Changes to the Citibank Dividend Card

I am one of those people who believe in putting everything I can on credit cards, but I will pay in full when the bills come in. It's so convenient these days where credit cards are accepted everywhere.

Aside from the convenience, more interestingly are the discounts and rebates. Getting money back from your spending, why not? Nothing to lose.

One of the cards I like to use is the Citibank Dividend Visa Card. A few days ago, Citibank circulated a notice that it is making changes to its Citibank Dividend Card. The changes will take effect from 28 Sep 2015.

Merchant Category Amount of cash back earned on the transaction based on that month's statement of account if spend is less than S$888^ if spend is S$888 or more^ Petrol 0.25% 8%* Grocery 0.25% 8%* Dining 0.25% 8%* All others 0.25% 0.25%

The footnote to the table further elaborated that the amount of cashback (dividend) is capped at $25 for each of the first three categories (i.e. petrol, grocery and dining). Effectively, that means that any spending on a category above $312.50 will not earn any further cashback. On the positive side, the dividend will no longer expire.

My monthly expenditure on grocery and dining tends to go way above that. Looks like I should start diverting spending to my other credit cards like DBS/POSB and UOB One cards? Citibank Credit is going to lose some of my credit spending.



No minimum spend is required to earn the cashback. But as indicated in above table, the cashback will be much lower if the total spend that month is less than $888. Huat ah!

It's rather difficult to figure out what the impact is for the individual. I wish they could have provided some indications by using my last few months' credit bills to illustrate how it would have differed from the past.

I hear OCBC has also made changes to their card (The annoying OCBC Frank credit card). Azrael was pretty annoyed by the changes to OCBC's. The banks always maintain an escape clause that allow them to make changes anytime. So it's their prerogative. But it is annoying.

Watch your credits!

Related:
4 credit cards with great cashbacks and discounts

The Day After Tomorrow

Singapore woke up on 12 Sep 2015 to experience the rude shock to discover that the opposition had gained the majority in Parliament. The PAP was now the opposition! LKY turned in his grave.

Soon after, Parliament enacted rapid changes. CPF Life was done away with, and all citizens could withdraw their CPF upon reaching age 55. Foreign worker quota was capped and drawn down. Minimum wage was introduced.

The citizens were jubilant. However, soon after these changes, things started going awry. With the introduction of minimum wage, productivity dropped. The higher wage resulted in the cost being passed back to the consumer. Without the augmentation of lower wage foreign workers, cost had risen. As a result, food courts and coffee shops raised their prices. Workers lament the increasing cost of living.

Some companies started learning from the Japanese and introduced automation to overcome the manpower crunch and increase productivity. The pace of machines replacing people accelerated. At supermarkets, there were no longer any cashiers. Automated self service had taken over fully. The only staff was a security guard. Restaurants no longer needed waiters and waitresses as all orders were placed by patrons via tablet computers. Servers were automated delivery belts that moved the food from the kitchen directly to the table. Within the kitchen, cooks were gradually been replaced with machines that heated up pre-packaged food. The quality of food went downhill and became increasingly bland and unexciting. Patrons gradually stayed away from restaurants, except the few that served steamboat and BBQ buffets. Petrol kiosks were fully self-service. The traditional lower skilled jobs were no longer available to the citizens. 

As the workforce aspired to move up the curve, degree holders soon reached 80% of the population. Without the lower skilled workforce, basic household repairs like electrical and water pipe repairs became expensive affairs. Many households gritted their teeth and allowed their home to become increasingly degraded. Housing estates soon looked worn, aged and derelict. Cars had to be towed across the Causeway for even basic maintenance. 

MRT line breakdowns worsened. Frequent breakdowns at HDB blocks became a common sight. The SCDF was fully taxed carrying out rescue operations everyday across the island.

A generation of 55 year old started withdrawing their CPF with much excitement. After all, without a CPF Life annuity, there was little motivation to keep the money in CPF. The money was soon squandered away as the citizens spent their sudden windfall in expensive holidays, 'helping' other family members, starting businesses that failed and buying expensive cars. 90% of the cohort had to continue working till their health fell apart, yet with no end in sight as they no longer had a longer term income to support them otherwise.

With an increasingly ageing population without the influx of foreigners, 50% of the population were over 55 years of age. Medical costs rose. The government coffers were running dry and unsustainable, and could no longer continue to subsidise the high costs of national healthcare. Increasingly, more people could not afford the healthcare. Lifespan started to drop.

Personal income tax went up to 50% across the board, borrowing from the European model. The government started leaching on the investment holdings in GIC and Temasek Holdings. Soon, that was also used up. National Service was abolished as the government could no longer support the hefty defence budget. Only a small regular force remained.

Singapore was invaded! Not having any significant defence force to speak of, it could only muster a dozen aged F15 and F16 that suffered from spares shortfall, and only five Leopard tanks and 8 Bionix infantry fighting vehicles that could still move. Half of which broke down soon after. The country was rapidly overrun. The triumphant victor smirked, "Little Red Dot, you are erased!"

"Oi, wake up! Time for our morning exercise!"

"Mmm. Huh?"  Oh, damn. Post-election nightmare. WTF. Looks like it's still Pay-And-Pay. Mumble, mumble, grumble. 

Life goes on. Thankful that my investment portfolio and CPF remain intact, and I can still look forward to retirement one day.

Interest free student loan for tertiary education

Interest free student loan? Wow! Sounded too good to be true. I thought it was some kind of scam when I read this: How I used my university student loan to partially pay off my university fees.

[You can read above to find out how InvestProperlyLah capitalised on the loan to make some gains at the same time! Interesting move.]

It is certainly no scam. I did a check at the DBS website and found more information: DBS Tuition Fee Loan. So indeed, you could take up an interest free loan for the duration of the course at a tertiary institute.

There are various conditions involved for sure. But it seems straightforward enough. It can fund 90% of subsidised course fees for university (or 75% for polytechnic). You just need a guarantor between the age of 21 to 60 who is an undischarged bankrupt.

It doesn't seem too difficult to take up. It's an alternative to drawing a loan from parent's CPF. By the way, you can do one or the other, but not both.

The loan can be repaid in a lump sum or in equal installments up to 20 years at a minimum of $100 per month, starting within 2 years from graduation. But if the loan is not repaid upon graduation, I think the interest will be hefty as it is pegged to the average prime rate of the 3 major banks.

[See http://www.turtleinvestor.net/cpf-and-4-room-hdb-my-true-story]

Looks like an alternative for my kids to consider, in time to come. And I can leave my CPF to continue clocking interest instead. So the education fund that I've been building up for them can remain invested until they graduate to pay off the loan.

Do superheroes need insurance?

Came across this from Aviva: Do Superheroes need insurance?

So do Wolverine, Batman, Spiderman, Superman and Hulk need insurance?

I think these guys need multi-million dollar insurance, seeing as how they are constantly causing lots of collateral damages. Especially the Hulk. Is there a shirt replacement insurance he can get as well? Superman might need that too? He keeps losing his suits whenever he changes into his underwear-outside outfit.

Batman and Spiderman can do with medical insurance. They seem fragile.

But I think no insurance company will want to provide any annuity scheme to them though. Pay and pay, seemingly forever. These guys live forever. CPF Life would go bankrupt with them.

I thought it was funny, yet sensible. Have a good laugh!

10 Daily Purchases that Hurt Your Budget - How did I score?

Came across this article from SavingAdvice.com on 10 Daily Purchases that Hurt Your Budget. So I did a quick assessment to see how I score against this checklist:

1. Breakfast Snack. I used to buy a "pow" and a soya bean drink from a stall behind the bus-stop where I take a transfer bus when going to work. But I have long since stopped that practice. I prefer to eat a slice of bread or whatever buns or what not that we have bought or my wife baked.

2. Lunch Out. Something I certainly do so everyday at work. More so for the social interaction with colleagues and an excuse to walk the distance for an exercise. But it's inexpensive as we typical lunch out at hawker centres. So I guess it doesn't count.

3. Takeout for Dinner. Naw. I go home for dinner. Wifey's cooking is too good to miss.

4. Happy Hour Drinks. Nope. Since I go straight home after work. I don't drink anyway.

5. Soda or Energy Drinks. Stopped drinking such things for a couple of years. Or at least not those with a high calorie count. It's not good for weight control.

6. Late Morning or Afternoon Snacks. Has never been my practice to snack. Fortunately. Bad calories.

7. Cigarettes. I don't smoke. It's a vice I can definitely do without. It's bad for health by the way. Kills the lungs.

8. Newspapers, Magazines or Silly Apps. This, I definitely have an affinity for. I'm a sucker for newspapers and magazines 'cause I like to read. But no way am I going to pay for apps!

9. Lottery Tickets. Certainly an occasional Toto for me, chasing the million dollar dream. Obviously it hasn't worked out so far. I used to spend quite a bit on this each weekend. Not that I came away completely empty handed. But the risk-reward definitely wasn't in my favour. Proven time and again empirically. I get better returns investing in the stock market.

10. Parking. I don't drive to work. So no.

Looking at above, it looks like my only vice are the papers and magazines I subscribe to. That's a score of 1 out of 10. Maybe two if you count the lunch thingy. I'll stick with my only vice.

Related:
How much does a household spend a month?

Portfolio of 8 Singapore Stocks - Aug 2015 [updated 31 Oct 2015]

On 14 Aug 2015, as the Singapore market trended down, I highlighted 8 Singapore companies to keep watch on. I figured that an opportunity would come soon if the downwards trend continued. Indeed, it came pretty suddenly on 24 Aug 2015 (see Playing with the bears of 2015).

While the STI never quite hit the official 20% bear territory, it was pretty close, reaching -19.9%? A 0.1% difference is perhaps just a technicality. Many stocks reached their low point that day.

I thought it might be interesting to see how a portfolio made up of these 8 stocks would fare over time. I assumed that a reasonable investor wouldn't have caught the lowest point to buy, but would have delayed a few days to watch how things unfolded before jumping in.

So, taking reference from the prices a few days later on 28 Aug 2015, here's how a $100,000 portfolio would look like for this portfolio of 8. No REITs nor business trusts. But the 8 are broadly diversified.

Stock	Number of Shares	28 Aug 2015	Dividend Yield	Price to Book ratio
OCBC	1,300	$9.280	4.03%	1.1
Keppel	1,700	$7.200	7.02%	1.15
M1	4,200	$2.920	6.43%	7.08
Boustead	14,600	$0.855	4.73%	1.46
Kingsmen	15,200	$0.820	4.43%	1.59
VICOM	2,100	$6.000	2.93%	3.82
HourGlass	17,000	$0.735	3.06%	1.23
GKGoh	14,900	$0.840	4.73%	0.73

In working out the above, I did not take into account transaction fees. The number of shares were based on approximately $12,500 for each stock, rounded to the minimum lot size of 100. With that, the whole portfolio would have cost $99,126. I guess if transaction costs had been factored in, it would have come close to $100,000 anyway.

Let's see how this fares over the next few years with a buy and hold strategy.

--
1 Sep 2015 ...

I forgot to indicate the dividend yield and their price-to-book (P/B) ratio of the stock previously. So I have updated into the above table, but these are based on the data on 1 Sep 2015.

These are all dividend yielding stocks, and mostly with P/B below 2.0. The exceptions were M1 and VICOM which had much higher P/B. These probably reflect the premium that M1 commands as a Telco and likewise VICOM in their vehicle inspection role.

I'm drawing inspiration from Teh Hooi Ling's article where she mentioned a finding from historical analysis that stocks with a healthy dividend yield over P/B ratio tended to perform better over time.
--

31 Oct 2015 ...

The data for M1 was amended due to earlier error. Changes are highlighted in yellow.

Playing with the Bears of 2015 - should I be excited or miserable?

Over the weekend, the headlines were screaming death and destruction. When the headlines of two national papers start carrying headlines like this, it's time to pay serious attention!

What's with the sudden excitement? It's not as if it suddenly happened. The STI has already been declining for months from the last high of 3500 earlier this year. So 3,000 is perhaps just a psychological number, which was otherwise of no significance?

At 3,200, we were already effectively experiencing a correction (-10%) and we had already gone past that. By 2,800, we would officially be in a bear market (-20%). In fact, some of the emerging markets had already reached bear territory in recent weeks.

On, 24 Aug 2015, the local market seems to have collapsed. The board was a sea of red. Mumbles of "Black Monday" was heard. The VIX was rapidly reaching the 30s while the STI had reached 2,843.

Was it a capitulation? Judging from the many posts that it was an opportunity to buy, I guess not yet. From this point, there can only be two possible trajectories: (a) the market continues further downhill and sparks a complete capitulation before making its recovery, or (b) we are already at the bottom and the market recovers from here.

With Scenario A, there will be more regrets of "Shit, I bought too early!" or worse, "I better sell before it's too late!"  With Scenario B, there will be regrets of "I missed the bottom!" Either way, it will be a wailing wall of regrets.

Undeniably, this will be a baptism of fire for new investors who have not experienced the events of 1997, 2000, 2002/3, 2008/9 and 2011. They will look back in time and wondered what the fuss was. History tends to look a lot less terrible than today's reality.

Watching a profit of $50,000 sink into the negatives within a matter of weeks or even days can be highly demoralising for somebody with a portfolio of $250,000.

For an impending retiree, watching a retirement fund of $1,000,000 sink into $800,000 is like experiencing a firestorm that had just burned down a sizable part of the farm you're living on. It could well mean reducing a lifestyle of $3,333 a month to just $2,667 a month for the next few months or years, even as inflation creeps upwards!

What's been its effect on me? I've been dumping all my cash drawers and depositing them into my investment account. Buying and buying, day after day, as the market trended downwards. My only worry is running out of cash before it has reached the bottom of this pit. I should probably pace myself.

But two things I shouldn't touch: (a) the education funds for my kids, and (b) at least 6 months worth of expenses in cash as an emergency fund.

So what have you been doing?

How much does a household spend a month?

Cost of Living

The Department of Statistics publishes various sets of data that are available to the public to download from its data collection efforts. One of the interesting data set I came across is on Household Expenditure:

Source: 
http://www.tablebuilder.singstat.gov.sg/publicfacing/createSpecialTable.action?refId=3988&exportType=csv

Average Monthly Household Expenditure
HDB 1 & 2-room: $1,287
HDB 3-room: $2,478
HDB 4-room: $3,918
HDB 5-room: $5,283
Exec Flat & Condo: $8,000
Landed Property: $10,409

My own bottom-up estimates suggest that for my family of four residing in a condo, I would need $7,800 minimally to more or less maintain the current lifestyle. If I were at age 55 now, I would need $7,109. And at age 65, $5,977.

- I do not smoke, drink nor gamble. The occasional Toto don't count.
- I own a car and assumed that I would continue to maintain one till age 64.
- I assumed all housing loans have been paid down. No other debts.
- Overseas holidays are not included. I would need surplus to fund these luxuries.

The numbers seem to be fairly close to the overall statistics. I shall be collecting detailed data over the next 12 months to validate these figures.

Funding the Cost of Living

Based on my norms of 4% extraction from an investment portfolio, that means I would need the following to retire on (figures in bracket are if 5%):
Now - $2.34m ($1,87m)
Age 55 - $2.13m ($1.71m)
Age 65 - $1.79m ($1.43m)

In Teh Hooi Ling's "Show Me the Money - Book 1", chapter 19 on "Debunking the 'safe instruments for retirement' myth", she analysed various $1m portfolios over during timelines, and concluded that a 5% extraction to get $50,000 each year was largely viable. This was despite the ups and downs of the market.

Looks promising.

Aspial 5-year 5.25% Retail Bonds - Leveraging from the Market

Aspial started offering a 5-year 5.25% retail bonds to raise $75 million. It is nice to see more of such high yielding bonds appearing for the retail investors.

More:
Aspial to roll out 5-year 5.25% retail bonds (Straits Times)
Aspial issues a 5.25% bond with minimum $2000 (Investment Moats)
Aspial 5.25% retail bond thoughts (Got Money, Got Honey)

Aspial bond 2015 (Martin Lee)

Clearly, the bond is being offered with a higher coupon rate than compared to the upcoming Singapore Savings Bond (for the definitive collection of articles on SSB, check out GiraffeValue's 71 resources on Singapore Savings Bonds).

Some wondered why Aspial would be raising money from the market instead of borrowing from the banks. Checking against POEM's data on Aspial itself, we see some interesting data that can shed some insights:

Stock Data
Market Capitalization (SGD 'mil)	703.66
Common Shares Outstanding ('mil)	1,882.6200
52 Week High (SGD) (07/08/2014)	0.455
52 Week Low (SGD) (03/07/2015)	0.265
52 Week Return (%)	-15.940
Average Volume ('mil)	0.0148
Beta	0.56

Financial strength
Current Ratio	3.25
Quick Ratio	0.99
Long Term Debt to Equity (%)	247.97
Total Debt to Equity (%)	342.82
Interest Coverage Ratio (TTM)	1.28
Free Cash Flow to Firm (TTM) (SGD 'mln)	-34.97

Margin
Gross Margin (TTM) (%)	24.14
Operating Profit Margin (TTM) (%)	-1.39
Net Profit Margin (TTM) (%)	3.08

Dividend §
Annual Dividend per share (SGD)	0.0180
Dividend Yield (TTM) (%)	2.16
Dividend Yield (Annual) (%)	4.86
Payout Ratio (TTM) (%)	95.22
3-Year Growth Rate (%)	28.57

Valuation
Historical P/E Ratio	15.37
P/E Ratio (TTM)	43.53
P/BV (latest interim)	2.22
BVPS (latest interim) (SGD)	0.1669
EPS TTM (SGD)	0.0085

[Source: POEMS; as at 20 Aug 2015]

Aspial's debt-to-equity is more than 340%, with a short term debt of 95% due! This is way above my threshold of 40% that I use to screen for stocks to consider. It has apparently been exercising a very high level of leverage as it expands its business. These are numbers that would raise an eyebrow, or two. It possibly explains why Aspial has resorted to raising cash from the market to refinance borrowings, increase its working capital and to fund future business investments.

I am not buying nor own any shares in Aspial. But I'm going ahead to put in a small bid for this bond tranche.

Retiring on $2,000 a month [updated]

Retiring Siblings

Benny and Erica Tan are a brother and sister sibling pair. Benny had reached his statutory retirement age but was re-employed for a few more years.  Erica who is a tad younger, has however chosen to resign from her job and retired a year early. She got fed up working for an overly demanding boss. When she tendered her resignation, the boss begged her to stay. But she had already passed the point to turn back. She left with no regrets and is now picking up some ad-hoc work to fill her time.

They live in a 5-room HDB flat that have been fully paid for. The flat was transferred to them by their parents before they passed away. Not being graduates, they had basic jobs with decent but not 'obscene' pays.

Their lifestyle seems basic. While they do watch TV, they do not subscribe to cable. They do have an Internet subscription and each own a mobile phone with fairly basic plans. Both are singles with no spouse and kids to worry about. No car and certainly no motivation to do so as both do not even have a driving license!

It looks like they could survive on just $2,000 a month each. According to the Department of Statistics data on average household income and expenses, a 5-room HDB household averages $5,282.60 per month, while a 4-room HDB household averages $3,917.90 per month. I would judge that they are more akin to the 4-room HDB household although they live in a 5-room HDB.

Not having to spend a single cent on housing all their lives, their CPF contributions have been pretty much maximised and left untouched all these years.

Back to the Future

If they could rewind the clock and are instead at age 55 today, how would they make a decision on their CPF Life scheme?

[https://mycpf.cpf.gov.sg/Members/Schemes/schemes/retirement/cpf-life]

Under the revised CPF scheme , they could go for the Enhanced CPF Life with a CPF-RA of $241,500, giving a perpetual monthly pay out of $1,770 to $1,920 each from respective retirement age. Assuming the lower end at $1,770, they would each face a shortfall of only $230. How can they close this gap?  There seems to be a few possibilities ...

Monetise their Property

Rent Out

As they are living in a 5-room HDB flat, they have a room to spare. Being near to a Polytechnic and a Junior College, it's a location with possibilities. They could rent out a room. I wonder what's the market rate for a room rental in a HDB flat? Is $460 a month realistic? The risk lies in whether they can secure continuous rental.

[Renting out via AirBnB is an alternative. Unfortunately, it's illegal. For now.]

Sell Down

They could consider selling off their current 5-room HDB and downgrade to a smaller HDB, and then take the difference to invest for an income stream. So they could consider the newly announced 40-year lease 2-room flexi scheme (More: Joint Press Release by MND and HDB on 2-room flexi scheme, HBDWeb on 2-room flexi scheme).

For this to work, they would need to be able to extract out a cash value of $138,000 to be invested into income yielding products at 4% to get $460 a month. It seems possible. A check against this nifty tool at Simplyjesme on HDB resale prices shows an average resale price of over $600,000 for a 5-room.

The risk lies in whether the income yielding products are assured or come with downsides. But there seems to be more than enough margin of safety. If they sell their 5-room for $600,000 and buy the 40-year lease 2-room under the flexi scheme at $28,600 (for first timer applicants), that would leave them with $571,400. At 4%, that would generate an income stream of $22,856 a year, or $1,904 per month, well over the $460 gap that they needed to close. There's money to spare for overseas holidays, or to save for a rainy day.

Work Part-Time

Part-time Work

They could pick up some part-time work and earn some income. Assuming $8 per hour, they each need to put in only 29 hours a month to close the gap. That sounds like less than 4 full days of work a month! Seems doable. But are there employers willing to offer jobs designed for semi- retirees?

Monetise a Hobby

Benny in particular is an avid photographer. He could pick up some part-time work as a wedding photographer. But there could be some difficulties in getting sufficiently regular assignments to secure a steady income.

Conclusion

Inflationary considerations aside, there seems to be a few avenues to close the gap. Although, each does come with some level of uncertainty that could derail the plan. Are there other alternatives?

Building the Kids Education Funds with Unit Trust

For my children's Education Funds for tertiary education, I have been injecting monthly contributions and their annual Ang Pows (Chinese New Year red packets) into their respective portfolios using Unit Trusts. Both portfolios are similar. So I shall use one of them for illustration.

Broadly, the portfolio is evenly diversified across (a) Asian small-caps, (b) Global Emerging Markets (GEM), (c) Asia Pacific, (d) Europe, (e) US, (f) Singapore, (g) Short-term bond, and (h) Cash.

This has been going on for about 10 years. Guess how have the various Unit Trusts performed over the years? The specific funds are as shown below, with annualised returns over 1, 2, 3, 5 and 10-year horizon.

Fund Name	1 YR	2 YR	3 YR	5 YR	10 YR
Aberdeen Asian Smaller Cos	-5.74%	-0.23%	6.34%	6.26%	-
Aberdeen Global Emerging Markets	-5.73%	0.37%	1.34%	2.36%	6.50%
Aberdeen Pacific Equity	-3.45%	1.05%	4.41%	4.61%	6.55%
Cash Fund	0.37%	0.24%	0.19%	0.18%	-
Deutsche Singapore Eqty Fd	-6.60%	-1.57%	2.58%	3.46%	5.79%
Infinity European Stock Index	9.74%	9.15%	14.46%	7.85%	1.98%
Infinity US 500 Stock Index	20.63%	17.14%	19.19%	15.26%	4.26%
Nikko AM Shenton ShortTerm Bond(S$)	1.78%	2.11%	2.27%	2.50%	2.39%

[Source: Fundsupermart.com]

Taking a 1-year view, US and Europe are the top performers at 20.63% and 9.74%. Singapore, Asian small-caps and GEM are the worst performing and are in fact in the red.

Stretching out to a 10-year horizon, Asia Pacific and GEM are actually the top performing at above 6% each. Whereas, Europe and Bonds were the weakest. Even then, they still turned in returns of 1.98% to 2.39%. As the Asian Small-Cap and Cash Fund have less than 10 years of history, their 10-year annualised returns are not available.

What can we observe from the above? While by no means definitive, it does illustrate some points that are often talked about:

1. Markets will have their ups and downs. Diversification across markets make sense as they tend to perform differently from each other, except where there is a massive global crisis. No single fund is going to be the best performer forever. There is no magic bullet.

2. Equities will usually outperform Bonds in the long run but will be more volatile. From above, we see that Bonds and Cash Funds (money market funds) remained positive throughout, but do not vary much over time. Higher risk, higher returns (you can go into the red). Lower risk, lower returns.

3. Over a 10-year horizon, it is unlikely to make losses. Despite the events of the Global Financial Crisis (2008), European crisis (2011) and the recent China meltdown (2014), equities still turned in respectable 1.98% to 6.55% over the 10-year horizon. Unlikely does not mean never though! Time in the market matters.

4. Investing (but know what you are doing!), even with the expenses involved for Unit Trusts, will do better than leaving money in the bank. The banks have been offering less than 2% interest for the last decade (risk free of course, especially the first $50,000).

It is now only a few years away from needing the money for the kids' tertiary education. Time to apply the brakes and exercise caution. There is no longer room for "time in the market". In the years ahead, I will be shifting more of the equities into cash funds, towards a 20:80 ratio. There is no need to adopt a high-risk, high-return profile anymore. To be precise, can't afford to.

Related:
Kids education revisited - back to the future
Endowment plans for child education
Misadventure of the education savings funds

8 SGX Companies to Keep Watch On

In my recent interview by Giraffe, I mentioned several stocks that I felt may be worth keeping a close watch on due to various challenges that they are facing. So I thought I may elaborate a bit further on these.

OCBC. They have certain exposure to China and is hoping to grow its market there. With China experiencing some slow down, it will be affected. But my view is that a slow down does not mean that China will come to a halt. Business will continue to ebb and grow. It is a huge emerging market that is hard to ignore. And they will need capital (loans) to support business operations. Cash is king.

Keppel. A significant part of Keppel's business is in the marine sector which is facing challenges from the declining price of oil. Much of the oil around the world are moved by maritime shipping. There has been few new orders, although it does have a sizeable order book to carry it forward. If the situation persists, painful layoffs may well be necessary. Such layoffs could result in some loss of capabilities for the future. Since Choo Chiau Beng stepped down as its CEO, the new management team has had much to deal with.

M1. M1 is largely dependent on the domestic market telco market, unlike Singtel which has an international market for diversification. With a 4th entrant coming into the local telco scene, it would face cannibalisation from the competition. But the question is, will the 4th player survive? M1 has also been the first off the block to introduce new service schemes (innovation?) to try to take the market in the meantime.

Boustead. A part of its business comes from the oil and gas, as well as property development. Both of which are facing difficulties. The oil and gas challenge is similar to Keppel's problem. With a slowdown in population growth, the need for housing in land-limited Singapore is going to slow down. There is also a lot of competition from the many companies in Singapore. They are experiencing forex downside given the extensive business operations in Malaysia (rapidly depreciating M$) and Australia (A$ is almost the same as S$ now).

Kingsmen. If there is slow down in regional economies, resulting in less business shop upgrades and MICE events, then they are likely to experience difficulties in growing their revenue. But they seem to have a strong reputation. Good branding. The emergence of more and more theme parks in the region, as well as upgrades at existing ones, are continued business opportunities for Kingsmen.

VICOM. There are some on the shrinkage of car population with many cars due to replace those at the end of 10 years. As car owners replace with new cars, they will not need to go to VICOM that soon. Maybe there will be near term shrinkage in revenue. But VICOM is dominant and car inspections are legally required. All VICOM need to do is to just raise its charges?

HourGlass. Luxury goods would most certainly benefit from a large newly rich Chinese market, hungry for symbolism. But the stamp down on corruption in China has made many self-conscious, and an economic slow down would likely create further reason for pause and caution. The company is also in the midst of transition from its founders to the next generation.

GKGoh. It's businesses operations in Europe and Australia would probably be affected by the foreign exchange rates when translated into the S$ currency. Its Boardroom subsidiary (itself a SGX stock) seems to dominate in providing services to many SGX companies, providing a stable revenue stream.

But all the above are likely things that will blow over as things reach equilibrium with time (reversion to mean?). Demand for the goods and services will still be there to provide growth. Ultimately, the businesses will thrive, so long as they are not experiencing the "Kodak moment" and continue to be led by responsible management teams that do not engage in any shenanigan.

A ship full of bears

This week in particular has been an "excitable" week, with the market in a sea of red for a couple of days. Looks like a ship full of bears. But I'm a contrarian. The market goes down, I'm excited. So I'm buying. Gradually. Because I can't be sure the market wouldn't go down even further.

Disclaimer: Do conduct your own research and make your own decisions. I do not possess any all-seeing eye that claims to predict the future. So I am not a clairvoyant. Above is just a personal view of things.

4 Tasty Food at Old Airport Road Hawker Centre

There's something to be said about these traditional hawker food. It's so unlike the typical fare that we now get at all those franchised food courts. At the Old Airport Road Hawker Centre, good hawker food thrives.

Be warned: I said good, I never say it is healthy!

Considering how long the queue was, this store must surely be good! Like all faithful Singaporeans, I joined the queue of course. Got queue, must be good?

And I was not disappointed. It is VERY GOOD! Lots of stuff ("liao") in the bowl of Lor Mee. Tasty. And mine were the smaller bowls. I noticed most people went for the upsized version.

Not too far away is another store that sells deep fried crispy stuff. It seems pretty quiet with no queue. The hawker goes about his business quietly. I thought it wasn't good since there was no queue. But I noticed after a while that he was actually getting a lot of customers. It's just that his food gets served pretty fast, most of it takeaways.

So I ordered something to try - deep fried prawn-whatever-you-call-it. Oooh, it was "yums!" Couldn't help but to buy more to bring home.

Just a few store away is this store selling pancakes with different kinds of fillings. The pancake skin is thin, and the filling tasty. This is also VERY GOOD. The guy running this store knows how to do business too. Wish all retailers had his kind of customer service attitude. Good service and good food.

Last but not least, I had a go at this soya beancurd store. Heard it is also famous. It isn't bad. Maybe I ordered the wrong item though, 'cause I didn't get the taste that I was looking for (i.e. compared to the beancurd store near Selegie that I used to patronise).

As you can tell, I had quite a lot that morning. Those who live at the eastern end of Singapore really have it made. Envy.

Have to live a good life. What's wealth and health, if we can't enjoy our food too? Not to mention that it is comparatively inexpensive compared to a high end restaurant. Munch munch! Gluttony.