My friend told me that the Chinese newspaper publised complaints from several investors about the poor return from the Swing Fund. They earned a miserable return of about 2% after investing for 5 years, or 0.4% per year.
They were promised a product that guaranteed no loss of capital. They were told to expect a better return if the stockmarket did well. In fact, the formula is based on the return from 15 selected stocks.
During the past 5 years, the global stockmarket must have increased by at least 50%. The Singapore stockmarket increased by more than 100%.
In spite of this unusually favourable climate, the investors of the Swing Fund get a poor return of 2%. No wonder, they are very unhappy.
Lesson: Do not invest in complicated financial products that are based on a formula that gives you the worst of a number of selected stocks. One of them will perform badly, and the investor will lose out.
Lesson: Do not trust these products, even if they are marketing by respected banks.
Monday, June 11, 2007
Expensive to stay in Daydream Island
Dear Mr Tan
I checked the internet and found that it cost AUD 400 to book a hotel room at Daydream Island, Australia. You must be quite rich to be able to afford a holiday there.
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REPLY:
You should be able to get a lower rate or good discount, if you book through a travel agent or go as part of a larger group. The conference organiser was able to get a special rate of AUD 220 per room.
In my case, the air fare and accommodation are paid by the organiser, who invited me to speak at the conference. Otherwise, it can be quite costly, even for me.
I normally prefer to have a holiday in the nearby countries, i.e. Malaysia, Indonesia, Thailand or China. It is more affordable and the food is good. The weather is also warmer.
I checked the internet and found that it cost AUD 400 to book a hotel room at Daydream Island, Australia. You must be quite rich to be able to afford a holiday there.
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REPLY:
You should be able to get a lower rate or good discount, if you book through a travel agent or go as part of a larger group. The conference organiser was able to get a special rate of AUD 220 per room.
In my case, the air fare and accommodation are paid by the organiser, who invited me to speak at the conference. Otherwise, it can be quite costly, even for me.
I normally prefer to have a holiday in the nearby countries, i.e. Malaysia, Indonesia, Thailand or China. It is more affordable and the food is good. The weather is also warmer.
Taxi from Airport
I arrived at 6 am this morning and took a taxi to my home.
The taxi driver told me that he waited 1 1/2 hours at the airport before getting a passenger (me).
My wife remarked that the taxi queue at the airport could stretch for a long distance. If the taxi driver had to wait for more than 1 hour and get a passenger who travels a short distance, the taxi driver can be quite angry.
In my case, I had to travel quite far, so the taxi driver was happy.
It seems to be quite wasteful for a taxi driver to wait so long for a passenger at the airport. We need to make our taxi service more efficient and less wasteful.
The taxi driver told me that he waited 1 1/2 hours at the airport before getting a passenger (me).
My wife remarked that the taxi queue at the airport could stretch for a long distance. If the taxi driver had to wait for more than 1 hour and get a passenger who travels a short distance, the taxi driver can be quite angry.
In my case, I had to travel quite far, so the taxi driver was happy.
It seems to be quite wasteful for a taxi driver to wait so long for a passenger at the airport. We need to make our taxi service more efficient and less wasteful.
Lower return from Money Market fund
Hi Mr Tan,
The price of the money market fund of NTUC Income has been stagnant at $1.065 for the past 13 days. It seems this is the longest period of being stagnant since the past few months. Will this be the start of trend for the future and hence reduced return?
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REPLY FROM NTUC INCOME:
The inter-bank interest rate has come down during the past week. The current rate is around 2.2% p.a.
The unit price of the money market fund has stayed at $1.065 price stayed for 13 days. It has since moved to $1.066 on 5 June 07.
Based on the price movement, the fund provides a reasonable good return without any locked-in period.
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REPLY FROM TAN KIN LIAN
I am still keeping my personal savings in the money market fund. Although the return has fallen to about 2.2%, it is still better than fixed deposit rate (which has fallen as well).
The price of the money market fund of NTUC Income has been stagnant at $1.065 for the past 13 days. It seems this is the longest period of being stagnant since the past few months. Will this be the start of trend for the future and hence reduced return?
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REPLY FROM NTUC INCOME:
The inter-bank interest rate has come down during the past week. The current rate is around 2.2% p.a.
The unit price of the money market fund has stayed at $1.065 price stayed for 13 days. It has since moved to $1.066 on 5 June 07.
Based on the price movement, the fund provides a reasonable good return without any locked-in period.
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REPLY FROM TAN KIN LIAN
I am still keeping my personal savings in the money market fund. Although the return has fallen to about 2.2%, it is still better than fixed deposit rate (which has fallen as well).
Poor return on Whole Life policy
Dear Mr Tan,
I am currently 28yrs old. I have a wholelife policy which I believe give me a poor return.
Sum assured $40,000
Annual premium $694 /yr
Policy inception: Dec 1993, paid 13 yrs of premium already
Surrender value now: $7,500
Should I surrender the policy and invest in stocks, ETFs when the stock market corrects?
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REPLY:
The cash value now is less than the total premiums paid for 13 years. The return has been unsatisfactory. Most policies should have provided a positive return after 10 years.
I suggest that you should ask the company to give you a projection of the cash value in 10 years time. This will help you to decide if you should keep the policy for the next 10 years, or to move to another investment.
I am currently 28yrs old. I have a wholelife policy which I believe give me a poor return.
Sum assured $40,000
Annual premium $694 /yr
Policy inception: Dec 1993, paid 13 yrs of premium already
Surrender value now: $7,500
Should I surrender the policy and invest in stocks, ETFs when the stock market corrects?
-----------------------
REPLY:
The cash value now is less than the total premiums paid for 13 years. The return has been unsatisfactory. Most policies should have provided a positive return after 10 years.
I suggest that you should ask the company to give you a projection of the cash value in 10 years time. This will help you to decide if you should keep the policy for the next 10 years, or to move to another investment.
Poor connection to Singapore
I flew by Jetstar from Hamilton Island to Brisbane, arriving at 2 pm. My connecting flight was by Singapore Airlines at midnight.
Originally, I wanted to check my bags through to Singapore, so that I could spend the afternoon visiting Brisbane downtown.
Jetstar was not able to check my bags through to Singapore. I had to retrieve by bags from the domestic airport and take a train to the international airport in Brisbane.
The check-in counter for Singapore Airlines opened at 9 pm. Brisbane Airport does not have any facility to store my two big bags. I had to bring them down to Brisbane downtown to store my bags.
It was a big hassle. I cancelled my trip to the Brisbane downtown.
If I had flown Virgin Blue, instead of Jetstar, I would have been able to check my bags through to Singapore. They have a connecting arrangement with Singapore Airlines.
Lesson: Buy your tickets from the airlines that have a connecting arrangement. Do not buy them independently.
Originally, I wanted to check my bags through to Singapore, so that I could spend the afternoon visiting Brisbane downtown.
Jetstar was not able to check my bags through to Singapore. I had to retrieve by bags from the domestic airport and take a train to the international airport in Brisbane.
The check-in counter for Singapore Airlines opened at 9 pm. Brisbane Airport does not have any facility to store my two big bags. I had to bring them down to Brisbane downtown to store my bags.
It was a big hassle. I cancelled my trip to the Brisbane downtown.
If I had flown Virgin Blue, instead of Jetstar, I would have been able to check my bags through to Singapore. They have a connecting arrangement with Singapore Airlines.
Lesson: Buy your tickets from the airlines that have a connecting arrangement. Do not buy them independently.
Bringng up Vera
My daughter Su Ling shares her joy and experience in bringing up Vera in her blog. Her tips and insights are valuable to mothers and fathers of new born babies.
Vera has a happy and sweet smile. Everyone likes her.
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