But one of our biggest challenge is helping our clients frame this weird beast in different ways. Most people would kind of thing that I know a lot of things and not many things will be quite unexpected to me.

But Today I am going to be open to talk a little about one of my blind spots.

Back during the Covid period, we thought that our wealth management business is going to be done for. Our bread and butter was to meet clients and we cannot even do that with social isolation.

Thankfully, we know it wasn’t so bad. Humans managed to make it work. Our CEO set a challenge to make 2020 our best year ever, and we did well. And we also did well in 2021 in terms of onboarding new clients.

I thought enough of what kind of markets would affect client’s emotions in investing. A lot of my thoughts centered around how those existing clients that were already onboard could be feeling and how to alleviate the uncertainty in their minds. Of course, there is also the emotions of those that have not vested and how to frame the volatility they just seen in the past six months or one year so that they are more comfortable to take the leap.

2021 was an easier year because the market just go up then dip, then go up then dip. Since we were past that all clear in August and September 2020, prospects were financially less emotional. The opportunity cost of not achieving their goals outweigh the emotional worry about the markets.

I will use a chart of the ETF IMID or the MSCI All Country World IMI ETF as an illustration:

If it is a good year for us means that we have many new clients that come onboard in late 2021.

My blind spot was not being aware that… if you have an easier time onboard clients… they might be onboarded right before volatility.

In hindsight, this was so stupid of me mentally because one of the big things I know is about sequence of return. If you manage to reach close to financial independence because of a very good markets… what comes next is…. perhaps a poor starting sequence… which is potentially that negative sequence that may kill an income stream prematurely.

I kind of know this better than a lot of people.

But the problem is like many, we have too much things to think about and it just didn’t occur to me that what affected financial independence income planning can affect the business side of the work we do in wealth advisory.

And so that batch of clients endure one year of 26% drawdown in the market.

Then if we revisit this in year 2 anniversary, the returns is a cumulative 5.7%. That is an annualize 2.8% p.a.

Some clients struggle to understand this. In some of their minds, equity does at least 7% if not 12% p.a. in the long run. So to see this after two long years, they would start wonder if they make the wrong decisions, especially if they have trusted us and invested the majority of their net wealth.

More and more, I see the high level, evergreen problem as an expectations versus reality problem.

You set unrealistic, or misinformed expectations, you will have to manage that big gap between reality when it happens.

In talking with investors, I see this “the long term average return of equities is X% p.a. I want to start investing because I think that gives me a chance to hit my goal.” too much.

If they see average interest rate to be 1%, 1%, 1%, 1% every year, they will see equity return to be 7%, 7%, 7%, 7% every year.

The mismatch is sometimes not the performance of the return but their original expectations mentally. (in actual fact, bank interest is also not 1%, 1%, 1%, 1% every year!)

The reality is the market is just a volatile beast.

The sooner you accept that to get that 7% p.a. long term return, you got to feel like shit sometimes.

We can just move forward the time to a few months later in October 2024:

The cumulative for 3 years would be 20%. The annualized return becomes 6.4% p.a.

But then you forward about six months later:

Your cumulative returns is 4%!

That is an annualized return of 1.1% p.a. over 3.5 years!

I think some would wonder when Trump decided to kill the market, together with a falling USD if they made a mistake being in equities.

And here we are today:

The cumulative returns is about 31% and the annualized return over 4 years is about 7% p.a.

And I guess that is how the markets are.

There are some investors who wishes that they have invested earlier so that they don’t have to endure the “recent volatility”.

But I think that is a perception issue.

I crafted the following slides in something that our clients might get to see it if they come in to see their advisers:

It shows the same MSCI ACWI IMI over the past 15 years. Since ACWI IMI is Developed markets plus emerging markets large cap, mid cap and small caps, the annualized return is 10.5% and the cumulative return is 348%.

But the investor also eat a lot of shit the market throws at it along the way. The faint pink drawdowns show the evidence of that. And the folks that sit through it deserve the returns because they sat through those shit uncertainty the markets throw at them.

The evidence of a weaker emerging markets, of value shows that it is uncertain to always expect the markets to always do 10%, 10%, 10%, 10%, 10%.

What is also more underrated is whether developed, emerging, value, growth, small caps, fixed income investment grade, the critical part is whether you invest in any stuff at all. If you have you would be better than 15 years ago in aggregate.

You will only know in hindsight returns are this bad not when you live through it.

The advisory challenge is to shape the client’s perception to be closer to the reality. But if it is closer to reality it means another big challenge: Helping them to manage the emotional part when the market throws enough uncertainty shit at them.

What they will go through will be no different from you and I. The market does not identify that just because you are richer or poorer they should give some of us more money or take more from us. Both the high net worth and those with less can invest in the same fundamentally sound instruments. Their well implemented and fees are reasonable.

The real cost is not developing an understanding over them, and also bearing with the emotional & mental part.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post One of My Blind Spots Early in Wealth Advisory appeared first on Investment Moats.

Usually, my colleagues who were tasked to be our company champions would help arrange a company health screening. Since 2022, we been engaged with Dr. Tang from Meridian Medical Centre. Now typically, you can just take blood, urine and stool and once the results come out, someone will interpret the data for you.

Dr. Tang’s service for us is slightly different. This year, our Chairman Chris got out of his comfort zone to give us a pep talk on the importance of focusing on our health, how it adds up to a good/poor life and some of the stuff he learn over the past two years being more intentional about his health. Dr. Tang then briefed us on the tests that is available, and open to questions if we would like to know more.

We can then arrange for a web-session with Dr. Tang if this is the first few times we are seeing him, and would like to find out if doing certain tests is more applicable for our own situation.

Then after we do the test and the result is out, we have a web session with Dr. Tang to review our results.

I just did my review with Dr. Tang two days ago.

I would usually not do comprehensive blood tests that frequently due to cost optimization. But I would usually do some tests because I am interested to see how are my cholesterol, blood sugar readings.

This time, I opt for the comprehensive test which cost me $438.

The price is tad more expensive than the usually $250+- test that we usually do. But Dr Tang sold us the idea that this test has more metric that would give me different and deeper perspectives about my health situation.

I didn’t actually paid attention to what it is supposed to measure. I just pre-commit that even if I don’t take this test, I might struggle to spend this sum of money.

What If You Can Sense Your Chronic Disease Chances for the Next Decade Based on Real World Blood Patterns?

I realize that the test Dr. Tang recommended is an advanced blood technology test from Finnish company Nightingale Health.

Most blood tests check just a few things — like cholesterol or blood sugar.

Nightingale’s test is different. It takes one small blood sample and runs it through a special scanner (called NMR — think of it like a super microscope for blood).

That scanner reads hundreds of tiny building blocks in your blood (like fats, amino acids, and inflammation markers) that say a lot about your body’s health — even before you feel sick.

Then they use smart computer algorithms to predict your future risk for multiple diseases, such as:

• Heart disease. This is the number 1 killer globally.
• Diabetes.
• Kidney or liver problems. These usually progress silently until it is too late.
• Lung disease. A leading cause of disability and death (especially with smoking history or pollution exposure)
• Chronic inflammation.

They do all that in one go, from one blood draw, and you get a detailed health report. So didn’t do any urine and stool test. Just one blood draw.

These health conditions usually build up over many years, often without symptoms.

But they also leave metabolic fingerprints, which leaves subtle changes in your blood’s chemistry that Nightingale’s scanner can detect early.

For example, high triglyceride levels, inflammation markers, or abnormal lipoproteins can all signal future heart or diabetes risk, even if your normal tests look OK.

Nightingale will then correlate my blood test with the health data sets of their partners. They have partner with big long-term health studies like the UK Biobank and FinnGen. Each of these have large groups of people who gave blood samples, and researchers will track these people over 5, 10, 15+ years. Because some people developed diseases while others didn’t. With these information, they have a database of the blood of people who got sick.

They feed all this historical data into AI models that:

• Learn what blood patterns typically lead to disease
• Spot combinations of markers that raise or lower risk (even if any single number looks normal)
• Adjust for your age, sex, etc.

So, if your fingerprint resembles thousands of people who later developed heart disease or diabetes, your risk is higher.

They give you a personalized score, like:

• “You have a 24% chance of developing heart disease in the next 10 years.”
• “Your liver disease risk is low.”

This isn’t a guess — it’s based on patterns proven in real-world outcomes.

This test is pretty new. Nightingale only open their laboratory in November last year. They have been granted ISO 13485:2016 certification, which is the international quality management system standard for the design, production and distribution of medical devices. ISO 13485 is a requirement for medical device distribution in Singapore, and together with the earlier announced Health Sciences Authority approvals, this certification makes Nightingale Health ready to launch its blood testing service in Singapore before the end of the calendar year.

Let us take a look at my results.

My Cardiovascular disease score: Low risk

I was presented the risk score against various ethnic group but I was told I should focus on my ethnic group Chinese:

I got to admit I struggle to understand what this means initially. Dr Tang guided me to read that my overall risk category is low. If you look at the top bar under Low risk it is broken up into three section. I am to the left side. This kind of means that based on the biomarkers collected, when cross reference the database of the people with similar blood values, 3 out of 100 people are likely to develop cardiovascular disease within the next 10 years.

If we compare my blood values to those in a reference group of similar ages (male, 35-44 years old) in say the UK Biobank, my risks is lower than average.

The way to read these result is: If I carry on the lifestyle that I have recently, my chances of developing cardiovascular disease is 3.2%. However, if I change my lifestyle, or there is something external that affects my health, then this will not be accurate anymore.

My Risk of Heart Attack: Low Risk

The test then break down that cardiovascular to the risk of heart attack.

The risk is low here.

My Risk of Stroke: Low Risk

It is good to know that the risk of having stroke based on similar blood values is low.

My Risk of Developing Type 2 Diabetes: Low Risk

I think I always have a slight concern with whether I would develop type 2 diabetes ever since my 2-week monitoring of my blood sugar, done with Providend in 2022 (You can read I Tracked My Blood Glucose for 14-Days 24/7. What I Found Out About My Glucose Tolerance)

So I was thankful that it shows that my risk is low and if we compare to the reference group, my risk is much lower than average. We will have to revisit this diabetes topic later.

My Risk of Chronic Kidney Disease: Low Risk

When I had a glimpse of the test result, my chronic kidney disease score is the one that I struggled to interpret. It show higher than average against the reference group and the risk category is low.

Dr Tang explain that overall my risk score is low. So if we look at the top bar, I am still towards the left side of low risk, which shows that my risk of developing chronic kidney disease is low. But compare to the 35-44 year old males of my group, my score is higher than average.

My Risk of Fatty Liver Disease: Low Risk

Strong.

My Risk of Liver Fibrosis: Low Risk

My Other Test Scores

The test includes a few standard metric profile and I have listed them with some comments below.

High Cholesterol

Dr Tang is a pretty polite person but even when he saw this he basically ask what the fxxk did I do in the past year that got my cholesterol to this.

My overall cholesterol was higher but in a way both my LDL and HDL was higher. I told Dr Tang I been basically eating no vegetables, eat three eggs a day with chicken, and pork balls. But I think what is more significant is my LDL was much lower in 2024 relative to the other years.

The main difference in 2024 was less meat than usual. And now that I return to more meat you get this kind of result. This year, I really cut down on even my favorite snack Cheezels and the like a fair bit and that reduction doesn’t seem to help.

I would probably reduce from 3 eggs to 2 eggs a day, but I think I will also remove the skin in my chicken boneless thigh and see if the reduction in saturated fats will help.

Dr Tang pointed out that because my HDL is higher as well, the overall Cholesterol/HDL ratio maintain at the same level.

I think it is important that I keep my Triglycerides low. I think I was a little concern by my 2024 triglycerides reading but Dr Tang explain that the reading can be a little noisy especially if I have a alot of calories intake within the 2 hour of the test. Last time, we need to fast for these tests. With the advancement of technology we don’t need to fast before the test.

Triglycerides are a type of fat in our blood. If the amount is low it is okay but too much may result in inflammatory process which leads to plague in the blood vessels.

This test also tests Apolipoprotein A1 and B. A1 or (ApoA1) is the main protein on HDL and B (ApoB) is the main protein on LDL, VLDL and IDL. Lipoprotein can be seen as the bus or transportation of the cholesterol because cholesterol by itself cannot move through the bloodstream. The B/A1 ratio tells us how our “bad” lipid transport compare to the “good” lipid transport. Low is better.

Traditional cholesterol tests can miss subtle risks. Two people may have:

• The same LDL cholesterol level.
• But one has more ApoB particles = more plaque risk

Apolipoprotein tests show the actual number of dangerous particles, not just how much cholesterol they carry.

Since the ratio is within the acceptable range, my balance between both lipid is good, which indicates a heart-protective profile.

I got to Watch My Sugar Intake

Dr Tang request to see if I can get my HBA1C down below 6.0. While my reading is in the ideal range, we can see the number inching up. If we reached above 6, we might need to do fasting plasma glucose (FPG) or oral glucose tolerance test (OGTT) to see if I am pre-diabetes.

I actually saw this result before the 10-year diabetes risk you see before and I was confused how I should relate the two. I think the way to look at it is, if I carry out my current lifestyle, my chances of developing diabetes is low. However, based on the HBA1C there are some things I can do to improve the situation.

The Kidneys

Dr Tang is slightly concern with my lower eGFR.

He wonders if this is due to not being properly hydrated. I guess maybe I been drinking too much coffee and not enough water. So this is something that I should see if I can improve upon.

High Testosterone and Normal Thyroid Function

Dr Tang ask if I am on any medication because some might affect my testosterone level. My testosterone was higher than normal. Since I am on no medication this is a surprise.

Dr Tang tell me to enjoy this high level because usually it will go down with age.

Tumour Markers Reveals Little Clues

These tumour markers are not diagnostic on their own. They provide clues of potential cancers.

• AFP: Liver Cancer
• CEA: Colorectal Cancer
• CA 19-0: Pancreatic Cancer
• Beta-HCG: testicular or ovarian
• Total PSA: Prostate cancer

At this moment, they provide no clues of the presence.

Conclusion

I always have a weird feeling doing some kind of comprehensive tests and checks because you don’t know what it might pick out. Perhaps I am afraid to face the fact that if some numbers is out of the norm, how would I feel about it.

I think some of you don’t like to do these checks because you might be able to live in continue denial that you can eat some of the delicacy or continue to engage in some current lifestyle.

If the tests is able to pick out early signs of problems, then we have the chance to revert and continue to live a good life. Perhaps we might even have a life to live in the first place.

And I guess this applies to some areas that we have neglected for a while.

For some of your friends, it is their wealth. My ex-colleague felt so much guilt about not wanting to engage actively thinking about money until one day she say enough was enough. Sometimes it is our fear about confronting health.

I grew to learn that some of these reports, finance or health is pretty useless if you don’t have someone to contextualize what it means. Dr. Tang’s review with me is pretty short, but I somehow feel that I am open to sharing more overtime. Perhaps this is the third year talking to him and the familiarity does changes the dynamics.

I told Dr. Tang: “You know…. seeing you trying to help me learn how to read the bar charts and the table kind of make me more in touch with how it feels whenever I try to explain these financial planning stuff to other people! I be nodding my head and say ‘Okay’ or ‘I see’ but I be thinking what the hell is this!”

There is always going to be some areas of our lives that we are less familiar with.

It is whether we want to be intentional to take a step forward. I shared with Dr. Tang I would probably have to review this report again and try to process what he said, and what was written in a more quiet setting to move forward. Asking him explain again might be a waste of his time and my time.

I kind of like this 10-year look at my chronic risk level because sometimes that is how I view wealth planning. I am thankful that my chronic risks for the next 10 years is pretty optimistic if I can keep my current lifestyle.

But there are some areas to work on (See cholesterol and blood sugar).

I think firstly, I might want to test my degree of sensitivity if I make some daily changes.

The fxxk thing about health is that you got to make meaningful changes and test to see how the numbers look. The difference with the financial stuff is that you could try and make meaningful changes and see your own progress.

What improve our health changes is good motivation, and crafting good habits of wealth. Making wise wealth decisions and allocating your family free cash flow are critical good wealth habits. And while it is good to project how our situations will look like in 30 years, that is probably too far.

But I think many families will benefit if you just draw a straight line of ten years, and try your best to think of all the milestones that could potentially happen. You could draw a couple or three lines if your life is not so clear cut. And for each of these lines, you can project the outcome.

If you are kind of interested in a test like this, maybe you can let me know. I may be able to put you in touch with my colleagues and guide you how to do this with Dr. Tang.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post I did a Nightingale Health Check and Here are My Results. appeared first on Investment Moats.

I talked more about Avantis Global Equity Fund (ticker: AVGC) and Avantis Global Small Cap Fund (AVGS) in the article mainly because they were the only available funds.

Shortly after the post, they also release the Avantis Emerging Markets Equity Fund (AVEM) to the public.

After reviewing and understanding more about the fund, I decided to reallocate the emerging market allocation in Daedalus Income Portfolio from iShares EIMI into AVEM. The main reason is to better align the portfolio to Daedalus more systematic active philosophy. I would have no problem using Dimensional’s Emerging Markets Large Cap Core Equity Fund but I wish to keep the money in my Interactive Brokers account to better compartmentalize the portfolio away from money for other financial goals.

I thought its good time I talked about it.

The fund started off as their most tiny fund with US$9 million in AUM if my memory don’t fail me too badly. Since then, they have grown the AUM to $51 million today. Some readers have asked my channels if there is a concern about their small AUM size.

I am not sure what is the concern here. Perhaps they need a certain size to remain cost efficient but I think their worry is smaller fund, more susceptible to close down. I think if the fund gives me a 100% premium performance over the benchmark index over 15 years and close down due to the size, I would not complain much.

I would just begrudgingly switch over to another fund that helps me express a systematic active philosophy for emerging markets like Dimensional Emerging Large Cap Core or iShares Edge MSCI EM Value Factor UCITS ETF USD (EMVL).

Actually EMVL will be a pretty good option.

What is more important to us is:

1. We can understand whether the manager has a coherent strategy.
2. Whether that strategy is sound and align to our own philosophy.
3. Have they shown a history of implementing and executing the strategy well.
4. Implemented in a low cost manner.

A few of these more systematic active funds and ETFs is that.

If the UCITS business does not work out for Avantis, and they do the same thing as Vanguard and leave a region, then it is not a problem.

It is a much bigger problem if they anyhow invest your money, consistently change their strategy, then decide to close down the fund. In the former case, they have invested and expose you to the risk and return in a manner you understood and agree. In the later, they basically take your money to gamble.

Avantis Emerging Markets Equity Performance

Anytime I took a look at how AVEM did against EIMI, I was quite surprised.

If we take a look at how AVEM (light blue) did against EIMI (light purple):

Since last Thursday, AVEM did 20.8% versus 14.9% since inception. Emerging markets have generally did well.

If you wish to track AVEM performance, you can review them at Morningstar at this page. If you try Googling Morningstar you might hit pages of different kind of return in different currencies.

I put AVEM’s performance till end of June over here with the index return of various Emerging Market indexes:

IMI stands for Investable Market Index, which means the index includes large-cap, mid-cap and small-cap stocks. SMID stands for Small and Mid Cap so it excludes large cap stocks. I have updated the table to include both EMVL (the iShares) and some other index.

Before we start, note that this is a very short six-months. Probably not the time frame to see if this is a good fund or bad fund.

What I am trying to do is to figure out where the performance is attributed to.

Generally:

1. Mid-size companies were doing better than larger companies which are doing better than the smaller companies.
2. But smaller companies were doing much better than larger companies in the last three months.
3. Growthy companies were doing better than cheaper companies.
4. In the last 3 months, the growthy larger companies were doing better than the larger value companies.
5. In the last 3 months, the growthy small companies were doing better than the small value companies.
6. In the first 3 months, it is likely value did better.

Avantis runs a systematic strategy based around the research of what consistently gets you companies that gives high expected returns.

And that ends up with companies that are:

1. Fairly profitable companies but very cheap.
2. Highly profitable companies that are fair in price or even cheaper.
3. Smaller companies that fit #1 and #2

If you wish to understand more about Avantis’ systematic strategy, you can read my first article on them.

AVEM benchmark against the MSCI Emerging Markets IMI index, which means unlike Dimensional’s strategy they prefer to cover some smaller companies as well. The fund is pretty diversified over 1,498 companies. The Dimensional Large Cap Core covers 1,502 companies despite its large cap focus. The MSCI Emerging Market has 1,203 companies while IMI has 3,099 companies.

Your returns will eventually be based on the securities holdings in your fund, which is ultimately based on the strategy. If it is an indexing strategy, then its based on the index weighing. If it is a systematic active strategy like Dimensional’s, EMVL or AVEM, then it is based around the systematic securities selection in the strategy.

AVEM higher weightage to the profitability factor (which tends to show up in growth companies) and greater number of small, mid size companies may have improved their performance relative to Dimensional’s. Despite value doing better in the first 3 months, and growth doing better in the last 3 months, AVEM did well in both half of the half-year. It is remarkable that AVEM managed to capture the return in the systematic manner.

If we invest in AVEM, we probably have to note that we probably get more mid-cap size companies that are more profitable and companies that are fair in value. This strategy will suck if large cap emerging markets did very well for a long time or value companies do value well for a long time.

I am pleasantly surprised by how Avantis have executed with AVEM thus far. Let’s see if I will have to swallow these words at the end of the year.

For those who are interested in investing in AVEM or EMVL, these are UCITS ETFs that are listed on the London Stock Exchange. You can invest in them through a broker such as Interactive Brokers. These ETFs are domicile in Ireland and more tax efficient. The more important point is that currently Ireland have zero estate tax for foreign non-resident. ETFs domicile in the US would have 18-40% estate tax. Of course dividend withholding tax (if there are dividends distributed) is 15% relative to 30% for the US domiciled ones.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post Reviewing Avantis Emerging Markets Equity UCITS Fund (AVEM)’s Good 6-Month Returns. appeared first on Investment Moats.

Let’s call my university mate Alex.

We met at the Food Republic food court in Suntec City for lunch. Alex worked close by and he directed me to see what I would like to eat there. His “go-to” meal is this seemingly China Cai Png store.

I decided to order this Chicken Cutlet Fried Rice.

In a packed Suntec City Food Republic, the queue is very short, which usually make you suspect about the quality and quantity. I saw the guy cook the fried rice then wait to put the meat. He cut one stack of chicken and I thought that was decent.

Then he waited.

And cut another stack and put it in. Holy shit.

Then he give me a bowl of soup.

$7.30.

Not cheap but also not too expensive. It was satisfying enough

Alex would tell me his “go-to” Cai Png will come up to be $8-$10.

I can see that he did not order any rice with his food. I always know Alex is pretty into the low-carb kind of diet. We started to talk about food.

I never really understand his “why” until he unpack for me.

“My mom’s line of ancestry have a history of dementia and Alzheimer’s disease.”

Alex saw that a couple of his relatives end up in that way. After his dad passed away, his mom deteriorate in the same way. His brother and he decided to hire a maid for mom. Turned out the maid was very reliable. But it was during a period where the maid had to go back home and he stayed with the mom that drove his conviction in. He observed first hand how much his mom’s condition has deteriorated.

There is probably a part of him that wishes to rebel against fate, which drove him to do the research into whether there are ways to do that. While things like Alzheimer’s disease are part genetic, they sometimes say it is also Type-3 diabetes and there is link to sugar and carb consumption.

Alex found that controlling our sugar intake, taking care of getting enough sleep, being mentally active during our old age in a certain manner are viable steps we can take.

I would sometimes explain to others that we develop unique conviction (sometimes irrational) when we are “touched” by certain events compared to others.

When his wife and him had their son 10 years ago, both of them decide to do their will and LPA (Lasting Power of Attorney). He proceed to explain to me that the will, and the LPA clarifies the propagation, division of the money in both the state of [both parent’s death] and if he ends up in the same situation as mom despite trying to do his best.

“You realize that when we go for holidays, both my wife and I usually are together. That should make you think about whether it is a good idea to have both of these things.”

“I think you should consider doing your LPA if you have not done so.”

I thank Alex for pushing this to me. He is probably the second person, aside from my colleague Vincent who explain to me what I need.

I spend the next moments explaining to him that my KPI for the year was to refine how Providend’s client adviser engage their client on the topic of long term care. This refinement process involves thinking about how much is needed for long-term care needs, going bottoms up instead of just top down, the technical math of sizing how much to self-insure long term care needs, the how-tos and how it compares to insurance.

I could just go into that… but I choose to just share our experience with putting up my grandma in a nursing home. The environment and experience, the degree of subsidies and my philosophy towards these things after my research and personal experience.

Alex is more pensive when he reflects upon his career and financial situation.

He worries less about money and am thankful about what understanding that means.

“There was another retrenchment exercise at the bank. I decide to put my hand up if they need me to go. Given how long I been there, I would most likely get a decent number of month’s worth of severance sum and I can decide where I can go from there.”

“I think I have taken care and saved up for my retirement.”

“The only thing that I might need to save up more is if he (son) needs to go to an overseas university. So we might be looking at a sum of $400,000.”

As the conversation develops, Alex shared about retirement.

“If I look at what I need, I would probably need $1,000 monthly in my retirement. Not including her [wife]. If we include that, we are probably looking at double that.”

I told Alex straight up I was astonished he would actually tell me such a number.

Whenever a topic drifts to retirement planning, I expected all sorts of standard numbers. $4,000. $5,000. $7,000. $10,000 monthly. Due to the unique place that I work, I would regularly see income planning numbers of $15,000 to $30,000 monthly.

I was not horrified if Alex have considered too little. Have he consider this. And that. Possibly missing out on this. Had he consider all this, the capital that he needed would be much higher.

I was astonished because his mind rebelled against three pretty big things that prevented folks from seeing a more reasonable income needs number.

The first is most people are too anchored to their current lifestyle and the figured they guessed is closer to their current position in life. Most people are less introspective, reflective and cannot envision a more realistic lifestyle they desired that is different from their current life position.

To make it worse, you need to have the headspace to come up with a figure for each of those line item and the total amount.

Not many people does that. I think nowadays, I spend more of my time telling folks I cannot do this part for them and if you want a good income plan, you better be more introspective and figure this part out. I basically told my ex-colleague three days ago that this will be her major exercise if she wants to really know the mileage of her $550,000 in cash and $200,000 accessible CPF OA at 55.

The second thing is this is more remarkable given where Alex work, the people he interact with. I am sure this number is far, far, far lower than any of his colleagues, peers thinks they need.

I never went into any financial numbers check with Alex. Usually, I have my way of figuring out if a person’s financial situation leans towards very safe, safe, pretty ok but sometimes can fail, or needs further conversation, or basically not there yet (given not just their wishes, but what I think people normally needs {even though they might not see it at that point})

I just told him that experience tells me both his wife and him should have reached CPF Full Retirement Sum. This means each has a CPF LIFE Annuity Income, accessible at 65 years old, that has the purchasing power of S$1,400 monthly today. (If you have no idea how this math came about, I kind of write about this in this two articles: CPF’s New Personal Retirement Income Planner Tells Me I Secured a $1,430 to $1,770 Real Monthly Income and How to Inflation-Adjust Your CPF LIFE Basic or Standard Plans)

His introspective look at his future lifestyle basically tells him that he has covered his retirement lifestyle today, even without touch his cash savings. If we factor inflation, that CPF LIFE Standard income would be closer to $900-$1000 monthly today if we consider inflation. Alex’s situation is pretty safe not because of whether the income covers his spending exactly but that this CPF LIFE income looks like a safety net over the income he can withdraw from their cash assets.

I felt the last consideration is there are still things not saved up yet. The family still has a $900,000 mortgage not paid off and in his mind, they still have to save up $400,000 in children’s education.

These layers made it so only a very small number of people can come up with such a relatively low income needs figure.

I kind of think that the income needs figure that gives most people the kind of financial security and peace of mind they want is a much smaller figure than they realize. I also think an important part of financial advice that is of real value is to ask critical questions that tell us their true income needs, help them envision, force them to confront their real fears.

Some may have already saved up a capital conservatively that hit the true income figure that gives them security.

If security is more emotional and mental, the value of advice is both the technical and also in the way we can frame what truly gives them emotional financial security with the numbers & investments.

In a way, the earlier mental conflict with dealing with his dad’s passing, his mom’s situation, the experiences of living in family isolation during covid may have helped peel away with the things that is less important. The things that he can work a paid income for. Peeled away the good-to-haves.

What is left might be his actual ikigai-kan.

And that ikigai-kan just cost not so much.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post “I Just Need S$1,000 Monthly in My Retirement. I think I had saved up for that.” appeared first on Investment Moats.

I explain how I constructed this portfolio in Deconstructing Daedalus Income Portfolio and Why I Currently Invest in These Funds for Daedalus. You might not understand what I wrote below if you haven’t read this post.

All my personal planning notes such as income planning, insurance planning, investment & portfolio construction will be under my personal notes section of this blog. You can also find the past updates in the section.

Portfolio Change Since Last Update

The portfolio was valued at $1.441 million at the end of May and is at $1.476 million at the end of June.

We reported a portfolio change of $35,000 for June 2025.

The portfolio is valued in SGD because that is the currency that I would most likely be spending on.

As of 3rd July 2025, the portfolio is valued at $1.497 million.

Here are the primary security holding returns for the month-to-date and year-to-date:

The table that shows the fund holdings denotes the month-to-date and year-to-date performance of the funds that I own, against Major Index ETFs. The Major Index ETFs is present to compare the performance. Just to be clear, I do not own the major index ETFs and you should see the top table as what I own.

The returns of all funds are in USD. This includes the performance of the Dimensional funds, which I use the returns of the USD share class so that the returns are comparable. I have also listed the major index ETF performance for comparison.

The market continues to digest and reprice whatever that is in the news.

If you look at the bottom table (Major Index ETFs):

1. Emerging markets did the best of 6.8% after doing 4.8% last month. Their performance this year has been the best.
2. The small caps globally pulled down the All Country World IMI results relative to the index without IMI.
3. The smaller size and cheaper companies is not helping the Global Core Equity.
4. The difference between the Russell 2000 and S&P 600 is probably healthcare and technology. Small cap technology have been doing better and we can see the better performance of the Russell 2000 compare to the S&P 600.
5. Avantis Global Small Cap Value, Dimensional Global Targeted Value continues to do better than the Russell 2000, S&P 600, SPDR MSCI USA Small Cap Value Weighted due to the weaker USD, and monetary conditions easing in the international markets. Although we are observing better performance this month from USSC.
6. JPGL, IFSW, AVGC, Dimensional Global Core Equity (which I don’t own in this portfolio) falls within the realm of MSCI World. You can review the performance of these funds against the MSCI World Index. AVGC and Global Core Equity are more levered to the profitability factor, which kind of help them keep up with the MSCI World Index performance, which has become pretty high in the profitability factor. IFSW is a different beast. They have change their methodology (which I should write about in the future). I have the least allocation to IFSW but it has been the best performer these two years.
7. Emerging market small cap is not doing as well as international small cap but definitely doing much better than US small caps. They enjoy both the tailwind of correction from the low and USD weakness.
8. Despite interest yield remaining high, the Global Aggregate bond continues to earn the coupon returns of the underlying.

The portfolio lost 1.52% due to the weakening USD against the SGD. YTD the portfolio lost 6.85% just from currency alone.

Role of Portfolio

The goal of the portfolio is to generate steady, inflation-adjusted income to cover my essential living expenses. It’s built using a conservative initial withdrawal rate of 2.0–2.5%, which is designed to hold up even under extremely tough market conditions — including scenarios like the Great Depression, prolonged periods of high inflation (averaging 5.5–6% over 30 years), or major global conflicts. In other words, it’s stress-tested to withstand some of the worst financial environments in history.

The income needs to last: from today (age 45) for the rest of your life — potentially forever.

I am currently not drawing down the portfolio.

For further reading on:

1. My notes regarding my essential spending.
2. My notes regarding my basic spending.
3. My elaboration of the Safe Withdrawal Rate: Article | YouTube Video

Based on current portfolio value, the amount of monthly passive income that can be conservatively generated from the portfolio is

The lower the SWR, the more capital is needed, but the more resilient the income stream is.

Nature of the Income I Planned for

Generally, different income strategies produce different types of income streams. They can vary by:

• Consistency: Some provide steady income, others fluctuate over time
• Inflation Protection: Some adjust with inflation, others remain fixed
• Duration: Some last for a set number of years, others are designed to last indefinitely (perpetual)

An income stream based on the Safe Withdrawal Rate framework is consistent and inflation-adjusted, and if we use a low initial Safe Withdrawal Rate of 2.0-2.5%, the income stream leans towards a long duration to perpetual.

Here is a visual illustration of how the income stream will be based on the current portfolio value:

The income for the initial year is based on a 2% Safe Withdrawal Rate. The income for subsequent years is based on the inflation rate in the prior year (refer to the bottom pane of inflation in the previous year). If the inflation is high, the income scales up and if there is deflation, the income is reduced.

Investment Strategy & Philosophy

After trying my best to learn how to invest for a while, the portfolio expresses my thoughts about investing at this point.

The portfolio is run in a

1. Strategic: allocation doesn’t change by short-term events.
2. Systematic: rules/decision-tree-based implemented either myself or an external manager.
3. Low-cost: investment implementation cost is kept reasonably low both on the fund level and also on the custodian level.
4. Passive: I spend relatively little effort mentally considering investments and also action-wise.

You can read more in this note article: Deconstructing Daedalus My Passive Income Investment Portfolio for My Essential & Basic Spending.

Portfolio Change Since Last Update (Usually Last Month)

I held a small position in Matterport (MTTR) during the COVID period. I was down 91% on the position. Real estate information company CoStar (CSGP) purchased Matterport in a cash and shares transaction. So as a Matterport shareholder, I got some CoStar shares.

I decided to clean up my portfolio by moving CSGP to my other portfolio Crystalys. So CSGP is the only sale. However, I can’t sell all the shares so I am still left with 0.1312 CSGP shares on Daedalus.

Current Holdings – By Dollar Value and Percentages

The following table is grouped based on general strategy, whether they are:

1. Fixed Income / Cash to reduce volatility.
2. Systematic Passive, which tries to capture the market risk in a systematic manner.
3. Systematic Active, which tries to capture various proven risk premiums such as value, momentum, quality, high profitability, and size in a systematic manner.
4. Long-term sectorial positions.

Portfolio by Account Location

Portfolio by Region of Securities

Portfolio by Fund, Cash or Individual Security

Portfolio by Strategy.

Main Custodians

The current custodians are:

1. Cash: Interactive Brokers LLC (not SG)
2. SRS: iFAST Financial

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post $1.497 mil Daedalus Income Portfolio Update – June 2025 appeared first on Investment Moats.

Think it is a pretty good article and brings up some Coast FI planning points to think about.

I would like to share what I think.

On How They Calculate the Coast FIRE Number

The article says that to compute your coast FI number is simple:

This equation kind of looks simple but it is not super intuitive always so maybe I explain a bit.

You need to work out the Portfolio Balance Needed to Support Income Needs in Retirement. This means that you need to work out how much you need in a traditional retirement.

How do you do that?

Well that is why I say it might not be so complicated. Firstly, you need to know when you want to fully retire but you can work on a 65 year old target.

If the number then is $2 million.

You divide $2 million by (1 + Real Rate of Return)^{number of years}.

You need to know the rate of growth to that age… and the inflation rate…

There are still a few bits of variable so I don’t think it is that simple at all.

I came up with a calculator in the past when I wrote my Coast FI article 8 years ago (fxxk time really flies)

It is a Google Spreadsheet which is available for folks to try. You can vary the age of retirement, the income you need then, but today, and it is based on a Safe Withdrawal Rate spending method.

Go to the middle section or you can access the sheet here.

The Financial Assumptions are Important in Your Coast FIRE Plan.

The article points out that your plan is as realistic as the assumptions that you put into the plan and it is easy to see why.

You are making a few assumptions here:

1. What you will spend on in a traditional retirement in terms of the line items.
2. How much the line items cost today.
3. How you assume the inflation will be like today and in the future.
4. What kind of income strategy you will use to generate the cash flow for spending in retirement.
5. How flexible or inflexible is your future spending. This will affect the income strategy and the capital to provision for.
6. What your tax rates will be like in the future.
7. Would you still work in some capacity?
8. How likely will your preference for work and not work change?
9. How certain is social security?

If what you came up with is close to the eventual situation, your plan should work better but many of us know that it is easier said than done.

I will tell you that dealing with these assumptions is not unique to Coast FI or FIRE.

You have to consider the same thing for traditional retirement!

The main difference you may feel different is some of the planners are closer to their traditional retirement than far away. So they kind of felt they know the lifestyle better.

Potential Psychological Challenges of Coasting

The article gives some potential psychological challenges to think about:

1. You may not find it easy to ‘switch’ from deep saving mode and suddenly not saving any money in Coast FIRE
2. Your identity may be challenge because you tie your self worth to the ability to earn that significant salary before coasting.
3. Tensions with your spouse. You are ready to downshift but your spouse isn’t. Your spouse may not deal with carrying the financial burden that well.

Better Coast FI Advice from Kyith Can Add Value to Your Plan

I say this part in jest but the article list out same areas where a financial planner can add value.

I think firstly a financial planner needs to understand what is the appeal of Coasting. If the planner doesn’t , then he or she won’t actively sell this concept as well.

I do find coasting appealing personally for the few reasons:

1. There are hardworking people who could be in lucrative but tiring careers. They themselves know this cannot go on forever.
2. They might be so tired that they want a full FIRE but realistically the money needed is so much more. They also faced the emotional struggle if it makes sense to fully retire at 40 years old.
3. Innately, most of us want to work but in our own terms.
4. We want to do responsible things. If we have the opportunity to earn a lot and okay to do it for a period we want to save up enough. But how do we size up what is enough?

Coast FI or FIRE is to save up for the biggest capital need while we have a lucrative career, which is our traditional retirement. Psychologically, this reduces the stress of trying to find a demanding job, only for the income, to save up for something like that.

I think if advisers understand this, they listen more actively to who they speak to and see if this lifestyle is more ideal for them.

I do think that more and more, the value may also be helping clients size up a sum that may help their children reach not a full retirement, but part of the retirement. This needs technical expertise that the advisers can help with.

If the assumptions can make or break the plan, then someone with more technical expertise could also add value.

And I think there is a lot of value here because… you are leaving a lot of opportunity cost on the table by leaving your job and you are buying the peace of mind that what you have considered is:

1. The plan matches the true idea you have in mind.
2. The plan is realistic.
3. The plan has enough conservatism that you are comfortable with.

Value goes on beyond the numbers because you got to believe enough that you are doing the right things.

The article did bring out certain nuances:

When estimating the real rate of return, advisors might begin with historical inflation data and the expected performance returns of the client’s asset allocation. However, advisors could go a step further by using Monte Carlo simulations to model a variety of outcomes, including scenarios with higher inflation or lower-than-expected market returns.

What I learn from my colleagues is that some people think too linearly and binary. Then there are others that came up with too many scenarios.

There should usually be a sweet spot there where we don’t look at one situation but also not so many situations that you are paralyzed after that. The value is figuring out whether we are roughly ready, very ready or not ready at all.

Finally, there is a lot of value in the ongoing advise:

1. Out of all the future financial goals, are there new goals identified only during coasting?
2. Is the sum you sized up for traditional retirement still sensible?

This turns out a good article for us to reflect and ponder about.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post Financial Planning for Coast FI/FIRE appeared first on Investment Moats.

In the first part, I reviewed the sub-funds unit trust available for AIA Representatives. If you own an investment linked policy (ILP) under AIA and wish to to see how Singaporeans can switch to sub-funds that better align to your current investment philosophy, you can read the article.

In the second part, I reviewed the sub-funds unit trust available for Prudential Representatives. If you own an investment linked policy (ILP) under Prudential and wish to to see how you can switch to sub-funds that better align to your current investment philosophy, you can read the article.

I think this will be my last exercise into profiling what an existing policyholder of Investment-linked Policy can do if they wish to better align the investments selection to their updated investment philosophy.

Again, before I start, I wish to be clear that:

I am not recommending anyone buy particular sub-funds. This article is meant to help those with an ILP and for various reasons, are not getting proper, adequate advise with enough sophistication and integrity from who ever sells them the policy. The main objective is for those who have decide to keep the ILPs, whether they can better align the investment funds in the ILPs to their current investment philosophy.

You can read the second paragraphs in both my articles above about fund switches. Technically most 101 ILPs offer free switches and the switches are bid-to-bid, which means you do not incur one time spread costs. But it is better to read your policy documents just to be more certain.

The Sub-fund Unit Trusts that are Available Under Great Eastern for Singaporeans to Switching.

Before switching, you might want to find out what are the other sub-funds that are generally available to switch to. These might also be funds that your adviser did not mentioned to you.

I done part of the work by listing down a whole chunk of the funds that are available under Great Eastern that you can consider.

They are taken from this Great Eastern Fund Screener page.

Generally, the sub funds available for Great Eastern ILP can be found in three groups:

1. Greatlink Funds. These are the sub funds for the retail ILP policyholders. If you have a legacy fund, it might fall under here as well. Your ILP should be named with something like GreatLink or SupremeLink or something Great.
2. Max Funds. Specific to a set of Max ILP product series such as MaxInvest, MaxGrowth, MaxSaver, MaxSeries. These are funds that typically bundled with protection and riders.
3. Prestige Portfolio Funds. Funds available for the high net worth (HNW) product lines

From what I understand, if you have a Max Policy, you cannot buy GreatLink-only Funds. The funds on Prestige Portfolio are mainly generic unit trust from say.. Fidelity, Allianz, Pimco etc. This is not to say you cannot get the same funds on GreatLink and Max. In GreatLink and Max, Great Eastern creates a “mirror” fund, which essentially tracks an external fund such as Allianz Income and Growth.

In this first two tables I have listed out the funds under GreatLink:

There is about 39 GreatLink sub-fund unit trust here. This table is as of 29 Jun 2025.

You can’t really see the funds, or the performance of the funds unless you click to view a larger table.

I listed the

• fund inception date,
• its rough equity to fixed income allocation,
• management fee and
• the 5-year and 10-year performance and the corresponding benchmark performances.

Here are some things to note:

1. I am not focusing on the poor or good investment performance. I am more reviewing how long the funds have been running, if they manage to keep up with the benchmark (because we know most active funds or portfolio underperform the index typically so that is not a surprise).
2. I deem that 5 and 10 years to be long enough for us to reflect upon the investment performances.
3. The returns are bid-to-bid returns, and would have factored in the expenses and the management fees.
4. They do not include the ILP policy charges and recurring ILP fees, which are typically charged by deducting units that you own.
5. All performances are in SGD.

My Observations about the Historical Performance of the Great Eastern Sub-funds

Like Prudential, Great Eastern have more funds that are actually wrapped around an actively-managed unit trust managed by an external manager.

Great Eastern will always have some relationship with OCBC and also LionGlobal Investors. In 1986, OCBC Asset Management firm was founded. Great Eastern established Straits Lion Asset Management in 1996. In 2005, OCBC asset management and Straits Lion merge to create what is known as Lion Global Investors today.

Thus, a lot of the sub-funds are funds managed by LionGlobal. But there are also mirror funds to other asset managers. I do notice that there were less funds under GreatLink created recently.

Great Eastern have a lot of sub-funds that have longer than 20 years of history.

If you are an investor curious about fund performance, like whether active funds can beat passive funds over the long run, you might gain some insights by reviewing the tables above. The annualized returns since inception would be 20 year returns.

The returns are what is earned by the policyholders, before the policy charges, insurance charges.

Funds that Beat their Benchmark Since Inception

If we compare the three major insurers, Great Eastern have the most funds that beat their benchmark index since inception:

1. Greatlink Lion Japan Growth. This is an 18 year old fund that beat Topix since inception.
2. Greatlink Lion Vietnam. This is an 17 year old fund that beat the benchmark since inception.
3. Greatlink Short Duration Bond Fund. This is a 23 year old fund that beat the 3-Month SORA + 35 bps since inception.
4. Greatlink Global Emerging Markets Equity Fund. A 12 year old fund that beat the MSCI Emerging Markets since inception.
5. Greatlink ASEAN Growth Fund. A 34 year old fund that beat the MSCI All Country ASEAN Index since inception.
6. Greatlink Cash Fund. A 34 year old fund that beat the 3-month SORA since inception.

It is more disappointing that the good performers turned out to be very region specific or short-term fixed income based. These might not be something you wish to pivot to in a global portfolio.

Funds that Kind of Kept Up with the Benchmarks

There are funds with longer term performance that at least put in some hard work to be below the index but not too far off:

1. Greatlink Lion India. 18 year old fund which did 4.57% p.a. vs 5.91% p.a for the benchmark.
2. Greatlink Singapore Equities Fund. 23 year old fund which did 5.5% p.a. vs 6.6% p.a for the benchmark.
3. The Greatlink Lifestyle Series. There are 5 different portfolios here and the Progressive, Steady and Secure kept up with their benchmark pretty well.
4. Greatlink Far East Ex Japan Equities Fund. 23 year old fund which did 5.0% p.a. vs 5.6% p.a for the benchmark.
5. Greatlink Global Bond. 23 year old fund which did 2.3% p.a. vs 2.5% p.a for the benchmark.
6. Greatlink Global Real Estate Securities Fund. 20 year old fund which did 2.7% p.a. vs 2.9% p.a for the benchmark.
7. Greatlink Global Supreme Fund. 26 year old fund which did 3.3% p.a. vs 3.8% p.a for the benchmark.
8. Greatlink Asia Pacific Equity Fund. 34 year old fund which did 4.0% p.a. vs 4.3% p.a for the benchmark.

The Unit Trust Sub Funds Available Under Prestige

There are like 100 unit trust that is available if you own a Prestige ILP. These are not mirror funds but basically you can invest in the unit trust as if you buy them on iFAST FSMOne. Just that they are under this ILP Structure.

Unfortunately, I am not going to go through all the funds.

I am however going to help list the Top 20 funds based on Performance Since Inception and for the Past 10 Years.

Best performance since inception:

Best performance for past 10 years:

I am not recommend you to invest in the top performing fund. Rather, there are funds, in this ILP structure, that is available to you, that has done returns that many would acknowledge help people compound their wealth well.

Are There Great Eastern Global Sub Funds if Singaporeans want a One-Fund Equity Solution?

I think your choices under Greatlink is rather limited. You are left with:

1. Greatlink Sustainable Global Thematic Fund which is an Allianz Bernstein fund
2. Greatlink Global Equity Fund which is a Goldman Sachs fund
3. Greatlink Global Equity Alpha Fund which is Schroder Global Equity Alpha
4. Greatlink Global Perspectives fund which is Capital Group New Perspective Fund

All 4 is at least 23 years old. Their returns since inception isn’t that great but I suspect that they didn’t do well for the first 10 years. If you observe, their last 10 years return is not too bad.

If I were to do it for myself I might just stick with Greatlink Global Equity fund or the Alpha one and hope that they learn to be closet indexers.

If you own an ILP that invest in the Max funds, I don’t think there is a global fund that fits the Global Allocation profile.

If you have an ILP based on the Prestige Series, there are a lot of funds. But actually you are also left with:

1. Fidelity World A Acc SGD
2. Schroder ISF Global Equity Alpha USD
3. BlackRock GF Global Dynamic Equity A2 USD
4. JPM US Value A Acc NAV SGD
5. Allianz US Equity AT NAV SGD
6. Franklin US Opportunities A Acc SGD

A rather limited list. I have to expand to USD denominated funds in order to have a wider global equity choice. Since US makes up 60-70% of Global Allocation, some of you might be comfortable in having that ILP be in US equity as part of your global allocation if the ILP isn’t such a large allocation.

All the Global funds underperform the MSCI World index so this is trying to make do with whatever we have.

Positioning Your ILP as Part of Your Global Allocation.

Another strategy is to put your ILP as one of the product that gives you exposure to a certain region.

If you did your review, you might get a view of your portfolio in region:

Your returns is based on whether you are able to capture the risk exposure of different region. And if you want to capture the potential returns globally, you will need to have adequate exposure.

If your investments are made up of various products currently, by switching to another fund, it may help you weave the ILP well so that your whole investment strategy looks cohorent.

We reviewed the funds in the previous section and you can see what are some of the funds that are more sound that you could take your chance and weave them in better:

1. Greatlink Lion Japan Growth.
2. Greatlink Lion Vietnam.
3. Greatlink Global Emerging Markets Equity Fund.
4. Greatlink ASEAN Growth Fund.
5. Greatlink Lion India.
6. Greatlink Singapore Equities Fund.
7. Greatlink Far East Ex Japan Equities Fund.
8. Greatlink Asia Pacific Equity Fund.

We have about 3 funds that gives you emerging markets/asia pacific exposure. There is 1 Singapore fund.

More and more, I see that positioning your ILP as part of your global allocation to be more sensible because most of the Great Eastern and Prudential funds do better regionally than globally.

Conclusion.

I hope people get the spirit behind this article and hope people don’t give me comments like “ILPs are a scam!” or “They are so costly!” or “They should just surrender the policy even if they get zero money back!”

This is more for those people who have committed and want to try to make the best out of their current situation now that they are more financially aware. Sometimes it is easy for us to say because it is not our own money.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post Reviewing the Great Eastern Investment Linked Policy Sub funds. appeared first on Investment Moats.

We were having deeper discussion about different way risks are perceived.

My member James was giving some reasons why out of the three Singapore banks (UOB, OCBC, DBS), he ended up avoiding DBS and OCBC:

“During the subprime crisis, DBS got hit with 2.4 billion while OCBC got hit with 1.3 billion. UOB got round the crisis relatively unscathed.”

My first personal thought is how significant are these 2.4 and 1.3 billion for each company. If we look at these companies from the system perspective, should blame or judge them as poor risk management or did you forgot that they know parts of these financing deals they make will fail and design & implement a system to manage that.

I think is both.

1. There should be some conservatism if we practice our critical thinking. Which means we should not make some of these deals.
2. It makes more sound sense to expect different degree of deal failure and design a system for this.

I pushed James to consider that if we are trying to be conservative, and cover all our bases, we are going to leave a lot of deals on the table. Even if we try to cover all our basis by sensing the motivation of the owner and observing the style of management, through their actions, it might be futile because the “base rate” might be generally more management and businesses are problematic. If that is the case, a business is more likely to fail in the long term than succeed.

A good example of acknowledging the base rate of failure but still taking risk are systematic passive or active strategies like Amundi Index tracking funds or Dimensional funds.

1. Companies that are weaker don’t impair your entire net wealth.
2. Companies that show market-risk, value, profitability, momentum, illiquidity, low volatility premiums have the premiums harvested systematically.
3. There are periodic ways to reconstitute the portfolio which means the failures get systematic weed out into the portfolio.
4. Different strategies involve equal-weighting, value-weighting, dividend-weighting, which systematically shifts the nature of the portfolio.

All of this work on the base rate that companies generally fail, and we generally don’t know which companies will succeed in the long run.

Sometimes it might be that I am digging up something to argue but I generally think some members like James may glean something from these different perspectives. Both of us probably came from the same world of “only having a few eggs in the basket and bloody watching over that basket like a hawk”. But I think it is important to consider what are we most afraid of, how we protect ourselves in the past, what are other ways that attempt to protect what we are most afraid of and why would they work.

My friend STE shared this extract from a book:

There seem to be two parts, but essentially talking about the relationship between risk and time horizon. It also fills in how net wealth affect how you look at risk.

In planning for the wealth of low net wealth or high net wealth, we kind of first look at the time horizon. The time horizon is how long before you need to use the money. The money for a certain goal. If your time horizon is short, you need the money soon, you cannot hope for much variability in the outcome from your target.

Variability in the outcome of your target is basically risk.

We learn that in various things. The target outcome of flying the plane is to reach Taiwan. The risk is the plane reaches the middle of the ocean. There is a variability in the outcome.

If your time horizon is long, then you have time for your investments to work itself through the various short business cycles so as to properly price the business growth. This means some investments are very challenging if you need the money within 15 years.

We are fxxking scared about a lot of things because we grew anxious if we can have that return, to achieve our goal in time. But many disrespect the importance of the period you need for the investment to mature.

Investors know that if a fixed income doesn’t default, you get back your principle if it matures in X years. Perhaps you should look at equities this way. It is like a 15-25 year pseudo-fixed income. If your goal is less than that, don’t blame us, don’t blame equities for not giving you what you want. You over-expected it. If you are lucky, you can get the outcome. But if you are unlucky…. don’t blame the equities, don’t blame the gurus.

I think what Morgan Housel wrote is damn profound:

“The most important question to ask when thinking about risk isn’t how much volatility or upside you are looking for, but how much time your emotions and goals need for that volatility to play out.”

Whenever we consider an investment, the first question is often how much return we could potentially get. Not many would ask about the experience that we might have to go through to earn that return.

I think many understand that they won’t smuggle drugs even if the returns are worth it because they get the worst case risk they might get into. But we won’t readily consider the experience first. This is because not many tell you that you need 15-25 years. If you know, then would you consider how uncomfortable you would feel?

Perhaps.

Two Asset Allocation Non-Negotiables to Avoid Your Family Dying Poor.

James and another member Lim Der Shing commented on some portfolio guidelines they set so that they don’t fxxk themselves up with concentrated single stock position.

Der Shing’s 2 Bite Size Rules:

1. I will put at most 5-6% of my equity portfolio into one company on cost basis.
2. A single stock is allowed to grow up to 15-20% of equity total. Then it must be trimmed.

Single stock means a single company risk like Sea Ltd, Ali Baba, Beike or DBS etc. Firms like Berkshire Hathaway does not count.

James:

1. 10% max per company.
2. He doesn’t trim
3. Since his biggest exposure is properties in Singapore, that forms a big chunk of his investments.

I should contextualize that both are referring to wealth that has already built up, and what they produce in work income is miniscule compare to the portfolio. We are talking about north of eight figures here. What Der Shing and James are afraid of, can be different from someone with a work income coming in or in the process of building up their wealth.

I think James does trim, it is just that he doesn’t remember because we have seen examples of that. Selling away is in a way trimming. I guess some can take a step back and be more structured in the way they think. Read in a different way, equities form a much smaller portion of James’ portfolio that even if 10% is pretty concentrated, that equity holding is still pretty small in the grand scheme of the entire portfolio.

Limiting your portfolio to a smaller amount is more about playing defense first. In 2021, I wrote on Providend about two illuminating questions that we can ask ourselves with an investment decision we are about to make.

The first question might fit more here. There are two ways of phrasing the same question:

1. I know in this uncertain world, no one can predict that the likelihood of mistakes will go up, no one wants to make a mistake but which mistake can I least afford to make?
2. After going through 2008, we know that most mistakes are recoverable but what are the mistakes that I do not wish to make?

This questions force us to think about our investments with how deep the risks we can see (and also cannot see) and relate to how important is our financial goal.

If you think that you have enough money for your lifestyle, would you still put 30% in a single stock, single sector, a product of concentrated risks?

I still see this kind of behavior around.

They have immense trust in:

1. Their ability to be nimble.
2. That their concentrated position would have positive sequences of outcome from year 1 till year 30.
3. Don’t know what kind of weird logic.

I think people failed to grasp the “base rate” here and generally plan with optimism even though they think their plan is conservative.

Or that there are people who technically have enough money trying their best for their family to die poor.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post Making Your Family Die Poor appeared first on Investment Moats.

If you wish to subscribe successfully, you must place your order via Internet banking (Cash, SRS, CPF-OA, CPF-SA) or in person (CPF) by 2nd July. Singaporeans, PR, and non-Singaporeans can all buy these Singapore Treasury Bills.

You can view the details at MAS here.

In the past, I have shared with you the virtues of the Singapore T-bills, their ideal uses, and how to subscribe to them here: How to Buy Singapore 6-Month Treasury Bills (T-Bills) or 1-Year SGS Bonds.

The Tbill cut-off yield in the last auction is 2.00%.

If you select a non-competitive bid, you may be pro-rated the amount you bid and would yield 2.00%. If you would like to ensure you secured all that you bid, it will be better to select a competitive bid, but you need to get your bid right.

Some past non-competitive auctions were pro-rated. Here are some past examples:

1. 11 Apr 2024

In competitive bidding, if your bid is lower than the eventual cut-off yield (in the example below), you will get 100% of what you bid for at the cut-off yield (not the lower yield that you bid for).

Gaining Insights About the Upcoming Singapore T-bill Yield from the Daily Closing Yield of Existing Singapore T-bills.

The table below shows the current interest yield the six-month Singapore T-bills is trading at:

The daily yield at closing gives us a rough indication of how much the 6-month Singapore T-bill will trade at the end of the month. From the daily yield at closing, we should expect the upcoming T-bill yield to trade close to the yield of the last issue.

Currently, the 6-month Singapore T-bills are trading close to a yield of 2.00%, slightly lower than the yield two weeks ago.

Gaining Insights About the Upcoming Singapore T-bill Yield from the Daily Closing Yield of Existing MAS Bills.

Typically, the Monetary Authority of Singapore (MAS) will issue a 4-week and a 12-week MAS Bill to institutional investors.

The credit quality or risk of the MAS Bill should be very similar to that of Singapore T-bills since the Singapore government issues both. The 12-week MAS Bill (3 months) should be the closest term to the six-month Singapore T-bills.

Thus, we can gain insights into the yield of the upcoming T-bill from the daily closing yield of the 12-week MAS Bill.

The cut-off yield for the latest MAS bill auctioned on 24th Jun (3 days ago) is 1.88%. The MAS bill is 7 basis points lower than the last issue two weeks ago.

Currently, the MAS Bill trades close to 2.06%.

Given that the MAS 12-week yield is at 2.06% and the last traded 6-month T-bill yield is at 2.00%, what will likely be the T-bill yield this time round?

What we are observing is:

1. The rates at 3-month and 6-month interest rate is un-inverting. This means the 3-month interest rate is becoming lower than the 6-month, which is the usually shape of the yield curve.

Given where things are I am incline to think that yields will be at slightly lower at 1.97%.

Here are your other Higher Return, Safe and Short-Term Savings & Investment Options for Singaporeans in 2023

You may be wondering whether other savings & investment options give you higher returns but are still relatively safe and liquid enough.

Here are different other categories of securities to consider:

This table is updated as of 17th November 2022.

There are other securities or products that may fail to meet the criteria to give back your principal, high liquidity and good returns. Structured deposits contain derivatives that increase the degree of risk. Many cash management portfolios of Robo-advisers and banks contain short-duration bond funds. Their values may fluctuate in the short term and may not be ideal if you require a 100% return of your principal amount.

The returns provided are not cast in stone and will fluctuate based on the current short-term interest rates. You should adopt more goal-based planning and use the most suitable instruments/securities to help you accumulate or spend down your wealth instead of having all your money in short-term savings & investment options.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

The post New 6-Month Singapore T-Bill Yield in Mid-June 2025 Should Fall to 1.97% (for the Singaporean Savers) appeared first on Investment Moats.

My tale of meet ups let me know that they would usually come in bunches. But they are purely coincidental. We try to find patterns where there usually isn’t.

My ex-colleague wanted to carry on a previous conversation we have about money. The last time we actually message was about 2 years ago. We would usually meet up with another ex-colleague of mine. The three of us happen to be mutual friends, joint up awkwardly due to mutual circumstances.

“Sure, I am open to meeting up. We can do it next week or…. I think this Friday I am likely available as well.”

“I think it is better if we meet up this week.”

Whoa. I was taken aback how urgent this seem to look. I hope there isn’t anything bad happening with the family.

I found out there was nothing of that sort when we met up for dinner on Friday.

Rather, she told me that.. this was not the last time we had such money conversations. The first conversation was probably almost 6 years ago in 2019. All these remain as conversations.

I give her space to think (because people need space and its not my money).

And life happens.

So 6 years later, she is 37 and not 31 already.

Sooooooooo much time seem to have passed but what seems to be the worry?

We discussed a lot of things but it boils down to something rather simple:

I have some life goals. I would be glad if I have taken care of these life goals 6 years ago. But now I am older, and I have not taken care of them. And I am running out of time.

You replace my friend with yourself and you might see similarities there.

Taking care of life goals usually means funding them to a certain degree or making sure that for all your money, are you funding the goals adequately?

“I see my dad going in and out of hospital and I see first hand what happens if I don’t eat right and take care of myself well.”

Sometimes I wonder if we at Providend or Havend actually deconstruct the process how people make decisions and whether there are evergreen patterns. I think we know pretty early that many can pay attention to our content and be inaction, or take action in their own way.

Whatever discomfort, if there are any discomfort they will start compounding. Eventually the discomfort will be so significant that it will push them to take action.

In the past, they cannot get past the hurdle of paying other people to do things… they think they can do themselves. So they do it on their own.

Discomfort exists in different forms. It can be for some reason you are not getting the returns. You keep shifting between investments but not getting anywhere. You would like to invest this way and you tried but you don’t have the time. Basically, there is an ideal financial setup in your mind, but you just could not get it right.

The value is alleviating this discomfort. This can be a promise. I think our challenging is delivering on the promise.

The discomfort builds and builds and so the value of advise also builds and builds until you buay tahan and you need to get it solve because time is running out.

I can detect that my friend finds her setup to be so primitive and backward. She “only” has $550,000 in one bank account, $150,000 in CPF SA, $250,000 in CPF OA and nothing else.

I can think of many worse off position than this. We all feel guilty because we think that we achieved less than we should or when compared to others. The danger is when we blame ourselves and we find ourselves shameful.

My job is to tell her that many would exchange their financial position to be in hers genuinely.

A blank piece of paper that you can draw a beautiful picture is better than one with a lot of things scribble on it. You have to first fxxking try to erase it first.

I shared with her a few things:

1. She has reached CPF FRS. This means that she has the equivalent of a flat $1,400 monthly income by the time she is 65 till she die. If she self-manage to take care of inflation, she has the equivalent of $1,000 monthly income.
2. The excess money of about $200,000 in her OA will be accessible at 55. That can be considered together with the rest of her $550,000 in one portfolio that the money can come out at different time periods. Although that would not be accessible for 18 years.
3. If we use two simple rules of thumb of 2.5%, 3% safe withdrawal rate, this will give her an idea about the inflation-adjusted income potential of her $750,000 if she allocate them well:
   • 2.5%: 750,000 x 2.5% = $18,750 annually or $1,560 monthly. Tenure is 60 years or to perpetual.
   • 3.0%: 750,000 x 3.0% = $22,500 annually or $1,875 monthly. Long tenure, conservative but doesn’t cover the most disastrous sequences.
4. Now that we have a few numbers ($1k, $1.4k, $1.5k, $1.8k in income), her exercise is to figure out how much her lifestyle today, in the future will cost. The more she can be introspective so that she can connect what she really wants (which is security) with the lifestyle she wants, the more she can get what she wants.
5. I personally think that knowing how much of what you find important is covered by your current income (which is derive from your assets), gives people some degree of stability then telling people a yes or no.
6. I showed her a basic bank, portfolio account routing framework, the spirit behind it so that she can better compartmentalize her spending, but also easily tell how much she has in her income portfolio next time. All she has to do is start creating one savings account.

I think that is the start for now.

Conversations will remain as conversations. Ideas remains as ideas. Until you do something about it.

If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.

You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.

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