I spent the past weekend on my forex intensive. It was incredibly draining and frankly I'm not sure how much of it I actually got. We were supposed to practise on our demo accounts till the first hands-on session today, but I only got my log-in info late Tuesday, and my experience so far has not been encouraging. I'm not sure if it's because I didn't really "get" it and am barking up the wrong tree as a result, or am just unlucky. I tell myself that I'd intended to practise for a good long time before I jump in for real, anyway. Will I earn my course fees back at least, as promised? Eventually, I hope. The bigger question may be whether this is something I enjoy enough to do for supplementary income, or if I should start looking for other avenues.
In other news, I've yet to settle the issue of my integrated shield insurance plan, which is annoying. I'm also not too happy with the life plan my parents got me years ago, which isn't due to even break even for a good long time, from what I can see. I think the hefty annual premium can be put to better use, and will most likely terminate the policy at a loss. I also plan to terminate the foundation policy my parents got me as a child. The premium is not substantial, but I feel that every dollar invested counts.
Not that I've been that virtuous, financially speaking. I've been lusting the new HTC Desire since I knew it existed, but my plan isn't up for renewal yet. I couldn't face the thought of paying full retail for the phone, and ended up trolling the internet for a good deal. In the end I paid cash for a 2-week old European import. I would have preferred a local set, but I saved over 20% on retail, money which could go towards a nice Noreve case. Will be really cash poor until UniSIM pays me the balance of what they owe me at the end of the month.
Re my fitness plan, I was doing 30 minutes on the crosstrainer until the forex intensive weekend basically knocked me out. As I'd feared, my self-discipline faltered. My strategy when the spirit is weak is to make a compromise with myself: any workout is better than none. 100 calories or even 15 minutes fulfils my obligation to myself on bad days. I have yet to motivate myself to resume yoga, though, which is bad.
Work begins on 1 July, and it occurred to me that since the semester doesn't begin till 30 August, I could actually take the holiday I'd wanted. I'm not sure what sort of budget I'd have to work with; even with the savings on accommodation it's $1.5k for a ticket to London. The plan right now is a week away in August, maybe in the first week, after the campus lockdown starts and before YOG opens.
Thursday 17 June 2010
Tuesday 8 June 2010
Monday 7 June 2010
NYT: The Low-Cost Power of Exchange-Traded Funds
April 9, 2010
By CONRAD de AENLLE
TWO trends in fund investment have progressed side by side for several years: strong flows of money into exchange-traded funds and into portfolios that track the movements of a stock index.
The coincidence is no coincidence. Nearly all E.T.F.’s — so far — are index funds, so as each type attracts investment, so does the other.
The trends indicate a broadening realization that the lower expenses of running and owning both kinds of funds give them an edge in performance that’s hard to overcome over the long term. Index fund managers have no research to conduct or buy, make no visits to companies and trade relatively few securities. E.T.F.’s, including the handful of actively managed ones, have additional cost advantages.
The widespread view of portfolio managers and other investment professionals is that the migration of assets will continue, affecting performance, costs and the types of products available. “This is a very dynamic time in the asset management space,” said Christian Magoon, chief executive of Magoon Capital, a consultancy that advises fund issuers. “E.T.F.’s are a disruptive technology similar to the digitalization of music. E.T.F.’s are disrupting mutual fund vehicles.”
What’s so disruptive is that E.T.F.’s trade throughout the day, unlike mutual funds; that makes E.T.F.’s useful for professional investors, including mutual fund managers. Even more disruptive, maybe, is that E.T.F.’s can often replicate mutual fund portfolios, actively or passively managed, at considerably less cost.
Total expenses, including management fees and costs for marketing, trading and legal and regulatory compliance, are 1.26 percent for the average actively managed mutual fund, according to Morningstar. For index mutual funds, the corresponding figure is 0.99 percent, while the average E.T.F. is run for just 0.57 percent of assets.
That helps to explain why E.T.F.’s have grown at a faster pace of late. Assets rose 67 percent in the 12 months through February, data from Morningstar show, compared with 49 percent for mutual fund assets.
The growth of E.T.F.’s seems to be coming at the expense of actively managed mutual funds rather than index funds, which are more than holding their own. Assets in index funds totaled $1.7 trillion at the end of last year, triple the amount at the end of 2000.
There is another cost advantage to E.T.F.’s that leads analysts to predict continuing expansion: taxation is less severe.
“E.T.F.’s are substantially more tax-efficient” than mutual funds, said Harold R. Evensky, president of Evensky & Katz, a financial planning firm. That is especially true when the portfolio follows indexes dominated by large companies like those of the Standard & Poor’s 500 or the Russell 3000.
The reason is arcane and comes down to differences in the way E.T.F.’s and mutual funds create or eliminate shares to meet investor demand. A rule generally allows E.T.F.’s to do so without triggering taxable transactions.
“If you’re invested in an S.& P. or Russell 3000 E.T.F., there is no tax consequence until you sell,” Mr. Evensky said. In an equivalent mutual fund, he added, “you may have tax consequences if you just sit there and hold it and haven’t done anything.”
“An E.T.F. is almost like having money in a retirement account.”
The various ways to enhance returns through E.T.F.’s have not been lost on investors — or on portfolio managers. Scott Burns, director of E.T.F. analysis at Morningstar, said that several large firms, notably Legg Mason, Pimco, Goldman Sachs, T. Rowe Price and Eaton Vance, have taken steps to introduce actively managed E.T.F.’s.
Mr. Burns has called active management “one of the hottest areas in the E.T.F. market,” although it still comprises just 0.2 percent of E.T.F. assets. He also noted that firms like Charles Schwab and Fidelity had begun offering some E.T.F.’s for little or no commission.
Active E.T.F.’s are likely to be more expensive to run than index E.T.F.’s, although more economical and tax-efficient than equivalent mutual funds. Mr. Magoon, the fund consultant, expects the cost gap between active E.T.F.’s and active mutual funds eventually to be anywhere from 0.4 to 1.5 percentage points annually. Such a discrepancy is “going to be hard to ignore,” he said, and mutual fund managers will come under increasing pressure to cut expenses and fees.
Some firms will convert their products to E.T.F.’s or run identical portfolios using each structure, Mr. Magoon predicted. Others will see their best and brightest managers go off to run hedge funds or something else with high potential rewards.
Active E.T.F.’s are most likely to grow at the expense of active mutual funds, not passive E.T.F.’s, investment advisers say. The trend toward indexing is likely to continue, and it may cause problems, in theory, for the markets and investors. There could be such a thing as too much indexing.
“If everyone’s an indexer, then they’re not investing on fundamentals, just buying the biggest stocks in the index,” said Jeremy DeGroot, chief investment officer of Litman/Gregory, a company that creates portfolios using multiple active managers. That could create a pattern in which the big index components are bought, become bigger, then are bought some more, no matter the price, until a violent reality check brings valuations back in line.
He considers that a long shot, because an overwhelming majority of assets is still actively managed. But he pointed out that something similar has already happened. In the late 1990s, Internet stocks soared and portfolio managers kept buying to keep from underperforming the benchmark indexes that the small group of stocks increasingly dominated. What became a few enormous companies — mega-capitalization stocks became “mega-cappier,” as Mr. DeGroot put it — kept soaring until they crashed in 2000.
OTHER, more subtle effects are expected as indexing proliferates. Mr. Burns, at Morningstar, suggested that as outperformance by active mutual fund managers becomes harder to achieve, some will be tempted to “swing for the fences,” taking on more risk in the hope of beating their peers. Finding winners among actively managed funds is not easy now and would become harder as the number of consistently strong performers dwindled. That’s why fewer investors seem to be making the attempt.
“What you’re seeing is more advisers embracing lower-cost asset-allocation strategies and embracing E.T.F.’s,” Mr. Burns said. “They’re throwing up their hands and saying, ‘I don’t want to beat the index; I want to get the index.’ ”
By CONRAD de AENLLE
TWO trends in fund investment have progressed side by side for several years: strong flows of money into exchange-traded funds and into portfolios that track the movements of a stock index.
The coincidence is no coincidence. Nearly all E.T.F.’s — so far — are index funds, so as each type attracts investment, so does the other.
The trends indicate a broadening realization that the lower expenses of running and owning both kinds of funds give them an edge in performance that’s hard to overcome over the long term. Index fund managers have no research to conduct or buy, make no visits to companies and trade relatively few securities. E.T.F.’s, including the handful of actively managed ones, have additional cost advantages.
The widespread view of portfolio managers and other investment professionals is that the migration of assets will continue, affecting performance, costs and the types of products available. “This is a very dynamic time in the asset management space,” said Christian Magoon, chief executive of Magoon Capital, a consultancy that advises fund issuers. “E.T.F.’s are a disruptive technology similar to the digitalization of music. E.T.F.’s are disrupting mutual fund vehicles.”
What’s so disruptive is that E.T.F.’s trade throughout the day, unlike mutual funds; that makes E.T.F.’s useful for professional investors, including mutual fund managers. Even more disruptive, maybe, is that E.T.F.’s can often replicate mutual fund portfolios, actively or passively managed, at considerably less cost.
Total expenses, including management fees and costs for marketing, trading and legal and regulatory compliance, are 1.26 percent for the average actively managed mutual fund, according to Morningstar. For index mutual funds, the corresponding figure is 0.99 percent, while the average E.T.F. is run for just 0.57 percent of assets.
That helps to explain why E.T.F.’s have grown at a faster pace of late. Assets rose 67 percent in the 12 months through February, data from Morningstar show, compared with 49 percent for mutual fund assets.
The growth of E.T.F.’s seems to be coming at the expense of actively managed mutual funds rather than index funds, which are more than holding their own. Assets in index funds totaled $1.7 trillion at the end of last year, triple the amount at the end of 2000.
There is another cost advantage to E.T.F.’s that leads analysts to predict continuing expansion: taxation is less severe.
“E.T.F.’s are substantially more tax-efficient” than mutual funds, said Harold R. Evensky, president of Evensky & Katz, a financial planning firm. That is especially true when the portfolio follows indexes dominated by large companies like those of the Standard & Poor’s 500 or the Russell 3000.
The reason is arcane and comes down to differences in the way E.T.F.’s and mutual funds create or eliminate shares to meet investor demand. A rule generally allows E.T.F.’s to do so without triggering taxable transactions.
“If you’re invested in an S.& P. or Russell 3000 E.T.F., there is no tax consequence until you sell,” Mr. Evensky said. In an equivalent mutual fund, he added, “you may have tax consequences if you just sit there and hold it and haven’t done anything.”
“An E.T.F. is almost like having money in a retirement account.”
The various ways to enhance returns through E.T.F.’s have not been lost on investors — or on portfolio managers. Scott Burns, director of E.T.F. analysis at Morningstar, said that several large firms, notably Legg Mason, Pimco, Goldman Sachs, T. Rowe Price and Eaton Vance, have taken steps to introduce actively managed E.T.F.’s.
Mr. Burns has called active management “one of the hottest areas in the E.T.F. market,” although it still comprises just 0.2 percent of E.T.F. assets. He also noted that firms like Charles Schwab and Fidelity had begun offering some E.T.F.’s for little or no commission.
Active E.T.F.’s are likely to be more expensive to run than index E.T.F.’s, although more economical and tax-efficient than equivalent mutual funds. Mr. Magoon, the fund consultant, expects the cost gap between active E.T.F.’s and active mutual funds eventually to be anywhere from 0.4 to 1.5 percentage points annually. Such a discrepancy is “going to be hard to ignore,” he said, and mutual fund managers will come under increasing pressure to cut expenses and fees.
Some firms will convert their products to E.T.F.’s or run identical portfolios using each structure, Mr. Magoon predicted. Others will see their best and brightest managers go off to run hedge funds or something else with high potential rewards.
Active E.T.F.’s are most likely to grow at the expense of active mutual funds, not passive E.T.F.’s, investment advisers say. The trend toward indexing is likely to continue, and it may cause problems, in theory, for the markets and investors. There could be such a thing as too much indexing.
“If everyone’s an indexer, then they’re not investing on fundamentals, just buying the biggest stocks in the index,” said Jeremy DeGroot, chief investment officer of Litman/Gregory, a company that creates portfolios using multiple active managers. That could create a pattern in which the big index components are bought, become bigger, then are bought some more, no matter the price, until a violent reality check brings valuations back in line.
He considers that a long shot, because an overwhelming majority of assets is still actively managed. But he pointed out that something similar has already happened. In the late 1990s, Internet stocks soared and portfolio managers kept buying to keep from underperforming the benchmark indexes that the small group of stocks increasingly dominated. What became a few enormous companies — mega-capitalization stocks became “mega-cappier,” as Mr. DeGroot put it — kept soaring until they crashed in 2000.
OTHER, more subtle effects are expected as indexing proliferates. Mr. Burns, at Morningstar, suggested that as outperformance by active mutual fund managers becomes harder to achieve, some will be tempted to “swing for the fences,” taking on more risk in the hope of beating their peers. Finding winners among actively managed funds is not easy now and would become harder as the number of consistently strong performers dwindled. That’s why fewer investors seem to be making the attempt.
“What you’re seeing is more advisers embracing lower-cost asset-allocation strategies and embracing E.T.F.’s,” Mr. Burns said. “They’re throwing up their hands and saying, ‘I don’t want to beat the index; I want to get the index.’ ”
Sunday 6 June 2010
The case for passive investing
From the author of Index Funds: The 12-Step Program for Active Investors.
Thursday 3 June 2010
Home recipes: Cantonese soups
I imagine there are as many Cantonese soup recipes as there are Cantonese mothers! Here is a list, mostly from my granny. I collect new ones from my aunt in HK, tv programmes on TVB and the web.
When I say Cantonese soups, I mean soups that are slow-cooked (老火汤, to 煲汤).
Watercress
Dried jujubes (red dates)
Dried octopus
Pork bones
Radish (daikon)
Dried cuttlefish
Pork bones
Old cucumber
Dried oysters
Pork shin/shank/hock (muscle) 猪展
Lotus root
Dried jujubes (red dates)
Dried octopus
Pork muscle
Black beans
Pork muscle
Dried jujubes
Chicken feet
菜干
Dried jujubes (red dates)
Dried octopus
Pork bones
Dried straw mushroom/shiitake with chicken
Pork ribs
Snow pear
Apricot seeds (南杏北杏）
Watercress
Pork muscle
Dried figs
Apricot seeds
Snakehead fish
Ginseng
Dried whelk/chicken
Dried whelk
Chicken
Wintermelon
Jinhua ham
Dried scallop
六味湯
Pork muscle (omit and add sugar to make 糖水)
淮山 （山药）
玉竹
龙眼
芡实
百合
莲子 (or Chinese barley 薏米, which is the recipe my dad remembers from his childhood)
Chicken
北芪
党参
杞子 （构杞子）
Pork muscle
Beetroot
Green apples
Carrots
Pork muscle
Sweet corn
Carrots
Pork muscle
Pumpkin (or kabocha or butternut)
TBC...
When I say Cantonese soups, I mean soups that are slow-cooked (老火汤, to 煲汤).
Watercress
Dried jujubes (red dates)
Dried octopus
Pork bones
Radish (daikon)
Dried cuttlefish
Pork bones
Old cucumber
Dried oysters
Pork shin/shank/hock (muscle) 猪展
Lotus root
Dried jujubes (red dates)
Dried octopus
Pork muscle
Black beans
Pork muscle
Dried jujubes
Chicken feet
菜干
Dried jujubes (red dates)
Dried octopus
Pork bones
Dried straw mushroom/shiitake with chicken
Pork ribs
Snow pear
Apricot seeds (南杏北杏）
Watercress
Pork muscle
Dried figs
Apricot seeds
Snakehead fish
Ginseng
Dried whelk/chicken
Dried whelk
Chicken
Wintermelon
Jinhua ham
Dried scallop
六味湯
Pork muscle (omit and add sugar to make 糖水)
淮山 （山药）
玉竹
龙眼
芡实
百合
莲子 (or Chinese barley 薏米, which is the recipe my dad remembers from his childhood)
Chicken
北芪
党参
杞子 （构杞子）
Pork muscle
Beetroot
Green apples
Carrots
Pork muscle
Sweet corn
Carrots
Pork muscle
Pumpkin (or kabocha or butternut)
TBC...
Home recipes: chicken
Marinade for grilled/roast/BBQ chicken
Steamed chicken 蒸鸡
Mix chicken with other ingredients and arrange on a large plate. A thin layer will ensure faster cooking. Steam. Half a chicken will take at least 20 minutes to cook (stir after 10 minutes).
Garnish with spring onions.
Ho See Fatt Choy (sounds like 好事发财 in Canto, thus eaten for CNY)
Braised sea cucumber
Dried spiny sea cucumbers are the best, if you can afford them. Soak them overnight, then boil till they are soft enough to cut open. Scrape away as much of the innards as you can, then boil for an hour or so and scrape again. If it's still not clean, you'll need to repeat the process from soaking overnight onwards, till they are clean - the sea cucumber is dirty lil bugger! As you do this you have to be careful not to overcook them till they disintegrate. Braise the result with chicken, chicken feet and dried shiitake.
- Premium dark soy sauce (generous amount to get a better colour)
- Ginger juice (from freshly grated ginger)
- Shaoxing rice wine
- Sesame oil
- Maggi seasoning
- A generous amount of salt
Steamed chicken 蒸鸡
- Chicken pieces, chopped small for faster cooking
- Salt
- Shaoxing rice wine
- Sesame oil
- Soy sauce (light and dark)
- Dried shiitake mushrooms, soaked, steamed and sliced thinly
- Black fungus 云耳, soaked and sliced
- Dried lily buds 金针, soaked, hard ends removed and knotted
- Preserved large-rooted mustard 大头菜, julienned and soaked
- Ginger, julienned
- Spring onions to garnish
Mix chicken with other ingredients and arrange on a large plate. A thin layer will ensure faster cooking. Steam. Half a chicken will take at least 20 minutes to cook (stir after 10 minutes).
Garnish with spring onions.
Ho See Fatt Choy (sounds like 好事发财 in Canto, thus eaten for CNY)
- Chicken back, feet and fat
- Dried shiitake (keep the stems if they are Japanese - will be tender enough to eat when cooked)
- Ho see (dried oysters - bigger ones are better for braising)
- Light soya sauce and salt
- Water
Braised sea cucumber
Dried spiny sea cucumbers are the best, if you can afford them. Soak them overnight, then boil till they are soft enough to cut open. Scrape away as much of the innards as you can, then boil for an hour or so and scrape again. If it's still not clean, you'll need to repeat the process from soaking overnight onwards, till they are clean - the sea cucumber is dirty lil bugger! As you do this you have to be careful not to overcook them till they disintegrate. Braise the result with chicken, chicken feet and dried shiitake.
Wednesday 2 June 2010
Scott Adams's 'Unified Theory of Everything Financial'
- Make a will
- Pay off your credit cards
- Get term life insurance if you have a family to support
- Fund your 401k [like CPF/SRS] to the maximum
- Fund your IRA [ditto] to the maximum
- Buy a house if you want to live in a house and can afford it
- Put six months worth of expenses in a money-market account
- Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
- If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio
Investing rules to live by
As I come to the end of Smarter Investing
, I thought I would post some of the great lists and quotes from the book. The lists below pretty much summarise what the book is about.
This is a list of "eye-openers to get you thinking", from the introduction:
. Harlow, UK: Pearson Education.
, I thought I would post some of the great lists and quotes from the book. The lists below pretty much summarise what the book is about.This is a list of "eye-openers to get you thinking", from the introduction:
- It is not too hard to be a great investor.
- The market beats the 'average' investor.
- The average investor is terrible at investing.
- The market beats most professionals.
- Industry costs are excessive.
- Past performance tells you almost nothing.
- Picking winners is hard.
- Many will be poor in their retirements.
- You can easily avoid these pitfalls.
- Make better evidence-based decisions.
- Accept that higher returns come with more risk.
- Spread your investments around.
- Use history and research wisely.
- Understand your portfolio.
- Obsessively seek to minimise costs.
- Try to keep your emotions in check.
- Plan for inflation.
- Understand the power of time.
- Harness the power of compounding.
- Start investing now.
- [Decide on your] investment period.
- The mix of instruments is the most critical decision you will make.
- [Use] rules of thumb for defining your mix.
- Be conservative in your estimates of future returns.
- Diversify using funds or equivalent baskets of instruments.
- Don't try to beat the market, be the market.
- Own the broad (total) equity market.
- Own high-quality domestic bonds.
- Reduce costs at all times.
- Don't buy products you don't understand.
- Beat the taxman -- legally of course.
- [Use rules of thumb to decide] how much to contribute.
- [Practise] lifecycle investing.
- [Limit the] income [you take] from your portfolio.
- Maintain the mix.
- Stick with your mix through thick and thin and avoid chasing returns.
- Don't look at your portfolio too often.
- Avoid the noise.
- Pay for truly independent advice if you need it.
. Harlow, UK: Pearson Education.
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