Tuesday, October 09, 2007

Yes, MM Lee I would like to give it a try....

"In other words, you will never lose. And if anybody thinks
he can do better
, he's welcome to take his money and
go to a fund manager and try and do better
" -MM Lee on CPF returns.

I'm going to take the newspaper cutting with those words, go to the CPF office and ask for my minimum sum. Yes, if I can my hands on my money, I have a plan to invest it. What I'm going to do with the money is in my new blog:

Why do I think I can do better than 3.5%? I've been investing my CPF money ever since part of it became available in CPFIS. Much of it was invested more than a decade ago, I've never sold anything after investing. 5 years ago, I started using http://www.dollardex.com/ because it offers lower commissions for unit trust. For many years investors have been urging the govt to use its bargaining power to bring down the cost of commissions & management fees of fund managers so that CPF money can be invested at a lower cost. After more than a decade, our world class govt finally said they will look into it. One thing I like about DollarDex is you can use it to plot the performance of your investments vs what you would get if you left it in your CPF-OA. Here's what my portforlio which consists of 12 unit trust looks like:

Past history is no indication of future performance. For all you know, I could have been lucky....in spite of the high management fees & commissions, I still manage to do better than the CPF-OA "as good as it gets" rate. Forget history ...check out my new blog : More than 3.5%!


Anonymous said...

Hi Lucky

We are all struggling to attain some level of stability in life.

Given the ups and nows of stock markets, seeing the skyrocketing prices of China and BRIC stockmarkets, one cannot help but hold one's breath with one's investments.

As the saying goes, no risk no gain. On the other hand if you risk, the risks are also pretty real.

Some say the bull run is over; some say the best is yet to be for these emerging economies.

Whether one is rich or poor, the story is the same. Trying to attain security and more security.

Sometimes I wonder if the whole global econonic/financial system is defective. Why must man be so preoccupied with his economy despite having progressed from third world to first world?

Add to that if a govt like PAP also wants to do business with our money, it adds to the complication.

I pray that all that we see will not burst upon us like a overblown bubble.

A new safer system should be found, one that emphasizes more on stability rather than market forces.

I kind of see China taking this route - in its Yuan policy and the steady progress of its bourse over the last 1 year.

This even though the China govt too has come up with a sovereign fund like Singapore Temasek/GIC.

But I believe their investment strategies/policies might be different.

Their fund could be used to secure their financial markets for stable growth, having learnt painful lessons in the past 15 years or so.

I hope a stabilizing mechanism will eventually be institutionalized, one capable of counteracting heart-stopping market volatility that send whole regional or worst global economies into a tailspin.

recruit ong said...

me thinks the world has forgotten about one thing - sustainability. All the financial bubbles and stuff to a noob like me is just churning. We are killing the earth and the next industry that the world should be looking into is green industry.

Kenneth said...

The green industry is also captive to the market players. Once investors see money to be made, they will rush to that industry and drive up their market prices.

Even basic commodities like coffee, sugar, corn have been subject to such market-driven forces.

In the past coffee farmers suffer because of the chaotic fluctuations in prices.

Thus what begins as something essential can end up becoming a highly speculated good.

The green industry is likely to be another victim or benefactor, depending of which way you look at it.

Thus there is a need to look more at the overall picture; how the whole economic/financial system is about and how the big market manipulators like hedge funds can be counterbalanced by an equally stability force and not only when things go wrong.

The use of sovereign funds to do that such as practised by the Hongkong govt with the support of China during the Asia economic crisis was an important precedent and I believe continues as a policy behind the scene to this day.

LuckySingaporean said...

anon 11.41pm,

We are talking about 100B and a period of 40 yrs...at a low return. It is simply too much too long too little. Indeed after doing this for 40 years, our dear leaders have to dispense lessons on work ethics to the citizens...telling them the once promised 55 yrs is no more...the principle that the money is yours is no more....and by the way, "they made tons with your money and they will keep it, use it as they see fit".

For many what could have been a proper retirement is now turned into labor. It is not Swiss standard of living any more.

If there has been fewer examples of pension funds attaining higher returns, it might still be less unhappiness. If they at least took care of the 85 yr olds, perhaps people will let the loss of opportunity cost pass.

More explanation does not help soothe the heart of a nation. Telling them they are too dumb to handle their own money cannot win hearts. Keeping the extra returns with is given out sometimes as tax cut for corporations of which the govt owns many does not bring a sense of justice.

Thanks for your standard explanation which if oft repeated. Remember this is a great govt that once promised a Swiss standard of living and is now refusing to fund the lives of 85 yr olds. It can explain all it wants about its policies but it cannot explain away the unhappiness.

Yes stability vs higher returns. Higher returns the govt kept for itself, if it cared about our stability, why did it eliminate all the worker's benefits associated with stability? ...to make it easier to hire and fire workers. Stability is the last thing on the mind of this govt, it is money they can use for the GIC that comes first. Why did it open the flood gates to foreign workers causing a "structural unemployment" among older workers? Why did it eliminate pension funds for low ranking civil servants but kept it for the elites? This govt never cared about stability for the people. It has and always will be about economic growth and profit maximisation.

Stabilisation is an excuse to lock the money up for its own purposes.

We, Singaporeans are lucky to get the best explanations in the world....and we get only one explanation so we go to sleep well at night ...wake up in the morning and we are told to work longer and harder for our own good. Its a simple instruction just follow without question ...work another 10 years. You get to 55, it takes alot of blue pills to get you to ready for another day of work. ...

Anonymous said...

PAP even set to nothing some years back all the retrenchment benefit contracts signed between employers and employees' union.

They justified it to "save business costs".

Nobody could do anything to this serious and across-the-board breach of contract courtesy of PAP.

It was PAP which kept raising the cost of business since the mid 80s - through COEs, raising rental of govt factories, high traffic fines etc - despite the persistent hues and cries from the market.

Thus when the economy sank and the flight of businesses became severe, Singapore workers were made to bear the consequences of the willful mistakes of PAP.

Now it is doing it again, another and more far reaching breach of contract - the CPF issues - that hit at the very basic livelihood of Singaporeans.

PAP will keep playing dirty given the dearth of external checks and balances over a very long period of more than 40 years of one-party rule.

I understand the people are too busy to think about all these, especially when they have to earn a living under spiralling costs and tightening job market due to influx of foreign labour.

The opposition which should be attending to all these are doing next to nothing. Go visit their websites and see what they have said or done so far. They could have call an inter-party press conference to deal with this CPF issue and keep pounding on it. What's stopping them?

They are just helping PAP to legitimize its dictatorial rule.

Some Singaporeans did know that they have been underpaid in CPF interest, but as ordinary citizen they make do.

Seeing the "make do", the pragmatic, adaptable, today-complain-tomorrow-forget behaviour of Singaporeans, PAP keeps seizing the opportunities to exploit more, to bully them.

What we need therfore is to build up a counter intellectual force.

Blogs like this one holds the key.

Keep pounding the warning to readers because the serious problems that PAP created wont go away but will continue pile up, even as PAP sweeps under the carpet it own mistakes given the lack of transparency and accountability.

Considering that Singaporeans have never experienced democracy, they should be politicized.

To me this is not about joining an opposition party because not everyone is interested. Nor has it necessarily got to do with demonstrating in public places.

To me it is very simple : As voters can they even begin to understand that they and not PAP or LKY is the boss?

They must TAKE CONTROL and not view PAP like some kind of infallible omnipotent regime, often expressed by man in the street as "I am sure the govt has looked into this", "I believe the govt will check on this", and such.

Last night I saw a jump to more than 700 visitors to this site.

Keep it up, Lucky!

Anonymous said...

We can actually say there is no true social security in Singapore.

What CPF savings Singaporeans have are their own personal savings.

Yet PAP would compromise even this, with the excuse that it is taking care of the people.

PAP should instead consider seriously downsizing its global investments, selling its Temasek/GIC assets to put back the CPF money and start paying higher rates for it.

The signs are there that Temasek is not a viable enterprise anymore : Shin Corp, Barclays and now Temasek/Singtel in Indonesia for breach of anti-monopoly law http://www.todayonline.com/articles/215873.asp.

If Temasek's chief investment officer (CIO) recently had to resign, it tells a story.

On top of downsizing of Temasek operations, there should a true social security system in Singapore to help people in need.

PAP is not likely to do all these but that is because it does not foresee a problem for itself.

It has said Singaporeans are responsible for themselves not the govt. This should give Singaporeans an indication of what kind of govt we have.

But things are not that simple. No matter what, the destitute, poor, sick will have to be looked after however sloppily or strategically - like giving painkillers to patients who need hospitalisation (something I heard is being practised).

The fundamentals of running a country cannot be changed.

And PAP had been denying these fundamentals : social security or social welfare, political participation, governing rather than doing business, external checks and balances, transparency and accountability.

All these omissions are working to the grave peril of both nation and PAP.

According to Peter Drucker the renown management guru, governments have never been known to be good in business. PAP wants to be different but it is just an illusion.

In the marketplace, every successful business is accompanied by many failed ones.

But a govt going into business can just keep propping it up with taxpayers' money and make it look good outside. It is not subject to the true test of the marketplace.

Anonymous said...

Speaking of Temasek, it is interesting to know that the CIO responsible for Shin Corp did not resign but was moved to a newly created position in Temasek. The one who resigned took over from his predecessor and was not responsible for the Shin saga. So no one is responsible really. LOL

Btw I heard from a friend in the financial circle that DBS's Jackson Tai did not resign on his own but rather was "removed". I am sure that is just baseless gossip.

Anonymous said...

Hi Lucky,

Help take mine out too!

I started work 40 years ago. I had to pay protection money to protect my future - my retirement. I was promised that I'd get it all back when I'm 55. Fat hope! The shifted the goalposts along the way. I celebrated my 55 and they told me, "CPF SMRA - U Can't touch this".

CPF - Who's money is it anyway?

Since day one, this gigantic Common Peoples' Fund was used for who knows what? From CPF ->MOF ->MAS ->GIC ->Temasek ->Suzhou ->ShinCorp ->Manchester City Football Club -> to God knows where?

Even President Ong Teng Cheong could not know about our reserves.

Is it still there?

Why the desperation to hold on to CPF longer and extort further with Forced Annuity?

SM tells us to contribute more to Medisave and we can win lucky draws. Cute!

PM tells wives to get their husbands to withdraw from POSBank and deposit in CPF? Amazing!

Hen says more people are contributing more in CPF to enjoy the high interest rate? Fantastic!

MM tells us to invest it ourselves? Clever!

So who's money is it anyway?

Politicians with their penis talks must work or at least seen to be working. How else can they deserve the obscene salaries and pensions?

Bush: "Either you are with me or you are with the terrorists."

PAP: 'Either you are with me or you are dumb."

They changed the laws to keep holding on to our hard earned savings. They shamelessly tell us its for our own good. According to Hen some have 'a fling here and and a fling there' but most Singaporeans I know are decent and know how to manage their own finances.

If they need our money to help them make themselves important and rich, or to gamble on Singapore's reserves, just do it. Don't insult us by acting and talking as if they are God's gifts to Singaporeans, to the world.

Some people like ministers do not even need the CPF for retirement. (Oops, I forgot. They don't have. They have pensions which they collect till they die.) But ordinary people like me needs it after 55 when we are sick and unemployable.

If I cannot take care of today, why hoard my money for tomorrow. Yes, my money, not yours! Hey, I don't need so much money for my coffin. I don't even need a niche in a columbarium. I've left instruction to feed my ashes to the fish.