My wife had to go in to work on Mon, which is a public holiday in Singapore. Good thing is that she gets a day off-in-lieu for about half day of work. Bad thing is that it sucks having to work when everyone else is off. Anyway, I took the opportunity to go out for lunch with my family and spend some time with them before picking up my wife and heading home.

I’m not sure what triggered this post but it might have to do with the conversation I had with my mum after lunch. It had to do with selling the shares my dad held in his CPF Investment Account. These shares were bought many years ago and they basically lost track of them.

What’s surprising is that the shares were in unrealised loss positions of about S$30,000 in total. I knew of their existence but was not made aware of the size of the positions my dad had in them. This continues to be a source of frustration with my parents. A destructive combination of the desire to make lots of money quickly and the lack of investing knowledge and aptitude.

Which is why I have consistently advised my parents not to invest their CPF Ordinary Account and just be content with receiving CPF Life payouts. At least they are also receiving rental income from their condominium in Johor Bahru. Coupled with my dad’s previous losses incurred from trading FX of about S$50,000, the total investment losses of about S$80,000 could have caused a serious retirement funding issue.

They got lucky it didn’t wipe them out. My dad had a decent career in China and tapped into the manufacturing boom then. Despite my mum being a housewife, sufficient retirement funds were set aside and locked up before my dad could cause permanent damage. Of course, I would still point out that they would have had higher cash payouts if not for these investment losses.

I know what you are going to say. It’s okay to make investment losses as long as you recover from them. But this is usually not the case when you are older than 55 and spent most of your career as a salaried employee. It’s much more difficult taking a financial hit and recovering from it at that age because you don’t have sufficient working years to earn it back via salary income. Let’s not forget the emotional toll such an event can cause on you.

Want to know what caused these problems for my family? There are 2 main factors. One of which is my dad’s lack of investing knowledge and aptitude. The other is the stock and FX trading courses he attended that made him believe he could actually make lots of money from practising skills and techniques in the field of financial analysis that he never had any interest in.

Watching your family get burnt from your dad continuing to engage in trading activities that are so destructive when not applied well due to a misplaced self-belief has a significant impact. It created a very biased view that I continue to have until now, which is that trading courses of any kind are a form of financial leaching. Designed to drain your money without every repaying you.

Not only are their initial costs high. There can be ongoing further development costs as well. Just imagine. Bad enough that they took your money without you have earned a single cent. If you made losses, you have to pay even more to get better so you can start making profits. The best revenue model for the trainer and the worst learning model for the student.

It doesn’t matter what your success rate is. People’s lives can get ruined when they fail. The thing is, not everyone is suited to become a trader. That’s just a fact of life. In fact, most people don’t have the temperament, ability and aptitude to apply the techniques and skills consistently to make money. An overload of investing knowledge is not going to make up for this.

This is especially true for the middle-aged group like my dad, where the failure rate becomes even higher. These people are the most vulnerable because they have the highest cash holdings, least investment time horizon, most financial commitments and have the highest retrenchment risk. They cannot afford to make investment losses but yet are the most motivated to make the whole thing work.

I know it’s unfair for me to say this and I’m sure there are exceptions to my rule. But it’s easy to show me and the world your success stories. How about you find out what happened to the failures of your courses and tell me what their lives are like now?

It’s no secret that we have a few SG ETFs Monthly Investment Plans (MIPs) via banks and their associated brokerage arms. We believe that automated investing is the way to go given our busy work and personal schedules that is only going to get more intense if we plan to have a kid next year.

Which is why we are sensitive to any changes to these MIPs. Whether they are initiated on our side (e.g. amending the monthly cash amounts to be invested) or on their side (e.g. changes to the cash withdrawal dates or purchase price methodology).

That’s how I noticed the recent update to the POSB Invest-Saver this month. For both the Singapore ETFs [i.e. Nikko AM SG STI ETF (G3B on SGX) and ABF SG Bond Index Fund (A35 on SGX)], the monthly debiting from the savings account is now on the 15th of every month. It would be the next business day if the 15th is a non-business day.

There is no change to the purchase price methodology – generally based on the average subscription price on the business day following the day the savings account is debited. This means my wife should be receiving the average price on the 16th of every month or on the relevant business day after that.

As such, S$200 was debited from my wife’s POSB eSavings account on Thurs 15 Jun 2017. We were expecting the purchases of Nikko AM SG STI ETF (G3B on SGX) and ABF SG Bond Index Fund (A35 on SGX)] to be made on Fri 16 Jun 2017 with the associated average prices. However, there has been no update on the Regular Savings Plan section of my wife’s internet banking account for these purchases as of today.

Given how the update is usually done by the next business day following the purchase date, it makes me wonder whether there are any issues from the latest update. We will have to continue monitoring this, which is annoying because the plan was to reduce manual intervention and oversight. Let’s hope it gets resolved soon.

Anyway, this got me thinking about the funds transfer mechanisms for Smartly and StashAway when we eventually set our robo-advisor portfolios up. I know the initial plan was to set the automated funds transfer on the same date, time and amount to Smartly and StashAway for comparison purposes. But that might be pointless since we will be sticking with both of them for a while and we will essentially be receiving the same purchase prices for the ETFs in these robo-advisor portfolios.

At this stage, our MIPs’ purchase dates are generally on the 8th, 16th and 22nd of every month if they are business days. They are spread out in the middle of the month about one week from each other. We might set the automated funds transfer amounts to Smartly and StashAway to be the same. However, maybe it might be better to have one of them at the start of the month and the other at the end of the month. That way, we are capturing the price actions almost every week without any need to vary the amounts. If necessary, we can inject more cash funds into the equity markets manually when there are dips and crashes without touching the automated investing components.

It’s good to plan ahead even though Smartly and StashAway have not launched yet. After all, it’s important to incorporate these robo-advisors into our asset portfolio in a long-term and sustainable manner. Depending on the user capability, appearance, ease of set up & use, my wife and I will choose one each. Can’t wait to compare the both of them!