Saturday, March 29, 2008
Invest in a diversified fund for the long term
Dear Mr. Tan,
I have just opened an investment account with fund supermart. I wish to begin my first investment in unit trust. I am an moderate aggressive player and high returns are important to me. I am willing to take higher risks for significantly higher returns over time (above 10% p.a.). I am willing to take the risk of downside around 20% in 1 year. Can you please provide me with some suggestion on what fund to invest in the year 2008?
REPLY
My advise is to invest in low cost, diversified funds. You can aim for a more modest target of 6% to 8% p.a. for the long term. You have to deduct about 1% to cover the expenses.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
I have just opened an investment account with fund supermart. I wish to begin my first investment in unit trust. I am an moderate aggressive player and high returns are important to me. I am willing to take higher risks for significantly higher returns over time (above 10% p.a.). I am willing to take the risk of downside around 20% in 1 year. Can you please provide me with some suggestion on what fund to invest in the year 2008?
REPLY
My advise is to invest in low cost, diversified funds. You can aim for a more modest target of 6% to 8% p.a. for the long term. You have to deduct about 1% to cover the expenses.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Diplomat and the lady
This story is told by a diplomat.
If you ask a favour from a diplomat and he says "yes", he means "maybe". If he says "maybe", he means "no". If he says "no", he is not a diplomat.
If you ask a favour from a lady and she says "no", she means "maybe". If she says "maybe", she means "yes". If she says "yes", she is not a lady.
If you ask a favour from a diplomat and he says "yes", he means "maybe". If he says "maybe", he means "no". If he says "no", he is not a diplomat.
If you ask a favour from a lady and she says "no", she means "maybe". If she says "maybe", she means "yes". If she says "yes", she is not a lady.
Quotes on History
George Bernard Shaw:
We learn from history that we learn nothing from history.
George Bernard Shaw:
We are made wise not by the recollection of our past, but by the responsibility for our future.
George Santayana:
Those who cannot learn from history are doomed to repeat it.
George Wilhelm Hegel:
What experience and history teach is this -- that people and governments never have learned anything from history, or acted on principles.
Gerda Lerner:
We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events.
Karl Marx:
It is not "history" which uses men as a means of achieving -- as if it were an individual person -- its own ends. History is nothing but the activity of men in pursuit of their ends.
Kurt Vonnegut:
History is merely a list of surprises. It can only prepare us to be surprised yet again.
Mark Twain:
To arrive at a just estimate of a renowned man's character one must judge it by the standards of his time, not ours.
Oscar Wilde:
Anybody can make history. Only a great man can write it.
Pearl S. Buck:
One faces the future with one's past.
Percy Bysshe Shelley:
Fear not for the future, weep not for the past.
Ralph Waldo Emerson:
All history becomes subjective; in other words there is properly no history, only biography.
Winston Churchill:
History will be kind to me for I intend to write it.
We learn from history that we learn nothing from history.
George Bernard Shaw:
We are made wise not by the recollection of our past, but by the responsibility for our future.
George Santayana:
Those who cannot learn from history are doomed to repeat it.
George Wilhelm Hegel:
What experience and history teach is this -- that people and governments never have learned anything from history, or acted on principles.
Gerda Lerner:
We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events.
Karl Marx:
It is not "history" which uses men as a means of achieving -- as if it were an individual person -- its own ends. History is nothing but the activity of men in pursuit of their ends.
Kurt Vonnegut:
History is merely a list of surprises. It can only prepare us to be surprised yet again.
Mark Twain:
To arrive at a just estimate of a renowned man's character one must judge it by the standards of his time, not ours.
Oscar Wilde:
Anybody can make history. Only a great man can write it.
Pearl S. Buck:
One faces the future with one's past.
Percy Bysshe Shelley:
Fear not for the future, weep not for the past.
Ralph Waldo Emerson:
All history becomes subjective; in other words there is properly no history, only biography.
Winston Churchill:
History will be kind to me for I intend to write it.
Medical insurance and large bills
An insurance agent said that a good medical insurance policy will cover the large bill of $150,000.
This may not be the case. Some of the expensive treatments exceed the limits in the policy or are excluded from the policy.
Before you incur expensive treatment, it is necessary to consult your insurance company and check on the items that are covered. This is to avoid the shock of being landed with a bill that you cannot afford.
I have come across many cases of unhappy customers who find that only a small part of the bill is covered by insurance, in spite of what they were told by the insurance agent!
Most importantly, you should spend your money wisely. Do what is best for your loved one, but do not waste money on expensive treatment with a slim chance of recovery.
This may not be the case. Some of the expensive treatments exceed the limits in the policy or are excluded from the policy.
Before you incur expensive treatment, it is necessary to consult your insurance company and check on the items that are covered. This is to avoid the shock of being landed with a bill that you cannot afford.
I have come across many cases of unhappy customers who find that only a small part of the bill is covered by insurance, in spite of what they were told by the insurance agent!
Most importantly, you should spend your money wisely. Do what is best for your loved one, but do not waste money on expensive treatment with a slim chance of recovery.
Escalation of medical bills
Someone asked the question, "Why was the original estimate of $50,000 allowed to escalate to a bill of $150,000?
This is the real, commercial world. This is how some private sector doctors can make millions of dollars in income.
I have high respect for many doctors who earn a modest income and practice medicine in the best interest of their patients.
This is the real, commercial world. This is how some private sector doctors can make millions of dollars in income.
I have high respect for many doctors who earn a modest income and practice medicine in the best interest of their patients.
Evaluate your options
Someone asked me what I would do, if I were in my friend's situation and expensive medical treatment is needed for a loved one.
Here is my approach:
a) I will evaluate various alternatives, from various doctors
b) I seek advice from independent and knowledgeable people
c) I will not depend on the advice of an adviser (doctor) who has a conflict of interest
I wish to share this story.
A few years ago, Dr. Ee Peng Liang, the "father of charity" in Singapore, told me, "Kin Lian, my doctor told me that I had stomach cancer. But I have decided not to be treated as I am already over 80 years. I will leave this matter in the hands of God". Dr. Ee passed away peacefully after a year or two.
There are many ways to "do the best" for a loved one. Spending money on expensive medical treatment, with a slim chance of recovery, is only one way.
Here is my approach:
a) I will evaluate various alternatives, from various doctors
b) I seek advice from independent and knowledgeable people
c) I will not depend on the advice of an adviser (doctor) who has a conflict of interest
I wish to share this story.
A few years ago, Dr. Ee Peng Liang, the "father of charity" in Singapore, told me, "Kin Lian, my doctor told me that I had stomach cancer. But I have decided not to be treated as I am already over 80 years. I will leave this matter in the hands of God". Dr. Ee passed away peacefully after a year or two.
There are many ways to "do the best" for a loved one. Spending money on expensive medical treatment, with a slim chance of recovery, is only one way.
Expensive medical treatment
My friend's wife passed away recently from cancer. She was in her early 50s.
This was the third cancer attack over the past 15 years. My friend appointed a private cancer specialist to treat her. The initial estimate was $50,000. The total medical bill increased to $150,000.
My friend knew that the chance of recovery was very slim. When the initial estimate was exceeded, he found it difficult to decline the suggestion of further treatment. He had to spend so much money, when there was virtually no hope. He earned a modest income, so the medical bill represented many years of his earnings.
He had made an insurance claim on an earlier cancer treatment. The latest episode was not covered by insurance.
Lesson: There is no point in spending so much money for treatment, when there was virtually no chance of recovery. He should have obtained independent, objective advice from another specialist (other than the specialist that treated his wife).
This was the third cancer attack over the past 15 years. My friend appointed a private cancer specialist to treat her. The initial estimate was $50,000. The total medical bill increased to $150,000.
My friend knew that the chance of recovery was very slim. When the initial estimate was exceeded, he found it difficult to decline the suggestion of further treatment. He had to spend so much money, when there was virtually no hope. He earned a modest income, so the medical bill represented many years of his earnings.
He had made an insurance claim on an earlier cancer treatment. The latest episode was not covered by insurance.
Lesson: There is no point in spending so much money for treatment, when there was virtually no chance of recovery. He should have obtained independent, objective advice from another specialist (other than the specialist that treated his wife).
Learn about property derivatives
Dear Mr. Tan,
I would like to ask about property derivatives. How are they used (examples) and valued? Could you explain them in detail? Please recommend some journals which could help me to find the answers of the questions above. Your efforts will be greatly appreciated. With many thanks.
REPLY
You are probably referring to the asset back securities and collaterilised debt obligations (CDO) in the USA. I suggest that you search Google for these items, and read the writings from the experts. All the best.
I would like to ask about property derivatives. How are they used (examples) and valued? Could you explain them in detail? Please recommend some journals which could help me to find the answers of the questions above. Your efforts will be greatly appreciated. With many thanks.
REPLY
You are probably referring to the asset back securities and collaterilised debt obligations (CDO) in the USA. I suggest that you search Google for these items, and read the writings from the experts. All the best.
Government Bonds
Dear Mr. Tan
I am interested to buy Singapore Government Bonds for investment. Can you please tell me more about it as to where, how can when should I buy the Bonds.
REPLY
You can approach a bank or a stockbroker.
I am interested to buy Singapore Government Bonds for investment. Can you please tell me more about it as to where, how can when should I buy the Bonds.
REPLY
You can approach a bank or a stockbroker.
Invest your SRS
Dear Mr. Tan,
I am 47 yrs old and have been contributing regularly in cash to my SRS account so as to lower my income tax. I have been using the money to buy NTUC Income Growth policies for 15 to 17 years' term. The projected return is about 4 %. Do you think I am making a wise investment decision? Are there better ways to invest the cash in my SRS account?
REPLY
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
I am 47 yrs old and have been contributing regularly in cash to my SRS account so as to lower my income tax. I have been using the money to buy NTUC Income Growth policies for 15 to 17 years' term. The projected return is about 4 %. Do you think I am making a wise investment decision? Are there better ways to invest the cash in my SRS account?
REPLY
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Poor value from USD policies
Dear Mr. Tan,
I have been a regular reader of your blog since recent months. and found it is very informative and helpful. Thank you so much for your invaluable sharing.
I understand more about how insurance works, but start to struggle about the policies bought for my families now. We bought the whole life plan for my husband and myself since 2004. The coverage is US $50,000. The premiums total USD 2000 for both policies. The breakeven is 12 years in USD, but we are also losing on the depreciation of USD.
What will be your advice on these policies? Stop? Reduce the coverages? I know the current value of them should be very poor.
REPLY
I am sorry that I do not have the time to give specific advice of this kind.
I suggest that you read the FAQ in my blog and see if you can get any answers from there.
www.tankinlian.com/faq
I have been a regular reader of your blog since recent months. and found it is very informative and helpful. Thank you so much for your invaluable sharing.
I understand more about how insurance works, but start to struggle about the policies bought for my families now. We bought the whole life plan for my husband and myself since 2004. The coverage is US $50,000. The premiums total USD 2000 for both policies. The breakeven is 12 years in USD, but we are also losing on the depreciation of USD.
What will be your advice on these policies? Stop? Reduce the coverages? I know the current value of them should be very poor.
REPLY
I am sorry that I do not have the time to give specific advice of this kind.
I suggest that you read the FAQ in my blog and see if you can get any answers from there.
www.tankinlian.com/faq
Set a realistic goal
Dear Mr. Tan
What ETF should I be looking at if I would like to achieve a return of 10-15% p.a. Thanks.
REPLY
I am not able to advice on any product that can offer 10% to 15% p.a. I only aim for 5% to 6% p.a. for my personal investments.
Read this FAQ about investing for the long term:
http://www.tankinlian.com/faq/savings.html
If you wish to invest in the STI ETF, you have to approach a stockbroker.
Wish you all the best.
What ETF should I be looking at if I would like to achieve a return of 10-15% p.a. Thanks.
REPLY
I am not able to advice on any product that can offer 10% to 15% p.a. I only aim for 5% to 6% p.a. for my personal investments.
Read this FAQ about investing for the long term:
http://www.tankinlian.com/faq/savings.html
If you wish to invest in the STI ETF, you have to approach a stockbroker.
Wish you all the best.
Defamatory comments
I have blocked defamatory comments posted by visitors. These defamatory comments are directed at specific persons or organisations. They attack a person's character.
I allow comments that are fair and substantiated by facts.
I allow comments that are fair and substantiated by facts.
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