My Paper: My Money [How to Diversify and conquer]

In today 15th July My paper, my money got this article.

DIVERSIFY AND CONQUER

Short summary:

qns: How can one diversify investment?
ans: 1. combine assets like stocks(growth and value options) with bonds.
2. Invest globally
3. Rebalance/evaluate portfolio perf regularly

qns: What impat does a divesified portfolio have on returns
ans: bonds often do well when stocks do poor

qns: what should the portfolio for a 30year old professional look like ?
ans: more equities and stocks when entering 40, include bonds.

Invest[property special] 2:

2nd article that caught my eye!
DONT LET YOUR HOME LOAN HAUNT YOU!

It teaches one to consider the interest rates and lock in period etc when consider a mortage package.

Francis Chan shares his story of when buying his first house... he is shocked when he received a letter from bank to say that '' due to the flutuaction of interest rate environment, his monthly installment would have to be increased.'' This is when he haven even unpack his stuff in the new house.

So... some important information in the article

WHAT BANKS ARE OFFERING

1. DBS

Sibor fixed rate (Sibor stands for Singapore Interbank Offered Rate)

Year 1- 1.99% Year 2-1.99% Year 3-1.99%

Thereafter 3- or 12-mths Sibor +1.75%

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2. UOB'

Floating rate

Year 1- 3.5% Year 2 - 3.75%

Thereafter 4%

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3.OCBC

Floating rate

Year 1- 1.6% Year 2 - 1.6% Year 3-1.6%

There after 3.75%

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4.Maybank

3year fixed rate

Year 1-1.6% Year 2 -2.2% Year 3-2.9%

Thereafter 3.75%

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5.StanChart

2 year fixed rate

Year 1-1.5% Year 2- 2.5%

Thereafter 3-mth sibor +1.25%

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Fixed rate means protected against the fluctuation of the market interest rate... Its good, thus you can see, no bank provide fixed rate throughout lo...

then the author also mentioned about locked in period. It refer to how long you are tied to the bank and allow it to penalise you if you decide to redeem your loan early.

Haha.. first time home owner, good luck!(haha, including me too!)

Invest[property special] 1: Current property RUN

After reading the Invest pages in Strait times 12th July, I am drawn to 2 articles. The first one, is the headline, the front page!



It starts with...

''Recession? What Recession? The residential property market is on a roll with owner-occupiers, speculators and investors...''

"Demand shot through the roof and prices are rising.'''



So, this article is about the increase in demand for private apartment...despite the so call recession, the property market is doing well



Property Correspondent Joyce Teo came out with some reasons. I shall summarise it here.



1. Suburban boom

As people missed the bull run after 2007, many are catching it now, having the thoughts that its at the bottom of the market.

The Caspian, 99year leasehold project in Jurong West sold 300 units over 3days. Then followed by other project. Thus, believe this spark the boom off.



2. Interest absorption.

Paying 20% of the purchase, and you will be the owner of the apartment!

More attractive, the Interest Absorption Scheme(IAS), requires you to take up a bank loan, but the developers absorbs the interest payments until the project has been finished!



3. Small is beautiful

Projects that offer smaller, affordable units



4. VIP previews

When one call to register interest, they will be invited to a special preview! Being among the first to buy and choose.. plus, preview price lower than launch one!



5. Where are the price now

Price have dropped but experts are saying it may not last long...



Being in Singapore, one very good news is that we are not very affected by the recession! I think most Singaporeans dont even care what period is this. As recently GSS(Great Singapore Sale), Mastercards purchases shot to highest among recent years. Hopefully, these are not unnecessary spending just due to the GSS.

Thus, I not very suprise by the article above . Also, for investors, it might really be a good time to go into property market! XD Before the demand shot so high and affect the pricing again.



Propery investment need be cautious as it involve large sum of money. Even if now is the best time, the bottom of the market, we need to consider some factors before jumping into it.

Factors to consider include(after study the market):

1. Location

2. Loans available

3. Interest rate

4. Ability to support the apartment if unable to resell



Cost to consider when buying a property:

-Mortage payment(<40%>

-Legal cost(<1.5%>

-Stamp duty (0.7% for first $180000 1.4% on next etc)

-Valuation report

-Insurance premium(life+fire)

-Property tax(ard 4% if owner occupied, 10% if rented)

-Maintanence and Operating expenses



People who are going to be first time home owner may be interested in the article I going to intro next:)

MY PAPER: The Bonds that Binds

In my paper, 8th July Wed.
Under My Money,
The Bonds that Binds, from Mr Koh. Brought by HSBC insurance.
It encourage people to invest in bonds, a loan statement from a company or government sector.
OF course, it promoting the Asian Bonds.

Reason #1
Greater variety of bonds available. Asian bonds form the 4th largest bond market. (1st is US, then Europe and Japan)

Reason #2
Higher long term growth
Asian economies are expected to have higher long term growth

Reason #3
Higher and steadier returns
Higher yields compared to Singapore dollar based deposits.


Bonds in my opinion dont really gives a high interest or high yield. In Singapore its more of a steady kind of investment. OF course, its higher than the 0.125% bank give which is eaten up by inflation...

Straits Time: Invest

Bringing attention to Invest from The Sunday Times 5th July.

Haha... it says ' Where to park your hard earned cash'' Known fact that saving it all in bank may not be the best idea, with interest rate close to zilch.

The article suggested a few ways. 1) Saving and fixed deposits 2) Money market fund 3)cooperatives 4) Singapore government securities *SGS 5) structured deposits 6) endownment plans with fixed returns

What I think about the above suggestion is that generally they are rather low risk investment. Due to lehman brother, I think many think twice before investing. However, the inflation rate never change. One will always lose $$ with NOT INVESTING.

The low risk investments are really rather good in the market now.. where everyone is a little fear.. yet want to invest.. these may be the ways one can look out for

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Another article that catch my attention is developers rush to catch buying wave.
(talking about the more condo launches are due this month but market watchers say the price recovery will not last)


more details..go read up oh

Millionaires dropped by 22%

Millionaires in Singapore dropped from 78000 to 61000. A great fall of 22%! This is obviously due to the hit of the recession in 2007. I believed most of their investment lies with the stock market. Thus, a bearish market, with a plunge in most of the stocks result the significant fall in millionaires. The situation is worse in HongKong, getting a greater fall as compared to Singapore.

Diversification is the key. Dont let all your investment get affected by a single factor!

Electricity price going up from 1st July

Due to oil prices increase, the electricity bill going up by 7% in coming 1st July onwards.
Save electricity, to save the Earth, and also save your own money.



Actually there are easy ways to save your bills by using the correct electrical appliances. The energy saver appliances may seem expensive initially, but definitely, in the long run, you will be glad that you purchased them.

Other than this, you can also try to find out the appliances that used most electricity... Likely would be air-con, and water heater! Of course, refrigerator is somehow no choice. Cut down usage of the above appliances, you can actually save quite a lot!

HEre's an abstract from straittime.com

''RUNNING the air-conditioner to beat the heat over the next three months will cost $1.50 to $15.20 more a month.
Electricity prices here will go up by about 7 per cent from Wednesday, on the back of increasing fuel oil prices, said utilities services provider SP Services on Friday.
From next month, three-room households will pay about $4 more a month in power bills, and five-room households, about $6 more.
This is the first increase in electricity tariffs, which are revised every quarter, since the last quarter of last year.
From Wednesday, electricity will cost households about 19 cents per kWh, without the goods and services tax, up from the current 18 cents.
SP Services said the average fuel oil price over the last three months went up from $60.47 per barrel to $76.24 per barrel.
After going up 21 per cent in the last quarter of last year, electricity tariffs fell 25 per cent in the first three months of this year.
To reduce the likes of such wide quarterly swings in electricity prices, the Energy Market Authority (EMA) here, which regulates the electricity and gas industry, will now use a new formula to calculate tariffs.
This will take into account a wider spread of fuel oil prices from which an average is calculated - three months now, as opposed to the previous one month.
It also allows tariffs to reflect oil price movements more closely, instead of a three-month time lag under the old formula.



The last increase is in last october, where it have 21% increase in price!



For more details, see prime page A18 on Straits Times today!