Finance Smiths

Personal finance apprentices-in-training

Considering signing up with Tiger Brokers because of StocksCafe

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Recently, my wife and I have been considering whether to go back to the office to work for 1 or 2 days a week. We are still in the full work from home arrangement so it’s up to us whether we want to work in the office for a bit every week. We are undecided on this but it’s getting more difficult for us to focus at home on work. While we appreciate spending more time with the baby, he’s growing up and becoming more demanding and active. It has made us miss the social interactions and alone time in the office. Now that more of our colleagues are starting to return to the office, we may just head back to maintain our work-life balance.

Anyway, I was reading up on this collaboration between StocksCafe and Tiger Brokers. In summary, if I sign up with Tiger Brokers using the StocksCafe link and fund my account, I can get 1 year Friend of StocksCafe for every S$300 that I pay in fees. Since I have been thinking about setting up a separate trading account for US stocks that has a better user interface and lower commission fees, this came at the right time. As a limited time offer, if I open and fund the Tiger Brokers account before 30 Sep 2020, I can get the 1 year Friend of StocksCafe immediately without having to pay the S$300 in fees. I’m still considering this because I don’t want to have too many trading accounts, which makes it difficult to monitor our stock positions. But it’s a good deal since I use StocksCafe to do the entire portfolio tracking.

Missing the boat on technology stocks and cryptos

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We are back at working from home and it has been a busy time as we got back into the swing of things. With each week, it has become clear that the ongoing major restructuring at my wife’s bank is turning into a marathon instead of a sprint. Since the process is done in waves from top to bottom, the situation changes and new information surfaces about available roles as the appointments get confirmed. It’s tiring for her to have so much work going on while being unsure about whether she would still have a job at the end of this. Job uncertainty in the midst of a recession can be draining and exhausting.

There’s not much I can do except to discuss and strategise with my wife. It can be difficult to maintain a clear state of mind on the options ahead of her when she’s getting overwhelmed with daily work. While I may not understand the specifics of the various factors and their interaction, I help by going through the next steps with her in detail. So she knows what to do when the time comes and not miss crucial milestones and important points of consideration. It helps her to know she’s not alone in this and has my support.

As the baby gets older, he becomes louder and more demanding in terms of time and attention. He’s sleeping less during the day and is more active now. By diverting more time to my family, I had to spend less time at my job while ensuring stuff still gets done. Not an easy thing to do as things are already starting to fall through the cracks on my end. It’s like a balancing act with my priorities between what I must do, what I have to do, what would be good for me to do and what I can get away with not doing. I’m forced to be more efficient and effective with my time. Otherwise, I will have no time to myself for what I want to do.

My window of alone time is at night when my family goes to sleep. I stay up later to squeeze this time out for myself. I usually watch shows, read & write stuff and just enjoy the peace & quiet. I also self-evaluate on what I can improve on in the way I do things. This can be related to personal, family, professional and financial matters. As I assess our investment performance for the year, the shortcomings and weaknesses of our investing strategies start to surface. Every crisis teaches me something about what I lack and need to get better at. During the pandemic crisis earlier in the year, I invested larger sums of money into local and global ETFs as the markets crashed.

I may have improved on my position sizing and timing this time around compared to the previous crises. But my Dollar-Cost Averaging investing strategy after that without any manual lump sum investing resulted in me missing out on the subsequent recovery. I wasn’t sure the markets could recover so quickly and didn’t invest as much as I could have. More importantly, I missed out on the big bull run on technology stocks and cryptos by not understanding the investing trends at that time. The consequences of massive quantitative easing, low interest rates and the push into digitalisation.

I had some exposure to technology stocks via the US ETFs I was investing in and no exposure to cryptos. To be honest, these are not my areas of strengths to analyse and I have stayed away mostly from my lack of knowledge. And I paid the price for losing out on their outperformance and gains compared to every other industry sector stocks and asset class. So I have to learn from my mistakes and do something about this going forward. I have already missed the boat on technology stocks and cryptos this time around. Making a big lump sum investment now into them without any understanding just so that I don’t feel like I’m missing out is likely to be another mistake.

I can’t make up for lost gains when I have already lost the opportunity to do so. It’s due to my own laziness and ignorance, which can be painful to admit. So I have to be humble, take away my learning lessons and look inward to understand how I can get better. As I slowly gain more knowledge about technology stocks and cryptos, I have also gradually adjusted my asset allocation to increase my exposure to them. I’m not in any rush because I don’t want to get caught in the tail end of the big bull run. Conversely, I also don’t want to miss out any more if it continues. But I’m not going to jump into it without first learning more about them. I have to be patient and wait for the next opportunity to go for the bigger gains. There’s still time for me to work it out as long as I stay invested, focus on improving myself and keep moving forward.

Should we still buy the STI ETFs?

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My wife is finally on leave the same time as me and we are taking a much needed break from work this week. She had to dial into some conference calls conveying more information on the ongoing major restructuring at her workplace. There are some new developments that may benefit her but it’s still too early to tell at this stage. Only time will reveal whether she has played her cards right in such a high risk game. This is going to be a long and exhausting battle of survival so she needs to rest and recharge whenever she can.

We have been meeting up with friends & family, running errands, going out as a couple & family, spending time alone doing our own stuff. While making sure we leave ourselves with plenty of time to rest at home as well. It’s not about being productive in what we do when we are on leave but allowing us to take our minds off work and focus on other things. We enjoy aspects of our jobs but they can be overwhelming at times. Too much of anything is bad and it’s all about balance in life. That’s what we keep trying to maintain.

Anyway, I usually start off with a personal update before moving onto the subject matter at hand. After all, it’s a personal finance blog and I like writing down my thoughts and feelings here. I decided to write about this topic because I have been asking myself these questions recently. Should we continue to buy the STI ETFs even though their returns are bad? Or should we divert the associated cash funds (via automatic monthly investment plans and manual trades) into global ETFs that provide higher returns?

When I look at the performance of our portfolio on StocksCafe, it’s obvious that our global ETFs investments are doing much better than our STI ETFs investments. The global economic downturn caused by the Covid-19 pandemic resulted in weak external and domestic demand for goods and services. Given how dependent Singapore is on world trade, this bad performance of the STI ETFs makes sense as it enters into its worse recession since independence. In any major crisis, the biggest worry is whether we are on the right or wrong side of the resulting economic structural changes that occur.

It is unlikely that the world will return to what life was like pre-Covid-19. The same goes for Singapore and the question is whether it can build a new economy in time. After all, the industries that make up our current economy are heavily weighted to the past. I think some of them would recover and thrive in the future. Others could recover but only to survive. While the remaining ones may never recover. The issue is whether Singapore can develop new sectors fast enough to replace those industries whose declines were accelerated by Covid-19.

Our investment strategy involves buying more of the underperforming ETFs. But this only works out if it eventually outpeforms. And this depends on whether the underlying stocks/companies can recover and perform well or get replaced by better performing ones in the future. The global ETFs are more diversified so this is less of a concern. But the STI ETFs are less diversified so this is more of a concern. While it’s still too early to make a call on this, we will be monitoring it closely going forward. If we find that there’s a high chance this underperformance of STI ETFs could be permanent, we will start reducing our monthly cash funds Dollar-Cost Averaging allocation to them in favour of global ETFs.