NIKKO AM SINGAPORE STI ETF Ex-Date 10-Oct-2013

Upcoming Nikko AM STI ETF (Symbol = G3B) dividends.
Information extracted from SGX.com.

Expiry Date - 10 Oct 2013
Record Date - 14 Oct 2013
Date Paid/Payable - 31 Oct 2013
Dividend - SGD 0.045

Keching!

Expected Grand Total = SGD $54.00 ($0.045 x 1200)

The 10% Stock Picking Rule

Once again, this post was inspired by my readers who are looking for something more than Index Investing. One day, what if you can't help yourself and have an incredible urge to deviate from Index Investing? We are only humans, after all. Does this spell total disaster? Don't worry, you'll do just fine.

In the Millionaire Teacher's last chapter, Andrew Hallam recommends that if you really cannot refrain from picking individual stocks, do not commit more than 10% of your portfolio for stock picking. This is one rule that I agree with, and stick to religiously.

Like I have mentioned previously, this blog is about a personal story. A real story. My story. I won't kid you and declare that I don't pick individual stocks. I like to keep my finance journey fun. Who says growing my wealth cannot go hand-in-hand with having some fun?

The next question is, what stocks am I holding on to, besides STI ETFs?

Apple Inc. (AAPL) <USD>

No. of Shares : 1

Buy Price : $434.04
Prev Close : $489.56
Intention : Short / Mid Term

CapitaMall Trust (C38U) <SGD> 
No. of Shares : 1,000

Buy Price : $1.85
Prev Close : $1.98

Intention : Long Term

Both are very interesting companies which appeal me for a variety of reasons.

Trivial Question of the Day

Q : What does Apple and Capitamall Trust have in common?

A : Both pay quarterly dividends.

PS -
It was only a little more than a month ago that the STI almost dived under 3,000 points, halting at 3,004 points. Looks like it is sitting tight at 3,147 points today. Life goes on.

Government of Singapore Investment Corporation To Embrace Index Investing?

The world's eight biggest state fund with its portfolio valued at $248 billion is moving towards Index Investing. For a start, GIC is splitting its portfolio into two parts - one that is actively managed, and another tracks the market.

GIC Pte, manager of more than $100 billion of Singapore’s reserves, is changing its investment strategy for the second time in three decades to be more flexible as the global outlook becomes “complicated.”

GIC will split its portfolio into one that’s actively managed, and another that tracks the overall market, it said as its annual report showed returns were little changed. The company didn’t say how much of the assets will be managed or indexed against the market.

Source : Bloomberg 

Should I Care If The Straits Times Index Goes Under 3,000?

What a difference two weeks can make, you may ask.

 Two weeks ago, I bought 1 lot of Nikko AM STI ETF at $3.30. Since then STI ETF has been in a downward spiral. What is the price today? $3.09!

Okay, this may seem counter-intuitive to you, but does it matter to me now that it has dropped $0.21 (Omg! A loss!) in two weeks? Not at all! In fact, I hope that it will FALL even more.

Let's imagine I'm going shopping for something basic like groceries at Cold Storage supermarket. Assume I'm a Coca-Cola addict and drink it on a daily basis. Okay, I know it is not healthy but that's not the point here.

Do I like it when the price of my favourite Coca-Cola goes up? Nope. I want it to fall! Since I'm a Coca-Cola addict, I'm going to buy Coca-Cola regardless of the price increases (or decreases). Obviously, I would want the price to drop so that I will pay less for my daily fix of Coca-Cola. Makes sense?

Now, let's apply the same logic to STI ETF. Assume I'm a very disciplined investor in STI ETF and make a purchase every month, regardless of the price. Logically, I would want the price to be as low as possible when I'm stocking up on STI ETF so that I can buy it at a "discount".

The price only matters to me when I'm selling STI ETF - simple as that.Once you get used to this concept, you will find that price fluctuations is nothing more than mere distractions.

Meanwhile, I can look forward to Nikko AM STI ETF bi-annual dividends in October. Assuming I have 1,200 units by the expiry date, I can potentially pocket S$42 based on last year's dividend of $0.035.

Cheers!

SGX Seeks to Reduce Standard Board Lot Size to 100 Units

Source : Channel NewsAsia (19-Aug-2013)

Highlights

• SGX said it hopes to first reduce the board lot size to 100, and eventually to one unit.
• SGX aims to introduce the board lot size of 100 by the first quarter of next year (2014), and it could be at least two years (2015) before the lot size will be reduced to one unit.
• The proposed standard board lot size of 100 units will apply to ordinary shares, real estate investment trusts, business trusts, company warrants, structured warrants, extended settlement contracts and shares on GlobalQuote.
• Board lot sizes for exchange traded funds - barring the SPDR STI ETF and ABF SG Bond Fund - American Deposit Receipts and fixed income instruments, including Singapore Government Securities and preference shares, will remain unchanged. 

So, what does this mean?

For small-time index investors like myself, rejoice! Singapore ETFs, specifically SPDR STI ETF (ES3) and ABF SG Bond Fund, are targeted to have board lot size reduced to 100. A common problem faced by small-time investors is that a single lot of SPDR STI ETF cost in excess of $3,000+ and ABF SG Bond Fund $1,000+. A smaller board lot size will definitely make index investing more accessible for the average guy on the street.

Note

Nikko AM STI ETF (G3B) board lot size is already at 100 currently.

Nikko AM - Investing in MyHome

Part 5 of Nikko AM advertistment on Today newspaper on Nikko AM Funds.

As mentioned in an earlier post, you can rely on POSB - Regular Savings Plan to buy into the below funds if you wish to do so.

Nikko AM - Keeping Track of the STI

Part 4 of Nikko AM advertistment on Today newspaper on Dollar Cost Averaging (DCA).

Question

What is Dollar Cost Averaging?

Answer
Dollar cost averaging (DCA) is an investment strategy that involves investing of equal monetary amounts regularly and periodically over specific time periods in a particular investment or portfolio. By doing so, more shares are purchased when prices are low and fewer shares are purchased when prices are high. The point of this is to lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.