What the very rich are doing with their wealth?

I read an article provided by Bloomberg News that Singapore will become the world's top wealth management centre by 2013, surpassing Switzerland and London.

It looks like our tiny island nation is attracting a lot of wealth from around the world and we are not just talking about HNW individuals. We are talking about super HNW individuals and families!

These families are setting up family offices to manage their millions instead of entrusting their wealth to private bankers. They view private bankers as salesmen instead of custodians of their wealth.

Clinton Ang, 38, prefers to manage his family's wealth of about $100 million himself.  About 90% of his family's investable assets are in cash after he sold from October to March its investments in stocks, bonds and most property assets.

Some family offices cater to more than one family to gain economies of scale. It is said that it costs at least $1.5m a year to run a family office that includes an investment team. So, a family will need a minimum of $100 million to justify the expenses.

Personally, I know some very rich people but they never talk about their wealth. So, it is not easy to get a peek into the way they manage their money. Usually, those boasting about their wealth are the newly rich and who might have just attained their HNW status.

There is wealth and there is WEALTH.

ARA: Initiated long position at $1.22.

I initiated a long position in ARA today at $1.22 a share. This decision is based on my TA last evening. Fundamentally, at $1.22, the estimated dividend yield is about 4% but investing in ARA is primarily for growth.

The counter's share price touched a low of $1.20 before closing at $1.205 on the back of very high volume. Such high volume sell down usually has some momentum to follow through. So, we could see ARA's share price head lower next week.

Based on the TA I did last evening, the next supports are at $1.17 and $1.08.  However, seeing how strong the selling was today, there is a good chance that $1.17 will fold if it should be tested.

I am not putting in any overnight buy order, prefering to wait and see how things will unfold next week, given the strength of the selling.

What about the potential positive divergence? It is looking extremely dicey as the MACD took a nosedive today.

Although a fundamentally sound company, its share price could weaken further from here. It might be a good idea to wait for the dust to settle before adding to my newly created long position.

Related post:
ARA: Breaking support. Going lower?

ARA: Breaking support. Going lower?

I have been looking at ARA. The downtrend is persistent and I have yet to initiate a long position here.

Today, ARA's share price broke its previous low of $1.29, gapping down and touching an intra day low of $1.26 before closing at $1.27.

The DIs are negatively placed but the ADX shows that the downtrend is not a strong one. In fact, volume seems to be reducing as price weakens.

If this continues to be the case, the MACD could indeed form a higher low as price forms a lower low. A positive divergence in the works? Perhaps.

If we would like to do a bit of pre-empting, what price would we buy at?

$1.22 is a price that market participants would remember as that was the low of 21 Oct 2010 and the counter went much higher from there in the following months.

Next would be $1.17 which seems like a significant resistance which was tested many times before being overcome convincingly. It should therefore be an important support if tested. If that goes, we could see $1.08 next.

If we believe in trendlines and channels, we will see that ARA's share price seems to be nearing the support of its down channel.

Of course, this support could be compromised like it was earlier in August. However, when it was compromised, it recovered relatively quickly. Could it happen again?

Tea with AK71: Eldershield.

I am quite aware that I am ageing and, once in a while, I am reminded of the fact by other people.

Today, the government reminds me of this same fact by sending me a notice saying that I would be automatically insured under Eldershield come 31 December 2011.

Eldershield? Me? Wow, elder. This is cheerful.

So, being Singaporean, I want to know "how much"?

Annual premium: $174.96, payable till age 65.
Total premium from age 40 to age 65: $4,548.96

Second question, "what are the benefits"?

Benefits: $400 a month payout (maximum lifetime limit of 72 months).
Maximum claimable: S$ 28,800.00
Lifetime coverage.

OK, next question is harder. Do I need this? I mean is this really necessary? Opinions, anyone?