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Thread: BOND THREAD

  1. #331
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    newbie in bonds wanna ask a simple question. assuming i dun have the 250k minimum to enter those elite bond market... say i wanna put some regular savings aside on a stable return.. monthly 1k, 5k or whatever. small numbers. this is as opposed to putting funds into FD. purely savings mode. not aggressive.

    which is the best route? are platforms such as fund supermart the right places to invest? i note that they actually have zero sales charge for some bonds. sounds very good, no costs. any hidden fine print? based on their recommended conservative portfolio, they actually give stable returns.

    No. of years | Returns
    01 | 11.4%
    03 | 5.2%
    05 | 3.2%
    10 | 4.0%

    say based on 10 year horizon, a return of 4%pa is really quite decent vs FD. please dun say vs equity or other aggressive instruments, which are different risk nature.

    and i am not private banking client, so i dun have access to atas instruments.

    how about if i have a FD which i wanna put for 1 yr? what are the risks of putting that money into bond instead, and earn 4%?

    i know between now and say 2015, it is quite safe to put in bonds. but say LIBOR goes up to 4% in 2015, where to put the $$$ to get the same safe returns?

  2. #332
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    Quote Originally Posted by Shanhz
    i know between now and say 2015, it is quite safe to put in bonds. but say LIBOR goes up to 4% in 2015, where to put the $$$ to get the same safe returns?
    is 4% too much?

    libor = related to interest rate?
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  3. #333
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    Quote Originally Posted by roly8
    is 4% too much?

    libor = related to interest rate?
    haha, bro, you confirm engineer or marketing person.. LIBOR in laymen term means base interest rate lah.. that is the cost that banks borrow from each other. then add on their own profit (the "spread") and lend to you at a higher rate. 4% is too much, actually long term average is 2.7% nia.

  4. #334
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    Quote Originally Posted by Shanhz
    newbie in bonds wanna ask a simple question. assuming i dun have the 250k minimum to enter those elite bond market... say i wanna put some regular savings aside on a stable return.. monthly 1k, 5k or whatever. small numbers. this is as opposed to putting funds into FD. purely savings mode. not aggressive.

    which is the best route? are platforms such as fund supermart the right places to invest? i note that they actually have zero sales charge for some bonds. sounds very good, no costs. any hidden fine print? based on their recommended conservative portfolio, they actually give stable returns.

    No. of years | Returns
    01 | 11.4%
    03 | 5.2%
    05 | 3.2%
    10 | 4.0%

    say based on 10 year horizon, a return of 4%pa is really quite decent vs FD. please dun say vs equity or other aggressive instruments, which are different risk nature.

    and i am not private banking client, so i dun have access to atas instruments.

    how about if i have a FD which i wanna put for 1 yr? what are the risks of putting that money into bond instead, and earn 4%?

    i know between now and say 2015, it is quite safe to put in bonds. but say LIBOR goes up to 4% in 2015, where to put the $$$ to get the same safe returns?
    Let me try to take on your question.

    Return on Bond : depends on type of bonds and leverage.

    Prudent and conservative bond investors : about 4-6%, investable grade without leverage. Focus is in this group.

    Moderate Risk taker : Like cbsh, investable grade, 50-60% leverage, this will give around 8% net

    Aggressive Risk taker : high yield grade bonds, with high leverage, the yield can be as high as 20% depends on the leverage level.

    There are bond funds in the market that did not have sales charge nor switching fee. There is no free lunch. The fee they earned is either in the spread or mgt fee. Spread is hidden to the buyers/sellers, and could be as high as 0.5%.

    U have $250,000 and not a private bank client, it is very difficult for u to get the bond during IPO time.

    So u have two options :
    1. Bond Fund / Unit Trust : like fund-supermarket
    2. buy over OTC for straight bond

    Buying investable grade straight bond at OTC, the premium is high. Can be as high as 6-8% depends on the dividend payment date.

    Some of the bond fund pays monthly, some quarterly, some don't pay at all.

    U can go for bond fund / unit trust thru' fund-supermarket. With $250,000 as investment, it is rather difficult for the banks to do for if u are not a private client. BTW, private clients also don't do $250,000, they do much bigger sum..

    My advice is, look at other instruments, there are some asset classes better than bonds if you are not aggressive in bonds and no leverage. Please do your homework on this aspect.


    Hope above help

    BTW, we use SIBOR here and not LIBOR
    Last edited by Laguna; 20-12-12 at 19:31.

  5. #335
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    Quote Originally Posted by Laguna
    My advice is, look at other instruments, there are some asset classes better than bonds if you are not aggressive in bonds and no leverage. Please do your homework on this aspect.



    BTW, we use SIBOR here and not LIBOR
    thanks for the great info. what other asset classes do you recommend, with similar risk structure as bonds?

    oh yah... should have mentioned SIBOR. but at the back of my mind, when LIBOR goes up, SIBOR will follow.

  6. #336
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    It depend on your individual risk profile. My friend has invested his parent $250k in Capland convertible last year Aug11. It yield to maturity est 4% . FYI, capland is NOT RATED. Better than 0.75% in the FD. I suggest you buy "THE EDGE magazine" as it has a list of SG coporate bond in the market.


    If U are willing to take abit of risk. There is a Chinese developer SHUI ON SG bond. It pay U 8% every year & mature in Jan 2015. I think the price to buy is 104 (pls check with 2 sources). Your yield to maturity is est 5.9%.. It is also NOT RATED . Std chart was the underwriter for SHUI ON last year & they give 40% LTV.


    UOB recommends emerging mkt unit trust bond. According to them, the return is 5-7%. I believe SHUI ON is one of the portfolio.

    No calculate risk, no gain. Pls take note that this is not a recommendation.

    rdgs,
    Vic

  7. #337
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    Quote Originally Posted by Shanhz
    thanks for the great info. what other asset classes do you recommend, with similar risk structure as bonds?
    Now, I don't give calls unless itchy hands.

    what about u do some research first, and present your findings.

    Be self sufficient and don't count on others.

  8. #338
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    http://us1.campaign-archive1.com/?u=...2&e=0a767f9f5c

    5 things you need to know about Bonds – and why they are like Parma Ham
    Published 23/12/2012


  9. #339
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    Quote Originally Posted by Arcachon
    http://us1.campaign-archive1.com/?u=...2&e=0a767f9f5c

    5 things you need to know about Bonds – and why they are like Parma Ham
    Published 23/12/2012

    thx for sharing.
    I took the road less traveled by, and that has made all the difference.” - Robert Frost quotes (American poet, 1874-1963)

  10. #340
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    Property is good for long term investment. But timing & location (MRT & Good school etc) must be right. If U are those "marginal buyers" property investors who invested in Property in late 2011/12. It is not easy to hedge against inflation in the next 10 yrs as you are buying at HIGH price. You may have a negative return after paying high property tax , high maintenace fee , hgh reno fee , high PUB bill , high mortgage fee later on etc etc.


    A real property investor main is to buy a property with the intention of earning a return on the investment (purchase), either through rent (income), the future resale of the property, or both. If rental income will be weak (esp bad location) due to over supply in 2015 & property appreciation (CMs) will not be enough to hedge against inflation. Marginal buyers should hv not invested at all. Furthermore, Marginal buyers normally chose a location who is affordable (cheap) to them but location is not good.

    Marginal buyers should look into Reit , Bond unit trust / individual bond ,stock with consistent dividend payout like singtel. DONT EVER TOUCH PENNY STOCK if you want to be a winner against inflation. Dont think 200k to 300k cash avail can invest in property. Job sercurities is not perpetual & One big illness can easy cost you $100k within a year. Unless U are wise enough to buy insurance.



    I hv no knowledge in bond investing b4 2010. I start to find more about bond to hv alternative investing. Pls take note that I am just sharing what can be done for you with cash 100k to 300k avail to fit you with a alternative investing.


    Evergrande (LTV40%) CNY 1.5m. Coupon int.7.5% (S$22k/yr) bought@97. Price now@101


    Citi pacific perp (LTV 60%) US$200k Coupon int.7.875% (S$19.5k/yr) [email protected]. Price [email protected]


    Shui ON Sing bond (LTV 50%) Due 2015 S$250k. Coupon int. 8% (S$20k/yr). Bought@100. Price now@104.


    Central china real estate Sing Bond (LTV 50%) S$250k. Coupon int.10.75% (26.8k/yr) [email protected]. Price now@108.


    Petra food Sing Bond (LTV70%) DUE 2016 S$250k. Coupon int 5% ($12.5k/yr) . Bought@100. Price now@100.


    Hut Whampoa (LTV 60%) Due 2017. US$100k. Coupon int 6%. (S$15k/yr)
    Bought@100. Price now @107.


    Cheung Kong perp LTV60% US$100k. Coupon int.6.625% (S$8k/yr).
    Bought@94. Price now @101.


    Banyan Tree (LTV 60%) S$250k. Coupon int 6.25% (S$15.6k/yr)
    Bought@100. Price now @103.


    Lippomall (LTV70%) S$500k. Coupon int.5.875% ($29k/yr)
    Bought@100. Price now@105.


    ABN bank (LTV55%) US$300k. Coupon int.6% (S$22k/yr).
    Bought@100. Price now@107.


    Olam (LTV55%) US$200k Coupon 5.75% (S$S$11k/yr)
    Bought@100. Price now@95.

    etc etc etc

    Pls take note that half of my bond holdings is borrowed from bank @1.06% preferred rate. Usual rate is 1.38% (early 2012 was 0.95%) for USD & SG. Will slowly leveraging in 2014 my bond holdings. Pls buy "THE EDGE MAGAZINE". It has a list of SG corp bond with price & maturity date. Just be patience to wait for mkt to hv a big deep & buy GOOD SG bond if U a low risk profile investor.



    rgs,
    Vic

  11. #341
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    Fortunately I bought something else other than Olam 1.5 years ago.

  12. #342
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    Vic
    Thanks a lot for the sharing.
    Hope the newbie can learn more from you.

  13. #343
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    I am a small timer and i prefer to buy in small tranche. So i only left with retail bonds, bank preference shares, high dividend blue chips and high yield unit trust/fund.

    Did i left out anything for small time investors looking for yield?

  14. #344
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    Quote Originally Posted by Rosy
    I am a small timer and i prefer to buy in small tranche. So i only left with retail bonds, bank preference shares, high dividend blue chips and high yield unit trust/fund.

    Did i left out anything for small time investors looking for yield?
    Your profile looks great....

  15. #345
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    Bond is in greed and delusion phase, I predict next crisis will be bonds as now Cm7 stops prop fever already
    Ride at your own risk !!!

  16. #346
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    Quote Originally Posted by phantom_opera
    Bond is in greed and delusion phase, I predict next crisis will be bonds as now Cm7 stops prop fever already
    I cannot link CM7 to Bond, are u referring to straight bonds
    please enlighten

  17. #347
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    Quote Originally Posted by Laguna
    I cannot link CM7 to Bond, are u referring to straight bonds
    please enlighten
    Private banks are now packaging retail corp bonds and at lower and lower yields
    Also MErger and acquisition will be common growth strategy going forward, Corp bond issuance at record low yield to retail investors will be game of 2013
    Hot money from prop market will flow into corp bonds
    Ride at your own risk !!!

  18. #348
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    How about those bonds with Temasek as a relatively large shareholder like GLP and Capitaland?
    Quote Originally Posted by phantom_opera
    Private banks are now packaging retail corp bonds and at lower and lower yields
    Also MErger and acquisition will be common growth strategy going forward, Corp bond issuance at record low yield to retail investors will be game of 2013
    Hot money from prop market will flow into corp bonds

  19. #349
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    Quote Originally Posted by DC33_2008
    How about those bonds with Temasek as a relatively large shareholder like GLP and Capitaland?
    if you bought long ago it is pretty safe ... now hard to say for anything beyond 5y ... Genting perpetual already hit beyond 1.04x .... annual return if bought during IPO or at $1 is 5.125 + 4 = 9% ... this is without leverage
    Ride at your own risk !!!

  20. #350
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    I have bought them in $250k lot few years ago.
    Quote Originally Posted by phantom_opera
    if you bought long ago it is pretty safe ... now hard to say ... Genting perpetual already hit beyond 1.04x .... annual return if bought during IPO or at $1 is 5.125 + 4 = 9% ... this is without leverage

  21. #351
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    Quote Originally Posted by DC33_2008
    I have bought them in $250k lot few years ago.
    then u might want to consider selling it for capital appreciation in 2013
    Ride at your own risk !!!

  22. #352
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    They have gained quite a bit. Do you mean it will drop soon? Do you know about EastSpring Monthly Payment "M - Class". Bought with averaging at 0.96 and now has gone to 1.055. Payout is 5%. Have also bought in $250k block. Can hold?
    Quote Originally Posted by phantom_opera
    then u might want to consider selling it for capital appreciation in 2013

  23. #353
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    Quote Originally Posted by DC33_2008
    They have gained quite a bit. Do you mean it will drop soon? Do you know about EastSpring Monthly Payment "M - Class". Bought with averaging at 0.96 and now has gone to 1.055. Payout is 5%. Have also bought in $250k block. Can hold?
    you will need to calculate your annual return (yield + cap appreciation) since your purchase to decide .. of course if it is about to mature then just hold loh
    Ride at your own risk !!!

  24. #354
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    Quote Originally Posted by phantom_opera
    you will need to calculate your annual return (yield + cap appreciation) since your purchase to decide .. of course if it is about to mature then just hold loh
    That is a high yield fund.

  25. #355
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    Quote Originally Posted by DC33_2008
    They have gained quite a bit. Do you mean it will drop soon? Do you know about EastSpring Monthly Payment "M - Class". Bought with averaging at 0.96 and now has gone to 1.055. Payout is 5%. Have also bought in $250k block. Can hold?
    U do not have to buy or sell this fund in block right?

    I am also thinking of selling this fund partially to fund other purchases.

  26. #356
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    My PB ask me to request for lower commission. Have been buying in block of $250k.
    Quote Originally Posted by Rosy
    U do not have to buy or sell this fund in block right?

    I am also thinking of selling this fund partially to fund other purchases.

  27. #357
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    Quote Originally Posted by DC33_2008
    My PB ask me to request for lower commission. Have been buying in block of $250k.
    No sales charge to sell right?

    I am able to sell in small amount as and when i want it via online fund house.

  28. #358
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    No sale charge.
    Quote Originally Posted by Rosy
    No sales charge to sell right?

    I am able to sell in small amount as and when i want it via online fund house.

  29. #359
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    Quote Originally Posted by cbsh38584
    Property is good for long term investment. But timing & location (MRT & Good school etc) must be right. If U are those "marginal buyers" property investors who invested in Property in late 2011/12. It is not easy to hedge against inflation in the next 10 yrs as you are buying at HIGH price. You may have a negative return after paying high property tax , high maintenace fee , hgh reno fee , high PUB bill , high mortgage fee later on etc etc.


    A real property investor main is to buy a property with the intention of earning a return on the investment (purchase), either through rent (income), the future resale of the property, or both. If rental income will be weak (esp bad location) due to over supply in 2015 & property appreciation (CMs) will not be enough to hedge against inflation. Marginal buyers should hv not invested at all. Furthermore, Marginal buyers normally chose a location who is affordable (cheap) to them but location is not good.

    Marginal buyers should look into Reit , Bond unit trust / individual bond ,stock with consistent dividend payout like singtel. DONT EVER TOUCH PENNY STOCK if you want to be a winner against inflation. Dont think 200k to 300k cash avail can invest in property. Job sercurities is not perpetual & One big illness can easy cost you $100k within a year. Unless U are wise enough to buy insurance.



    I hv no knowledge in bond investing b4 2010. I start to find more about bond to hv alternative investing. Pls take note that I am just sharing what can be done for you with cash 100k to 300k avail to fit you with a alternative investing.


    Evergrande (LTV40%) CNY 1.5m. Coupon int.7.5% (S$22k/yr) bought@97. Price now@101


    Citi pacific perp (LTV 60%) US$200k Coupon int.7.875% (S$19.5k/yr) [email protected]. Price [email protected]


    Shui ON Sing bond (LTV 50%) Due 2015 S$250k. Coupon int. 8% (S$20k/yr). Bought@100. Price now@104.


    Central china real estate Sing Bond (LTV 50%) S$250k. Coupon int.10.75% (26.8k/yr) [email protected]. Price now@108.


    Petra food Sing Bond (LTV70%) DUE 2016 S$250k. Coupon int 5% ($12.5k/yr) . Bought@100. Price now@100.


    Hut Whampoa (LTV 60%) Due 2017. US$100k. Coupon int 6%. (S$15k/yr)
    Bought@100. Price now @107.


    Cheung Kong perp LTV60% US$100k. Coupon int.6.625% (S$8k/yr).
    Bought@94. Price now @101.


    Banyan Tree (LTV 60%) S$250k. Coupon int 6.25% (S$15.6k/yr)
    Bought@100. Price now @103.


    Lippomall (LTV70%) S$500k. Coupon int.5.875% ($29k/yr)
    Bought@100. Price now@105.


    ABN bank (LTV55%) US$300k. Coupon int.6% (S$22k/yr).
    Bought@100. Price now@107.


    Olam (LTV55%) US$200k Coupon 5.75% (S$S$11k/yr)
    Bought@100. Price now@95.

    etc etc etc

    Pls take note that half of my bond holdings is borrowed from bank @1.06% preferred rate. Usual rate is 1.38% (early 2012 was 0.95%) for USD & SG. Will slowly leveraging in 2014 my bond holdings. Pls buy "THE EDGE MAGAZINE". It has a list of SG corp bond with price & maturity date. Just be patience to wait for mkt to hv a big deep & buy GOOD SG bond if U a low risk profile investor.



    rgs,
    Vic

    If U buy a short dated STRAIGHT bond mature in 2015 giving yield 4-5%, U should be fine even there interest rate goes up to 3% by 2015. But 3% interest rate rise is unlikely.

    But be careful on Perpetual bond which offer lower yield 4% like Sing Post. Pls do not leverage if U just want to PARK your money to match inflation.

    But now, the new BOND issue coupon is very low. India largest bank ICICB SG bond 3.65% 7 yrs. Just be patience to wait for deep mkt correction if U just want to have a safe & low volatilty place to park your money in bond.

    A moderate risk investors should look in Dividend stock & Reit. Again be patience if U want to buy at LOW FLOOR. It will definitely come. If big correction come, make sure U have already do all your homework & are emotionally prepare to buy.



    rdgs,
    Vic

  30. #360
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    Quote Originally Posted by cbsh38584
    If U buy a short dated STRAIGHT bond mature in 2015 giving yield 4-5%, U should be fine even there interest rate goes up to 3% by 2015. But 3% interest rate rise is unlikely.

    But be careful on Perpetual bond which offer lower yield 4% like Sing Post. Pls do not leverage if U just want to PARK your money to match inflation.

    But now, the new BOND issue coupon is very low. India largest bank ICICB SG bond 3.65% 7 yrs. Just be patience to wait for deep mkt correction if U just want to have a safe & low volatilty place to park your money in bond.

    A moderate risk investors should look in Dividend stock & Reit. Again be patience if U want to buy at LOW FLOOR. It will definitely come. If big correction come, make sure U have already do all your homework & are emotionally prepare to buy.



    rdgs,
    Vic
    I like your last paragraph.
    Thank you all for sharing.
    I am totally new so I don't dare jump into something that I am not familiar with.
    I have been studying reits one by one.
    It is so energy consuming as I have no financial background at all.

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