Was surfing around and found many practitioners have blogs. The common thing about some of them is that they are quite secretive as to which company they are from. Perhaps they feel that their company may do something negatively about them if the company disagree with their views or perhaps their company has a policy not permitting blogging. Anyway, to me it is important that the adviser has the full backing of the company he works for. Clients should always satisfy themselves that the adviser has the full support of their company. If the adviser is distracted by their lack of company support, their clients are not going to get full attention from the advisers.

Just to let all know that some of my fellow colleagues have blog too. Check them out:

http://www.lioninvestor.com/
http://www.ifa-sg.com/
http://patlim.blogspot.com/

Enhanced Tax Benefits 

• Qualifying Child Relief/Handicapped Child Relief (QCR/HCR): For parents with qualifying children (existing or newborn), the QCR will increase from $2000 to $4,000 per child, and the HCR from $3,500 to $5,500 per child.
• Working Mother’s Child Relief (WMCR): Working mothers with qualifying Singaporean children (existing or newborn) will enjoy higher WMCR. Currently, the WMCR for the first, second, third and fourth child are 5%, 15%, 20% and 25% of the mother's earned income respectively. The WMCR will now be 15% and 20% of the mother's earned income for the first and second child respectively, and 25% per child for the third and subsequent child. The WMCR will be subject to an overall cap of 100% of the mother’s earned income for all her qualifying children.
• Combined QCR/HCR and WMCR: The total amount of QCR/HCR and WMCR claimable will be capped at $50,000 per child, twice the current cap of $25,000. Parents will be able to claim the enhanced QCR/HCR and WMCR from Year of Assessment 2009.
• Parenthood Tax Rebate (PTR): Currently, PTR is only available for the second to fourth qualifying Singaporean child in a family. Going forward, PTR will be extended to the first child and beyond the fourth child. The PTR will be $5,000 for the first child, $10,000 for the second, and $20,000 for each subsequent child. Both the father and the mother may use the PTR to offsett heir income tax payable. Parents of children born or legally adopted on or after 1 Jan 2008 will be able to claim the enhanced PTR from Year of Assessment 2009.

Enhanced Baby Bonus

• Cash gift: The cash gift for the first and second child will be raised from $3,000 to $4,000. The cash gift for the third and fourth child remains at the  current level of $6,000.

• CDA: The government matching contribution will be extended to the first child at up to $6,000. The matching contribution for the CDA for the second, third and fourth child will remain at the current levels. For the fifth child and beyond, a dollar-for-dollar matching for the CDA of up to $18,000 per child will be introduced.

And many others incentives. Read HERE , HERE and HERE

There were 100 monkeys and each toss coins – either head or tail. The monkeys were told by their trainers that they must toss in such a way so that the coins end up in heads. So these monkeys – who were skilled coin throwers - threw the coins into the air. The results were out – 50 monkeys’ coins were head. Amazing, these 50 monkeys have some skill or was it luck? Well, these 50 monkeys were asked to throw again and this time it must be heads again. The monkeys threw and 25 of time end up in heads. Marvelous. These 25 must be really good. Let’s ask them to throw again, and so out of 25 reduced to 14 which in turn reduced to 7 and reduced to 3.

The sequence were 100 -> 50 ->25 -> 14 -> 7 -> 3

These 3 monkeys must be extremely intelligent. Let’s put all our money with these 3 monkeys… they are the top fund managers ..opps I meant coin throwers.

For those who does not understand the morale of the story is this: Many fund managers have no real skill. Very often their relative returns to other funds are just random returns. By definition, there will be winners and losers. It does not mean that a fund has been consistently good for 5 years means it is a good fund because even those 3 monkeys can be consistently good for 5 iterations. In investment, it is not necessary to spot the best monkey. It is only necessary to ensure that one’s return tracks the market return. There are 3 risks in investment – small caps, value investing and market risks. It is not necessary to have a 4th risk (fund manager underperformance risk). It will bring great despair.

On 29 August 2008, a Straits Times article entitled “More help for pocket money fund students” described how the Straits Times School Pocket More Fund is helping low-income family with full-time students. To qualify for the ST School Pocket Money Fund, it needs to meet some criterions such as

Who are the high income earning financial advisers? Conventional wisdom tell us that if what the financial advisers are doing frequently and often - those kind of methods must have been quite rewarding and hence financial advisers who practice such methods must be quite well to do. This is based on the assumption that the "market" is rationate since nobody will want to do something frequently that is non-rewarding. I heard of many stories of financial advisers committing churning (a process in which the advisers sell and buy frequently without good reason and detrimental to the client in high fees); pushing products (Last friday I met a client who got so angry at her private banker trying to push products down into her throat); mispresentation (heard of many cases that the FA promises 5% guarantee return of a product which turns out to be simple interest and not annualized); half-truths (heard of another case of a FA told his client of a guaranteed 5% (now really annualized) but omitted the catch that the client has to buy another ILP product); ommission of toxicity (heard of many clients who bought investment grade "bonds" which turned out to be toxic CDOs which are defaulting like nobody business these days); even fund manager misrepresents (OK, this one I better not give example because I can get lawyers letter from them). I am sure these financial advisers must be earning tons of money doing this kind of things right? No. In a study conducted by CEG WorldWide, top earning financial advisers are doing quite the opposite which I summarised here:

“A teary Gao Ning, Singapore’s top male table-tennis player, crashed out of his first Olympics in just 24 minutes yesterday, losing 0-4 to unheralded Tan Ruiwu of Croatia. What raised hushed whispers at the Peking University Gymnasium, however, was not the manner of his defeat, but the surprising absence of a coach on court-side to advise and cheer the Singapore paddler on. While the presence of a coach is not mandated by the rule book, he or she can often play an instrumental role by recommending tactical changes or simply by encouraging the player” – Straits Times 22 August 2008.

My comments:

Check out this top 10 holdings of a particular unit trust:

This fund is a global equity fund benchmark against MSCI World Free Index. However, its top 10 holdings is wierld because:

1. It is using many index fund like Ultra Financial Proshares, Streettracks Gold Trust, iShares FTSE/Xinhua China 25 and iShares MSCI Taiwan Index Fund. OK - maybe the fund manager is a passive fund believer but...
2. Why is it investing in precious metal like gold in this non-commodity global equity fund? So it is a commodity fund too?
3. It is taking leveraging position in financials. That is pushing the boundary of a retail unit trust too far...

So has the return being good? Yes, over the 5 years the fund's NAV-NAV performance was 16.11% pa vs 4.43%pa benchmark return. Sounds good except that for the past 6 months it returned -26.07% vs -16.70% benchmark return!! Common, this is another fund that has high beta to get higher return in the bull run but its beta continues to be high in the bear run!! Is there no fund manager that can demostrate real high alpha (i.e. skill)?

My son asked me how to solve this question which was part of his Primary 1 maths worksheet:

Question: How many triangles are there in the figure below?

"During the period 1993-2000, the total return on {rating agency name deleted}'s top-rated U.S. funds averaged +106%, vs. +222% for the total stock market (the Wilshire 5000 Equity Index). What is more, these funds carried a relative risk (measured by standard deviation vs. the total market) of 1.26. Achieving but 48% of the market’s generous reward while assuming 26% more risk is hardly a tribute to the staying power of the stars"

- John Bogle of Vanguard http://www.vanguard.com/bogle_site/sp20010215.html