Raising of Re-Employment Age to 67

Today, we will be talking about the raising of Re-Employment age.
More links below on Retirement

MORE LINKS
5 Financial Things to do in your 20s
Singapore Finance Minister on Personal Finance Part 2
Reducing CPF Housing Accrued Interest
CPF +1% Interest for those age Below 55
Everyone Should Invest to Retire
You NEED Stocks to Retire
Reaching Full Retirement is Tough Work
Steps to help you reach Retirement

During this year's National Day Rally, PM Lee mentioned that the Re-employment age will be raised from 65 to 67 by 2017.

When people tell me that the Government is insane, making us work more and more, consistently pushing the retirement age backwards, my response to them is as per below:

There is a difference between the Retirement Age and Re-Employment Age.

RETIREMENT AGE (Singapore's minimum retirement age is set at 62)
The age most people stop working - in some cases, by law.
What it means is, companies cannot force you to retire before you reach your retirement age.
However, this is not the age that you must work to.
If you strike the lottery at the age of 30, you can quit your job and enjoy for the rest of your life!

RE-EMPLOYMENT AGE (Singapore's re-employment age is currently set at 65)
Companies are required by law (in Singapore) to hire their workers (those who reach the retirement age of 62) until the Re-Employment age of 65 if the worker wishes to continue working.
If you do not wish to continue working at age 62, you may just retire from your job (or quit).
This is done to ensure that older workers who wish to continue working do not get forced into retirement by their employers.
Plans to raise the Re-Employment age to 67 are set to kick in in 2017.

Share this knowledge with your family and friends who tell you that the Government is making them work until 67!
Sharing is Caring!

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STI 3rd Year Trend

Today, we are looking at the 3rd year of every US presidential term and its impact on Singapore Stock Market - in particular, the Straits Times Index.

We talked about other investment opportunities too, links below:
S&P500 Investment Opportunity
Carl Icahn Activism Investment Opportunity - Icahn Lift
Singapore General Election Impact on SG Stock Market
2015 will be a Great Investment Year

Since 1999 to 2015, STI tends to slump in August.
It is followed by one of the biggest rallies of the year
This is the month to stay invested or start investing!
Buy when the market is going down, and hold for it to go up! (because it will go up)

Quote of the day:

Together with elections, the stock might go up because elections usually happen after a rally in the stock market.
Since the Singapore Election has been set on 11 September 2015, we can expect a pretty decent recovery before the election is up.

1999 STI Price Movement

2003 STI Price Movement

2007 STI Prive Movement

 2011 STI Price Movement

2015 STI Price Movement

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S&P500 Statistical Investment Opportunity

Last Friday, the S&P500 hit red for the first time this year.
Just over 1 day, S&P500 fell from 2035.73 (Thurday's close) to 1970.83 (Friday's close); a drop of 2.7%.

However, during Asian trading hours today, S&P500 fell further to a low of 1913.99 before recovering back to 1933.99.
This represents a 1.86% drop from Friday's close.

We did an article describing how this drop in S&P500 presents an investment opportunity for us.
2Weeks Investing Strategy, we discussed how to invest in the next 2 weeks should the opportunity arise.
This strategy was formulated based on statistics found on CNBC.

Base on the statistics from CNBC, it is predicted that a rebound back to the top (1970.83) would happen within the next 2 weeks.
Within a span of 2days, the S&P500 has dropped by nearly 5%.
From 17 August however, the S&P500 has fallen from 2102.44 to today's 1933.99 - a drop of 8% in a week.
We think that with such a quick drop in price, it would most likely experience the same type of quick rebound upward.


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Icahn Lift Investment Strategy (Carl Icahn Investment in Cheniere Energy)

Today, we will be discussing an investment strategy/trend that I noticed.
It has something to do with longtime Activist Investor Carl Icahn.
Previously I had used this trend to invest in Apple Inc and made some money (will share the post soon).
However, recently Mr Icahn has invested in another company.
I figured this time the same trend MIGHT work again, thus it is worth sharing!

Some other investment strategies that I have shared before below:
1) 30% Gain from Netflix
2) My Investment Loss from Amazon
3) A 2-week Trading Tip

Carl Icahn has acquired an 8.2% stake in Cheniere Energy (Quote: LNG)
Might seek board representation on the company (become the board of director)

Cheniere Energy
Deals in liquefied natural gas

Since the disclosure of the position, Cheniere Energy rose to a peak of $70.92, a 13.4% increase from its 1-month low ($62.53) on 27th July 2015.
This uplift in share price is also known as 'Icahn Lift'
It subsequently calms back down to $68 levels, still an 8.7% increase from its 1-month low.

Icahn's Icahn Lift has historically had the effect of lifting a stock price up for several days before the stock price goes back down to average.
The 52 weeks lowest point of the share is at around $63 - $65.
So picking up shares at around levels below $65 while waiting for Carl Icahn to push for higher shareholder value seems like a good investment for the short to medium term.

As a side note, Cheniere Energy is currently also trading on its 1-year low, which might seem like a good time to buy for the medium-term while waiting for an activist action on the company.

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Enhanced Retirement Sum (ERS) for CPF

For an updated version, refer to the article HERE.

Today's post is about Enhanced Retirement Sum (ERS)
It is currently set at 1.5x the Full Retirement Sum (FRS)
Why would someone wish to put more money into their Retirement Account than necessary?
That will be what this post will answer.

For more information on the different types of Retirement Sums, click HERE
For more information on the amount on the different types of Retirement Sums, click HERE

Rationale
Finance theory states that as you grow older, you need to take less risk.
Hence as you grow older, your retirement portfolio should be fewer stocks & more bonds.
In recent years, Bonds' interest return has not been spectacular, especially high-quality bonds.
You also might not want to go into low rating bonds for higher returns (such as BBB rated bonds).
Most importantly, we need to understand that our retirement portfolio is meant to provide us with a stream of income (preferably steady income) during our retirement.
The CPF LIFE scheme (click HERE for more information) does that, the ERS adds on to what CPF LIFE can provide

Advantages of ERS
1) Higher Interest Returns - up to 6%
2) High-Rated "Investments" - since it is guaranteed by the Singapore Government which holds a AAA credit rating
3) Compounding Growth - Interests are compounded yearly, unlike bonds which do not compound
4) Fixed monthly income - it is like an investment that gives you a "payout" every month.
5) Its is auto-pilot - you do not have to do anything. You put your money in and expect money out every month. Unlike normal investments where you have to manage your funds actively.

Disadvantages of ERS
1) Low liquidity - you cannot wish to withdraw the whole amount out like you can with your private investment fund
2) Policy changes to CPF - changes might affect you from withdrawing any more money or getting higher monthly payouts or something beyond what I can think of for now
3) Political Risk - because it is Singapore Government backed, if anything goes wrong in Singapore, it will affect the returns you get from CPF.

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ETF Funds > Hedge Funds

ETF Funds are taking over Hedge Funds as published by 'The Economist' magazine.
The link to 'The Economist' article is HERE.
Link: Benefits of ETFs
Link: ETF Investing Strategies
Link: How ETFs are Changing the World

ETF Funds currently have more assets under management than Hedge Funds.

Difference	ETF Funds	Hedge Funds
Asset Under Management	$2.971 Trillion	$2.969 Trillion
Fees Charged	Usually less than 1%	2% annual charge + 15%-20% performance fee
Targets	Average retail investors	Wealthy Individuals & Institutions
Invests in	Stocks in an Index the Fund is tracking (Eg; S&P500), an exact replicate with small errors	A wide range of instruments like stocks, bonds, derivatives, futures, etc
Investment Objective	Tracks the market, give investors market returns in minimal fees	Aim to provide positive returns regardless of market movements

Over the long-term, it is shown that ETF Funds that track an Index tend to perform better than Hedge Funds, particularly after the fees for both respective funds are deducted from the returns.

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