There were 7 replies from readers. All of them mostly agreed with the views contained in this article. Here are their reasons:
1. 40-50 years ago in Singapore, I always heard 2 news among my friends and elderlies : a) Ghost stories b)Secret police terrorised the oppositions. But since 1990 onwards I hardly hear such news. I believe, as our society progresses, most of the ghosts and secret police have gone for reincarnation. It is a more civilised society now.
2. Many years ago, someone found an intrusion into their home computer from the internet. The intrusion was later found out to be authorised from MOHA. Strangely this was reported in the press. WKS defend the move stating they are doing Singaporean a favour by checking for virus on the computers of singaporean. I think I was in my teens then and did not understand much about politics. The fact is that the gov is snooping on us and collecting intelligence. They can add any law they want and they have the power of ISA. They even have the control of the press and media. If Singaporean can see this control being broken or a change, they may become less fearful.
3. Take me as an example, I will criticize government poor policy with similar minded friends only. And will not go beyond that or go public. Largely, the mass follow local press and accept what is reported in the newspaper even it is sometime biased reporting. They do not challenge it. Hence, it is tough to enlighten them, as they will ask me to shhh... This is also fear on my part, sadly.
Any points to add?
1. Singaporeans should have more moral courage to speak up. This is our country.
2. Singapoeran males are not only afraid to vote. Some of them(20-39yrs old) that are civil servants even express their fears of deferment of their reservists even when they have valid reasons on fear that their promotion chances will be compromised.
3. There are some very prominent politicians who if they are willing to make a anti PAP stand, become the opposition party, it will definitely sway singaporean into changing their mindset. But that is if they are willing to open their eyes and see the trouble ahead for singaporean under PAP continued rule - example Tan Soo Khoon. If in this election we have PAP turn anti PAP, the tides will finally changed.
4. Besides the point you raised on the secrecy in election, the slogan "compulsory in voting" is a malpractice. Nobody should be force to vote against his/her wish. I believe Singapore has the highest turn out rate for voting in election. Coupled with the fear of the vote can be traced (serial number), most (fearful) vote will go to the party-you-know-which.
5. Even Francis Seow, a prominent public figure from a respectable background, can be so easily dealt with. Dear Mr Tan, please be careful. But I will definitely vote for opposition in this election.
Sunday, June 21, 2009
How to construct a diversified portfolio
Dear Mr Tan,
I've read several articles that you've written where you've advocated buying the STI ETF. Thanks for taking the time to explain in simple terms the pros and cons of the issue.
I belong to the passive investing camp and believe in buying and holding a diversified basket of index-tracking, low-cost funds tracking several world markets and different asset classes. The STI ETF appears to be one such index-tracking, low-cost fund.
However, investing in the STI ETF only gives you exposure to the Singapore market, which is less than 1% of the global market. While it is a good way to participate in the local stock market, it is certainly inadequate if one wants to create and hold a diversified portfolio.
I'm interested to know if you or your readers have managed to construct a portfolio of low-cost (less than 1% expense ratio), passively managed index funds that track global market indices, investing from Singapore?
REPLY
I advise people to invest in an ETF rather than to manage their own stocks. They may forget to take up rights issue or sell the rights, leading to loss due to dilution of their shares. The dividends due to them may be paid to the wrong account. To avoid these losses, the investor has to keep track of the shares - which is quite tedious. It is better to leave these matters to the fund manager of the ETF.
I've read several articles that you've written where you've advocated buying the STI ETF. Thanks for taking the time to explain in simple terms the pros and cons of the issue.
I belong to the passive investing camp and believe in buying and holding a diversified basket of index-tracking, low-cost funds tracking several world markets and different asset classes. The STI ETF appears to be one such index-tracking, low-cost fund.
However, investing in the STI ETF only gives you exposure to the Singapore market, which is less than 1% of the global market. While it is a good way to participate in the local stock market, it is certainly inadequate if one wants to create and hold a diversified portfolio.
I'm interested to know if you or your readers have managed to construct a portfolio of low-cost (less than 1% expense ratio), passively managed index funds that track global market indices, investing from Singapore?
REPLY
I advise people to invest in an ETF rather than to manage their own stocks. They may forget to take up rights issue or sell the rights, leading to loss due to dilution of their shares. The dividends due to them may be paid to the wrong account. To avoid these losses, the investor has to keep track of the shares - which is quite tedious. It is better to leave these matters to the fund manager of the ETF.
Incomplete information on shares
Dear Mr. Tan
It is easy for an ordinary share investor to be cheated when they are provided with incomplete information. Below are some examples:
1) The investors are told that a company has huge cash on hand to the tune of say several hundred millions of dollars which give the impression that the company is cash rich and hence will pay good dividend or ready for business expansion. But they are not aware that the company also has huge debt to the tune of say several billions of dollars to clear.
2) The investors are told that the current year profit of a company will exceed say $100 millions which give the impression that the company is making a lot of money. But the investors are not aware that the earning of the company is only a mere 5 cents per share because there is a total of 2 billions shares in the company.
3) The investors are told that the earning of a company has increased 100% over the past 3 years but they are not aware that the company share price has increased 500% over the same period.
4) The investors are told that a company is wining a big contract worth $50 millions which give the impression that the company business is very good. But they are not aware that the wining of a $50 millions contract is not significant to a company with annual turnover of several billions of dollars.
Pang
It is easy for an ordinary share investor to be cheated when they are provided with incomplete information. Below are some examples:
1) The investors are told that a company has huge cash on hand to the tune of say several hundred millions of dollars which give the impression that the company is cash rich and hence will pay good dividend or ready for business expansion. But they are not aware that the company also has huge debt to the tune of say several billions of dollars to clear.
2) The investors are told that the current year profit of a company will exceed say $100 millions which give the impression that the company is making a lot of money. But the investors are not aware that the earning of the company is only a mere 5 cents per share because there is a total of 2 billions shares in the company.
3) The investors are told that the earning of a company has increased 100% over the past 3 years but they are not aware that the company share price has increased 500% over the same period.
4) The investors are told that a company is wining a big contract worth $50 millions which give the impression that the company business is very good. But they are not aware that the wining of a $50 millions contract is not significant to a company with annual turnover of several billions of dollars.
Pang
Puzzle: The Two Tribes
An island is inhabited by two tribes. Members of one tribe always tell the truth, members of the other tribes always lie.
A missionary met two of the natives, one tall and the other short. "Are you a truth teller?" he asked the taller one.
"Ba" the tall native answered. The missionary recognised this as a native word meaning either yes or no, but he could not recall which. The short native spoke English, so the missionary asked him what his companion had said.
"He say 'yes' " replied the short native, "but him big liar!". Which tribe did each native belong to?
Give your answer here.
A missionary met two of the natives, one tall and the other short. "Are you a truth teller?" he asked the taller one.
"Ba" the tall native answered. The missionary recognised this as a native word meaning either yes or no, but he could not recall which. The short native spoke English, so the missionary asked him what his companion had said.
"He say 'yes' " replied the short native, "but him big liar!". Which tribe did each native belong to?
Give your answer here.
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