Most of us as retail investors go through this process, to be a "pro" we spend all our time either perfecting our Technical Analysis skills (reading of chart patterns as people believe they can predict these movements based on past results) or Fundamental Analysis (reading of financial reports and being able to see the potential strength/weakness or growth/decline).
Some spend their whole life thinking that Financial Analyst are god-send and follow their advice religiously.
Some gets sucked into the rumors that were spread and jump in without making their own judgement.
Some buy and do not even know what they are doing (i recently heard a story where a person bought a single lot of a stock and was so proud that she owned a stock, but didnt even factor in brokerage fee, and a host of other things)
And we all think we are pros in our own ways doing these things
BUT here's the big question:
Do CEO of companies look at fundamental or technical analysis or go around listening to rumors just to run heir company? Its a good question because if they do, then all the more we should improve on those skills. However, I believe they do not look into those when running their company, but rather think of ways to grow their share price/profits/revenue/etc..
So, this leaves us with the dilemma, if they do not do what the retail investors do, why then are we doing those things? Are we looking at the wrong thing?
And just a last thought on listening to rumors/analyzing big investor movements when we make investing decisions. Many times we read reports of this or that big investor selling their share and we think that we should follow suit.
However, here's the thought: There are many reasons for selling, but only one reason for buying (and that is for the price to go up). The big investor could have sold due to
- re-balancing of portfolio
- have cash for other opportunities
- to purchase a home?
- for unforseen things in live
- to bring family on a super duper expensive holiday
But when we buy, we are only hoping for 1 thing, and that is the price will hopefully go up.
Wednesday 16 August 2017
Saturday 5 August 2017
Best Savings Account?
So this is my journey on maximizing my returns on my bank account. It led me to days of research here and there and finally I decided on Maybank Save Up Programme. Most people would be very familiar with OCBC 360 or UOB One, since they are more highly advertised. They started as great accounts with fantastic returns after fulfilling the criterias, HOWEVER, they re-adjusted their interest returns and it does not look attractive anymore.
Exactly how good is MayBank Save Up? It allows one to have an effective rate of up to 3% on the first $60,000 after the person fulfills 3 out of any 9 services stated. At first glance, it seems like it is hard to fulfill the conditions, since most of us of just started working are not really going to get any housing loan of at least $200,000, nor education loan of $100,000 nor a unit trust of $300 each month (DUE TO HIGH FEES).
However, I was attracted to the $300 Monthly Giro Bill Payment service and wanted to see how I could get the best out of this. This "additional" criteria was something that would put off someone who's first priority is to save up and not have extra spending. This is in contrast to it's competitors, who just requires the person to credit salary and spend $500 on their credit card.
So Magpie cracked his head and tried counting the monthly expenses that could contribute to the $300 Giro Deduction, at the same time not having to spend extra on Credit Card. Ideas came forth, such as making voluntary contribution to CPF through Giro, however he was disappointed to find out it was not recognized as a valid Giro Deduction. He went one step further since he has a current POSB Invest-Saver and checked with the bank if they could actually deduct from the Maybank account instead of the POSB account. Again, it was a straight no.
Magpie never gives up when it comes to good deals. He was already looking into Maybank Kim Eng's Monthly Investment Plan(MIP) and was wondering if he could actually open an account and use the Maybank account to have a Giro Deduction for the MIP. The first few email exchange with Kim Eng did not seem favorable, and it seemed like it would not work. Hence, Magpie would actually face the possibility of having to actually increase spending.
He tried for one last time, this time by walking into the bank and speaking to the banker. The banker was stunned by such a request and casually mentioned that very few people know of such a thing (The MIP). However, the banker did not have answers to the question of whether the Giro Deduction could be used for the MIP, since there was a small fine print in the conditions stated that payments to Maybank would not count.
They started contacting their product team and Magpie was shocked that they needed so long to confirm such a query. It took close to a week before they got back. And the answer was YES it is a valid arrangement.
What a FANTASTIC news! So here you go, this is what I feel is the current best savings returns for someone who just started work and is receiving a modest pay, and trying to save up as much. With the following criteria,
- Credit Salary of at least $2,000
- Spend $500 on Credit Card
- $300 per month Giro Deduction
the person NEED NOT increase spending just to hit the $300 per month Giro Deduction, however the extra amount needed to achieve the criteria for the highest savings rate possible could actually be channeled into the MIP which gives higher returns over time.
Exactly how good is MayBank Save Up? It allows one to have an effective rate of up to 3% on the first $60,000 after the person fulfills 3 out of any 9 services stated. At first glance, it seems like it is hard to fulfill the conditions, since most of us of just started working are not really going to get any housing loan of at least $200,000, nor education loan of $100,000 nor a unit trust of $300 each month (DUE TO HIGH FEES).
However, I was attracted to the $300 Monthly Giro Bill Payment service and wanted to see how I could get the best out of this. This "additional" criteria was something that would put off someone who's first priority is to save up and not have extra spending. This is in contrast to it's competitors, who just requires the person to credit salary and spend $500 on their credit card.
So Magpie cracked his head and tried counting the monthly expenses that could contribute to the $300 Giro Deduction, at the same time not having to spend extra on Credit Card. Ideas came forth, such as making voluntary contribution to CPF through Giro, however he was disappointed to find out it was not recognized as a valid Giro Deduction. He went one step further since he has a current POSB Invest-Saver and checked with the bank if they could actually deduct from the Maybank account instead of the POSB account. Again, it was a straight no.
Magpie never gives up when it comes to good deals. He was already looking into Maybank Kim Eng's Monthly Investment Plan(MIP) and was wondering if he could actually open an account and use the Maybank account to have a Giro Deduction for the MIP. The first few email exchange with Kim Eng did not seem favorable, and it seemed like it would not work. Hence, Magpie would actually face the possibility of having to actually increase spending.
He tried for one last time, this time by walking into the bank and speaking to the banker. The banker was stunned by such a request and casually mentioned that very few people know of such a thing (The MIP). However, the banker did not have answers to the question of whether the Giro Deduction could be used for the MIP, since there was a small fine print in the conditions stated that payments to Maybank would not count.
They started contacting their product team and Magpie was shocked that they needed so long to confirm such a query. It took close to a week before they got back. And the answer was YES it is a valid arrangement.
What a FANTASTIC news! So here you go, this is what I feel is the current best savings returns for someone who just started work and is receiving a modest pay, and trying to save up as much. With the following criteria,
- Credit Salary of at least $2,000
- Spend $500 on Credit Card
- $300 per month Giro Deduction
the person NEED NOT increase spending just to hit the $300 per month Giro Deduction, however the extra amount needed to achieve the criteria for the highest savings rate possible could actually be channeled into the MIP which gives higher returns over time.
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