Re: investing for my mom

[thor666]

SCI 7 & 12 yr bonds indicative 3% and 3.7% anyone?

New Bond Issue...

Seriously I don't understand why would anyone buy these long dated bonds at such low yields...

Better off buying mother shares right?

GG

Hi gg,

I am considering getting bonds for my mom as she may not have holding power. I think that might be a reason for people to buy bonds.

Also, very unlikely to happen, but if Sci goes bankrupt, bondholders will be paid first before shareholders.

Personally I would prefer to get stocks but I cannot guarantee for her the volatility.

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Well, a suggestion for you to guarantee, but consider this suggestion only if your mum wont touch this money for the next 7 years.

Ask your mum to loan you the money. You can pay her the interest of guaranteed 3% coupon from your pocket, you get the use of money for 7 years, which you can invest it in any way you like. If your mum has to loan money to someone, i think it is better to loan it to you than to SCI

It's a good idea only if he can guarantee to return his mum the money on demand anytime @ current market's price of the bond.

Thank you Temperament and safetyfirst. After checking out my moms profile, she has enough for a small portfolio, with sufficient cash holdings. I would be creating one based on mainly blue chip and mainboard stocks (generally safe and defensive stocks) for an estimated dividend yield of 4-5%. Will be great for her to have some small allowance since I can easily cover her emergency savings were she required to use for urgent case.

I'm still open to bonds myself. Probably will look at a small position in vanguard/Aberdeen bond etf as long term diversification.


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Just an update for all interested: I set up a dividend based portfolio for my mom. Decided against the coupon idea (another blogger did that) as I do not want to complicate money matters (even though my mom trusts me a lot). Invested Singtel, ocbc, first reit, maple logistics and frasers centrepoint limited. Shareholdings are roughly proportioned at 20% each.

I would guarantee the base price purchase in the event of stock bankruptcy, emergency withdrawal or expected permanent loss of value. This way, my mom remains invested with her own money and dividends go directly to her bank account. My role is to monitor long term fundamentals as I have 3/5 of the shares invested.

The bonus is share appreciation in the long term. But looking forward to her first dividend payout, that will be her extra pocket money.


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