My Retirement Plan At 35

[greypiggi]

IMO, it is nothing wrong with the ELN. It become dangerous only if it fall into wrong hand.

It provides similar service as insurance, transfer risk with a premium. If the insurance risks and premiums are well taken care of, then it is just another useful service, both to ELN issuers and ELN holders

Just to share :

I have been doing quite a few ELNs over the past 1 year. First thing first, know that it is a speculative position. I classify it in the same bucket as trading in penny stocks and stocks that i am willing to trade on 1-2 mth technicals.

Second, why i decided to switch out of penny stock and day trading to do ELN is that they offer as good yield but with less monitoring and risk. I only do ELN on blue chips like RIO, AMZN, FCX, AAPL, JPM, sometimes C etc. Has to be volatile.

Yield is >20% as a rule and i usually do 93% and lower strike. I also dictate the spot price to ensure i get in cheap at least for the day. My objective? To get an annualized >12% yield that can beat my old numbers trading high risk penny stocks. So far about 10+% gain based on 10 months (did abouit 20 ELNs and 1 converted), if i include the current mark to market loss on the 1 that got converted. So seems to work.

And if they get converted, i move them into my blue chip portfolio with a long term view. And acutally due to volatility , if i sold that one stock, probably would have gotten away with zero losses but I decided to hold since my rule is that i would not mind owning the stock long term.

Key thing is to know the short term chart and technicals for these volatile blue chips and to go in only when yield is attractive enough.

My 2 cents

[CityFarmer]

IMO, it is nothing wrong with the ELN. It become dangerous only if it fall into wrong hand.

It provides similar service as insurance, transfer risk with a premium. If the insurance risks and premiums are well taken care of, then it is just another useful service, both to ELN issuers and ELN holders

Just to share :

I have been doing quite a few ELNs over the past 1 year. First thing first, know that it is a speculative position. I classify it in the same bucket as trading in penny stocks and stocks that i am willing to trade on 1-2 mth technicals.

Second, why i decided to switch out of penny stock and day trading to do ELN is that they offer as good yield but with less monitoring and risk. I only do ELN on blue chips like RIO, AMZN, FCX, AAPL, JPM, sometimes C etc. Has to be volatile.

Yield is >20% as a rule and i usually do 93% and lower strike. I also dictate the spot price to ensure i get in cheap at least for the day. My objective? To get an annualized >12% yield that can beat my old numbers trading high risk penny stocks. So far about 10+% gain based on 10 months (did abouit 20 ELNs and 1 converted), if i include the current mark to market loss on the 1 that got converted. So seems to work.

And if they get converted, i move them into my blue chip portfolio with a long term view. And acutally due to volatility , if i sold that one stock, probably would have gotten away with zero losses but I decided to hold since my rule is that i would not mind owning the stock long term.

Key thing is to know the short term chart and technicals for these volatile blue chips and to go in only when yield is attractive enough.

My 2 cents

Thanks for sharing. The real experience is always useful (to further our understanding)

[Temperament]

IMO, it is nothing wrong with the ELN. It become dangerous only if it fall into wrong hand.

It provides similar service as insurance, transfer risk with a premium. If the insurance risks and premiums are well taken care of, then it is just another useful service, both to ELN issuers and ELN holders

Just to share :

I have been doing quite a few ELNs over the past 1 year. First thing first, know that it is a speculative position. I classify it in the same bucket as trading in penny stocks and stocks that i am willing to trade on 1-2 mth technicals.

Second, why i decided to switch out of penny stock and day trading to do ELN is that they offer as good yield but with less monitoring and risk. I only do ELN on blue chips like RIO, AMZN, FCX, AAPL, JPM, sometimes C etc. Has to be volatile.

Yield is >20% as a rule and i usually do 93% and lower strike. I also dictate the spot price to ensure i get in cheap at least for the day. My objective? To get an annualized >12% yield that can beat my old numbers trading high risk penny stocks. So far about 10+% gain based on 10 months (did abouit 20 ELNs and 1 converted), if i include the current mark to market loss on the 1 that got converted. So seems to work.

And if they get converted, i move them into my blue chip portfolio with a long term view. And acutally due to volatility , if i sold that one stock, probably would have gotten away with zero losses but I decided to hold since my rule is that i would not mind owning the stock long term.

Key thing is to know the short term chart and technicals for these volatile blue chips and to go in only when yield is attractive enough.

My 2 cents

Thanks for sharing. The real experience is always useful (to further our understanding)

Here, it's the Local Banks that offer the ELNs to clients on their terms. Yes it's usually on "BLUE CHIPS". i have yet to find one attractive enough especially on the strike price. Of course, we would like to roll over our capital again and again as long as possible, wishing we don't "ever" hit the strike price. If not we might as well buy the Blue CHIP from the market where we can have more "control" (Time, Price & Quantity averaging buying ). My 2 cents

[camelking]

IMO, it is nothing wrong with the ELN. It become dangerous only if it fall into wrong hand.

It provides similar service as insurance, transfer risk with a premium. If the insurance risks and premiums are well taken care of, then it is just another useful service, both to ELN issuers and ELN holders

Just to share :

I have been doing quite a few ELNs over the past 1 year. First thing first, know that it is a speculative position. I classify it in the same bucket as trading in penny stocks and stocks that i am willing to trade on 1-2 mth technicals.

Second, why i decided to switch out of penny stock and day trading to do ELN is that they offer as good yield but with less monitoring and risk. I only do ELN on blue chips like RIO, AMZN, FCX, AAPL, JPM, sometimes C etc. Has to be volatile.

Yield is >20% as a rule and i usually do 93% and lower strike. I also dictate the spot price to ensure i get in cheap at least for the day. My objective? To get an annualized >12% yield that can beat my old numbers trading high risk penny stocks. So far about 10+% gain based on 10 months (did abouit 20 ELNs and 1 converted), if i include the current mark to market loss on the 1 that got converted. So seems to work.

And if they get converted, i move them into my blue chip portfolio with a long term view. And acutally due to volatility , if i sold that one stock, probably would have gotten away with zero losses but I decided to hold since my rule is that i would not mind owning the stock long term.

Key thing is to know the short term chart and technicals for these volatile blue chips and to go in only when yield is attractive enough.

My 2 cents

Single stock or multi stock?
How long is your duration?
Don't think you can get more than 20% if it is based on single stock.
Unless my company has been "conned" by the bankers ...

[arthur]

What I was trying to say is, the rich doesn't necessarily get richer just because they have access to a lot more other choices of investment products. Same as the rest, they still have to do their due diligence as many of these are a lot more complex! The other interesting thing is, their decision to invest / not invest may be based on just one page of useless (to me) facts and figures. I was asked by another friend to take a look at an investment product recommended by a Private Banker - a request for more detailed info appears hard to get and the attitude was something like, 'if you need to ask, then it's not suitable for you. There're many others who're eagerly waiting to buy more of it..' My advice was to give it a miss... Phew! Was afraid I may have to go thro' a few hundred pages of financial gibberish which I doubt I can even understand...

But, again, you are right when it comes to Corporate Bonds. For these somewhat 'safer' investments, they have a lot more choices than other retail investors.

But, having a $1Mil may not necessarily qualify you, IIRC (I asked before) you need to commit at least the whole $1Mil for investment with the bank, spread over a few other investments.

I would sincerely ask your friend to request for a change of banker or banks if I am in your position. No point of sticking around with a "if you don't buy from me, others will and no questions to be asked" banker.
That's really bringing down the bank and other bankers reputation.

Yes, you are right that even for people with higher networth, they might not be investing savvy. Its a strange world but many out there are too concentrating on their biz that they couldn't be bothered to keep track of their investments portfolios.

Beside Corp bonds, there exist statutory bonds that requires a min 250k denomination. Personally, I feel bonds are a required and appropriately large component of one's portfolio till the deleveraging of the Great Financial Crisis blows over years down the road.
Sadly, many retail investors are unable to get such bonds unless smaller denomination are available or thru Singapore Govt Bonds. I do think SG bonds or bond funds, though lower yield, is better than a REIT that will give one heartache in this new world of ours.

One of the most risk-free bond fund I would suggest to retail investors is this UNITED SINGAPORE BOND FUND.
It may be accessed info thru here.
http://www.fundsupermart.com/main/fundin...ber=UBSGBD

The returns are nothing to shout about, You guys might even throw durians on me screaming WTF should I buy something given such a low returns of 3-4% over 5 yrs?

Well.. peace of mind bro, peace of mind.

PS to all retail investors: Do take note of Annual Mgt fees, annual expense ratio and maybe sales charges if one is to purchase from banks.
And I am not a certified financial adviser, so please take my words with a pinch of salt.

For all those who had somehow escaped the ravage of CDO products, we thank GOD or our "Lucky Star". i managed to escape by keeping up reading news about these products. i found almost all the news not in favour of investing in this products. So i gave CDO a wide berth.

At first when i read the brochures of these CDO, i were of course attracted to the capital guarantee parts.
(In fact most banks were stressing on this clause; smoke & mirror clause that layman found it hard to understand)
i found i don't completely understand this guarantee clause; so i did not buy.
i am sure many layman got trapped by this clause: "Capital guarantee what, there is nothing to worry"
So the moral of my story is that from CDO fiasco, i learn the English word "Guarantee" actually can have many meanings.
Under certain usage like in CDO brochures, "Guarantee means actually guarantee you have no guarantee at all due to all the attached conditions to the word guarantee.
So you see, i am now very, very careful whenever i come across the English word "guarantee".
i really learned now how to understand the word "Guarantee".
Have you?
Once again, we all thank GOD or our "Lucky Star".

i almost persuaded by some "bankers" to invest in ELN but i found that if the contract is executed, the price of the stock is not attractive to me. So i don't buy any. i like to ask is it possible for the banks structure this "ELN" that the "strike price" of the stock is attractive to me. So far they can't or i come across one. In other words, is there a possible condition for the Bank's ELN's strike price to be attractive to me. If possible, i can wait.

Of course they (Banks) do. Pow Chiat products for them what. (Reference to D.O.G.'s article above) In fact only not many months ago, some bankers still try to persuade me to buy ELN. Of course i told them the strike price of the stock was not attractive to me though the interest payment may be acceptable. Sometimes the interest payment is not attractive too for some ELN contract. Until now they have not asked me again. They may try some other "funny products" though. i have to be very discerning.

I still recall that one of the hidden clause with the Lehman Mini-bonds was that if one bank fails, the note is taken as default for ALL banks.
That was why many people was shocked that even though it was only Lehman and Bear Stearns that went bankrupt, the product is considered as zero dollars. Wow... its really pretty scary and wicked if you are to think about it.

[d.o.g.]

I still recall that one of the hidden clause with the Lehman Mini-bonds was that if one bank fails, the note is taken as default for ALL banks.
That was why many people was shocked that even though it was only Lehman and Bear Stearns that went bankrupt, the product is considered as zero dollars.

It was a "first to default" structure. If people had read the prospectuses the minibonds would never have sold because:

1. If they didn't understand it they shouldn't have bought it;
2. If they understood it they wouldn't have bought it.

Basically, the minibonds were toxic products that should not have been created, nor sold to anybody at all. But enough salesmen didn't care, and enough buyers didn't think, that large quantities of mini-bonds were sold.

What were the minibonds? They were insurance products - buyers put up collateral (their capital) in exchange for receiving insurance premiums. When the reference entity in question (Lehman) blew up, the collateral was seized to pay the insurance claims. That's what was really insidious about the whole affair. People thought they were buying a bond - that they were lending someone money, and that someone was paying them interest. In fact, they were selling insurance. Their money wasn't going anywhere - it was kept as collateral, and the money they got was the insurance premiums someone else was paying to protect against default. When the default did occur the collateral was given to the buyer of the insurance. Hence, total loss for the minibond buyer.

ELNs work in roughly the same way. The customer puts up money as collateral. In exchange he receives an insurance premium paid by someone else who is bearish on a stock (the equity in the ELN). If the stock crashes, the money is swapped for the stock. In effect, the insurance buyer has transferred his loss to the ELN customer. Of course, nobody really wants to be an insurer - people recognize their lack of expertise in pricing premiums. So the banks tell the clients they are earning "interest" instead of explaining to them that they are selling insurance to someone else who thinks the stock may crash.

Legal? Yes. Ethical? You decide.

[Contrarian]

> Banks love to sell them since they are fee-based, no risk. And the customers love it because they think it's win-win, either they get an interest payment or they
> get the stock at a cheap price.

Well said! The golden rules are:
1. When someone sell or promote something, it must be quite a good deal
2. When the customer ask, the staff will answer. The sales person is not obliged to tell everything... tell the answer, but not the whole truth

The better deals ... we must go and find... I learn from insurance, chinese medicine, IT products, from listed company managements... now learn to ask right questions liao...

[Temperament]

[quote='Contrarian' pid='29093' dateline='1343051607']
> Banks love to sell them since they are fee-based, no risk. And the customers love it because they think it's win-win, either they get an interest payment or they
>get the stock at a cheap price.

Unquote:-
Exactly! If the strike price of the ELN's stock is the price i want to buy from SGX market, then why not? So far i have yet to find one ELN offer like this.

[greypiggi]

[/quote]

Single stock or multi stock?
How long is your duration?
Don't think you can get more than 20% if it is based on single stock.
Unless my company has been "conned" by the bankers ...
[/quote]

Single stock. Note they are US counters with with high volatility. See the names I mentioned and ask your banker for quote. Not everyday yield above 20% for 93% strike. So I monitor about 8-10 names....

---

[/quote]
Here, it's the Local Banks that offer the ELNs to clients on their terms. Yes it's usually on "BLUE CHIPS". i have yet to find one attractive enough especially on the strike price. Of course, we would like to roll over our capital again and again as long as possible, wishing we don't "ever" hit the strike price. If not we might as well buy the Blue CHIP from the market where we can have more "control" (Time, Price & Quantity averaging buying ). My 2 cents
[/quote]

Local banks can also do USA eln. Ask them for quote. Yield similar to overseas private banks since the counterparts is usually Goldman, jpm, etc actually my mentality is always such that I do not mind getting converted. Get good stock cheaper and no comm to pay..... Can always buy more if it drops further.

[camelking]

Single stock or multi stock?
How long is your duration?
Don't think you can get more than 20% if it is based on single stock.
Unless my company has been "conned" by the bankers ...
[/quote]

Single stock. Note they are US counters with with high volatility. See the names I mentioned and ask your banker for quote. Not everyday yield above 20% for 93% strike. So I monitor about 8-10 names....
[/quote]


Thank you.