Singapore Loans?

Hi one of our readers commented that with such low interest rates, isn't better to be taking up car loans, home loans, education loans,establish credit lines etc. ?

Yup..in fact i really do agree with him. There's is really no better time to start taking up loans to buy your car, house ..etc. However, it is precisely because of the economic crisis, whereby people are worried to take up more loans than they can handle and the fact that banks are unwilling to lend that caused the low interest rates to start with. So be careful with your credit status. Living on too much credit/loans will affect your credit rating..and you might have problem getting future loans.

On a side note, just to remind those of you who are currently paying a fixed housing loan, whereby the contract was fixed quite some time ago...U SHOULD REFINANCE IT. Go for the floating rate one instead. It should save your quite a lot of $$, because the 3mth SIBOR rate is rather low now.

Fixed rate => You pay a fixed interest rate to the bank for the reaiming term of the loan

Floating rate => You pay a variable rate that changes over time. ( usually is 3mth Sibor + XX%), which could might be lower or higher than a fixed rate. However in the present situation, the floating rate is lower.

Here is a quick chart of present home loan rates..taken from 'The Edge' Magazine. (Dated 23-29 March 2009)

Phllip Capital Market Watch

Here is the summary of the video:

1. The market follows the human psychology. It has the following stages

• Shock - 2007, people did not realize that banks have certain models that were very very risky,like the CDOs and stuff
• Denial - 2007 ended up as people brush away the risks
• Anger - Now people are angry with all the bail out $$ that comes from the tax payers, and all the $$ that the executives from failing companies get
• Bargain- That is what is happening now..FEDs try to get people to buy stuff by setting up all the bail out plans, the fund that is combine with the private investors
• Depression/Acceptance -Video did not say anything about it. But i feel that, it is the time when people really feel like that the market has no hope and stop investing in anything and lost their interest in investments in general

2. They believe the rally will continue..however it will still drop in the near future too.

3. Go long on 30year treasury bonds and silver ( because the FEDs are going to buy into them in the next 6 mths.



In my opinion, just buy commodities that are based in USD, like the metals. This is because, with all the bail out and stuff..USD will bound to drop.
Reason being, the real value of the commodity will still remain, but since the USD is worth less now, you need more USD to buy the same amount of commodity. Hence you gain the so called 'inflated' amount.

US Treasury Unveils Legacy Asset Program

This is yet another one of the ways the US is trying to help the economy recover.

A short explanation on how it works :

The US government is forming a public-private funds in order to help buy into all the troubled assets. On one hand, the government reduces its risk in buying the risky assets, while on the other hand, they also prevent private investors from potentially making a big profit. ( some people worry that private investors might be able to find VERY VERY good deals and hence make too much $$ out of it..)

This in turn will help to free up their assets that the banks are holding which cannot be sold off, because with the government sharing the risk, people might be more confident to buying the risky assets. Leading to banks having more confident to lend money to companies ( as they now hold more liquidity) and in turn boost the economy.


Problems that I feel might occur:

1. This fund is managed by the private fund mangers! Which means that something sneaky might go on, or that they might do things for their best interest.
2. Also this does not solve the problem that the assets are still 'troubled'. I mean even though the risks might be reduced, it does not mean people will make crazy decisions of buying lousy assets.
3. If such funds happens to fail (due to buying of wrong assets), it will lead to a greater impact on the weak economy. Hence prolonging the crisis.
   

Updated fixed deposits (FDs) rates and some saving rates

The interest rates are really low now..i only included the highest few available. The link can be found on the left of this blog, under the section ''Good Money Parking Places''

Alternatively , u can click here.


Remember..every little bit of interest you earns count!

Business networking session

Hi all, I guess those of you who have been keeping track of my blog knows that I have a few business ideas in mind. And since quite a number of you people have expressed interest in this,I would like to organize a get together to do some brainstorming and work out the feasibility of the ideas.

The meeting will not solely be on my ideas only..if you have any..feel free to share!

Here are the details:

Date : 19th Apr ( Sunday )
Time: 1-4 Pm
Venue: 3 Shan Road, Phillip Investor hub (meet at reception area 1st, i will bring you people to the meeting room)
http://www.streetdirectory.com/asia_travel/travel/travel_id_29816/travel_site_40678/4/



Agenda

Business Ideas / possible ventures ( Click on the ideas to find out more! )

• Landlord agency
• Teaching financial knowledge
• Setting up a Nando's franchise
• Jackie Chan cafe concept ( rent out space to rest, rather than food)
• Trading team
  

And other suggested ideas...


If you are interested..drop me an email at ntuchartist@hotmail.com with the following details :

1. Name
2. Hp Number
3. Age
4. Occupation
5. Which business idea/ideas you are interested in
6. Any ideas you have in mine
7. Bringing any friends? If so..how many?

I am looking forward to meeting you people because we will have an fruitful discussion! Even if nothing concrete comes out of it..we will all definitely learn a little more about setting up businesses in Singapore.

Cheers!

Kuala Lumpur

Hi Fellow readers!

Sorry for the lack of updates for the past few days. Was away in Kuala Lumpur, Malaysia for holiday. It was a fun/cheap holiday. Saw a few business opportunities over there that could be potentially brought into Singapore.

For example like

• Nando's . Its a place where it sells chicken, something like Kenny rogers. However i feel that the chicken there taste better..and its a little cheaper then Kenny rogers. 1/2 chicken with 2 sides for 20RM. Think franchise.
  
• Jackie Chan's cafe concept. Though i think there is a Jackie Chan cafe here, it is slightly different in concept. In Malaysia, the cafe is more of a place for people to sit and relax ( there have sofa chairs) after a busy day of shopping. Its more of renting a place than selling food/drinks. Think of it also as a place for bored and tired husbands and boyfriends to rest while waiting for their partners to finish shopping. =p

Shall update more soon..

How much wall street's executives are piad!

Click on picture to enlarge

Students should take student loan!

To all Uni students to be out there, even if you can afford your education in the universities, do take the student loan! Its interest free!

Here is how it works..assuming you can fully afford the fees.

Here is also some basic assumption :

• Annual school fees of around $6360 ( starting from engineering students going into NTU in Aug09 after tution grant and stuff )
• Bank Loan of up to max 90%
• Fixed Deposit Rates of 1% ( Its really low now i know..)
  

So in this case, you should take the interest free bank loan of

90% X $6360 = $5724 / year.

Asuming you put the 4 years for fees as a lump sum FD. You will get back

(5724 x 4 ) x (1.01)^4 = $23825.67

Which essentially earns you $23825.67 - ( $5724 x ) = $929.67 after 4 years.

* I simplified the 'true earning' by not taking into consideration that,
If you had not taken the loan and put what ever ' education $$' you have into an FD, only taking out when its time to pay the school fees.

But, anyway ..$929.67 is not bad rite?

Relative drop of STI and STI ETFs

*Source from bloomberg

This table consolidates the % drop in price of the present STI components as relative to the past 2 economic crisis.

As you can see..in general most of the stocks price have not reach their historical % drop in price. The only two have the historical biggest drop is SembCorp Marine Ltd and Cosco Corp Singapore Ltd which are shipping companies.

This is to give you a rough guide of how much you MIGHT want to wait before you start buying certain sectors. It is true that historical records does not mean it will happen again in the future, but it still serves as a rough guide.


If you are worried about picking the wrong industry, you can invest in the STI ETF. Which is basically a fund that tracks the STI index..which also happens to contain most of the blue chips in Singapore.
However they are 2 kinds of STI ETI. One is the DBS STI ETF 100, the other is the 'normal' STI ETF. There are some pros and cons to each of them. And I suggest you read them up before investing in them. Some factors to consider is the lots size, managment fee ( yup, you have to pay the managers who have to manage this ETF!) etc.
Here is a link to some comparison of the 2 ETFs : http://www.moneytalk.sg/2009/02/dbs-issuing-sti-etf.html

STI drops- The Joseph Cycle

STI dropped by 61.47 points today!
Just remember, a drop of 70% from the peak is around 1164.
So by right there is still room for the index to drop if history is to repeat itself.

Only problem now that I see is..are we going into the cycle of long term recession? Meaning that for the next few years, the economy will not be growing as fast as what has happened over the past decade., and in fact might contract at a slow pace.

I got this idea after reading a book called 'The Joseph Cycle' which I borrowed from the Bedok library. This book was published in 2004. But it did predict the stock market to collapse in 2008. Which is indeed true! ( More info on the book can be found here )



The Joseph Cycle refers to the cyclic nature of the world's economy. Each peak to trough is expected to last 7 years. Hence a complete cycle will be 14years. Going by this, 2001-2008 ( 7 years) is the bull run, and 2008-2014 is suppose to be the bear run. As of now, the author Simon Sim Chin Cheong has been right so far.

He substantiates his point by plotting out the index fluctuation over the years according to 'The Joseph Cycle' and major economic events that accompanied it. It may be coincidental, but it has indeed happened MANY times. However he also says that within this 7 years, there will be peaks and troughs. ( Medium term trading/investing strategy)

If we were to believe him, it would mean that any investment done now, is not to be held for the LONG LONG term of more than 5 years., but for the medium term of around 1-2 years, or rather till when the market rises too fast. This is because the expected returns for the next 7 years might be negative.

I am starting to take note of this cycle theory because I have not experienced a long period of bear market. To me, every time the market drops, I am expecting it to rebound in a few months. This book has opened my mind, and has shown me that it is possible for the market to generate a negative return over a long period of say 7 years, just because you happen to enter to the wrong part of the cycle.

Invest with care! We might really be in the bear part of the Joseph Cycle.

Technical Analysis - STI at support now!

Looking at the above chart. We are presently at around 1594, from the peak of 3876. That is a drop of around 60%!!

From my old posts, i think a drop of around 70% from the peak is the highest ever..


From the above. Its been trading sideways, and we are now at the support of around 1600, which is established in the end of Nov 08. Personally i think buying at any time below this 1600 mark will greatly reduce your risks. And..for all you know, a rebound might be coming..