STI ETF a.k.a. SPDR Straits Times Index ETF

(31-03-2014, 10:56 AM)Art or Science Wrote: Much to learn as I've just started investing.

Looking at your previous posts, it seems that
1) you want to invest
2) you are looking at DBS vs OCBC (i.e. banking stocks)
3) you are not sure about valuation etc.

Perhaps the better thing to do is just to buy the STI ETF.

Generally, if you buy $1 of the STI, you are buying (off the back of my mind)
30+c of banks (i.e. DBS/OCBC/UOB),
10c of telcos (starhub, singtel),
15c of the Jardine Group,
15c of properties (CapitaLand, Global Logistics, CDL etc),
5c of Commodities (Olam, Noble etc)
and 20c of others (SPH, SIA Engine etc)

Felix has pointed out the the banks normally trade at roughly the same PE as the STI. This is not a coincidence but largely because of the fact that the banks occupy so much of the STI.

I will think if you like the banks, want exposure to the sector and not sure what you are doing, then the STI might be a better bet - you get roughly 40% exposure for each $1 placed and it comes with better diversification.

(31-03-2014, 11:31 AM)AlphaQuant Wrote:

(31-03-2014, 10:56 AM)Art or Science Wrote: Much to learn as I've just started investing.

Looking at your previous posts, it seems that
1) you want to invest
2) you are looking at DBS vs OCBC (i.e. banking stocks)
3) you are not sure about valuation etc.

Perhaps the better thing to do is just to buy the STI ETF.

Generally, if you buy $1 of the STI, you are buying (off the back of my mind)
30+c of banks (i.e. DBS/OCBC/UOB),
10c of telcos (starhub, singtel),
15c of the Jardine Group,
15c of properties (CapitaLand, Global Logistics, CDL etc),
5c of Commodities (Olam, Noble etc)
and 20c of others (SPH, SIA Engine etc)

Felix has pointed out the the banks normally trade at roughly the same PE as the STI. This is not a coincidence but largely because of the fact that the banks occupy so much of the STI.

I will think if you like the banks, want exposure to the sector and not sure what you are doing, then the STI might be a better bet - you get roughly 40% exposure for each $1 placed and it comes with better diversification.

Hi AlphaQuant,

Thanks for the information. Really appreciate the advice.

Actually, I started buying STI ETF not too long ago via Philips SBP plan - for long term investing. Hope dollar averaging will work. So long as I am not averaging down - fingers crossed (There was a study by Vanguard.)

I've also been reading quite a bit (books by Benjamin graham, Peter lynch and John Neff). Each has their own philosophy and merits.. And I'm just starting to 'find my feet' and gauge which investing method suits me best whilst I invest in SBP plan..

Much to learn and apply.

Thanks once again!

If we buy an ETF or Index Fund do we have to worry about "when to buy"?
That's Pyramid down or up, which is a better strategy?
For me, i would like to take that into account too--Just like buying individual stock now.

Some gurus think when you buy is more important then what you buy.
i tend to agree. It's not necessary talking about B/B market timing. It can be about when you buy a stock, the market has valued it more than it's current intrinsic value already... No more juice left even if you squeeze.

think that the top holdings are banks and what will happen when the interest spread increases. gonna do them good.

usualy if you put your money in an sti etf, its gonna be passive

most investors can't beat the index, so might as well constantly invest in the index ^^

Hi Guys,

I'm not sure where to put this question, but since it's more related to the index fund I will put it here.

I have been vested in the SPDR STI etf for a year plus ( not too long ). What my concern is the averaging down part. Let's say I decided to avg down at every 10% drop, should I base this 10% drop on my etf average price? Or should I base this 10% drop base on STI highest point or yearly drop?

The main idea of indexing is to have a constant investment program regardless of the market.
Nevertheless, STI ETF will just have swimmed along with the market's conditions. In fact it represents the market.
Therefore even if i index ETF, i will consider "Timing"(aka averaging) too.
But how to average--like value pyramid down or value pyramid up?
For me (only for me) i think, about every 5 to 10 % STI down, i will value pyramid down.
Never index before.
May want to do it because of no HC anymore.

But what if your avg price is down more than the STI? For example, your avg price is down 10% while the STI is down 5%. Should you avg down or wait for STI to go down to 10%?

Which is the optimal way to avg down? Based on avg price or current price?

Can i put it another way?
Nobody will know the optimal way to average down or up because nobody knows how the market exactly behaves up or down?
i think (only think) if you can average down all the way till the fallen knife has found it's target, and you still have the energy, enough to run round your block; presuming you are living in high rise flats or condoes.
Congratulations then.

Caveat Emptor:-

Classic Textbook's financial knowledge only recommend Average Up, never average down. if you can find one please let me know. i am always eager to learn something new though i don't mind reading some thing i have read before. Because this time i read again, i may see something differently.
Just like listening to the same piece of music or drinking the same Reisling wine, you may find you have a different experience today. It can be simply due to your mood today or anything unexplanable.
That to me is the secret of "enjoying life" and never need to be bore when you do the same thing again and again.
So is your investing going to be like what i just describe above about music and wine as analogy?
Just for laugh only!

Good read on STI ETF investment.

My STI ETF Survived the Sub-prime Crisis.
http://www.bigfatpurse.com/2010/01/my-st...me-crisis/

For me, I invest STI ETF by adopting market-cycle strategy (golden-cross and dead-cross) .