Saving Accounts Interest rates
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The theoretical price is as you mentioned, but market is not always based on theory, haha
Certain times, especially during crisis, bond price might plunge below par value. Take the very recent financial crisis. The price of some traded preference shares (this is somewhat like bonds) went below par value. If you managed to snap up during this period of time, you are guaranteed a capital gain besides all the coupon that you're supposed to get while holding it.
I would guess that all discounted bonds are distressed. If everything goes well, it should be traded at above par value. -
May I ask which preference shares went below par value?
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It’s a US listed one. HSBC preferences shares A. Those from stanchart too, I believe.
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lapapillion:
It's a US listed one. HSBC preferences shares A. Those from stanchart too, I believe.
I thought some local banks too? I may have misremembered, it was a crazy time...... -
Yes, I think those from local banks too. The usual ocbc, dbs pref shares are way below par. But then again, so are a lot of other blue chips which offers a better chance of recovering capital fast. A lot of choices back then.
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lapapillion, why the MMF always on upwards trend… gotten mine… now it’s 0.001 higher lol… long way to go…
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micollh:
lapapillion, why the MMF always on upwards trend.. gotten mine.. now it's 0.001 higher lol.. long way to go..
Haha, well, better than savings account lah I think it's always upwards because of the way they average out the dividends/coupons/interest received. But I'm not an authority of this, it's just my speculation. They would likely stagger their purchase of the different assets so that the coupons or dividends they receive will not spike at certain months and there won't be periods where it's dry too. I guess it works somewhat like insurance participant fund. They will even out good years with bad years and tend to give out a steady bonus every year, except for the MMF case, they will even out over months instead of years.
You can try taking it out of the MMF funds. It'll take around 2 days (speaking from my own experience with POEMS mmf) from the time you apply to withdraw the funds out. If you need help on how to withdraw it, do let me know. -
Lapapillion, you didn’t mention investment in property any particular reason? Too high risk?
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peapot:
Lapapillion, you didn't mention investment in property any particular reason? Too high risk?
I also didn't mention investing in commodities
I'm just trying to stick to the topic as best as possible, haha! Maybe we should all start an investment thread. Seems like there's genuine interest to learn more from each other
I think with regards to property, I dare say that most people who made it big in Singapore must have done something with property. Just 1 or 2 rounds would ensure a very comfortable retirement. It's just harder and harder to do it now, with all the rules and huge downpayment required. The only property that I own is my current HDB flat and that is less than 5 yrs, so nothing I can do now :sad:
Just accumulate cash and wait for the right time I suppose
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I’m too interested to make my money work for me. We’ve worked so hard for our money, now it’s time to do the reverse. But I’m so slow in understanding how it works so, I shall back track and read all the post.
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