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actually, you don't strike me as one who is investing for the "thrills" it brings- you're looking at it solely as a means of wealth accumulation, am I right?
If that is true, why not go to the professionals? not the GE/AIA/PRU/ML varieties (no offence to those professionals out there), but the FAs from say funds supermart, finatiq, etc.
Money's meant to work for you- pay them, and let them recommend. :)
Originally posted by gasband:I posted the general process in my last reply, so take a look at that. I have not dwell into too much becos of the minimum $5000 needed. Its a lump sum to invest but I will look into that soon. I dun have too much info yet. It is definitely 8% with periods ranging from 3-6 months. BUT i do not know whether it is 8% based on a 6 month/12 months locked in or prorated for 3 months.... it is better to call various banks to check their interest rates and their terms. Different banks offer different interest rates for AUD fixed D...
8% return for $5000 investment within 3-6 months is a good bargain wor. Put Fixed deposit of $10k wun even get back 3% interest for a 6 months term now lor.
thanks for ur info, i will do some research when i have the time.
Originally posted by JasonC:actually, you don't strike me as one who is investing for the "thrills" it brings- you're looking at it solely as a means of wealth accumulation, am I right?
If that is true, why not go to the professionals? not the GE/AIA/PRU/ML varieties (no offence to those professionals out there), but the FAs from say funds supermart, finatiq, etc.
Money's meant to work for you- pay them, and let them recommend. :)
I can't take thrills.. i ever made a loss in stocks before.. abt 30% of what i invested...not a lot but i dun want to get stuck in the stock market. My sis has made a loss of over $20k.
i dun like to invest under pressure. Seriously, i have been approached by a few so called financial planners before.. they tried to sell this fund that fund to me.. but aft doing some research, i realize that the funds they reommended were not the good ones.
all i can say is don't buy unit trust...
Originally posted by pigsticker:all i can say is don't buy unit trust...
some unit trust pays well.
my sis earned a few thousand dollars from unit trust.. but of course, over a period of 6 yrs or longer.
Originally posted by browniebaobao:I can't take thrills.. i ever made a loss in stocks before.. abt 30% of what i invested...not a lot but i dun want to get stuck in the stock market. My sis has made a loss of over $20k.
i dun like to invest under pressure. Seriously, i have been approached by a few so called financial planners before.. they tried to sell this fund that fund to me.. but aft doing some research, i realize that the funds they reommended were not the good ones.
and they were from...?
what I meant was to leave the recommendation and analysis to them- then you make the final call. would save you the headache you're facing now ;)
Originally posted by JasonC:and they were from...?
what I meant was to leave the recommendation and analysis to them- then you make the final call. would save you the headache you're facing now ;)
not a headache for me.. juz want to hear the opinions of more ple and not listen to watever the financial planners say.. it's their job after all, u think they will care whether u lose or gain how much?
i think finatiq was one, standard chartered bank, prudential etc..
Originally posted by browniebaobao:
some unit trust pays well.
my sis earned a few thousand dollars from unit trust.. but of course, over a period of 6 yrs or longer.
but how much did she invest?? and it's over 6 years... the rate of return is probably just 1-2% by my guess...
Originally posted by pigsticker:but how much did she invest?? and it's over 6 years... the rate of return is probably just 1-2% by my guess...
i can't remember.. but it's definitely much more than 1-2%.
Unit Trusts is one of the lowest risk investments if you can find. Unit trusts is meant to be a long term investment, where the returns will increased exponentially if you do the investment for more than 15 years or even 20 years or more. It can be used for a retirement investment or wealth accumulation. Unit trusts will DEFINITELY have negative returns most of the time if you are looking to liquidate your returns within 2 or 3 years or even 5 years. You hardly have capital losses on unit trusts, it did happened with some unit trusts but with most unit trust investments, it is more of an issue of which fund will give you more returns. My view is that an unit trust is definitely better than a bank, earning returns of at least 4% and above and with a pretty manageable risks due to the dollar cost averaging.
recommend a few?
i have a couple of unit trust plans in the china and India Funds. The Emerging market funds are being tipped to do strongly but it is a very violatile fund. Thus China and India funds are pretty safe but again Unit Trusts are meant for really long term. I invested with Prudential and AIA anyway.
When i was like you, i started with 2 year or 3 year FDs/Bonds...then, as i grow up and financially wise, i began with IPOs which are quite stable..hold them for a few months to a year, u can make quite a tidy profit..then, go for penny stocks first...get a foothold..let yr broker earn your money first..u have to lose some in order to win some..that's a mantra..then, go for technology stocks..if your brave, go for commodities for a few months first after your foray into penny stocks..when ur lao jiao enuff, then try hedging or taking an opposite position in a futures contract...if too scared, go for blue chips but u need to have a huge capital for your portfolio by now..
currently, im into Indian and SG REITS...
my personal take on hedging against a currency risk is a personal risk you have to undertake. By investing in foreign currencies, you are hoping to earn:
1) by the high interest rate, which is really very high compare to our singapore rates...
2) that the currency will appreciate against SGD.
If an AUD FIXED D gives you 8% for a 3 month lock in period, the possible scenarios are:
1) You earn the interest plus the currency stagnates against SGD. you get back capital minus off cost which is normally negligible against the interest earned, esp if you use the better method of changing the currency with an online platform like POEMS and TX to the bank rather then converting at the bank itself.
2) You earn the interest plus the currency appreciates against SGD and earn on that appreciation upon conversion back to SGD
3) You earn the interest but the currency depreciates at a rate lower than interest against SGD. So you still get back your capital plus some interest earned
4) You earn the interest but the currency depreciates at a rate higher than interest earned against SGD. You suffer capital loss.
With 4 possible scenarios, you are only at risk of loss with one scenario. Therefore, it is important for yourself to analyse and take a personal risk on whether within that 3-6 months of investment, what is the possibility of the currency depreciating so much you will suffer capital loss esp when the interest earned is so much higher than singapore rates. That is the risk you have to undertake yourself...dun think even the experts can give a 100% assessment of what will happen 3-6 months down the road.
Thanks for the info, i myself have some assets in US dollars bought a couple of months ago. To hedge agianst the USD i also bought a bearish USD fund. Basically this fund moves in opposite direction to the USD. So if USD goes down (aginast the major currencies of the world) as whats is happening now, this fund goes uo in value. Its a nice hedge.
You mentioned POEMS, you mean one can open a fixed deposit account in Aus (or any foreign bank/currency) thru POEMS? basically i want to know who do i approach to open a fixed deposit account in foreign bank?.
8% return for 3 months locked in period, is it possible?
Let me tell you this, the banks in India are offering 10-11% on fixed deposits with 3 years lock-in period. Considering the measily amount the singapore banks offer and the negligible currency risk, this is absoilutely great. Heck, the return match even some unit trusts.
Make your money work for you =) read up on rich dad poor dad =)
plant a $2 note in the soil and remember to water it everyday
Originally posted by fox_hound_33:
Thanks for the info, i myself have some assets in US dollars bought a couple of months ago. To hedge agianst the USD i also bought a bearish USD fund. Basically this fund moves in opposite direction to the USD. So if USD goes down (aginast the major currencies of the world) as whats is happening now, this fund goes uo in value. Its a nice hedge.
You mentioned POEMS, you mean one can open a fixed deposit account in Aus (or any foreign bank/currency) thru POEMS? basically i want to know who do i approach to open a fixed deposit account in foreign bank?.
Let me tell you this, the banks in India are offering 10-11% on fixed deposits with 3 years lock-in period. Considering the measily amount the singapore banks offer and the negligible currency risk, this is absoilutely great. Heck, the return match even some unit trusts.
Nope you still have to open up a Foreign Currency FD with a bank here. However, most people convert their SGD to the other currency with the banks too and the spread for conversion of currencies charged by the banks are usually high mostly 1% and above. If you go through POEMS, their spread charged is usually very little, less than 0.5%, so what you do is to convert your currency through POEMS and instruct them to transfer it over to your Bank's Foreign currency FD. You need to pay a one time TX charge but usually the amount you save on the spread is so much more. A bit more troublesome but saves you a couple of hundreds.
Merrill lynch is offering 3.15% fixed coupon for 2.5yr tenure structured deposit. Capital protected. For a low risk instrument, the returns are pretty attractive with a relatively short tenure. Note the standard posb structured deposit usually takes 4-5yrs
Originally posted by browniebaobao:recommend a few?
Easy, just buy index funds like the STI ETF. It has the lowest management cost and gives out dividends every year. Unlike unit trusts which has a management fee of 3-5% which eats up into your profits.
Originally posted by fox_hound_33:
8% return for 3 months locked in period, is it possible?
Let me tell you this, the banks in India are offering 10-11% on fixed deposits with 3 years lock-in period. Considering the measily amount the singapore banks offer and the negligible currency risk, this is absoilutely great. Heck, the return match even some unit trusts.
Correct me if im wrong.
8% returns for 3 months= 36% returns per yr (by reinvesting the 8% returns you have compounded for the yr)
Calculation using $100 initial capital:
1st 3 months: $100 x 108%= $108
2nd 3 months: $108 x 108%= $116.64
3rd 3 months: $116.64 x 108%= $125.97
4th 3 months: $125.97 x 108%= $136.04
For the year your profit is $36 with initial capital of $100. Very good returns!
Indian banks 11% i.r for 3 yrs would only give you 3.6% per yr. That is lousy.
I dont really know the banking system well, pls enlighten me about the first part 8% returns on AUD FIXED D 3 mth lock-in period.
most interest rates are quoted on a per anum basis.
8% for 3 months is better than the stocks.
More likely 8% for 3 months is pro rated, but if its not it really sounds fantastic!
hi guys,
i've noticed that some of you were contemplating investing in a foreign currency because of the fact that they offer higher returns. i'd just like to share my thoughts on some of the comments above.
there are reasons why interest rates are so high for countries like India, Australia etc. Because there are other things to consider. For example, India's inflation is roughly about 10%. What does that mean to us? It means that there is a possiblity that the currency will be worth less in the future. How will that affect us? Because we are ultimately going to get our money back in SGD, the exchange rate will play a very important role in determining whether we will make money from that investment.
I am no fortune teller, neither will i be able to tell you which currency will do well. But I'd just hope people here understand the concept of exchange rates versus interest rates. Let's look at an optimistic scenario:- let's say we put our money in an Australian account bearing 7% interest. Should things go well, the Singapore Dollar will start to weaken against the Australian dollar after we put our money in so that when we want to take our money (AUD) out, we will be able to change our Australian Dollars to more Singapore Dollars. This gives us 2 returns. 1) from the 7% interest, 2) from the exchange rate.
Conversely, if the AUD strengthens considerably against the SGD we might see the money we have put into the Australian Dollar account diminishing instead of giving the returns we expected.
What I am trying to say is quite simple really. You are rewarded for taking risk. In this case you will bear interest rate risk as well as exchange rate risk if you invest in a foreign currency account. Granted, the value of the currencies wont drop to zero in a few months, but in a severe scenario you might see the value of your money diminishing rather than growing.