I recall my first investment was through a insurance agent (Let's call him Mr A) from NTUC Income (Insurance Co-operative). It was called the Ideal Policy. It is sold to me as an investment link product with a substantial amount of monthly premiums going in a balanced fund. Problem is 15% of the first 3 years of premiums goes into payment for commissions and other overheads.Thereafter 100% of premiums paid gets invested fully into a diversified fund. At that time, Mr A marketed himself as an investment guru and he claimed that he has helped his other clients double their initial investment outlay through skillful top up of funds at the right time. Mr A seems to possess the amazing ability to enter and exit the market!
The fact that even before investing, one would have lost 15% per annum does not seemed too bad at my young age then. I have always thought that no pay no gain....and indeed, I paid hard to learn a great lesson! I never made any money from the NTUC Income investment linked products. The promised top-up by Mr A at the right opportunity never materialized throughout the many years I stayed loyal to him.... I got squeezed dry.
Friday, 2 March 2012
Wednesday, 29 February 2012
Insurance is essential
To achieve financial independence, insurance will form a critical piece of one's financial armour. The keyword here is protection.
Life is like a box of chocolate....you never know what you're gonna get. Critical illness may strike and inevitably inflict a heavy toll in the painstaking built up of investments and savings. Also, if one were to pass away suddenly, it would be totally irresponsible to leave your loved ones struggling on their own.
A responsible man thus must always channel whatever resources he has into obtaining sufficient protection even before embarking on the road to accumulating wealth via investments....on a personal note....this is my number one golden rule in financial planning. It is plain stupidity to argue that one should channel all resources into investments as soon as possible to take advantage of the higher yield. Insurance is never a creature of investment....it is the armour to protect loved ones from the harsh and cruel events that fate may deal on us.
Life is like a box of chocolate....you never know what you're gonna get. Critical illness may strike and inevitably inflict a heavy toll in the painstaking built up of investments and savings. Also, if one were to pass away suddenly, it would be totally irresponsible to leave your loved ones struggling on their own.
A responsible man thus must always channel whatever resources he has into obtaining sufficient protection even before embarking on the road to accumulating wealth via investments....on a personal note....this is my number one golden rule in financial planning. It is plain stupidity to argue that one should channel all resources into investments as soon as possible to take advantage of the higher yield. Insurance is never a creature of investment....it is the armour to protect loved ones from the harsh and cruel events that fate may deal on us.
Interesting facts about an asset management company called AVI as per below....guess which stocks they purchased on the SGX last year?
Asset Value Investors (AVI) is an employee owned asset management company. Our primary goal is to achieve the long-term growth of our client's capital through the management of a global stock portfolio. We strive to be a premier investment firm providing consistently superior performance by identifying valuation anomalies and focusing on investing where the market price does not reflect the estimated intrinsic value.
Our distinct value oriented and low risk investment approach, which has been in place for nearly 25 years, is to find undiscovered value among high quality assets.
AVI - investment philosophy
- Buy companies on substantial discounts to net asset value
- investment holding companies on wide discounts
- companies with a strong balance sheet and good quality of underlying assets
- seek anomalies
- under-researched situations
- situations where the underlying assets are not recognized or are misunderstood by the market
Answer: Macquarie International Infrastructure Fund. (Note: Current dividend yield of 9.3%)
Monday, 27 February 2012
Wilmar reported 56.9% rise in 4th quarter net profits
Wilmar International Ltd. on last Wednesday reported a 56.9% rise in fourth-quarter net profit largely due to improved performances of its oilseeds and grains business, and contributions from its new sugar segment.
Net profit for the quarter ended Dec. 31 was US$500 million, up from US$318.6 million in the same quarter a year ago, the commodities trader said in a statement to the Singapore Exchange.
Revenue for the period rose 26.7% to US$11.5 billion from US$9.09 billion
Surprisingly, market chose to punish Wilmar and it's price plummet from S$6 to S$5.070 all within 1 week. Actually regretted not selling off Wilmar at S$6....
One of my colleagues actually asked me why I hold Wilmar when my strategy was dividend yield focused. Wilmar is never a dividend yield play. It was a result of putting trust in analyst buy recommendation last year which resulted in investment at the peak of prices.
Moral of the story: When analyst recommend buy, it is time to sell.
Right now, can only suck thumb and wait to sell it off at a good price (Target: S$5.80) and re-invest the proceeds on higher dividend yield counters.
Sunday, 26 February 2012
How to build recurring dividend income
If one can generate 7% of dividend yield, for every S$1K, there will be S$70 produced.
If one can generate 7% of dividend yield, for every S$10K, there will be S$700 produced.
If one can generate 7% of dividend yield, for every S$100K, there will be S$7,000 produced.
If one can generate 7% of dividend yield, for every S$200K, there will be S$14,000 produced.
The trick lies in building up the principle amount invested. Once it reaches 6 digit, the return starts to get enormous and the snowballing momentum becomes unstoppable once the dividend itself gets reinvested. S$14K is close to 3 months bonus for many middle income folks out there! The power of simple compounding and that is before we even consider the effects of capital gain or future growth in dividends yield.
If one can generate 7% of dividend yield, for every S$10K, there will be S$700 produced.
If one can generate 7% of dividend yield, for every S$100K, there will be S$7,000 produced.
If one can generate 7% of dividend yield, for every S$200K, there will be S$14,000 produced.
The trick lies in building up the principle amount invested. Once it reaches 6 digit, the return starts to get enormous and the snowballing momentum becomes unstoppable once the dividend itself gets reinvested. S$14K is close to 3 months bonus for many middle income folks out there! The power of simple compounding and that is before we even consider the effects of capital gain or future growth in dividends yield.
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