DBS begins axing staff

Yes, it's not new news now.

DBS is axing 6% of their staff strength (about 900 employees) across their Singapore and Hong Kong operations (news article here).

Usually the end of the bear market is indicated by banks laying off staff. DBS is the first, and probably won't be the last.

STI has rallied, but no I don't imply that the end of the bear is here. The worst seems to be over though.

Discount price, anyone?

The adversity today is opportunity for you to create your wealth for tomorrow

Bull and bear markets are cyclical.

After the reign of the bull, the bear usurps his throne. After that, the bull pokes the bear's hairy butt off the pedestal with his horns again. The cycle continues.

I admit that I would be more cautious the next time I see paw tracks on the market. That could be another 10 years from today. I won't let so much money get lost again by taking defense when everything seems too good to be true. This is about overcoming the demon called greed.

Then again, I am now not going to deceive or be deceived that I don't already smell bull dung. Our good friend, Mr Moo, is already somewhere around the corner, plotting his return -- can't you smell him? This is about overcoming the demon called fear.

If you're not already on your way back in to the market, I hope that you are at least plotting it! If you don't want to invest a whole lump sum, there is always dollar cost averaging (another good article can be found here).

Know that opportunity loss is still loss, no matter how you choose to view it.

It may be better to postpone your plans

It is finally publicized today on the papers that the Integrated Resort (IR) at Marina Bay cannot be completed on time. I personally think it is a good idea for them.

On one hand, there are datelines to meet, on the other hand, I'd rather the dateline is not met than to have a shoddy completion. You don't want the floors to give way after you strike a winning-7 on your jackpot machine (I'm more concerned of the safety of the people. For the record, I am against gambling).

A few days ago, I was having a conversation with a client. He intended to purchase a flat in less than a year. Half a year ago, he invested his CPF money with an insurance agent (no, not me) expecting to grow his money to an amount that can help him pay the downpayment for his flat in a year's expectation.

He definitely didn't expect the market to take a turn down. As of today, he probably lost 40-50% of his investments. A few days ago, he asks me if he should terminate the policy.

I asked him if he does that, how does that help him with his goal in buying a house in less than a year. He suggested to me to help him set up a portfolio that can help reach that goal.

I had to tell him that's not gonna work.

A better idea is for him to keep his current investment, because even if he draws it out now, it doesn't help at all. I think he should calculate how much he really needs for the house, and try to work backwards how much he needs to put today, and how long it takes. He should work on the time frame and the contribution he needs to set aside to reach that amount, and decide if he will do that. He should consider to push his house purchase further away instead of rush in, only to end up in bigger debt, and tight cash flow.

While not everything should be delayed, some things that can be delayed, then it'd better be. Like the analogy of not having the floor in the IR to give way, you don't want your finances to give way just because you chose not to secure the foundations before inviting your guests (your family!) to come in.

I made this mistake myself years ago. I can vouch that postponement is usually the better option.

How are you feeling?

Seriously. How are you feeling about financial services?

The market is giving us all a huge whipping. AIG's recent drama left many insurance policyholders skeptical and worried of the stability of insurance companies. Mortgage giants like Freddie and Fannie, and huge financial institutions like Lehman Brothers, do prove that indeed there is no such thing as certainty of existence just because you are a big company, or backed by the government.

Indeed, how is this affecting you about financial planning? Is there no other way? Is hiding money in your Milo tin effective? Is inflation really an issue to you, or do you actually admit that you have no idea what it is about?

Yes, it's scary. I admit it. It is scary.

Do you still see light in the darkness? Please, I'd really like to know how you feel.

ETFs - something worth looking out for

Ever heard of ETF? It stands for Exchange Traded Fund (I won't be defining what it is here. Instead, you can read about it here).

I thought ETFs are extremely interesting because you trade them like a stock, but they aren't as exposed to risk because they are diversified. In comparison to unit trusts, ETFs are much easier to maintain and monitor, and the charges are extremely low.

While I would think that ETFs are best suited for DIY investors who will never employ the help of financial advisors, I also think that it is good to put a reasonable amount of your investments in it. Unless you completely don't want to monitor the markets, ETFs are cost-effective, and effective.

However, in our local market, the ETF market is not as established as the States. You won't get much variety for now, and chances are if you want to diversify on broader sectors and countries, you still need a larger portfolio of unit trusts. But do stay tuned, because it is very likely that when the investors market here are more receptive to ETFs, there will be more variety of this product. Unit trusts may not completely become the thing of the past, but it sure will see a great downsizing. I know I would do that to my own portfolio when the time comes.

For more about ETFs, I thought this article is a very good read.

For the current available ETFs in our Singapore market, you can take a look here.

The Great Sale

I don't know why it hasn't dawned on you yet. There is a great sale going on in the financial markets. Here's why:

1. STI is at least 50% lower than it usually was.
2. Unit trust funds are also at a price which brings envious investors who missed the boat, to hop right in again.
3. Financial institutions are bending their backs to come up with attractive financial products that they normally wouldn't bother when they are enjoying good times (eg: single premium endowments with bonus returns)

So long as the majority fails to realize that this is a sale, the price will remain low, and financial institutions will continue to do cartwheels. But one day they will realize it, and it's those bargain hunters who will have laughed to the bank way before.

If you're always waiting for Sheng Shiong and Harvey Norman to come up with a sale, what are you waiting for regarding this one?

Attempting to raise investors confidence

What encourages me is to see governments step in. The objective is to assure investors and to raise confidence in the market.

http://news.yahoo.com/s/afp/20081020/ts_afp/financebankingworld
Have you begun returning to the market yet?