Interest Rates of Banks and Finance Companies

In the recent months, interest rates of Banks and Finance Companies in Singapore have been trending downwards.

Here are two reports from Straits Times and AsiaOne:

1) March 24, 2008
Singapore interest rates likely to fall further Fed cut and robust Sing$ could push interbank lending rate below 1%
By Nicholas Fang
SINGAPOREANS can expect cheaper mortgages but lower savings and fixed deposit rates in the months to come.
Read the article: http://www.straitstimes.com/Free/Story/STIStory_219818.html

2) Mon, Mar 10, 2008
The Business Times
Inflation erodes away bank savings Banks cut fixed deposit rates; but cautious investors stay liquid in face of market volatility. (SINGAPORE) Cash-rich Singaporeans averse to risky alternatives are in an unhappy spot of having their savings eroded by inflation.
Read the article: http://www.asiaone.com/Business/News/My%2BMoney/Story/A1Story20080317-54776.html

Here are the stats I got from www.mas.gov.sg and plotted on a chart.

Table and chart of Interest Rates of Banks and Finance Companies for past 26 months.

Also, here is the chart for 25-year historical trend.

Table and chart of Interest Rates of Banks and Finance Companies for past 25 years.

So, what's feasible to do now:-
a) If you have a mortgage loan beyond the lock-in penalty period, re-finance the mortgage loan;

b) If you are kind of "dunno whether market will go up, down or crazy", drip money into an equity-based portfolio; See Drip in new money-1 & Drip in new money-2 .

c) If you just want something better than F.D, then lock in the minimum rate with TMAsialife's NestEgg. See chart below:
Enquiries:
waynekohwg@gmail.com
8288.9005

Quotes (020-2008)

You can fool some of the people all of the time,
and all of the people some of the time,
but you cannot fool all of the people all of the time.
– Abraham Lincoln

Taken from an interesting article/ podcast: PIMCO Investment Outlook June2008

Index funds vs. active funds

This is one podcast that I subscribe to and listen to religiously.

Vanguard's Plain Talk on Investing podcast:
In this episode, "Index funds vs. active funds", Vanguard Chief Investment Officer Gus Sauter will help you better understand two different approaches to mutual fund investing—indexing and active management.
Download the podcast in MP3 file.

You can also read the transcript while listening to the podcast.
(tip: use tab browsing to open the transcript on another page)

ERP - Ever Ready Pressure

Of late, I have seen more and more ERP gantries being erected along several roads, such as the one from Esplanade towards One Raffles Quay, the one in between MICA building and The Central.

Usually, I am not one who complains about ERP. But this time round, it is different. Together with the formidable oil price hikes (plural), I have succumbed to literally let my white car become a "white elephant".

Try out new ways.....upd 19May2008

Date Start: 1Jan2008
NAV = $4,610.50 as of date 19May2008
Returns to-date (since 1Jan2008) = -7.79%

New: Decided to pick a benchmark that can better reflect BFS.

Benchmark: iShares MSCI EAFE Index Fund (ETF)
Date Start: 1Jan2008
NAV = $4,919.18 as of date 16May2008
Returns to-date (since 1Jan2008) = 0.38%

click to enlarge view

Quotes (019-2008)

".....Polar bears weren't the only lumbering carnivores declared threatened this week. Wall Street bears were scarce as well....."

----- DAVID CALLAWAY -----
from: Marketwatch: "Dollar turnaround has bears on the run"

Quotes (018-2008)

"Inflation is like the boor who goes to the hottest restaurant in town without a reservation, barges past the maitre d' and then grabs a seat, refusing to leave. The restaurant can accommodate the unwelcome customer, hope he'll eventually depart of his own volition or try to throw him out."

----- Michael R. Sesit -----

Morningstar Fund Awards 2007 Singapore

Fixed Income Categories

• Dollar Bond - PIMCO GIS Total Return Bond Fund
• Non dollar bond - M&G Corporate Bond Fund
• High Yield Bond - AllianceBerstein - Global High Yield Portfolio
• Emerging markets bond - Templeton Emerging Markets Bond Fund
• Asia bond - AIG International Funds - Singapore Bond Fund

Equity Categories

• Global equity - DBS Shenton Global Opportunities Fund
• North America equity - Schroder ISF - US Smaller Companies
• Europe equity - Franklin Mutual European Fund
• Emerging markets equity - Fidelity Funds - Emerging Markets Fund
• Asia-Pacific with Japan equity - UOB United Regional Growth Fund
• Asia-Pacific ex Japan ex Asean equity - First State Regional China Fund
• Asean equity - Lion Capital Singapore/ Malaysia Fund

Source: Morningstar Research

Post-Retirement Hospitalization and Surgical (Shield Plan) Insurance

This is a follow-up to my recent article:
http://www.waynekoh.com/2008/03/hospitalization-and-surgical-shield.html

After some "numbers crunching", I have got the figures plotted on a graph. The basic idea is to project a certain sum of money required to fund the Post-Retirement Hospitalization and Surgical (Shield Plan) Insurance cost. And the focus is on the cash portion only, i.e Plan rider and the portion beyond the current annual withdrawal of S$800.











(Click on image to enlarge)

Using an example of John, 35-year-old; the projected "6585" cost (excluding Medisave) is about S$115,000 when John turns 65 in 30 years' time .
To get S$115,000 at age 65, John needs to invest about $90 per month into a "Drip in new money" portfolio that generates 8% p.a (taking into account sales charges of 2.5% max).
This $90 per month may also be part of John's SRS plan to benefit from the deferred tax incentive system. See http://www.waynekoh.com/search/label/Supplementary%20Retirement%20Scheme%28SRS%29

Try out new ways.....upd 03May2008

Date Start: 1Jan2008
NAV = $4,708.11 as of date 03May2008
Returns annualized = -16.3%
Returns to-date (since 1Jan2008) = -5.84%

MMF update

This is a follow-up to MMF rtn vs Bank deposit rates which I will post on a monthly basis from now.
Remarks: $1,000 parked in MMF would have yielded $4.61 more than savings rates YTD since 1st Jan2008. Other figures as shown above.