Finance Smiths

Personal finance apprentices-in-training

Top up function available for DBS DigiPortfolio

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We got an email from DBS today about the top-up function being available for the DBS DigiPortfolio. The last time I wrote about my wife setting up her Asia and Global Portfolios, I expressed my disappointment at how she was unable to increase her investment in them by making contributions.

Instead, she would have to close her existing portfolios and open new portfolios. Which made no sense for this type of investment product. It’s about time this top-up function is made available for the DBS DigiPortfolio.

We logged into DBS Digibank online to play around with this feature. The top-up process for both the Asia and Global Portfolios is simple and straightforward. The email mentions it will take a few days for the respective ETFs to be purchased and reflected in her portfolios.

We are hoping this can be shortened to 1 day, at most 2 days. Otherwise, we have to take into account this lag to invest the transferred funds when she does make contributions. It’s not good for the processing time to be so long since you would want the funds invested once the markets open.

Anyway, we found out there seems to be no way to set up a regular funds transfer into the DBS DigiPortfolio. Which means an automated monthly investment plan into my wife’s Asia and Global Portfolios is out of the question for now.

We are hoping the top-up function can be further developed to allow for automated regular funds transfer into the DBS DigiPortfolio. In addition to being able to top-up whenever and however we like. The main thing is we don’t want to have to manually log into DBS Digibank online each time to do the top-up.

We want to be able to set up a regular investment plan with DBS DigiPortfolio. This forms the Dollar-Cost Averaging part of our investing strategy i.e. has no market timing element to it. Sure, when we see market dips or even crashes, we want the flexibility to manually transfer in larger sums of monies to be invested. But that’s for the Value-Cost Averaging part of our investing strategy i.e. has a market timing element to it.

While this is an improvement to DBS DigiPortfolio, we feel it still has a long way to go when compared to robo-advisors. It’s better than OCBC RoboInvest if it’s any consolation. But traditional banks continue to be slow-moving and inferior in terms of technological advancements of products and services they offer compared to the FinTech Companies.

My view continues to be that traditional banks have only been able to remain profitable because FinTech Companies have not been able to make inroads into core banking businesses. Which is about to change with the advent of Digital Banks. Eventually, our core banking businesses that generate the majority of the profits will come under attack. And traditional banks will be too slow to react – bogged down by legacy systems, people, processes and procedures.

Can’t imagine why people worry about whether Digital Banks will be profitable. There’s so much that can be scalped from the existing profits of traditional banks. If only you realise the amount of excess capacity we are carrying. The number of people that works there just collecting a salary and going through the motion every day. You will be shocked at how long we have been allowed to operate this way.

I am looking forward to the results of the MAS Digital Bank Licenses Applications. And I hope they get awarded soon so that the Digital Banks can start operations after that. I can’t wait to put my skill sets to the test to see whether they are actually value-adding or I have been doing nothing useful at all. If I get eliminated, it just means I’m one of those people and was unable to pivot in time. And I deserve that outcome. Exciting stuff to deal with in time.

Anyway, my wife has planned in the dates of her manual funds transfers into the DBS DigiPortfolio as part of her monthly investment plan. It’s going to be annoying for her to log into DBS DigiBank online each time to do it so I might help her with it. Fixed amounts on fixed dates to be executed manually. Sigh, can you find a way to automate this DBS?

We also adjusted some of our monthly investment plan automated contributions to weight out portfolios in accordance with our earning power. Since my wife earns more than me, her portfolio is weighted towards reinvestment of dividends/distributions i.e. more capital-growth focused. Since I earn less, my portfolio is weighted towards dividends/distributions payout i.e. more income focused. To compensate for my lower salary income. I wonder how will this work out.

Back from holiday and getting ready for work

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We got back yesterday from a 2-week trip to Croatia (Europe) and it was great! Haha, our last long holiday was a 1-week ski trip to Austria (Europe) several months ago in Feb 2018. Not counting our recent short long weekend trip to Langkawi (Malaysia) last month in Aug 2018. We have missed our long getaways to faraway cities and countries so it’s been really good to travel. Took an extra day off today to rest and recharge before heading back to work tomorrow.

Asset Portfolio

Had some time to look at how our asset portfolio has been performing. We have been gradually increasing our automated monthly investment amount in the past few months as the equity markets dipped due to the trade war unfolding. We have also been manually investing in Global ETFs on days when the equity markets dip is bigger but we have no automated investments happening.

From next month Oct 2018 onwards, about S$1,500 will be automatically invested in Singapore ETFs via bank monthly investment plans while S$1,500 will be automatically invested in Global ETFs via robo-advisors. Which reminds me about StashAway introducing its higher-risk portfolios last month in Aug 2018. We switched both our StashAway accounts to the highest-risk portfolio available and we are happier with the less conservative ETFs selection.

An issue we have always had since setting up our robo-advisor accounts is that our Smartly portfolios are more aggressive than our StashAway portfolios even at the highest risk ratings. They are more even now with the StashAway change and that’s a good thing. The Singapore ETFs automated investment portfolio produces cash dividends and the Global ETFs robo-advisors portfolio re-invests the dividends. We plan to hold them for a long time so it’s important we take on more risk to generate the higher returns.

Although the investment portfolio of our asset portfolio is growing nicely from the capital injections, the cash component has only increased slightly as we spent most of our recent monthly salaries on the Croatia (Europe) holiday, credit cards bills and investment & saving plans. With another upcoming trip planned for Sydney and Melbourne (Australia) in Nov 2018, we don’t expect the cash situation to improve until the end of the year. It’s bad not having leftover cash to spare so we are going to have to be more careful with our everyday spending.

Work

My wife just had her annual performance review this month in Sep 2018 and it went alright. It has not been a good year in terms of the bank’s revenues and continued restructuring is likely to have a negative impact on her remuneration outcome. We are expecting an average rating and hope it goes fine for her. We should find this out in the next few months and will provide an update from there.

More importantly, it looks like my wife might be okay to stay on in her current job role at the bank for now. The promotion and higher salary at the start of the year helps a lot but it’s starting to look like she might want to pursue another challenge in either a different job role or bank. She’s having a difficult time managing this want of hers versus her maybe needing more job stability as we are planning to have a kid next year.

It’s a tough balancing act even just preparing to have a kid and it will just get harder from here as we eventually make our transition into working parents. I reckon it will be a much bigger challenge for my wife as she struggles internally with accepting the limitations on her professional and social lives of going down this working mum route. It takes time and I have to be patient in supporting her transition.

While my job situation is perhaps more stable and uneventful, that presents its own set of issues. Being too safe can result in a boring work life and this gets to me over time. Which is starting to happen but I might also still be okay to stay on in my current job role at the bank for now. Sometimes, I wish we were more contented with what we have and achieved so far. Then I start to wonder whether it’s this desire for new experiences and excitement that drives us forward.

Investments for June 2018

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Automated Investing for June 2018: S$1,300

Maybank Kim Eng Monthly Investment Plan

  • Buy 27 units of SPDR STI ETF (SGX: ES3)
  • Buy 27 units of Nikko AM STI ETF (SGX: G3B)
  • Buy 96 units of Lion Phillip S REIT ETF (SGX: CLR)
  • Buy 88 units of Nikko AM REIT ETF (SGX: CFA)
  • Buy 67 units of Philip APAC REIT ETF (SGX: BYJ)

POSB Invest-Saver

  • Buy 28 units of Nikko AM STI ETF (SGX: G3B)
  • Buy 89 units of ABF SG Bond ETF (SGX: A35)

OCBC Blue Chip Investment Plan

  • Buy 175 units of Nikko AM STI ETF (SGX: G3B)

Manual Investing for June 2018: S$9,100

  • Buy 10 units of Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYD)
  • Buy 10 units of Vanguard FTSE Emerging Markets UCITS ETF (LSE: VDEM)
  • Buy 500 units of SPDR STI ETF (SGX: ES3)
  • Buy 200 units of Philip APAC REIT ETF (SGX: BYI)
  • Buy 500 units of Starhub (SGX: CC3)
  • Buy 400 units of M1 (SGX: B2F)
  • Buy 700 units of Singtel (SGX: Z74)
  • Buy 4,000 units of Astrea IV bonds (SGX: RMRB)

Robo-Advisor Investing for June 2018: S$1,600

StashAway

  • Funds transfer of S$800 invested in US-listed ETFs

Smartly

  • Funds transfer of S$800 invested in US-listed ETFs

Total Invested Amount for June 2018: S$12,000

With the drop in equity markets, I made manual investments in telecommunication stocks and ETFs. It was a good opportunity to use up some of my investment cash, which has been building up for a while now. I’m happy to take my time with its utilization though, not in any rush to get it invested. Patience is important because I want to take advantage and buy during the dips but not use up too much of my investment cash while waiting for the crashes.

I realise regular monthly investing helps to make me more patient since I don’t feel like I’m missing out on the price actions and market events. Just a matter of choosing which ones I want to participate in more. Like the one this month in June 2018. Equity markets (especially the developing economies) got spooked by trade-war fears and I was okay to take more long positions in ETFs. Same goes for telecommunication stocks with the entry of new competitors.

Our jobs are stabilising with each month and we now have the time to plan our holidays for the second half of the year. At this stage, it’s looking like Malaysia, Croatia, Australia and we hope to travel every 2 months. Maybe even a ski tip to France, Switzerland or Japan at the start of next year (Jan 2019) if we can find a way to make it happen.

To be honest, we are not expecting any promotions, decent increases in salaries or bonuses in our next performance review given how the year is going. It just seems to be more of a maintenance and adjustment year where we get used to the higher levels of workload, expectation, stress and pressure. I don’t think it’s time for us to start looking outside our current firms and job roles even though I am starting to see some movement as our colleagues leave for higher paying and level positions.

It’s nice to know the current employment market in our industry and field/sector is not too bad. Just wondering whether it’s time for us to start planning our exit strategies in case something happens. Start understanding our market values and which firms and areas we can go into from here.