How to open online trading account?

tokyoxpress

New Member
Another kudos for u, Bronson.
Your touching on the subject on related trusts funds is the most explanatory. Can I trade with cash instead of the traditional CPFIS?
 


htchew

New Member
Yes your agent will be most delighted to receive cash, cheque or banker's draft etc. If it is via your super annuition/pension fund, then they have to do lots of documentation/paper work. Btw if you risk appetite is low, why not you start with bonds first (treasury bonds, government bonds, corporate bonds, etc) with return of within 5.5 - 6.5% per annum, on the average). The risk for bond fund is low but the return is higher than LCY FD (even after deducting the management fees). Do check the percentage of the management fee/service fee because it will be deducted from your principal amount/NAV (net asset value).

On a later development, crude oil has reached USD 103 per barrel yesterday. Crude palm oil also has reached USD 1,265 per tonne (from a low of USD 450 a year or two ago). Gold has reached USD 998 per ounce. If your risk appetite is extremely high then do consider CO, CPO and Gold derivatives index. But we need to have lots of fund (holding power) to go into derivative index and prevent the situation where we may loss everything (house, car, savings, jewelry, lifestyle) if we are not careful.
 

tokyoxpress

New Member
hi Bronson, honestly speaking, the only thing i connect with the term Bond as in funds is "James Bond". Pray,please, tell me more "What is Bond funds?" and what it would mean to a small man like me who invest in this fund. Thanks.
 

htchew

New Member
Hi Tokyoexpress,

To understand what is a "bond fund", we need to understand what a "bond" is:

CORPORATE BOND:
For large MNCs (Fortune 500 companies) i.e. Tesco, LG, Toyota, ING, AIA, etc, they may issue promissory note with maturity of 5 years (subjected to regulatory compliance).

Upon maturity, holders of said primissory note can redeem it together with interest.

In example, ING issues bonds worth 500 million USD with return of 8% per annum. And usually it is open to institutions as well as fund managers to invest. Said p.note is called a "BOND", in most simplifield layman term.

[Other types of bonds are treasury bond, gov bond and statuatory bonds. These types of bond can come in smaller denomination and affordable with most of us on the streets i.e. $10,000, $50,000 etc].

And when fund managers set up a unit trust fund, they will choose to invest either locally or overseas on sectors/industries they believe can give good return so that their fund can pay high return to retail (& other) investors.

A (unit trust) fund that invests massively in stock market is called an equity fund.

A fund that invests in property market / Reits is called a REIT fund.

A fund that invests in bond market is referred to as a "bond fund". Usually the fund manager will choose those of standard AAA+ to invest.

(According to Moody & S&P), there are various classification to the bond / treasury instruments:

: AAA+ (triple A plus)
: AAA (triple A)
: AAA - (triple A minus)
: BBB+
: BB
: CCC

For us as a retail investor, we need to know what types of bonds our fund manager (unit trust company) invests in. For your reference, we should not choose a fund that invests in "B" or below.

P.s: During the financial crisis in 1997-98 when Asia was under siege, anything "B" and below are considered junk.
 

htchew

New Member
One more thing. Before investing in any fund we have to 100% ensure that we exercise due diligence; and equate the task of choosing a fund agent to that of choosing a husband/wife (most people tend to neglect this point and chose fund agents whom cannot perform, suck and causes investors to bleed with their hard earned money).

There are also agents who have the habit of asking their clients to switch funds without prudent analysis of the market movement. Beware that each time you switch fund, you pay comission / serv chg for the fund you switch to.

But you also need to watch the signal from your agent to exit when the timing is right (i.e. if you invest in country X 's property fund and if there is a Mortgage crisis in that country (of which your agent will call you to sell), then you will have to follow him/her.
 

lozan

New Member
Hi bronson, i have just opened an online trading account with poems, i like to try buying share online, any advice you would give? what kind of share i should first look into?
 

htchew

New Member
Congratulations Zan Ong. You may refer to my previous posts on what to look for when buying shares(either online or thru a remiser). Some people started off by throwing dice but I 'm sure that's not what we should do. By the way, if you trade online, usually you will no longer have a remiser to advise you. So please trade carefully and good luck.
 

kyotoxpress

New Member
Hi Bronson,

Kindly simplified why in the US, the FED's raising or lowering of interest rates matters much to the investor?

tsk..tsk..

tokyoxpress is now kyotoxpress.
 

htchew

New Member
Hi Ben,

To understand why FED 's interest rate movement has an impact to the investment sentiment, we need to first understand the fundamental impact of 'interest rate movement to the investment appetite'.

Example:

A lender lends out 50 millions at interest rate of 9.00% per annum. The lender needs to source for cheap fund i.e fixed deposits at 3.00% per annum. So in layman term the margin of profit of the lender is around 6.00%. (Please refer to my previous posts on countries' central bank / monetary authorities having the absolute right to decide the prime lending / deposit rate).

Let say (a) the prime lending rate rises to 10.50%, and the deposit rate follows and it is now 4.00%; OR, (b) prime leading rate comes down to 7.5% and the deposit rate is 2.15%.

When above situation (a) arises, the fund managers will do a lot of fund switching (i.e. they could lock in their profit from stock market and then move their fund to short-term Fixed Deposit / NCD (negotiated certification of deposit) since the FD rate is higher now.

When (b) happens, fund manager could borrow more (since the lending rate and treasury rate is lower now), and they could put the money in stock which will then cause the index to rise.

US is one of the largest importers and economies in the world. It is always used as a benchmark by developed as well as developing countries. So when (a) or (b) happens, you see lots of impact, especially to the stock prices.

P.S Above is a simple example for all of us to understand. Hope it helps.
 

kyotoxpress

New Member
A few questions from an ordinary salary man....

1. If the lender lends out 50 mil at the rate of 9.00% p.a. why does he need to find a cheap fund of a FD at 3.00% per annum?
Isn't he earning an interest of 9.00% per annum already?
2. What is meant when fund managers lock in their profit?
3. In an article recently publish in the Business Times, with the economy now in a doldrum, the time to buy out stocks right now is too hard to resists although there are many still holding out to get the best.

P.S. I'll go for forex if you ask me what with the US dollars now at S$1.33.
 

htchew

New Member
Hi Ben,

Answers to your questions:

1) A lender is usually a bank (although there could be other types of lender). In order for a bank to lend out money to borrowers, it needs to have sufficient fund. One way of sourcing of fund is thru collecting of deposits from fixed depositors.

2) Fund manager locking in profit means they are selling their portfolio (i.e. stocks that they hold on hand) and release profit from the sale.

3) Ask your remiser if it is time to buy :)

P.S: USD hasn't been stable in the past few months. If you are into USD forex, be extra careful.
 

kyotoxpress

New Member
Interesting explanation. Which begs the question? That when the lender is lending out 50mil and he's sourcing for funds from fixed depositors, the fixed depositors will hope that the USD rises above the bank's buying rate in order to see a substantial realize profit.
Concurrently, the FED reserve lowering of interest rates will determine the market to borrow. Is that my understanding?
 

leetona

New Member
hi all, i do think that MLM is much better to earn money....isit true? thinking of joining but still got lots of ???
 

htchew

New Member
Hi Ben,

My explanation using example of $50 million is based on local currency SGD. I did not include the explantion of foreign currency i.e. USD lending or borrowings else I will have to write a lot on treasury rates and overnight money market rates which is complex to understand.

Btw, if you intend to be a USD fixed depositor but you 're not sure whether USD will go up or down few months from now, a realible source would be to look at the 3 months USD forward rate in the money market.

On your question "Concurrently, the FED reserve lowering of interest rates will determine the market to borrow. Is that my understanding?"
==> When FED reduces the interest rates, yes it will attracr USD borrowing (if it is cheaper than other FCY). Besides that, it will reduce burden of sub-prime borrowers as they now pay less interest. The deposits rate for USD will also go down. But usually the Dow Jones and Nasdaq will go up when interest rate is reduced.
 

htchew

New Member
HI Svvest,

MLM is a good way to make money if you are able to build a network of 500 people under you. Else people usually end up being a consumer of their product and slowly the momentum will cool off. You also need to find a MLM company with good products. When joining MLM, need to review its commission structure. I have seen some which create lots of grey commission structure and at the end it is the MLM agents who will lose out.
 

kyotoxpress

New Member
MLM is a pretty intensive business of marketing product not just selling product. It's also looking out for agents to add to your team. Unless you are already into the 3rd year, you literally need a rocket booster to get the business off the ground.
 

kyotoxpress

New Member
Can't fault the average citizens here with a little bit on the side just to make ends meet. Honestly, standards of living has 'shot-up', not just gone up.

But MLM is fraud with many 'inconveniences', in the end time, and lots of time, is wasted. Is a small market here unlike in the bigger countries like the united states. If you must, be prepare to take advantage online marketing by investing a good amount of money for a developer to design and built a web e-commerce site.
 

kyotoxpress

New Member
hi bronson, the price of basic commodities has risen, a telling result of global warming as one factor. Given this scenerio, commodity currencies from producing countries such as aust. $ & NZ $ will see a rise. Global warming is going to be an impact on the economies for a long time to come.
 

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