4 Reasons to invest in STI ETF

by ALVIN on FEBRUARY 27, 2011

#1 Low cost – management fee and sales charge = less than 1% per year

If you understand compound interest and its effect, you would know that your investment capital would exponentially. Likewise, if compound interest can work for you, it can work against you as well. I am talking about fund management fees. They have eroding effects too. It makes a lot of sense to spend as little as possible for fund fees. This is one important criteria when you invest in any funds. STI ETF currently charges about 0.3% management fee, comparing to similar unit trusts which charged between 0.75-1.5%. This means that you have 100-500% of savings right from the start! And this has not factored in the compounding effect. Talking about sales charges, Fundsupermart currently charges 1.25% for the unit trusts and while you buy STI ETF from a broker, POEMS charges 0.18% to 0.28%. If you just buy a lot which cost you $3,000 and the minimum brokerage fee is $25, your percentage cost would be 0.83%, still lower than the unit trust’s sales charge.

#2 Growing Singapore economy

As a Singaporean, I am happy in where I am as I see Asia as an emerging affluent continent. Singapore being a business hub, would likely to flourish with Asia. I have faith in the economy and hence, buying into Singapore companies is one of the best way to participate in the growth of Asia. We have many established companies that have began expanding their influence in Asia and other parts of the world. Giants like Singtel, KepCorp, SembCorp, DBS, UOB, etc, are well managed and financially sound (I am not suggesting these are stocks to buy, they are just example to illustrate my point). As Asia grows, I believe they would gain some market share as well. And right now, they have consistent cashflow as they provide services that Singaporeans pay for everyday. To be able to buy into all these companies would require a large capital. But with STI ETF, you would be able to partly own the top 30 companies in Singapore, the bluest chips of all.

#3 Good Diversification

The STI has a mathematical methodology to identify the top 30 companies in Singapore. There will be periodic review of the constituent stocks and any replacement of the top 30 can be effected. STI ETF would track this index closely, and make adjustments accordingly. As such, you would always buy into the top 30 companies at any one time. You do not rely on any single company for investment growth. And in this 30 companies, they cover many industries and sectors. These are forms of diversification. This is especially important if you do not know how to pick stock.

#4 Buy the index if you cannot beat it

It has been said that most fund managers cannot beat the benchmark index. Is it true? Kay from Moneytalk has did a comparison between STI ETF and the similar unit trusts. Taking the dividends from STI ETF into consideration (without factoring the fund costs for all funds), the STI ETF indeed outperformed the fund managers. There is a saying, “if you can’t beat them, join them”! If the fund managers cannot beat the index, it would be wiser to buy something that replicates closely with it – STI ETF.

Conclusion

Comparing to unit trusts, you can buy STI ETF at a cheaper rate and have a potential higher return. To me, it isn’t a difficult choice. Another important thing I want to warn you is that you still have to buy at the right time. Do not expect to buy the STI ETF at the height of a bull market and expect to see profits. Timing is important. I would like to quote Warren Buffett, “be fearful when others are greedy and be greedy when others are fearful”.

财女风情：投资彩票与中奖几率

财女风情：投资彩票与中奖几率
Created 09/10/2012 - 14:52
谁不想富有，谁不想过衣食无忧的生活？

只是每个人都想成为那微忽其微的幸运儿；这种侥幸的心态，助长彩票业迅猛发展。

这也是为什么中彩票几率那么低，以统计期望值来看几乎是必输的游戏，但是却可以风靡那么多人，算牌、签牌，包牌，什么怪招都来。

想让自己成为一个理性的理财赢家，到底该不该买彩票？

答案是不一定。

为什么？

一般来说，彩票的获利期望值为负数（因为政府要抽税、卖彩票的企业要抽佣），简单说，就是所有买彩票的人，当期的总支出一定会大于所得，完全听任几率决定胜负，你不可能用技术改善你的胜率。

所以，参加这样的赌局确实是不理智的行为，当然，有人相信他们可以用各种形式的算牌法来提高胜率，祝福他们能成功。

在我看来，你只是用钱买了做梦的特权，盘算着如何支配一笔在现实中你可能永远也不会得到的财富。

运气独立不会累计

几率里还有一个重要的概念，是事件的独立性概念。

很多时候，有人会因为前面已经有许多人没中奖而去买彩票，又或参与到累计回报的游戏；殊不知，每个人的“运气”都是独立的，不会因为前人没有中奖你中奖的机会就多了。

在这理，我不是想否定大家的美好梦想，只是要提醒你，投资彩票有超过50%的金额，其实就是你的“美梦成本”，只要能够认清这一点，爱怎么玩都随你，但后果自负。

假如真的幸运中奖了，那也请你一定要将奖金视为血汗钱，放进皮包里收好。

因为大多数中大奖的人很容易出现“财富麻痹症”，不知不觉就养成浪费的习惯，最后当彩金花光殆尽时，就会再度作可能再中奖的白日梦，那可真的是无药可救了！

中奖如同美丽梦想

什么是“彩票”？你弄懂了吗？

彩票是一种公益性的事业，怎能让多数人赚钱呢？

因为只要没有作弊，彩票纯粹就是几率的问题而已。确实，有的人买彩票，生活改善了，但你算过这其中的比率吗？

彩票从1000000号到1999999号，以100万为一组，共有01组到1000组的1000万种组合，这还是没数从2000000号到5999999号的组合。

你中奖的几率仍然近乎于零，这实在是很“美丽的梦想”！

尽管如此，我还是不建议你买彩票。

首先，你不是什么灵异之人，梦只是梦而已；其次，幸福研究表明，彩票赢家并没有因为中奖而变得更幸福。

但最重要的是，投资在彩票上的钱是很难回收的。在类似的博弈活动中，唯一确保以稳赚不赔的，大概只有主持的“庄家”而已。

当然，不管乐透彩、马票或21点，都是庄家精算过的赛局，可以投机的机会不多，因此有钱人不会在这上面花太多时间（要考虑赚钱的时间效率）。

实际上，彩票中奖的概率远比掷硬币，连续出现10个正面的“可能性”小得多。

买越多亏越多

如果你有充裕的空闲时间，不妨试试，拿一块硬币，看你用多长时间能幸运地掷出自始至终的连续10个正面。

实际上，每次抛掷时，你都“幸运”地得到正面的可能性是1/2，连续10次下来都是正面的概率是10个1/2相乘的总和，也就是（1/2）10=1/1024。

想想吧，千分之一的概率让你碰上了，难道不需要有上千次的辛勤抛掷做后盾？

所以理论上，彩票就是买越多损失越多的博弈游戏。一次买很多，存心要中头奖的人，几乎也都会通通拿去做“公益”了。

总结：赚大钱必辛劳

即使对追求金钱狂热，你也必须理性分析各种情况。

投资要求期望收益一定大于0，而博弈不要求，比如买彩票、赌马、赌大小……的期望收益就小于0。

支撑投资的是关于未来收益的分析和预测，而支撑博弈的是侥幸获胜心理；投资要求回避风险，而博弈是找风险。

所以，不论是博弈、投资或消费，对我们来说，最重要的是要充分理解金钱的流向和游戏的规则。

因此，在你尚未了解金钱的本质和游戏规则之前，我诚心地建议你不要轻易参与任何金钱游戏，如此才是真正的聪明之举！

创富的欲望及想赚钱的欲望是不同的；我得到一个重要的结论，就是太多人期待不劳而获，多数人只想要有钱花，而不太会去想怎样赚更多。

真的要赚钱，想赚大钱，从来没有不辛苦的。

与其把希望寄托在彩票上，不如寄托在自己身上。

生活的道路要踏踏实实地走，不要整日期待摇奖机给你摇出一条金光大道。对生活抱以认真的态度，生活也会赋予你美好的阳光！