andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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33 Responses

  1. NewbieNC says:

    Hi Andrew, nice post. I wonder if there is any company like Vanguard or Assetbuilder in Singapore?

  2. RobberBaron says:

    Just for fun, I've created a new "lazy" investing index tracker based on two of my current lesser holdings.

    I call it the "Lazy Two-step." 50% in each of two ETFs. Sort of like country-western dancing from the sofa. Not a lot of intellect involved. But the results from this will help shape my future monthly investments.

    Lazy Two-step Holdings:

    _TIP – iShares Barclays TIPS Bond Fund (US Treasury Inflation-Protected Securities)

    _VOOV – Vanguard S&P 500 Value ETF

    (As I buy through Sharebuilder, I need not be loyal only to one funds family, and the Vanguard comparable to iShares TIP was not available when I started investing. The difference appears to be negligible anyways)

    This is not the broader market coverage Andrew espouses – no "growth" stocks, only large-caps, and very limited bonds coverage. This would be a very conservative approach. Yet with a much lower dividend payout than I usually target (usually >3%). These are, however, very inexpensive funds, and while the first isn't quite a true "index" it is priced like one.

    I chose July 1 2011 as my start date, and started with $3,300 in play money for each (no commissions calculated).

    Here's the 85 day valuation performance:

    July 1 2011 Sept 22 2011 NET

    TIP 3,300 $3,477.90 $177.90 Up 5.39%

    VOOV 3,300 $2,679.60 $620.40 Down 18.80%

    More details, if you want that.

    Purchase price and (fictional) share holdings on July 1 2011:

    TIP $110 x 30 = $3,300

    VOOV $60 x 55 = $3,300

    Subscribing to Andrew's maxims, guess what I'll be buying next week? (real money, in my regular monthly activity

    The next few months should be interesting.

    • RobberBaron says:

      Here's the 85 day valuation performance:

      ……………July 1 2011 . . .Sept 22 2011 . . . NET

      TIP…………… 3,300 . . . . . $3,477.90 . . . . . $177.90 . . . Up 5.39%

      VOOV……….3,300 . . . . . $2,679.60 . . . . . $620.40 . . . Down 18.80%

      More details, if you want that.

      Purchase price and (fictional) share holdings on July 1 2011:

      TIP…………… $110 x 30 = $3,300

      VOOV……….$60 x 55 = $3,300

    • Hey RobberBaron,

      It sounds like you have a great strategy in place. And thanks again for all the detail. This is the kind of thing I love seeing on my site because so many people can learn from or be inspired by it. Thanks!!!!

  3. Hey Newbie NC:

    I really wish there were a company like Assetbuilder or Vanguard here in Singapore. But there isn't!

    Having said that, you can build a portfolio of exchange traded index funds (ETFs) which would do the same thing for you, at an extremely low cost. You would just have to be responsible for the monthly transactions on your own. If you go to my section titled, Expat Investing, you will find some models (when scrolling down) for Singaporeans, and expats based in Singapore. Let me know if you have questions!

    Cheers Newbie!

  4. Matt Sheflin says:

    Andrew,

    I have a Vanguard Account with the following balance-

    Vanguard Total Bond Market 40%

    Vanguard Total US Stock 30%

    Vanguard Total Intl Stock 30%

    I am having a hard time figuring out when to rebalance. I don’t mind spending up to an hour a week on this portfolio, so time isn’t a consideration. I want to figure out when I should rebalance and when I shouldn’t-especially when its so easy to transfer electronically. At one point, my portfolio increased by 11.5% in in just two weeks (stocks up, bonds down), but I didn’t rebalance to my percentages above because it happened so quick and I wasn’t sure if frequent rebalancing in an up-an-down market is detrimental or now. I’m not even sure what frequent is…

    Do you have a rule about rebalancing if time commitment is not important? If portfolio goes 5% off target balances? 8%? Does it matter whether bonds or stocks are up? Does it matter how quickly they have changed?

    Thanks for any advice,

    Matt

    • Hi Matt,

      I have rebalanced about four times in the past 12 years. That's once every three years. At most, I think you should rebalance once a year.

      Simply buy the underperforming index each month, with your fresh money. And if, on January 1st each year, your portfolio is off by 5-10% or more, then do a bit of rebalancing. But don't do it more than that. It will drive you crazy.

      If the markets get hammered (dropping 20% or so) you could rebalance at that level, regardless of the time of year, but don't get sucked into "doing something" just for the sake of it. Rebalancing sometimes improves improves, and sometimes it doesn't. So I don't think you should consider doing it more than once a year.

  5. NightSky says:

    My question is, if you're in a boat like me being a late blooming college student (I'm 27), and you don't have a lot of money to invest in a US Index stock and bond combo, what are the chances I will make any kind of decent return on my money? I'm talking like 1k. And since I can't provide a decent monthly contribution, that cuts in even more to the equation. I just finished your book Andrew, and I'm just a little confused about which US Indexes and bonds to invest in and what the likelihood is of someone who is ranked below the middle-class that I could make a decent return on my investments.

    • Hi Nightsky,

      Whatever you do, don't reach for higher risk. Start slowly and responsibly. Save some more money, and when you have at least $2K, then buy a Singapore stock market index (ETF) through Standard Chartered or DBS Vickers' brokerage. Save a further $2000 after that (even if it takes you a year) and then invest in a Singapore bond index. When you have a few more thousand saved, buy a world stock market index (VT). You're young, so your concern should be a very long term one. Don't get wrapped up in what returns you think you'll get today. Overall, this strategy will give you (statistically speaking) the best long term chance of success. And you won't need this money for a very long time (because you're young) so you can let patience and discipline allow you to slowly amass wealth.

      How does that sound? It takes patience and discipline, but I think you can do it!

      • NightSky says:

        Thank you for your response Andrew. I'm definitely planning on keeping the money in there for a long time. I don't plan on touching the money. I appreciate the advice on which stocks/bonds to invest in. I'm already trying to save an additional 1k now. Looking forward to having a great financial future!

  6. Patrick V. says:

    Hi Andrew- are purchasing index funds and bonds via Schwab competitive with Vanguard? I currenlty have most my funds with them and it would be very convenient.

  7. matador2004 says:

    Hi Andrew,

    I've read your book and it's opened my eyes in the world of indexed investing. I'm living in the Philippines and there's only two funds that offer an indexed approach. The fund that offers a much lower initial investment and lower annual fees is PSIF. Here's the link to the Oct 2011 performance- . Even if the annual management fee is 1.5%, would you still recommend I get this fund?

    Thank you for your advice.

    • Matador,

      The most important indicator of future performce for any portfolio will always be the expense ratio of the funds you hold. Your fund (at 1.5%) is far too expensive.

      But your options are limited unless you're able to open a brokerage account with access to the New York Stock Exchange. Many people in your part of the world actually set up accounts in Singapore, with companies like DBS Vickers. Build a portfolio of low cost ETFs, and you could get your average expense ratio down to 0.2 percent or lower. But if you can't open an account in the Philippines, you may need to visit Singapore, open an account there, then wire the money to Singapore when you want to add to your investments.

      Remember, past results are poor indicators of future performance. The cost of the portfolio, over time, is the only thing that will count over the long haul. The lower, the better, as long as you're nicely diversified.

  8. Patrick V. says:

    Hi Andrew- are purchasing index funds and bonds via Schwab competitive with Vanguard? I currenlty have most my funds with them and it would be very convenient

    • Hi Patrick,

      If you don't know what your expense ratios are with Schwab, then you may be paying far too much.

      As a brokerage, Schwab can sell you everything including the kitchen sink. This can be a good and a bad thing. Look up the expense ratios on the funds you own. They shouldn't be hgher than 0.17% for a U.S. fund or 0.2% for an international fund. If they are higher, you can still use Schwab to find lower cost funds (actually, ETFs might be your lowest cost option through Schwab)

  9. matador2004 says:

    Thank you so much for your detailed reply. I will look into opening an account in Singapore.

    Wishing for more success of your book in this new year!

  10. Patrick Voyles says:

    Thanks Andrew….the Schwab total market index fund(SWTSX) has a net expense ratio of .09%. The Schwab international index fund(SWISX) has a net expense ratio of .19%. The Schwab total bond market index fund(SWLBX) has a net expense ratio of .29%. Based on that data and following your book my thought would be to move my current Schwab actively managed funds into the above noted idex funds with the proper balance you outlined. Would really appreciate your thoughts prior to pulling the trigger. Thanks in advance!

  11. NightSky says:

    Hi Andrew. So after a short period of time, I was able to have enough money to invest 2k in a Singapore Index, Singapore bond, and a world stock index (total is 6k). The question I'm wondering is why Singapore? I looked at the total stock fluctuations since its inception and it doesn't seem to be growing. It seems to rise and then fall in approximately equal proportions so as to never go anywhere. The US economy, however, is on its way up again as the recession finally dies down. I know that you teach buying at clearance prices, but I see the US economy rising even higher. I don't see this happening for Singapore. I'm wondering what your rational behind me investing my life savings into a market that doesn't seem to grow over time is.

    On another note, I can't seem to find out how to sign up for Standard Chartered on their website. Am I missing something? I can't find a sign up link. I cannot us Vickers because they require a passport, and as of now, I don't have one.

    • Hello Nightsky,

      I recommend (no matter what the economic climate) that people put their eggs in multiple baskets (International stocks, domestic stocks, domestic bonds) and rebalance. You must ignore what index is "doing well" and what index isn't. In fact, your instinct is actually very human, but this isn't a good investing trait. To be good, as investors, we shouldn't chase rising prices, we should dispassionately keep a balance, and actually be a bit fearful when others are greedy and greedy when others are fearful. The rebalancing process (or buying the lagging index in our portfolios) automatically ensures that we do this.

      • NightSky says:

        I understand. Buy low, sell high! I'm just wondering why you picked Singapore. I've researched a little and know that it's a big hub port for goods. Beyond that, however, I know little about its economy and the economy's stability. I have a lot of questions, and I'm really eager to learn. I don't want to take up a lot of your time asking all these questions, but it should be a good sign when I'm asking a lot. It shows that I care where my money's going, and I don't have blind faith like the people you mentioned in money market accounts.

        As for signing up for Standard Chartered, am I supposed to open a Singapore account? I can't find a way on the website to open a US account.

        Thanks for all your help and answering my questions thus far! I've never invested before and I don't know anyone that has. I want to do it the smart way.

  12. Andrew says:

    Hi Andrew,

    I am an Australian, living overseas (currently Vietnam) so I am a non-resident for tax purposes. I have contacted Vanguard Australia regarding getting the ball rolling. This is what they have told me:

    Vanguard Investments Australia Ltd and its Funds are registered in Australia and are operated to comply with Australian laws.

    We regret to inform you that unfortunately Vanguard Australia can no longer accept applications from non-Australian residents which includes Australian citizens currently residing overseas.

    This policy is as a result of the US Foreign Account Tax Compliance Act (FATCA) and similar expected legislative changes in Canada, Europe and elsewhere which increases our compliance burden from accepting non-residents.

    What do you suggest I do in this situation? Should I look into other options in Australia?

    Thanks

    • It sounds like a national tax issue, rather than a Vanguard issue. Your best option would be opening an account in Singapore, with DBS Vickers. They will allow you to do it, as long as you end up speaking to someone on the phone who knows of the option. If they say no, it means you have someone on the line who just doesn't know. Call them back. This is what many of my readers have done…from Vietnam, Thailand, Malaysia etc.

      Cheers,

      Andrew

      • Andrew says:

        Hi Andrew,

        Thanks for the reply and the advice. I'll look into DBS.

        I've been reading about the Singapore 'issues' in the comments on your other posts. I have no investment experience, nor do I have any sort of university degree in anything related to finance. Does that mean that I will have to pass the test that other people mention, or is that for something else?

        Thanks

        Andrew

        • You may have to take the test, but it's just a multiple choice test and they would give you the study material. And it would take a few hours to study for it. In some cases, those living outside Singapore have not had to take it. I have friends who took it without any experience in money. In fact, the test itself is so irrelevant, I wouldn't pass it either, without studying the silly questions first.

      • VeronicaB says:

        Hi Andrew, just came across your site. With regard to your suggestion for an Australian expat to open an account with DBS Vickers on account of Australian tax laws preventing Vanguard from offering services to Australian non-residents (conversation thread from April earlier this year), would you know whether it is possible to set up such an account for an Australian expat based in PNG? Many thanks

  13. Lance Shubert says:

    Hi Andrew;

    I plan to buy your book but wanted to ask before hand if someone in their 60s should bother with index funds rather than actual stocks since it appears you need time with unmanaged index funds?

    I'm Canadian living in Thailand and have a brokerage account at Citibank Singapore but not happy with them because the interface is hard to use. I also have a Schwab account in Hong Kong for my US stocks and an Interactive Brokers account for my Canadian stocks.

    I will eventually retire to Canada so my question is as I'm a senior citizen do you recommend buying unmanaged index funds at my age.

    Thanks

    Lance

  14. VeronicaB says:

    Hi Andrew, sorry, PNG stands for Papua New Guinea. We are Australian expats based there and are exploring investment options (on the share market) that are available to us (and align with Australian tax law rulings for non-residents). I found the commentary very useful – just querying the applicability of advice to people based further afield from Singapore. Thanks

  15. Ivo says:

    Hi Andrew

    I am a Bulgarian expat in Singapore.
    I recently read your book and thanks to it i decided to stop my Zurich application!…

    But now my partner and i are a bit stuck – what to invest in from Singapore, which can be also portable as in a couple of years we might be in Australia, Nz or back in Europe…

    Your advice is very welcome! 🙂

    Cheers, Ivo

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