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I always say that I don't know everything there is to know. I am not humble. I am just being honest. I am also not a very good investor. Again, I am not humble. I am just being honest.
So, when I get very difficult questions, I like to share the questions and hope that I will learn from other people who might have answers.
Here is a message from a reader:
Dear AK,
Hope all is well with you. I attended the second chit chat session that you organised. If you remember, I was the one who asked you about Malaysian Ringgit. I had some back then and eventually I remitted it out to Sg in US$ as I hope I can make some forex gain eventually.
If I were to ask any relationship managers what to invest in, they will advice that I buy products like bonds or funds that give out dividends. If I were to suggest US bank stocks, they will suggest products like structure notes which band 3 bank stocks and gets too complicating for me. My experience with relationship managers have never been good and most of the time I ended up losing or ended in positive territory after taking interest earned into account.
I am thinking of putting it in stocks and since with US$, I can only either purchase stocks listed in NYSE /Nasdaq or US$ denominated stock in SGX. I have shortlisted a few US$ counters in SGX and am of course leaning more towards the first two that give much higher dividend and perhaps GM. I would love if I can hear your view and advice especially on HPHT.
At this stage, I don't want too much risk and am more into capital preservation and hoping to get good dividends. Please feel free to make any other suggestions.
SGX
Hutchinson Port Holdings Trust 9%
Mandarin Oriental International 4.33%
Jardine Strategic Holdings 0-89%
Jardine Matheson Holdings 2.68%
HongKong Land Holdings 2.36%
Dairy Farm Internationals. 2,64%
NYSE
General Motors 4.58%
General Electrics 3.5%
Source: Bloomberg.
I had meant to write to you weeks ago but was kinda pei she to trouble you and to pick your brain but I know you have always been most generous with your sharing and so I have finally done it ! Thanks for sparing me some of your time
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| Second "Evening with AK and friends" early this year. |
My reply:
I am sure you gave the matter much thought before converting your Ringgit to US$. I am happy for you.
With regards to your question on what to invest in, I believe you are right to avoid bond funds.
I don't know about the other stuff you asked about apart from HPH Trust. You could do a search in my blog for this and you will see what I think of it.
If you like, I could extract some bits of your message to me and share them on my blog to see what others have to say. I don't know everything there is to know, for sure.
If you are interested in dividends and you want to make sure you are doing it properly so as not to put your capital in jeopardy, you might want to consider signing up for Dividend Machines. See: A second chance to create your own Dividend Machines.
So, if anyone has any good ideas to share, please feel free to do so in the comments section.
Related posts:
1. Second "Evening with AK and friends".
2. Nobody cares more about our money than we do.
3. HPH Trust: Storm clouds over a safe harbour?
Bloggy Award
9 comments:
From my FB wall:
Eric Goh:
"Invest in US stock for dividend income isn't that simple. There are withholding tax of up to 30% on dividend payment to consider and the percentage varies from company to company. ADR fees to pay if you invest in foreign listed company. Custody fee that brokerage firm charges. These are cost factors to consider for buying US stocks. So far my cheapest option for buying US stocks was using standchart account."
HPH at current price of abt US$0.62 is quite attractive. however long term, the trust will be at a disadvantage vs China ports in terms of policy, cost savings.
from what I understand, investing in US stocks has a disadvantage of estate tax. and these tax rules have changed constantly. Maybe some of those who invest in US stocks can comment further on this. if you have a proper strategy, plain vanilla SGX stocks should provide a decent enough return
It is important to remember that HPH Trust has been delaying much needed CAPEX to support distributions to unitholders.
The DPU will drop in the near future, all else remaining equal, because the CAPEX cannot be delayed for much longer or so the CEO said in a recent interview. So, this is probably a negative to watch out for in the near term if we are interested in the income the Trust is supposed to generate for investors.
Divested all my HPH trust. Not a fan of the short leases.
There are plenty of mid-dividend US stocks, not sure why you only shortlisted GM and GE? Seems pretty unconventional picks to me. For a start, utilities should yield at least 5% and should be pretty defensive. I've been slowly buying US dividend stocks recently too, although my picks are pretty risky and volatile.
Aiyoh so many blogs pushing sales for financial education coursea recently.
Hi SMK,
I don't know about other blogs but regular readers will know that I have always advocated self study first. Refer to "Food for Thought" in the right side bar. That is the most economical way to learn.
For people who need to attend courses in order to learn, I will recommend only those courses which I think provide good value for money and not cost an arm and a leg. ;)
Try US listed stocks with low/non-US sourced income (e.g. Shell, philip morris, etc). No/negligible divi withholding tax but some dislike it due to multiple forex margin losses (e.g. If shell obtains income from UK, it needs to convert earnings from £ to USD and u'll need to convert SGD in USD to buy/sell the company's stock on NYSE). Alternatively just buy shell from LSE (london stock exchange) but some (like philip morriss) do not have that option.
Today, the ringgit depreciated to a fresh level against the US dollar at 4.1270 and 2.9346 versus the Singapore dollar. Earlier, the ringgit opened at 4.0201 and 2.8697 against the US dollar and Singapore currency respectively...
Source:
http://www.msn.com/en-sg/money/timevalueofmoney/usdollar-rm-breaches-41000-after-crude-oil-falls-below-usdollar42/ar-BBlJ33x?ocid=LENDHP
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