How to make an investment plan

[choozm]

ah, Commerzbank SGD bond fund... saw it before when looking for alternative to ABF SG bond index fund (i.e. high credit rating, low expense ratio bond funds). BUT... small fund size

[choozm]

AIGIF Singapore Bond Fund - "...by investing primarily in high credit quality SGD fixed income instruments issued by Singapore and non-Singapore entities."

But its top three holdings include Ascendas Real Estate Investment Trust and CapitaMall Trust. hmm... REITs in a bond fund?? huh?

[indexfundfan]

AIGIF Singapore Bond Fund - "...by investing primarily in high credit quality SGD fixed income instruments issued by Singapore and non-Singapore entities."

But its top three holdings include Ascendas Real Estate Investment Trust and CapitaMall Trust. hmm... REITs in a bond fund?? huh?

Could they be debt securities issued by the trust? Any link?

[choozm]

Please refer to the annual report 31 Dec 2004 from FSM. It says "...selectively capitalizing on opportunities in high yield bonds and participation in real estate investmenttrusts (REITS)"

On 31 Dec 2004, it has 18.97% equities (doubled from 2003), 61.06% bonds, 19.97% current assets (cash?).

I am really shocked. No wonder its sales charge and mgmt fee are higher than usual.

[wilfredling]

AIGIF Singapore Bond Fund that may not invest in Bonds? I am really surprised. Why does MAS allow such confusion?

[indexfundfan]

AIGIF Singapore Bond Fund that may not invest in Bonds? I am really surprised. Why does MAS allow such confusion?

That's what you get with an actively-managed fund. Imagine an investor in this fund who has decided on 50/50 equity/bond to match his/her risk profile. But, in actual fact, the ratio is more like 60% equity and 40% bond.

[indexfundfan]

AIGIF Singapore Bond Fund that may not invest in Bonds? I am really surprised. Why does MAS allow such confusion?

That's what you get with an actively-managed fund. Imagine an investor in this fund who has decided on 50/50 equity/bond to match his/her risk profile. But, in actual fact, the ratio is more like 60% equity and 40% bond.

Let's continue the AIG SG Bond fund discussion HERE.

[starlight1968sg]

Thanks Dr LOW.
I have printed your article and will digest it later.

[indexfundfan]

Thanks Dr LOW.
I have printed your article and will digest it later.

starlight, do let me know if you have any feedback.

[wilfredling]

Hi all,

Yesterday sudden market correction shock many of us. It is obvious that the reaction of some of us indicates that there was no mental preparation of the risk in investing in the equity markets. It is a good time to re-read this article that indexfundfan had written. If there was never an investment plan, it is time to start planning for one now. If there was an investment plan but still feeling terrible during the sudden market correction, please review your plan again because it does indicate a mismatch between one's risk tolerant and the portfolio's risk.

[Alphas]

bonds are great for long term investment, but have watch for currency revaluation

[dowz]

bonds are great for long term investment, but have watch for currency revaluation

hmm... i would prefer equities for long term investment.

but then, it also depends on the duration of 'long term' bah.

[starlight1968sg]

I prefer "anything that makes me rich"

[awcute]

Wow good article. I have some new pointers for further search.
Moderator, a suggestion.
May be a sticky post that contains a link to this article is required in beginner section.
Make them read first, or may be beginner forum is required? But this means must move all beginner topic out (a lot of work).

[dowz]

not to mention that a lot of topics tend to go OT, where it'd be difficult for the admins to sort out the 'beginner' threads

[olympian]

great stuff........thank you.

[Hulumas]

Thanks everyone. I hope it can serve as one of the "new investor starting guide".

Oh yes, It can't be denied, after reading through its content. It adds extra investment knowledge of mine. Thank you very much for your posting effort.

[evideo]

This information rocks !

[jangoh]

I've attached an excel spreadsheet to help me plan for retirement based on the threadstarter recommended procedure. Please note I'm not a financial consultant and I take no responsibilities if the calculation method is wrong.

Just to share with all and maybe some can check to see if I did it correctly. Feel free to modify and improve it and share it here. Thanks.

[patlim]

I've attached an excel spreadsheet to help me plan for retirement based on the threadstarter recommended procedure. Please note I'm not a financial consultant and I take no responsibilities if the calculation method is wrong.

Just to share with all and maybe some can check to see if I did it correctly. Feel free to modify and improve it and share it here. Thanks.

dear jangoh,

sigh, if life can be so simple and everything can be assumed to stay on an even course, but my concerns remain the same because i have to point out and re-align u back to the basics as there are serious gaps in your wealth protection planning.

[jangoh]

dear jangoh,

sigh, if life can be so simple and everything can be assumed to stay on an even course, but my concerns remain the same because i have to point out and re-align u back to the basics as there are serious gaps in your wealth protection planning.

Hi Patlim, may I know what are the serious gaps ?
The spreadsheet only caters for retirement fund and assumes the protection part is taken care of. Meaning that if I stated say $12k for investing every year, i must have already taken care of my other daily expenses and term insurance expenses. If anything happens at any one time, I can draw on my insurance payout and investment wealth for help.
Yes, if I buy term, my insurance stops at say age 60. So at that age, i only have my accumulated wealth for help.

What if my investment plan goes wrong at that time ? Then i can only blame myself and it is a risk to take. But if I take a whole life plan for the kind of term insurance I need, the premium increases drastically and I will not even have $12k to invest annually now. Maybe even need to top up somemore.

[patlim]

dear jangoh,

sigh, if life can be so simple and everything can be assumed to stay on an even course, but my concerns remain the same because i have to point out and re-align u back to the basics as there are serious gaps in your wealth protection planning.

Hi Patlim, may I know what are the serious gaps ?
The spreadsheet only caters for retirement fund and assumes the protection part is taken care of. Meaning that if I stated say $12k for investing every year, i must have already taken care of my other daily expenses and term insurance expenses. If anything happens at any one time, I can draw on my insurance payout and investment wealth for help.
Yes, if I buy term, my insurance stops at say age 60. So at that age, i only have my accumulated wealth for help.

What if my investment plan goes wrong at that time ? Then i can only blame myself and it is a risk to take. But if I take a whole life plan for the kind of term insurance I need, the premium increases drastically and I will not even have $12k to invest annually now. Maybe even need to top up somemore.

dear jangoh,

once again, let me emphasise that i do not wish to dwell on opinions and my advice to u is to seriously consider meeting up with your financial adviser and execute your wealth protection planning before embarking on the other ws of wealth management.

thanks and best regards.

[jktee]

dear indexfundfan, I just started investing. can you recommend me some good books to read? thks.

[pipi486]

I had a good read, thanks

[momo]

Hi,

I chanced upon this book. This is just another guide.
The Standard & Poor's Guide to the Perfect Portfolio: 5 Steps to Allocate Your Assets and Ensure a Lifetime of Wealth... By Michael Kaye

From page 18, the "universal rules" are:
. You should not have more than 75% in any asset class.
. You should have at least 5% in short term cash instruments.
. You should allocate at least 5% to international securities.
. You should have exposure to at least three asset classes.
. You should hold no more than 10% in an individual stock.
. You should have at least 25% in stocks.
. You should have at least 10% in bonds.
. You should consider rebalancing if an asset class moves at least 5% from its initial weighting.

Just sharing.
Ultimately, I guess it is still "to each his own".