We have compiled a list of STI Component counters showing their Cash from operations from year 2004-2008. Primarily, it is to compare the trend and consistency of their cash generating ability over the years. Please take note that the compiled charts are taken at face value from Reuters. And when we mean "face value", we mean take it with a pinch of salt ( like how you should treat what SGDividends, Analysts, your stock broker, e.t.c says). Treat us like some noise in the background and really go verify the facts and do your own due diligence..come on..don't be a pig. Pigs get slaugthered unless they can fly away. Anyway, read the comments at one of our post to understand why we say what we just said...... thanks to that nice chap who alerted us on our mistake in that post..... Also pls note that we did not include the 3 banks, UOB,DBS,OCBC in the document below. This is due to a small voice that told us not to do it and this is a personal issue....don't ask.
So just what exactly is Cash Flow from operations? Cash flow from operations is the cash that a company generates through running its business. It's generally a better measure of a business's profits than earnings because a company can show positive net earnings (on the income statement) and still not be able to pay its debts. It's cash flow that pays the bills. Its the real mc-coy...unless that company is some certain S shares that just pluck digits from thin air.. Cash Flow From Operations 1
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Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
" The shortest route to top quartile performance is to be in the bottom quartile of expense. " - John Bogle ( Founder of The Vanguard Group)
This post is to do a comparison in relation to investment expenses between Unit Trusts, ETFs through DBSV Cash Upfront and other brokerages and POEMS sharebuilders plan. In relation to sales charges, based on the spreadsheet done below, there is an optimal way to invest, so as to reduce charges or fees, based on the investment amount if one is to follow a monthly dollar cost averaging strategy.
Generally, dollar cost averaging means allocating a fixed amount of money into investments at regular intervals, so as to lower the average cost of the investment, since when share prices go up, less shares are bought and when share prices go down, more shares are bought. The other reasons for dollar cost averaging (DCA)include not having enough funds to buy a pricey blue chip company say, the minimum 1 lot DBS shares and so DCA allows one to slowly accumulate DBS shares. Other reasons includes a person not being savvy enough or having not enough time to monitor the market so as to "generally" time the market to enter. The reason why we are comparing the said instruments is because these share a common trait, which is, they allow one to so call diversify their portfolios. Well, personally, SGDividends do not use any of this said instruments, that is Unit Trusts, Share Builders Plan or buy any ETFs, but oh well, to each his own.
For those who don't know what POEMs share builders plan is...read below.
Ok so now that we have some background information on what the POEMS share builders plan and the DBS Vickers Cash Upfront Service is....let us compare! Do note that for the share builders plan, we are refering to the scenario where a person buys more than 2 different counters each month....since 2 or less counters is not really diversification....don't you think? Therefore, the handling fees is $10.70 instead of $6.42.
Also, do note that Share Builders Plan only allows one to buy certain Singapore listed shares.
Regarding ETFs, most of them allow one to buy in terms of 100 units or 10 units ( for example, DBS STI ETF 100) instead of a board lot size of 1000 units, so monthly regular DCA of $100 is still possible....
Ok some points to note. It is stated above that between the monthly investment amount of $100 - $700, unit trust is the cheapest. That's misleading ok....in addition to the sales charge above, there is an annual managment fee of generally 1.5%. In fact, SGDividends has been very sweet to the Unit Trust as we took the lowest sales charge of 1.5% among different UTs. Many UTs have sales charges of up to 5%.
ETFs generally have, in addition to the above sales charges, an annual fee of 0.28% - 0.3%. Also, one must pay brokerage fees when one liquidates this investment. Unit Trusts do not charge fees when it is liquidated. Having said that, ETF is still cheaper than Unit Trust.
For Poems ShareBuilder Plan, in addition to the above charges, there are compulsory unaviodable charges of $10.70 for corporate actions per counter. So, lately, with the recent spate of rights issuance by some bluechips company, there has been quite some expenses.......
So well, you decide for yourself which is the way to go...... and do note that expenses is just one single factor when investing as the performance of the underlying instrument through which ever means, Share Builders Plan, DBS Vickers Cash Upfront or Unit Trust..e.t.c is still the most important
If you like this blog, do help SGDividends by adding us as your favourites via this link,THANK YOU!:
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
So what does the term buy-and- hold really mean? How long does one hold to consider oneself such an investor? Frankly, its just an academic jargon which is of no use debating over. Life is larger than this. We were reading up on Marc Faber cos he looks abit like Hannibel Lector in the movie and also because he said that it is a myth that stock markets go up generally in the long run. So well.. this guy is a smart guy..having gotten his PHD in economics at age 25 and having so much experience in the money markets of the world.....his comments is at least worth some consideration. Besides, conventional wisdom says that when one is young, start investing in equities as in the long run, equities in general rises. One can see this is by clicking on the charts for the DJIA (Dow Jones Industrial Average Index).
Taken from the book below......
"
The average life expectancy of a multinational corporation-Fortune 500 or its equivalent-is between 40 and 50 years. This figure is based on most surveys of corporate births and deaths. A full one-third of the companies listed in the 1970 Fortune 500, for instance, had vanished by 1983-acquired, merged, or broken to pieces. Human beings have learned to survive, on aver-age, for 75 years or more, but there are very few companies that are that old and flourishing. "
And this research is based on Fortune 500 companies which are considered blue chips and therefore relatively considered less risky than those mid-cap or small- cap stocks. Its quite scary to think whats the average lifespan for mid-cap or small cap stocks then.....10-30 years? Therefore, it is imperative that one researches the stocks thoroughly before buying, instead of just buying many different stocks after a surface read-up on the company, in the guise of the oft-used word of "diversification".
Serves to remind one also to allocate at least 2-3 times a year to rebalance and relook at ones portfolio. Anyway, the authors also did a study on why some select few companies were able to grow beyond the lifespan of a normal company and one of the common factors is the financial prudence of the company management and board.
It terribly irks SGDividends when we receive glossy, thick annual reports every year! Save the money and trees..dudes!
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
