback from HSBC EGA account

https://www.hsbc.com.sg/content/dam/hsbc/sg/documents/accounts/everyday-global/terms-and-conditions-governing-everydayrewards-programme.pdf

Though 1% cashback is not great, it's still better than nothing.... haha

Hokkiens have a good way of saying this "when there is no fish, prawn also not bad"

Example if u are paying $4K of tax, it's still a respectable saving of $40, sufficient for a good meal  😋

With the nerf of Grabpay Mastercard/AXS benefits, this should be the best way of paying our taxes.

Do u have an even better way? Let me know in your comments below. Thanks

Is RMG at $1.49 a good SELL?

 

Raffles Medical Group (RMG) is a private healthcare provider in Asia, operating in Singapore, China, Japan, Vietnam and Cambodia. It has a network of clinics with family physicians, specialists and dental surgeons, and owns Raffles Hospital, a tertiary care hospital in Singapore, which accommodates surgical centres, medical laboratories and 24 specialist centres in various areas like Obstetrics & Gynaecology, Cardiology, Oncology and Orthopaedics.

RMG has a market capitalization of around $3B and the latest FY22 results have been reasonably good. Revenue grew by 6% to $767M and profit grew by 72% to $144M. Earnings per share grew 72% to 8c, while Net Assets Value grew 6% to 55c. A final divdend of 3.8c has been declared and will xd on 9 May.

Taking a closer look at its P&L, shows the strong increase in profit came mainly from a sharp drop in Staff costs ($45M) and Inventories and consumables used ($21M).

From the long term chart, RMG price has performed very well, growing from $0.2+ in 2009 till around $1.5 in 2016 and 2023. There were two attempts to break $1.5+ range n 2015-2016 before succumbing to profit taking to $1. Then Covid struck in 2020, and the price is again attempting to break $1.5+ resistance level.

Moving Average MA50 seems to be sloping up and supporting to push price upwards. Volume is slightly above 20days average. Stochastic oscillator is also trickling up  to the overbought region. All-in-all, Technical Indicators do not seem to point to a strong punch through resistance level of $1.5+

Singapore & China reopening from Covid, could push its financials better in the year ahead.

What do u think? Let me know in your comments below 😍

My 7-Figures Singapore Portfolio

My portfolio has been painstakingly built over 20 years of investing. It is far from perfect and there could also be some glaring mistakes seen in my portfolio made years ago. After publishing below blog post, some readers have requested to share my 7-figures portfolio

On-Target for 6-Figures 2023 Income

To do my small part in contributing to the Singapore investing community, here goes 😅:

As a relatively conservative investor, the largest component of my current portfolio is Fixed Income Bonds, consisting mainly of 6/12 months T-bills, SSB, Fixed deposits and Temasek/Astrea Corporate Bonds. 

Next are the 3 local banks, which I picked up over the past few years. Would have loved to purchase more for a bigger % of my portfolio, but they have risen so much over the past year. In the past, I tend to avoid bank stocks, as I felt they are important yet boring companies. However as I age (more risk averse 😆) and analyze them further, they truly have solid investment moats in Singapore and very strong financial fundamentals. 

Mapletree Industrial Trust is a good Reit, strong sponsor with nice increasing dividends. I probably picked it up at a slightly higher price, on anticipation in the growth of its newer Data Centres purchases. With current weakness in Technology and rising interest rates, MIT prices have retraced somewhat.

Comfort Delgro seems to be a good proxy of the Covid reopening with packed MRT trains nowadays. But the lucrative taxi market have been carved away by Grab/GoJek private hires. Hope it continues to pay good dividend. Some patience is probably needed here.

Wilmar is a solid commodity company, which I have shared previously. Currently it seems to be shrugging off negative Adani news and edging slowly but surely up. Hope there's more price upside 😎

Is Wilmar at $3.94 a good BUY?

Everyone should be familiar with Singtel, as it used to be the largest company in Singapore. The banks have now overtaken its market cap position. Lucrative overseas calls have been replaced through technology like whatsapp/zoom etc. Industry players are also left wondering what is the next killer app for 5G. 

Oil & Gas companies (SMM and Kepcorp) used to be darlings of the 'black gold' market. Fierce competition from Chinese/Korean shipyards have eroded their profits. Hopefully with the recent merger of SMM+Keppel O&G, will we see better days ahead. 

This ends my humble sharing of Top10 portfolio. Hope it encourages u to press-on in your investing journey. Please feel free to comment below if u have further questions 😂

Highest Savings Account! HSBC 5.35%!!!

HSBC bank has just released its new interest rates for April 2023. Though it has dipped slightly by 0.2%, it is still the highest savings account in Singapore at 5.35% !!!

You can also read more here:

http://thesingaporemarket.blogspot.com/2023/03/hsbc-555-ega-savings-account.html

Unlike OCBC360/UOB One accounts, the HSBC Every Global Account (EGA) account has no tough conditions to fulfill (eg. salary crediting, minimum spending of credit cards)

https://www.hsbc.com.sg/accounts/products/everyday-global/

For new accounts opened in April, the reference month would be based on March balances which would be $0. EGA bonus interest of 4.35% would be applicable for the next 4 months of April-June. 

There's also a 1% cashback reward for incremental balances from previous month. Applicable for the first 2 months (Apr & May) and thereafter you may choose to either withdraw all your funds (remember this is a savings account!) in Jun, leaving just $2k balance to avoid the fall-below fees, and then redeposit again on 1 Jul 23. Alternatively, you may choose to let the funds remain in June to enjoy still a respectable 4.35%

https://www.hsbc.com.sg/content/dam/hsbc/sg/documents/hsbc-everyday-global-account-bonus-interest-promotion.pdf

The payment of the bonus interests would only be made in Sep, which would be few months later, so there's kind of a component of a fixed deposit mechanism within. The plus point is that it's still a savings account and you are free to move your funds for emergencies or to capitalise on other investment opportunities that arise (unlike 6/12 months T-bills and Singapore Savings Bonds).

This HSBC EGA savings account can be a bit confusing, so do comment below if u have further questions. Sharing is Caring!  😎