eToro – Social Trading

2 months ago, I started exploring a very unique investment platform, eToro. This is a very controversial social trading portal, often labelled by others as “Scam”. Nonetheless, eToro is gradually getting accredited by reputable authorities in the world.

My eToro Profile

eToro was founded in 2007, with its HQ in Cyrus (hence the suspicion in old days), not until 2010 where it introduced its unique function – social trading with “CopyTrading”. It enables investors to view, discuss, follow and copy the network’s top performers’ trades automatically. It uses CFD as investment vehicle, and in recent months launches the most-welcomed feature to invest in the underlying in long unleverage position.

Very importantly, eToro has now acquired the following regulations, which has proven its credibility in liquidity risk.

  • EU – by CySEC authority
  • UK – by FCA
  • US – FinCEN
  • AU – ASIC

Another features I like the most in eToro is the forum-style investment discussion, as well as the user friendly financial reports & insider activities. One can find like-minded strangers in investment journey, many who in fact are very talented in stocks analysis and are able to provide different insights.

Come and join me in eToro, click here for my profile – of course I’ll be happy if you would like to copy me, let’s have some ideas exchange there.

Stock Market – Is it a V-shape Recovery?

It has been an eventful March and April, we are undergoing an unprecedented pandemic which affects greatly the norms of social interaction for human beings. A “new normality” is to continue for the foreseeable future, with huge focus in digitization and online collaboration to minimize the spread of virus.

COVID-19 Global Cases dated 12 May 2020

As you can see from my previous post in March, the global active cases increase from 100k to 4 million in less than 60 days! Deaths also grow from 3.5k to 285k, that’s a very saddening and dire situation we are in. With US start its reopening last week without seeing decline of active cases, the worse is yet to come in my humble opinion.

Singapore is now entering 2nd month of its circuit breaker started in April 3, having most Singapore residents to stay/work at home in order to break the chain of transmissions of Covid-19 in the community. We have achieved much successes with reduced community cases to single digit in the recent few days, however, the dormitory infected cases is still hovering at mid hundreds with no sign of improvement.

A lot of SMEs are suffering with worsening business outlook since March. It is not uncommon to see people getting pay cut or retrenchment in social media nowadays, in which I am very grateful to still stay employed.

IWDA bottoms at 43-ish, has now recovered to 55 level

We are in a strange state – economy is worsening/plunging, while stock is soaring to its previous high. There are various “guru” throwing different market sentiments, retail investors are mostly confused and stay sideline.

What did I do? Though equally puzzled, I continue nibbling IWDA, adding tech stocks which are generally not affected by such pandemic, as well as buying few calls with expiry date in 2021, anticipating the stock market will resume its glory by end of the year.

What if I am wrong? Short term performance in stock market doesn’t matter to me, I will keep DCA on IWDA, ensuring my cash is working hard for me even in current horrified economy downturn. It has been proven without fail that the stock market rises in long term.

And I am convinced staying somewhat invested is the correct long term investing strategy.

First Bad News in year 2020

It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis, she said in an online press briefing.

IMF chief Kristalina Georgieva said on Friday (Mar 27)

A sunny morning, my son woke up at 7am, started to play by himself, but it took us another hour to get up from the bed – we just want some extra rests on a beautiful Saturday.

Brew myself a cup of coffee, Milo for my wife, and a cup of Abbott Pedisure for my son, we enjoyed a joint breakfast together with some breads bought from barcook bakery at sim lim yesterday. As usual I checked my whatsapp message while drinking the hot coffee, and found a shocking message from my colleague.

“No increment (crying face), but better than having to axe anyone in the team”

What? I am confused, we just got the announcement from our CEO two weeks ago that our bonus for 2019 is going to be slightly above market rate, we did a salary appraisal exercise a week ago, and HR sent out a mass email saying that the salary increment will be paid in May payroll, retrospective to April. All good, I gave my team a pretty good increment, and expect a good rating from my line manager as well (he should be quite generous, I hope). What change?

After few minutes’ chat, I realised that there is an emergency announcement from CEO late last night, the management had made a tough decision not to raise the salary in this fiscal year, in view of the unprecedented CoronaVirus outbreak. This is bad, unexpected, and rather sad news to everyone, especially to my team who had gone through a tough December month on site, and they should be awarded generously for their efforts! Can’t imagine how disappointed they are when they hear the news on Monday.

It is not that I didn’t expect such cost cutting initiative to come, quite the contrary, I actually am prepared for a small retrenchment in our office by June. But the speed of how things’s change is horrendous! It proves that we have all underestimated the effect of the wide spread virus to our daily life, and we are not mentally prepared to take it, though we thought we are.

This news did disrupt my investment plan, which is to take advantage of the recent market crash to increase my stock exposure. I would have to dip into my emergency war chest now if I follow my initial plan – not ideal. I need some time to digest it, and make a new plan quickly.

Last hope for me is that no surprise for the imminent bonus payout in April, please don’t cancel this payout, my dear management, we are prepared for a bad year in 2021, but not 2020 please 😦

Recession? Opportunity?

Year 2020 is no doubt an eventful year, US-China trade war, Hong Kong protest, COVID-19 outbreak, and the most recent US Fed emergency interest cut.

COVID-19 Global Cases dated 7 Mar 2020

It is clear that the global economy is now seriously hit by the outbreak of COVID-19, which originated from Hubei province, China, and has infected more than 100k population in less than 3 months time. Many countries have now strengthened border control, restricted travellers from affected countries from entering into the countries.

Singapore, a tiny urbanized country, which depends heavily on import and export business, has recently downgraded its GDP growth forecast in year 2020 from 1.5% to 0.5% (average). The fear of upcoming recession is getting real, miniters are forgoing one month of salary, 85,000 civil servants expect year-end bonus that is the lowest in 10 years.

Sudden plunge of IWDA last week

Market sentiment in capital market is swinging from the extreme greed since Q4 2019 to extreme fear in early 2020, particularly the “roller coaster” share price swing last week. Is this the beginning of market crash, with the last one being in 2009, 11 years ago? Well, your guess is as good as mine.

Should we sell everything and keep our hard-earned cash in biscuit tin under the bed? Absolutely NO, in fact, in times like this, cooler heads prevail. As a long-term investor, this is exactly the moment we should, cautiously, deploy our reserved warchest into the market. If the crash is inevitable, it will be my first golden opportunity to get involved in a major financial crisis, and fortunately, I am ready to fight the battle.

Lastly, please do not blindly bet your entire networth into the market in lump sum right now, things might get worse in the coming months and there is no certainty that the rebound will be as quick. Have a plan, and execute your plan with dicipline, it will pay off nicely.

Side Hustle Ideas

Getting boring at 9-5 routine office works? Wanting to quit your job due to stress at works? It is very common phenomenon for almost every employee in the job market, and typically it happens 2 to 3 years after you joined the work force, regardless if this is your first job, second, or third job.

I, too, go through such viscous cycle being >10 years in employment. When such feeling develops, I will start exploring side hustles, for few reasons. First, distract myself from the stressful routine works. Second, look for alternative funnel where I can earn passive income from, in a hope that I can eventually escape from the rat race and FIRE!

There are so many instrument I have involved myself into over the years, such as digital marketing, setting physical and virtual shops, Forex trading, stock investing, cryptocurrency mining and speculation, and index ETF DCA (dollar-cost-averaging). Many of which are waste of time and money, nonetheless they did open my eyes and shaped my risk appetite. All in all, it is painful to spend so much money and time into such activities, but let’s look at them as investment cost, so that I feel better 🙂

DCA into Index ETF is the main side hustle / passive income generator I am focusing on since last year, and will continue investing on a consistent basis for the next 10-20 years at the minimum. It doesn’t require much of my energy / time, what I need to do is to buy certain index ETF by end of the month without looking at its price (it is not as easy as it seems if you’re investing >1,000 USD a month). I am doing this via few channels, ie. Stashaway using SRS funds and IB (Interactive Brokers) using cash, not for diversification purpose, but to fully utilize the spare money in my SRS funds invested few years ago.

In recent months, I have came across few more side hustles such as Youtube channel marketing, dropshipping via Shopify and AliExpress, print to demand, and Option trading. They are all interesting concepts for me, unfortunately the market are saturated and over supply (except Option trading). Without an enormous amount of time and effort are invested for at least a few months, they couldn’t not provide a sustainable stream of passive income everyone dreams of.

Nevertheless, option trading is very interesting to me, particularly at selling cash-secured put (get your stocks at preferred strike price, while collecting premium) and selling covered call (collect premium in exchange of the obligation to sell your stock at strike price). I am requesting trading permission for option trading in my IB account, and eyeing at some quality US stocks for option trading. My primary strategy is to collect premiums to boost my ROI (return on investment) without taking exorbitant risk

What is your favorite side hustles and if you have achieved any success in generate passive income from them? Please share your view so that I can learn from you 🙂

Speculative Investment – Cryptocurrency

If you invested 100 USD in Feb 2011, when the bitcoin price is as cheap as USD 1, you would have been a millionaire today (bitcoin price is around 8,500 USD in Jan 2020).

Since graduated in 2009, and started to have my own earning power, I had heard not only once from various sources that bitcoin is a scam, a lot of speculators who were heavily invested in it had burned their hands and some even ended their lives due to heavy loss. As a result, I didn’t spend a minute to understand this speculative investment, I wish I did.

Fast forward to July 2017, few months before bitcoin rose to its historical price level, USD 19,783 in Dec 17, I chanced up a telegram group in Singapore discussing crypto mining. As an undergraduate with passion in mechanical engineering, I was immediately indulged with crypto mining and bought my first rig from carousell at SGD 3,800, with only 1 month of research. It was a 6 x GTX 1060 rig, and able to yield close to 1 ETH a month (considering the ETH price was peak at 1,200 USD in Dec 2017, it was a pretty profitable side hustle with ROI of less than 4 months – provided you sold at peak of course). I didn’t have buyer remorse at that time, though my wife is unhappy with the fact that I didn’t inform her before I pulled the trigger – wise words for those who decided to ignore your wife 🙂

Estimated monthly profit of USD 250 for one rig in year 2017

I later sold the GTX 1060 cards and “upgraded” the rig to GTX 1070, and started to build my own rigs. It was a intriguing process where I bought and resold Nvidia GTX and AMD RX graphic cards, built one rig after another, and gone through the entire cycle of booming and fading mining activities in Singapore from late year 2017 to early year 2018. I once have had a total of 4 rigs with 24-26 graphic cards mounted on, turning my study room into a sauna with average ambient temperature of 35-40 degree celcius. Again, after getting some nags from my household CFO, and the climbing risk of fire hazards, I decided to move all the rigs to a paid warehouse with monthly rental (including electricity) of approx. SGD 150 to 180 per rigs, this lasted another 6 months. Eventually I cut loss and managed to find a buyer in Carousell who is willing to take all 3 rigs for a one-third of its cost. Considering the taken price of a graphic card dropped from as high as SGD 500 to <SGD 100, this deal is the best I can find in the market, before considering the last resort – rubbish chutes at void deck.

Beautiful mining rig isn’t it? The cost is as high as SGD 4-5k when the mining fancy is at its peak
Profit dropped to <USD 3/day (USD 90 per month) in late 2018, can’t even pay for its electricity cost.

All in all, the loss in cryptocurrency mining is bearable, and the fact that mining is no longer profitable for NOW doesn’t indicate that cryptocurrency is a scam. Till date, I am still happily HODL-ing some bitcoin and ethereum, and will not hesitate to add more capital once the bitcoin drops below USD 5,000 price range. Blockchain technology and digital banking is the future trend, the early we board the train the closer we are to our life goal – financial independence.

HDB Upgrade to EC – Yay or Nay?

Parc Canberra Executive Condo is a luxury development located along Canberra Link, District 27 Singapore. Developed by Hoi Hup Realty and Sunway Development, the property has intends up to 495 units with the site area of 194,187 sqft. The land site is also well served by the new 12 hectare Sembawang Integrated Hub situated just across Canberra Link. Only 400m away, the residents easily reach the upcoming Canberra MRT Station on North-South line.

Canberra Parc

Gone are the days where young couples spend low few hundred thousand of their savings in HDB (BTO / Resales), fulfilling 5 years MOP (minimum occupation period), and easily upgrade to EC (executive condominium) or even private condo with the profit gained after selling the HDB. HDB is no longer a viable investment which guarantees good returns thanks to the multiple cooling measures implemented by Singapore government, for good reasons, particularly since year 2013 when the HDB price reached its peak.

My wife and I picked the worst timing purchasing our 1st property – 5I resales HDB in Singapore, at a whopping cost of SGD 495,000 in late 2013. Similar to other residents in Singapore, we were told that the HDB price could only goes up and the sky is the limit, due to land scarcity. Truth is the price doesn’t recover till date and we are standing with more than 20% loss on capital. It was not a concern for us initially and we were happy with our dream house. However, now that our baby boy is growing fast, we start having many other considerations such as proximity to primary school, comfortable and kid friendly environment, smart home facility (okay it is merely for my own indulgence), and etc. The thought of EC upgrade comes into our mind, and Canberra Parc comes just at the right timing !

20% capital loss for our HDB “investment”

Of course, there are many other financial considerations to be evaluated before we even think of pulling the trigger. One of the main concerns is the cash outlay required for down payment could be amount to minimum a quarter of a million dollar. Considering that we have very minimum CPF OA savings in our account, due to consistent OA to SA transfer done since 2 years ago, I might have to liquidate my stocks to fork out such an amount, of course it is not my preference as it will disrupt my long time investment planning. The benefit of upgrading to EC is that the potential of capital appreciation is much higher than HDB based on historical data (again one could argue that past data doesn’t represent future growth , but all in all the potential / probability of price appreciation is still much higher than HDB).

Anyway, we have booked for show flat preview after CNY, where we will also discuss the overall financial commitment with the property agent. It doesn’t cost a dime for such preview, just our time of a day on weekends 🙂

Update 06 March 2020:
We have decided to drop the idea of investing in EC, due to huge upfront cash outlay required, as much as SGD 250k for a SGD 1 million EC. We do not have so much cash reserve for this commitment, and it is too much a concentrated risk to have our reserve capital to be poured in a single investment vehicle, although based on historical data EC’s appreciation in value is rather generous if the location is convenient.

Time in the market or Time the market?

It is probably not uncommon to hear this – time in the market is better than timing the market. These are 2 different investing philosophies, ie. waiting for market to crash before pulling the trigger, or dollar-cost-averaging every fixed period of time, ignoring the market condition.

I was once a believer of stock picking, creating many templates to analysis the P/E ratio, P/B ratio, discounted cash flow, John Neff screener, Graham checklist, etc etc. It is intriguing to add more and more screeners into the template, only to find that they are most of the time conflicting with each other. This often complicates the stock picking process particularly to a clueless amateur like myself. As a result, those templates get dumped into cold storage, and I start following the leads from other financial bloggers.

My favorite is definitely AK71. If you are into financial bloggers in Singapore, you must have heard of his name in various online forums. He is very famous for his extremely frugal lifestyle, but at the same time his brilliant, selfless, down to the ground sharing of his investing ideas back in 2009/2010 when he first started blogging as a hobby. His mid six digits dividends income is a legendary achievement in Singapore. Unlike many other financial bloggers who are fond of US / global market, AK71 achieved his financial independence in his early 40s only by investing in SG stock market, particularly in REITs.

Screenshot of AK71, aka ASSI’s blog

Followings the free-of-charge stock tips from AK71, and some guts feeling, I built a 8-10 portfolio (mainly REITs) since year 2010/2011, it performed very well and even beat the STI benchmark (ES3) in some good years (particularly in year 2012). The portfolio produced some 4 digits passive dividend income yearly.

Not bad a portfolio considering it is based on copy & paste and guts feeling approach?
Didn’t realize that I’ve collected close to SGD 50k dividends in the past 9 years …

The buy and forget approach yielded quite good profits in dividends for the past 9 years, however, there are also few stocks which I have to cut loss eventually as fundamentally the business is losing its steam, namely Sabana REIT and First REIT. I am grateful that the losses, though painful, are still within tolerance and insignificant as compared to the losses incurred in Forex Trading and Cryptocurrency Mining (story for another day). All in all, my result in stocks investing till date is still in green. I do aware that my “achievement” in stocks investing is no less than pure luck. Though I did try to spend some time studying fundamental & technical analysis, the interest often gets faded quite easily mainly due to the pressure in my day job.

In year 2018, I chanced upon a thread in HWZ Money Mind forum named “Shiny Things Club”, the thread starter was a successful proprietary trader and wrote a book “Rich By Retirement” illustrating ETF investment terminology in Singaporean context. The simple and effective DCA (dollar cost averaging) investing method quickly gets to me. I then started my ETF investing journey since late year 2018 via low cost broker IB (interactive broker) recommended by Shiny Things. I simply invest a fixed sum every month into IWDA, and “go to pub”.

Since DCA requires little effort in stock analysis, I now have more time to focus in building my active career, which produces more invest-able capital to be injected into my portfolio. My next action plan is to divest my SG stocks completely and transfer the capital into global ETF, so as to balance the geographical risk. To be honest, the DCA method, though effective and is a proven method to grow your asset steadily, is rather routine and boring. To keep the momentum lasting for >20-30 years, I have decided to allocate a small amount of my savings (5-10%) in speculative investment – cryptocurrency mining and trading. Please note that this is not for everyone, if you have other casual hobbies to divert your attention, please do so and stay away from bitcoin, ethereum and whatever shitcoins recommended by some “financial gurus”.

In a nutshell, time in market is always more superior than timing the market, unless you are the legendary Warren Buffet, Graham Phillips, Jim Roger, or the infamous AK71 . This is the reason why most of hedge funds are not able to beat the benchmark CONSISTENTLY. Therefore for majority of normal peasants like us, it is recommended to stick to simple (and boring) investment method, and spend your time and energy in other activities, let the compounding interest does its magic to fund your retirement.

What is your opinion? Do you prefer to analyze and cherry pick stocks on your own? There is no right or wrong answer, just personal preference.

How much I lost in Forex Trading?

In 2012, I was getting bored and tired of my engineer routine works, and decided to quit and took a short break. During my one-month notice period, I started exploring side hustles (in fact I was into SEO / affiliate marketing in 2010, gave up due to lack of time / interest), one of my Uni friend introduced me to a “free” forex seminar in Singapore, that’s how I got into a short stint with Forex trading.

Fascinated with the concept of passive income by the trainer, I thought for few days and decided to sign up for the 2.5 days Forex course amount to SGD 3,888 (yes, I must be crazy back then). Looking back, the training material can be easily downloaded from online resources such as forex factory, baby pips, or even free YouTube channel.

The trainer was affiliated with a Forex broker, he then introduced us some top up packages with bonus credit, i took one with 1k USD bonus credits with 3k USD top up (another crazy move), without realising later that the bonus credits cannot be cashed out!

The trainer did offer some free SMS Forex tips, weekly analysis, monthly forum/discussion, etc. All of which are pretty useless, particularly their SMS Forex tips, I still recalled I lost >USD 500 (500 pips!) for a sell limit USDJPY tip, rated by the trainer as AAA graded tip, when the Yen was devalued like no tomorrow (ie. the tips called for counter trend trading, anticipated a rebounce). After this trade, I sort of lost my mind and started trading without stop loss, a big no no for an amateur like myself. As you could imagine, I blew my account in less than 2 months.

I have to admit that I love chart analysis , although my skill set didn’t improve much due to lack of patience keeping a trading journal, and the fear of losing my hard earned capital. I lost another 1k SGD over the last 3-4 years when I tried to pick up other Forex trading skills and tried to get myself serious into this side hustle. I even followed a trader who trade based on Feng Shui terminology (ended up he is not a scammer actually, he does has an edge in Forex trading but not suitable for most peasants like us).

So how much I lost / invested in Forex trading ? Close to SGD 10,000 + countless hours of anxious and sleepless night!

What did I gain from this painful experience? Some excitement from winning trades, of course. But most importantly, I found my risk appetite in investment – I am keen at involving in high risk investment (sometimes even speculation) in pursuit of high capital return, with the goal of growing my net worth steadily. Sound contradictory isn’t it?

It is all about sizing. I have decided to keep my speculative investment below 5-10% of my total portfolio, in a hope to keep some spies in my routine stocks investment. The plan sounds great, however when I indulged myself in bitcoin mining / trading in year 2017, the plan started to go south, that’s for another day.

How is your experience in Forex or other speculative trading? Are you the 1% trader who has developed your edge for consistent profits?

CPF Achievement- Year 2020

Stepping into year 2020, it is time to review how is the performance of my biggest bonds portfolio – CPF. While CPF can be seen as a controversial political topic in Singapore, my take is that since it is a mandatory contribution (and a huge 20% deduction from your monthly salary) for all Singaporean and PRs, it is in my best interest to find the best way to “hack” the system.

One common method encouraged by most financial bloggers is to do OA to SA transfer. This way you get almost double the compounding interest! One may argue that such transfer is one way ticket since you are not allowed to do SA to OA or MA transfer, I have the same thought and therefore the procrastination for few years before I made the call and pulled the trigger in year 2018. I simply cannot resist the 4% compounding interest in SA! This will helps a lot in shortening my journey to FI (financial independence) by achieving FRS hopefully before 40 years old. I am keepiNg track the progress using an excel file shared by HWZ few years ago, will be detailing the plan next time.

Summary of CPF contribution in year 2019

I have been accumulating some $$ in OA few months ago for preparation of refinancing my housing loan (currently I am with OCBC housing loan, its interest rate was exaggerated from 1.3% to 2.4% in a year time!), else OA should usually be emptied and transferred to SA every month end. In addition, I just did a SGD 7k SA top up before end of January, hopefully i could meet FRS (Full Retirement Sum) by late 30s.

How do you plan your CPF contribution, regardless if you trust the system or not? Do share your thoughts in comment section for discussion.

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