I send a letter addressed to the following:
Tan Kin Lian
Singapore 809744
The letter finally arrived after 20 days. The post office searched for my house address and street address, using my postal code, and wrote it on the envelope. This is necessary for the postman to deliver the letter to my house (i.e. the "last mile").
Congratulations to Singapore Post. They did take the trouble!
Thursday, April 3, 2008
Investing in resource and commodity
Hi Mr. Tan,
What is your view about investing in resource and commodity sector? I understand that this sector has appreciated fast during turmoil in the financial market, caused by high price of oil, gold, and other commodities. However, there's also a recent correction, which might give a better opportunity to enter.
What is your view of this sector fund? Currently I am looking at First State Global Resource, which has 1.5% annual management charge, and 1.74% expense ratio. The United Global Resource Fund has 8.63% expense ratio (which I think it's too high).
REPLY
I am not familiar with investing in the resource and commodity sector. I heard the comment of an analyst on CNBC. He said that commodities are bullish now, but investors should be ready to sell at short notice. He reminded investors about what happened on the bursting of the dotcom bubble.
I prefer to invest in a well diversified equity fund.
What is your view about investing in resource and commodity sector? I understand that this sector has appreciated fast during turmoil in the financial market, caused by high price of oil, gold, and other commodities. However, there's also a recent correction, which might give a better opportunity to enter.
What is your view of this sector fund? Currently I am looking at First State Global Resource, which has 1.5% annual management charge, and 1.74% expense ratio. The United Global Resource Fund has 8.63% expense ratio (which I think it's too high).
REPLY
I am not familiar with investing in the resource and commodity sector. I heard the comment of an analyst on CNBC. He said that commodities are bullish now, but investors should be ready to sell at short notice. He reminded investors about what happened on the bursting of the dotcom bubble.
I prefer to invest in a well diversified equity fund.
Investing in hedge funds
Hi Mr Tan,
Hope to seek your advice on my queries:
1) What is a hedge fund?
2) There are many investment portfolios offered by banks, are any of these considered as hedge fund?
3) Can you give an example of a hedge fund?
4) Is it safe to buy investment portfolios offered by banks such as UOB, OCBC?
5) Is it better off buying a long term investment portfolio offered by banks or is it better off buying company's shares directly from a broker? What's your advise? Note that I'm not one person who market watch.
REPLY
I suggest that you search for "Hedge Funds" in Google. You will come across several references in the internet. You can read the articles on hedge funds there.
If you are picking a unit trust offered by a bank, you should look at the initial spread, the annual expense ratio and other factors. Most of these funds have high charges that reduce the return on your investments.
You should avoid investing in an investment that you are not familiar, such as a hedge fund. There are many types of hedge funds. They take money from the investors and borrow additional money (i.e. leveraged) to make risky investments. Many hedge funds performed badly during the past year, as their investments lost money.
I usually advice people to buy a low cost diversified fund, such as the STI ETF, as a long term investment. Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Hope to seek your advice on my queries:
1) What is a hedge fund?
2) There are many investment portfolios offered by banks, are any of these considered as hedge fund?
3) Can you give an example of a hedge fund?
4) Is it safe to buy investment portfolios offered by banks such as UOB, OCBC?
5) Is it better off buying a long term investment portfolio offered by banks or is it better off buying company's shares directly from a broker? What's your advise? Note that I'm not one person who market watch.
REPLY
I suggest that you search for "Hedge Funds" in Google. You will come across several references in the internet. You can read the articles on hedge funds there.
If you are picking a unit trust offered by a bank, you should look at the initial spread, the annual expense ratio and other factors. Most of these funds have high charges that reduce the return on your investments.
You should avoid investing in an investment that you are not familiar, such as a hedge fund. There are many types of hedge funds. They take money from the investors and borrow additional money (i.e. leveraged) to make risky investments. Many hedge funds performed badly during the past year, as their investments lost money.
I usually advice people to buy a low cost diversified fund, such as the STI ETF, as a long term investment. Read this FAQ:
http://www.tankinlian.com/faq/savings.html
Invest in a life annuity
Dear Mr. Tan,
I am 61 year old. I have around $100,000 to invest. I need your advise on a better investment compared to the low interest rate for fixed deposit.
I am thinking of putting the sum to a deferred anunity with NTUC Income. Am I able to withdraw the full amount from NTUC when I reach 65 years old. What are the likely return I will be getting in 4 year time?
REPLY
I suggest that you call the business center of NTUC Income and ask them about the return on the deferred annuity.
Please read this FAQ
http://www.tankinlian.com/faq/life.html
I am 61 year old. I have around $100,000 to invest. I need your advise on a better investment compared to the low interest rate for fixed deposit.
I am thinking of putting the sum to a deferred anunity with NTUC Income. Am I able to withdraw the full amount from NTUC when I reach 65 years old. What are the likely return I will be getting in 4 year time?
REPLY
I suggest that you call the business center of NTUC Income and ask them about the return on the deferred annuity.
Please read this FAQ
http://www.tankinlian.com/faq/life.html
Poor return on ILP policy
Hi Mr. Tan,
Great to chance upon your website!
I have an issue with my ILP investment. My annual premium is $1200, and I have been paying it for 2 years and eight months, current cash value at only $600.
I'm aware it's too late to cancel the account. Even though my monthly premium is not high, I still don't like the idea of paying for mortality charges.
Do you think it's more worthwhile to cancel now, suffer some loss and start investing in better products for a longer term gain? Does this make sense?
REPLY
As you have paid two years of premium, most of the upfront charges have already been incurred. I suggest that you keep the current investment account.
You can ask the insurance company for the mortality charges for the next five years and compare them with the benchmark rates shown on the attached.
http://www.tankinlian.com/faq/benchmark.html
If the mortality charges are too high, you can cancel the life insurance cover and buy a term insurance policy. You can still keep the investments.
If the mortality charges are reasonable, you can continue the policy for the next 5 to 10 years. You can cancel it when you reach age 60 or 65.
Great to chance upon your website!
I have an issue with my ILP investment. My annual premium is $1200, and I have been paying it for 2 years and eight months, current cash value at only $600.
I'm aware it's too late to cancel the account. Even though my monthly premium is not high, I still don't like the idea of paying for mortality charges.
Do you think it's more worthwhile to cancel now, suffer some loss and start investing in better products for a longer term gain? Does this make sense?
REPLY
As you have paid two years of premium, most of the upfront charges have already been incurred. I suggest that you keep the current investment account.
You can ask the insurance company for the mortality charges for the next five years and compare them with the benchmark rates shown on the attached.
http://www.tankinlian.com/faq/benchmark.html
If the mortality charges are too high, you can cancel the life insurance cover and buy a term insurance policy. You can still keep the investments.
If the mortality charges are reasonable, you can continue the policy for the next 5 to 10 years. You can cancel it when you reach age 60 or 65.
Public Tender
Singapore is used to the public tender system. The business is awarded to the tenderer who submitted the most competitive (lowest) bid. In some cases, the tenderer have to bid below cost, to win the tender. They find ways to cut corners to meet the low budget, leading to a poor quality of work.
Someone observed that the public tender system favours the large companies. They have the financial resources to spend money to submit the bid. The smaller companies are not able to compete.
I hope that there is another way for the principal to offer a reasonable price, and select the contractor based on their ability to deliver a better quality of work.
Someone observed that the public tender system favours the large companies. They have the financial resources to spend money to submit the bid. The smaller companies are not able to compete.
I hope that there is another way for the principal to offer a reasonable price, and select the contractor based on their ability to deliver a better quality of work.
Walkways in Hong Kong
My friend worked in Hong Kong a few years back. When he arrived in Hong Kong, he was provided with a car. After two months, he sold off the car. He preferred to use the Hong Kong MTR (Mass Transit Railway).
It was possible to walk to a nearby MTR station from most parts of Hong Kong. He could walk through the underground or overhead walkways. It was quite comfortable during most months of the year, due to the congenial weather.
He observed that many people in Hong Kong and Japan were quite slim. The walking is good for their health and keep them fit.
I hope that all MRT stations in Singapore have underground or overlink walkways. If commuters can walk in these sheltered walkway at a different level from the road traffic, more people will be willing to take the train. This has been proven by the Hong Kong experience.
It was possible to walk to a nearby MTR station from most parts of Hong Kong. He could walk through the underground or overhead walkways. It was quite comfortable during most months of the year, due to the congenial weather.
He observed that many people in Hong Kong and Japan were quite slim. The walking is good for their health and keep them fit.
I hope that all MRT stations in Singapore have underground or overlink walkways. If commuters can walk in these sheltered walkway at a different level from the road traffic, more people will be willing to take the train. This has been proven by the Hong Kong experience.
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