The Things about Buying into a Bond Product

Bond is a type of fixed income financial instrument backed by some government or company.

It should be, but its price is also correlated to current market rate.

When market rate goes Up, bond prices goes Down. The opposite side happens same too.

When get into more detail, there are actually more things.

If buying the bond price below face value, the indicated yield calculates in price gain till maturity.

If buying above face value, the overall yield calculates in the price drop till maturity.

There is a complicated formula to calculate overall yield which assumes reinvestment of all future distributions at current rate.

But I think complicated things can be read simple way.

If you'd cheaper bond price, buy below face value (means its face yield rate is below market rate).

If you'd have better short term yield, buy above face value with a higher coupon rate.

When market rate goes up and down, the bond prices can vary quite significantly too.

It's not surprising that within 1 year, the bond price can go up / down by 10%-15%. So if you sell it, there could be a gain / loss besides distribution.

If look at the long term bond ETF products, e.g. TLT, the price went down a lot ~40% since the FED started to increase interest rate.

Here is the thing, for a bond product, provided no default, if you hold till the end of 20 years, the yield is for sure to happen based on the entry price point.

If you buy an ETF? it doesn't have an ending date as the holdings are refreshed regularly.

Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

US 20 years Bonds continue to be at high rate

On the closing of first week of year 2025,

US long term bonds yield continue to be high at close to 4.85.

This goes a bit different way as FED just made another interest rate cut in Dec.

As this is about long term yield, it's more related to expected inflation in long run, any recession or crisis on the way, and maybe the credit of US government.

Overall, we should still see a lower interest rate for year 2025.

Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Crazy USD keep going up, What this may seem to mean?

After Dec rate cut, now USD goes up again at start of year 2025

It's going higher.

One key reason I think is that overall the world countries are all cutting rates. As US is cutting rates slower, and especially with the Dec hawkish tone when cut the rate, this pushes USD be stronger.

Another reason maybe, new president is perceived Strong?

I'd say, it's crazy. Imagine the USD/SGD went from 1.43 down to 1.28, and now surge back to 1.36.

Crazy moves for a currency rate.

There are so much market manipulations about it. I don't believe this is how a natural market force would behave for forex. 

Imagine I just hold USD at 1.29, and now is already 5% richer in SGD in just a few months (4?) time.

It's definitely crazy.

More crazy things may happen this year.

Is USD to be stronger? I have no idea. All I can see is that if it moves from 1.3 to 1.4, it's just normal and nothing to be surprised. Same for a move from 1.4 to 1.3. 

If it's all about demand and supply. I think this year the demand for USD would depends. So far US stocks have done so well, and bond rates are at high. These all mean very attractive for money to invest in US. It would need to depend on how much funds want to flow out and invest in other markets; and Fed rate decisions.

Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Which is more important? Don't lose money, or Aim for big gains

For an ordinary investor, the answer for me is definitely first

Don't lose money first.

There is nothing wrong to aim for big gains, for sure.

So it seems, in order to success, you need both: Sure win + Consistent gains

How to achieve this? This is big million dollar question.

I'd quote legendary Warren Buffett here: Rule No 1: never lose money. Rule No 2: never forget rule No 1.

Is it doable?

When you invest, it sure comes with risk correct? How can it be never lose money.

Actually it's possible.

For example, T-bill.

Well, I know, it's lame right? why not Fixed-D, it's even more safer.

That's why, never forget about this. Over 1 year, do you think it's ended with a gain better? Yes, always.

What's the harm of some fixed income instrument? None.

Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Back to blog, and New Year 2025 starts

It has been a long while,

Yes, I think I'd come back to write about this journey once a while regularly.

The good news is, I have survived the market, though just doing very average.

Year 2024 has closed, I've closed with 2.9% profit overall.

It's not impressive at all, considering that Fed rate is 4%+, stocks wise STI +16.8%, SP500 a whopping 23.3%.

Crazy markets.

I will not talk much about my own portfolio, or how much values here. Ya, this might be boring.. Anyway, let's see how it goes. Just will be some stuff that I talk to myself.

Well, since 2024 has been a great run for US stocks, I tend to think 2025 year will be limited.

Current instruments that I have: Tbill, US bonds, some ETF

Brokers that I use: IB, Futu Moomoo

That would be all for now. Hope my funds can have a good run for year 2025 though.

 

Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Staying Sideline

I have further reduced my stock holdings to negligible levels now. It's difficult to make money from it, and I would like to take a break to review and rethink about what should be my moves to better build up for my personal financials.

With mostly cash now, I'm arranging to pay down my house loans first. Besides this would mainly be earning the interest, do some minor fx operations and monitoring. For now, I would think it will be a quite a while monitoring mode, until I figure out or see some major opportunity that arises.

Staying sideline, staying relevant.



Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Reduced position

I have reduced my positions heavily by around 50%.

This is partially about mkt outlook, and current price levels. It has been long due, I should have done it sometime Oct last year.

Depends on price movements, I should be further reducing it by some. and then goes into monitor mode.

My long term financial objective has revised down also. By having an ambitious goal doesn't help in all scenarios. The path of time is quite fixed and limited.


Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Hello 2019, Bye 2018

The year of 2018 has concluded with a loss of 5.5K for me. I know the market is overall not doing so well, but this result is still quite poor as I have been prudent with fund allocation. 2018 should able cover back for the previous loss but ended up in red again.
The main draw back comes from 2 counters. I would not mention which they are, but they serve a hard lesson to me. Rosy pictures can turn plain, and weak prices can get weaker. No matter what the base is, profit or dividend or asset value, these metrics are not fixed. Seemingly cheap may not be real cheap always, or in future. Stock prices are about future, and they move ahead and fast.
While 2018 has passed, 2019 looks to be another challenging year. Not just stocks, even work life are the same. I'd say this is complex matter, this world, life, human society, economy and everything. Maybe it is just going towards where it should be, hard working is required and fruits need to be farmed and earned.
I would also need to set a right mindset. Invest is a means, it can bear fruits, it can also be damage. by going for it means accepting its nature. and it's not the only thing that matters, there should be focus on things like healthy living, meaningful life, family and children.
Well, I'm still on my course of investing as I'm not quitting the path. I can't say that I'm optimistic or pessimistic on it. It's just that I start to realize investing won't be suitable for everyone and it comes with its inherent risk factors.
I have come to a stage where savings won't help much already. The ideal scenario is that portfolio can self grow and help with my financial free goal. I know investing is an answer; but still, the approach should still be scientific based, i believe more on the compounding miracle. Anyway, won't be so straight forward too.
Wish all the best for the roads ahead. Cheers



Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Investment Platforms

The US market just tumbled before the break day 5-Dec. well it's a separate topic, I'd share about the investment platforms I'm currently using now.

Over past 2-3 years, I have tried many things, SSE A shares, forex, CFD, Foreign stocks, Futures etc.
I have no interest in warrants, or options stuff. These instruments are all inter-linked, esp Forex. Forex is an interesting thing, complicated, manipulated but inevitable.

Unavoidable, I have opened quite a handful accounts with various providers. they all got own characteristics, but to me most importantly is safety to fund.

After all these, I have now downsized all these investment platforms. so here are the few things left for me that I will move on with:
1. CDP (via local brokers)
2. IB
3. OANDA

I figure they should be able to provide the investment services that I need for now, and they are good platforms.
so what platforms are you using, I'd welcome your sharing in comments as well. Thanks for reading.


Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.

Year 2018 closing soon

This has been a busy year, this has been a fast year. I haven't post anything yet, so yes, here I am, still surviving in the market.

In terms of investment, it has been a tough year. There has been ups and downs. I had some success with Comfort, WBA counters, but really hit bad by some counters like Singpost, QAF. so the year would not be performing so well overall, but one consolation is that USD has strengthened, and that will give some currency gains.

Any lesson learned? ya I figure is that by all means be prudent and don't over commit, because you would never know that a rosy counter would turn out to be a bomb. It could go low, average down is fine, but bear in mind it will go lower.

The real question is, what's the sustainable way to make profits? keep taking or ride the bull for long time? that's something for me to think about. some profit taking had been good moves, but some proved to be not so good. If the overall return is still like this so so, why not just dump everything into a gov savings bond and earn predictable 2.x%?

This year I figure I would be looking at a small loss again or some margin profit. overall not so satisfied but as I said still can survive it. will post it when the year close.

Thanks for reading and all the best with investing!



Disclaimer: This post is not a call to buy or sell. Plse do your own analysis and make investment decisions.